Federal Register, Volume 76 Issue 138 (Tuesday, July 19, 2011)

[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Rules and Regulations]
[Pages 42567-42573]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18156]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 43 and 63

[IB Docket No. 04-112; FCC 11-76]

Reporting Requirements for U.S. Providers of International
Telecommunications Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission
(Commission) concludes that it should eliminate outdated and
unnecessary reporting requirements related to international
telecommunications traffic for which the burdens on U.S. international
service providers outweigh the benefits. Specifically, the Commission
finds four information collections are no longer necessary and removes
them from its rules: The division of telegraph tolls report; the
quarterly large carrier traffic report; the quarterly foreign-
affiliated switched resale carrier report; and the circuit-addition
report. The Commission also finds that the annual traffic and revenue
reports and annual circuit status reports can be simplified by removing
the requirement to separately report for off-shore U.S. points.

DATES: Effective July 19, 2011.

FOR FURTHER INFORMATION CONTACT: John Copes or David Krech, Policy
Division, International Bureau, FCC, (202) 418-1460 or via the Internet
at John.Copes@fcc.gov and David.Krech@fcc.gov

SUPPLEMENTARY INFORMATION: This is a summary of the First Report and
Order portion of the Commission's First Report and Order and Further
Notice of Proposed Rulemaking, IB Docket No. 04-112, FCC 11-76, adopted
May 12, 2011, and released May 13, 2011. The full text of the First
Report and Order and Further Notice of Proposed Rulemaking is available
for inspection and copying during normal business hours in the FCC
Reference Center, 445 12th Street, SW., Washington, DC 20554. The
document also is available for download over the Internet at http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0513/FCC-11-76A1.pdf. The complete text also may be purchased from the Commission's
copy contractor, Best Copy and Printing, Inc. (BCPI), located in Room
CY-B402, 445 12th Street, SW., Washington, DC 20554. Customers may
contact BCPI at its Web site: http://www.bcpiweb.com or call 1-800-378-
3160.

Summary of First Report and Order

1. In the First Report and Order and Further Notice of Proposed
Rulemaking, the Federal Communications Commission (Commission)
continues its comprehensive review of the international reporting
requirements for U.S. providers of international telecommunications
services. In the First Report and Order portion of the document, the
Commission finds that there are several reporting requirements that it
can eliminate at this time. The

[[Page 42568]]

Commission concludes that it no longer needs quarterly traffic and
revenue filings or quarterly circuit addition reports. The Commission
also finds carriers no longer need to file separately for off-shore
U.S. points. In addition, the Commission finds that the toll division
reports are out-dated and no longer need to be filed. The Commission
concludes, however, that carriers should continue to file annual
international traffic and revenue data and international circuit data
in order to protect the interests of U.S. consumers and U.S.
international service providers, and to facilitate the transition to
competition in international markets. This includes certain route-
specific data from facilities-based carriers, because the Commission
needs route-by-route traffic and revenue information to implement and
enforce pro-competitive international policies. The Commission also
needs international resale traffic and revenue data on a world-wide
basis since most international calls are initiated with a resale
carrier. In the Further Notice of Proposed Rulemaking (FNPRM), which is
published elsewhere in this issue, the Commission proposes a number of
ways to modernize the information that it collects and to make the
reporting requirements more tailored to the Commission's needs.
2. Elimination of the Quarterly Large-Carrier Reports (47 CFR
43.61(b)). The Commission's rules currently require facilities-based
and facilities-resale carriers to file a quarterly traffic and revenue
report for any quarter in which such carrier's traffic exceeds one of
four thresholds specified in 47 CFR 43.61(b). The Commission adopted
this reporting requirement as a way to detect ``one-way bypass'' that
might result from international simple resale arrangements. In the
Notice of Proposed Rulemaking (NPRM), 69 FR 29676, May 25, 2004, the
Commission sought comment on whether the application of the Quarterly
Large-Carrier Reports continues to be necessary. All those filing
comments in response to the NPRM support elimination of the reports.
The Commission agrees that the Quarterly Large-Carrier Reports are no
longer needed to detect market distortions. The Commission notes that
in practice, sudden changes in international traffic flows are not
necessarily related to one-way bypass or other anti-competitive causes.
Moreover, the Commission found that the quarterly traffic information
filed by the carriers has often been subject to substantial revision
and thus has been unreliable as an indicator of changes in traffic
ratios. The Commission therefore concludes that requiring carriers to
continue to file quarterly traffic reports will serve no useful
purpose. Instead, the Commission finds that it will be sufficient to
rely on annual traffic and revenue data regarding settlement payments
and minutes, as well as on complaints by U.S. carriers, to detect and
remedy anti-competitive activity by foreign carriers, including one-way
bypass.
3. Elimination of the Quarterly Foreign-Affiliated Switched Resale
Carrier Reports (47 CFR 43.61(c)). U.S.-authorized providers of
international message telephone service (IMTS) resale that are
affiliated with a foreign carrier are required to file quarterly
traffic and revenue reports on their affiliated routes if they: (1)
Have sufficient market power at the foreign end of an international
route to affect competition adversely in the U.S. market, and (2)
collect settlement payments from U.S. carriers for traffic affiliated
in its home market. 47 CFR 43.61(c). The quarterly traffic and revenue
report arose out of carrier concerns that overseas incumbent or
monopoly telecommunications providers might use their market power to
favor their affiliates that operate as carriers in the U.S. market. The
report was intended to provide the Commission an early warning of
attempts by incumbent carriers to engage in ``price squeeze'' behavior.
In the NPRM, the Commission sought comment whether the continued
application of the Quarterly Foreign-Affiliated Switched Resale Carrier
Reports is necessary at this time. The commenters disagreed on the
continued need for this reporting requirement. The Commission, however,
has not received any complaints from U.S. carriers alleging such
predatory behavior; nor have the reports revealed any such behavior.
Furthermore, the 47 CFR 43.61(c) quarterly report is not the only way
the Commission can address concerns that the settlement rates on a
particular route remain above cost. The Commission finds that annual
traffic and revenue filings provide sufficient information and thus the
filing of the Quarterly Foreign-Affiliated Switched Resale Carrier
Reports is no longer necessary.
4. Elimination of the Circuit-Addition Report (47 CFR 63.23(e)).
Carriers that have been certified as resellers of private lines are
required to report, by March 31 of the following year, the number of
circuits they added during the year and to identify the services for
which the circuits were used. 47 CFR 63.23(e). In the NPRM, the
Commission proposed to eliminate the circuit-addition report. The only
commenter to address this issue supports elimination of the report.
Because the facilities-based carriers from which private line resellers
purchase international circuits report those circuits on their circuit-
status report, the Commission has a record that the circuits are being
used. As a result, the Commission finds that the information from the
annual circuit-addition reports does not justify the continuing burden
of the reporting requirement.
5. Elimination of the Division of Telegraph Tolls Report (47 CFR
43.53). Telegraph carriers are required file copies of all their
agreements with foreign carriers governing the division of tolls for
international telegraph traffic. 47 CFR 43.53. In the NPRM, the
Commission proposed to eliminate this filing requirement. The
Commission agrees with the commenters that the decline in the telegraph
industry has made these reports unnecessary. The volume of telegraph
traffic has declined sharply over the years as telegraph service has
largely been replaced by other means of communication, and this
reporting requirement no longer serves a useful purpose.
6. Annual Traffic and Revenue Reports. The Commission shall
continue to require carriers to file the annual traffic and revenue
reports, albeit on a streamlined basis. The Commission finds that
route-specific traffic and revenue data from the annual reports
provides it with information that it needs to develop and implement
policies to facilitate the continuing transition to competition in
international markets, to monitor compliance with rules and policies,
to gauge the effect of its decisions on competition in the
international market, and for policy discussions in bilateral meetings
and multilateral forums and for Commission participation in
international organizations. The collection of aggregate world-total
data would not be an adequate substitute for route-specific data, as it
will not provide the specific data that the Commission needs to perform
its functions. The Commission also finds that it cannot fully
understand the IMTS market without information about IMTS resale. The
Commission concludes that it needs to obtain international traffic and
revenue data information directly from the international service
providers because there are no other reliable sources of information on
international traffic and revenue that will give it the full range of
information that the Commission needs. Therefore the Commission shall
retain the annual international traffic and revenue reporting
requirements. Facilities-based

[[Page 42569]]

providers of IMTS and private line services will continue to file
traffic and revenue data for each international route on which they
provide service. Carriers providing IMTS resale services will continue
to file traffic and revenue data on a world total basis. The
Commission, however, has sought comment on proposals to streamline
these filing requirements in the FNPRM portion of the document, which
is discussed in a separate Federal Register summary.
7. Annual Circuit-Status Reports. The Commission shall continue to
require carriers to file the annual circuit-status reports, albeit on a
streamlined basis. The Commission finds that information on
international circuits continues to be essential for it to fulfill its
mission and that there is no other source for this information. The
Commission uses this data to monitor the continuing transition of
international routes to competition, to monitor compliance with
Commission rules and policies, to gauge the effect of Commission
decisions on competition in the international market and to develop
policy positions for bilateral and multilateral negotiations and for
Commission participation in international organizations. The Commission
also uses circuit-status information to ensure that carriers with
market power do not use their access to circuit capacity to engage in
any anti-competitive behavior, to analyze merger applications, to
determine whether a proposed merger might result in an anti-competitive
concentration of market power in the international transport market,
and to help monitor compliance with the international bearer circuit
regulatory fees established in section 9 of the Communications Act, 47
U.S.C. 159. Therefore, the Commission retains the requirement for
facilities-based carriers to file international circuit data for each
international route on which they provide service. The Commission,
however, has sought comment on proposals to streamline these filing
requirements in the FNPRM portion of the document, published elsewhere
in this issue.
8. Elimination of the Requirement to Report Separately Traffic for
Off-Shore U.S. Points. The Commission eliminates the requirement to
report separately for off-shore U.S. points for the annual traffic and
revenue reports and circuit-status reports. In the NPRM, the Commission
proposed to eliminate the requirement that carriers file data for
traffic or circuits between a U.S. domestic point and an off-shore U.S.
point or between off-shore U.S. points. Several commenters support the
proposal, and two commenters argue that the Commission should go
further and eliminate disaggregate reports by U.S. points entirely.
Because the Commission has not found disaggregate reporting by U.S.
points to be of substantial benefit, it cannot justify the additional
burden that disaggregate reporting requirements impose on filing
carriers. It therefore eliminates all distinctions between domestic and
off-shore U.S. points and requires carriers to file a single traffic
and revenue report aggregating traffic and revenue data for all U.S.
points and a single circuit-status report aggregating circuit data for
all for U.S. points. The Commission will therefore no longer require
separate reporting for off-shore U.S. points. Carriers should combine
the traffic and revenue data and circuit data for the off-shore U.S.
points with the data for domestic U.S. points when filing. Carriers
thus will only report traffic and revenue data and circuits status for
calls and circuits between the ``United States'' and foreign points.
The ``United States'' shall be defined as the ``several States and
Territories, the District of Columbia, and the possessions of the
United States, but does not include the Canal Zone''--the definition in
the Communications Act, 47 U.S.C. 153(58).

Paperwork Reduction Act of 1995 Analysis

9. This First Report and Order adopts new or revised information
collection requirements, subject to the Paperwork Reduction Act of 1995
(PRA). These information collection requirements will be submitted to
the Office of Management and Budget (OMB) for review under section
3507(d) of the PRA. The Commission will publish a separate document in
the Federal Register inviting comment on the new or revised information
collection requirements adopted in this document. The requirements will
not go into effect until OMB has approved them and the Commission has
published a notice announcing the effective date of the information
collection requirements. 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.''

Final Regulatory Flexibility Analysis

10. As required by the Regulatory Flexibility Act, as amended
(RFA), the Federal Communications Commission (Commission) included an
Initial Regulatory Flexibility Analysis (IRFA) concerning the possible
significant economic impact on a substantial number of small entities
of the policies and rules proposed in the Notice of Proposed Rulemaking
(NPRM) in this proceeding. The Commission sought written public comment
on the proposals in the NPRM, including comment on the IRFA. This Final
Regulatory Flexibility Analysis (FRFA) addresses the policies and rules
that the Commission adopted in the First Report and Order portion of
the decision in this proceeding. This First Report and Order retains
the annual traffic and revenue report and the annual circuit-status
report. The First Report and Order adopts some measures, as described
below, to simplify compliance with the reporting requirements but
generally does not alter either report. The Commission will consider a
number of proposals to streamline the reports and to improve the
information that carriers will provide in the Further Notice of
Proposed Rulemaking portion of this proceeding. This FRFA conforms to
the RFA.

A. Need for, and Objectives of, the First Report and Order

11. The Commission initiated this comprehensive review of the
reporting requirements imposed on U.S. carriers providing international
telecommunications services under 47 CFR 43.51, 43.61, 43.82, and
63.23(e) of the Commission's rules, to modernize and simplify those
requirements. The Commission believes that the policies and rules
adopted in the First Report and Order will improve the data filing
entities report while making it easier for carriers, both small and
large, to provide the information required by the rules.
12. In the First Report and Order, the Commission concluded that it
continues to need the traffic and revenue information the carriers now
file under 47 CFR 43.61(a) of the rules and the circuit information the
carriers file under 47 CFR 43.82. The Commission further concluded in
the First Report and Order that it no longer needs the information
provided by the large carrier quarterly reports required by 47 CFR
43.61(b), the foreign carrier affiliate quarterly report required by 47
CFR 43.61(c), the circuit-addition report required in 47 CFR 63.23(e),
or the telegraph division-of-tolls report required by 47 CFR 43.53.
13. Currently, 47 CFR 43.61 requires that all international
telecommunications carriers file an annual report of their traffic and
revenues. Under 47 CFR 43.82, facilities-based common carriers

[[Page 42570]]

providing international telecommunications services must file an annual
report on the status of their circuits. The information derived from
the international revenue and traffic report and circuit-status report
is critical in understanding the international telecommunications
market. These reports are the only source of publicly available
information of this nature.
14. The information obtained from the traffic and revenue and
circuit-status reports is used extensively by the Commission, the
industry, other government agencies, and the public. The Commission
uses the information to evaluate applications for international
facilities, track market developments and the competitiveness of each
service and geographical market to formulate rules and policies
consistent with the public interest, monitor compliance with those
rules and policies, and guard the competitive effect of its decisions
on the market. Carriers use the information to track the balance of
payments in international communications services and for market
analysis purposes. Carriers and potential entrants use the information
for, among other things, assessment of market opportunities and to
monitor competition in markets. The Commission, along with other
government agencies such as the Department of Justice and the United
States Trade Representative, use the information in merger analyses and
negotiations with foreign countries, respectively. In addition, the
information contained in the circuit-status report allows the
Commission to comply with the statutory requirements of the Omnibus
Budget Reconciliation Act of 1993.

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

15. No comments specifically addressed the IRFA.

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

16. The RFA directs agencies to provide a description of, and,
where feasible, an estimate of the number of small entities that may be
affected by the rules adopted herein.\1\ The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' \2\ In addition, the term ``small business'' has the
same meaning as the term ``small business concern'' under the Small
Business Act.\3\ A small business concern is one that: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA).\4\
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\1\ 5 U.S.C. 603(b)(3).
\2\ 5 U.S.C. 601(6).
\3\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\4\ 15 U.S.C. 632.
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17. The policies adopted in the FR&O apply to entities providing
international common carrier services pursuant to section 214 of the
Communications Act; entities providing international wireless common
carrier services under section 309 of the Act; entities providing
common carrier satellite services under section 309 of the Act; and
entities licensed to construct and operate submarine cables under the
Cable Landing License Act. The Commission has not developed a small
business size standard directed specifically toward these entities. As
described below, such entities fit within larger categories for which
the SBA has developed size standards.
1. Traffic and Revenue Report
18. The First Report and Order retains the annual traffic and
revenue report, which common carriers providing international
telecommunications services are now required to file. Such entities
include entities providing international common carrier services
pursuant to section 214 of the Communications Act and entities
providing domestic or international wireless common carrier services
under section 309 of the Act. The carriers that the First Report and
Order will require to continue to file the traffic and revenue report
are a mixture of both large and small entities. The Commission has not
developed a small business size standard directed specifically toward
these entities. However, as described below, these entities fit into
larger categories for which the SBA has developed size standards that
provide these facilities or services.
19. Facilities-based Carriers. Facilities-based providers of
international telecommunications services would fall into the larger
category of interexchange carriers. Neither the Commission nor the SBA
has developed a small business size standard specifically for providers
of interexchange services. Under SBA rules, providers of interexchange
services fall within the size standard category for Wired
Telecommunications Carriers. Under that size standard, a Wired
Telecommunications Carrier is considered a small entity if it has 1,500
or fewer employees.\5\ Census Bureau data for 2007 show that there were
3,188 firms in this category that operated for the entire year. Of this
total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these
interexchange carriers can be considered small entities.\6\ Similarly,
according to Commission data, 359 companies reported that their primary
telecommunications service activity was the provision of interexchange
services.\7\ Of these 359 companies, an estimated 317 have 1,500 or
fewer employees and 42 have more than 1,500 employees.\8\ Consequently,
the Commission estimates that the majority of interexchange service
providers are small entities that may be affected by rules adopted
pursuant to the First Report and Order.
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\5\ 13 CFR 121.201, NAICS code 517110.
\6\ U.S. Census Bureau, American FactFinder, 2007 Economic
Census, http://factfinder.census.gov, (find ``Economic Census'' and
choose ``get data.'' Then, under ``Economic Census data sets by
sector * * *,'' choose ``Information.'' Under ``Subject Series,''
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.''
Click ``Next'' and find data related to NAICS code 517110 in the
left column for ``Wired telecommunications carriers'') (last visited
March 2, 2011).
\6\ See Trends in Telephone Service at Table 5.3.
\9\ See id.
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20. In the 2009 annual traffic and revenue report, 38 facilities-
based and facilities-resale carriers reported approximately $5.8
billion in revenues from international message telephone service
(IMTS). Of these, three reported IMTS revenues of more than $1 billion,
eight reported IMTS revenues of more than $100 million, 10 reported
IMTS revenues of more than $50 million, 20 reported IMTS revenues of
more than $10 million, 25 reported IMTS revenues of more than $5
million, and 30 reported IMTS revenues of more than $1 million. Based
solely on their IMTS revenues, the majority of these carriers would be
considered non-small entities under the SBA definition.\9\
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\9\ See 13 CFR 121.201, NAICS Code at Subsector 517--
Telecommunications.
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21. The 2009 traffic and revenue report also shows that 45
facilities-based and facilities-resale carriers (including 14 who also
reported IMTS revenues) reported $683 million for international

[[Page 42571]]

private line services. Of these, four reported private line revenues of
more than $50 million, 12 reported private line revenues of more than
$10 million, 30 reported revenues of more than $1 million, 34 reported
private line revenues of more than $500,000, 41 reported revenues of
more than $100,000, while 2 reported revenues of less than $10,000.
22. The 2009 traffic and revenue report also shows that seven
carriers (including one that reported both IMTS and private line
revenues, one that reported IMTS revenues and three that reported
private line revenues) reported $51 million for international
miscellaneous services, of which two reported miscellaneous services
revenues of more than $1 million, one reported revenues of more than
$500,000, two reported revenues of more than $200,000, one reported
revenues of more than $50,000, while one reported revenues of less than
$20,000. Based on its miscellaneous services revenue, only the carrier
with revenues of less than $20,000 would be considered a small business
under the SBA definition. Based on their private line revenues, most of
these entities would be considered non-small entities under the SBA
definition.
23. IMTS Resale Carriers. Providers of IMTS resale services are
common carriers that purchase IMTS from other carriers and resell it to
their own customers. The SBA has developed a small business size
standard for the category of ``Telecommunications Resellers.'' Under
that size standard, such a business is small if it has 1,500 or fewer
employees.\10\ Census data for 2007 show that 1,523 firms provided
resale services during that year. Of that number, 1,522 operated with
fewer than 1,000 employees and one operated with more than 1,000.\11\
Thus under this category and the associated small business size
standard, the majority of these resellers can be considered small
entities. Similarly, in the 2009 traffic and revenue report, 1,232
carriers reported that they provided IMTS on a pure resale basis.\12\
Based on their IMTS resale revenues, Commission data reveals that IMTS
resale service is primarily provided by carriers that would be
considered small businesses under the SBA definition. For example, of
the 1,232 IMTS resale carriers, 644 carriers reported revenues of less
than $10,000; 1,025 had revenues less than $500,000; and 1,068 had
revenues less than $1 million.\13\ Consequently, the Commission
estimates that the majority of IMTS resellers are small entities that
may be affected by our action.
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\10\ 13 CFR 121.201, NAICS code 517911.
\11\ U.S. Census Bureau, American FactFinder, 2007 Economic
Census, http://factfinder.census.gov, (find ``Economic Census'' and
choose ``get data.'' Then, under ``Economic Census data sets by
sector * * *'' choose ``Information.'' Under ``Subject Series,''
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.''
Click ``Next'' and find data related to NAICS code 517911 in the
left column for ``Telecommunications Resellers'') (last visited
March 2, 2011).
\12\ See FCC, International Bureau, Strategic Analysis and
Negotiations Division, ``2009 International Telecommunications
Data'' at page 1-2, Statistical Findings, and Table D at page 22
(April 2011). FCC website location http://www.fcc.gov/ib/sand/mniab/traffic/.
\13\ Id.
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24. Wireless Carriers and Service Providers. Included among the
providers of IMTS resale are a number of wireless carriers that also
provide wireless telephony services domestically. The Commission
classifies these entities as providers of Commercial Mobile Radio
Services (CMRS). At present, most, if not all, providers of CMRS that
offer IMTS provide such service by purchasing IMTS from other carriers
to resell it to their customers. The Commission has not developed a
size standard specifically for CMRS providers that offer resale IMTS.
Such entities would fall within the larger category of wireless
carriers and service providers. Below, for those services subject to
auctions, the Commission notes that, as a general matter, the number of
winning bidders that qualify as small businesses at the close of an
auction does not necessarily represent the number of small businesses
currently in service. Also, the Commission does not generally track
subsequent business size unless, in the context of assignments or
transfers, unjust enrichment issues are implicated.
25. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category.\14\ Prior to that time, such firms
were within the now-superseded categories of Paging and Cellular and
Other Wireless Telecommunications.\15\ Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees.\16\ For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007
show that there were 1,383 firms that operated that year.\17\ Of those
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than
100 employees. Thus under this category and the associated small
business size standard, the majority of firms can be considered small.
Similarly, according to Commission data, 413 carriers reported that
they were engaged in the provision of wireless telephony, including
cellular service, Personal Communications Service, and Specialized
Mobile Radio Telephony services.\18\ Of these, an estimated 261 have
1,500 or fewer employees and 152 have more than 1,500 employees.\19\
Consequently, the Commission estimates that approximately half or more
of these firms can be considered small. Thus, using available data, we
estimate that the majority of wireless firms can be considered small.
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\14\ U.S. Census Bureau, 2007 NAICS Definitions: Wireless
Telecommunications Categories (except Satellite), http://www.census.gov/naics/2007/def/ND517210.HTM (last visited March 2,
2011).
\15\ U.S. Census Bureau, 2002 NAICS Definitions: Paging, http://www.census.gov/epcd/naics02/def/NDEF517.HTM (last visited March 2,
2011); U.S. Census Bureau, 2002 NAICS Definitions: Other Wireless
Telecommunications, http://www.census.gov/epcd/naics02/def/NDEF517.HTM (last visited March 2, 2011).
\16\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
\17\ U.S. Census Bureau, American FactFinder, 2007 Economic
Census, http://factfinder.census.gov, (find ``Economic Census'' and
choose ``get data.'' Then, under ``Economic Census data sets by
sector * * *,'' choose ``Information.'' Under ``Subject Series,''
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.''
Click ``Next'' and find data related to NAICS code 517210 in the
left column for ``Wireless Telecommunications Carriers (except
Satellite)'') (last visited March 2, 2011).
\18\ See Trends in Telephone Service at Table 5.3.
\19\ See id.
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26. 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.\20\ The SBA has approved
these definitions.\21\ The Commission auctioned geographic area
licenses in the WCS service. In the auction, which commenced on April
15, 1997 and closed on April 25, 1997, seven bidders won 31 licenses
that qualified as very small business entities,

[[Page 42572]]

and one bidder won one license that qualified as a small business
entity.
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\20\ Amendment of the Commission's Rules to Establish Part 27,
the Wireless Communications Service, GN Docket No. 96-228, Report
and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).
\21\ See Letter from Aida Alvarez, Administrator, SBA, to Amy
Zoslov, Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, FCC (filed Dec. 2, 1998).
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2. Circuit-Status Report
27. The First Report and Order continues to require common carriers
that provide international telecommunications services on a facilities
basis to file the annual circuit-status report. The Commission has not
developed size standards specifically addressed to such carriers, but
they fall within larger categories for which the SBA has developed size
standards.
28. Facilities-based Carriers. Facilities-based providers of
international telecommunications services fall into the larger category
of interexchange carriers. Neither the Commission nor the SBA has
developed a small business size standard specifically for providers of
interexchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer
employees.\22\ Census Bureau data for 2007 show that there were 3,188
firms in this category that operated for the entire year. Of this
total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these
interexchange carriers can be considered small entities.\23\ According
to Commission data, 359 companies reported that their primary
telecommunications service activity was the provision of interexchange
services.\24\ Of these 359 companies, an estimated 317 have 1,500 or
fewer employees and 42 have more than 1,500 employees.\25\
Consequently, the Commission estimates that the majority of
interexchange service providers are small entities that may be affected
by rules adopted in the First Report and Order.
---------------------------------------------------------------------------

\22\ 13 CFR 121.201, NAICS code 517110.
\23\ U.S. Census Bureau, American FactFinder, 2007 Economic
Census, http://factfinder.census.gov, (find ``Economic Census'' and
choose ``get data.'' Then, under ``Economic Census data sets by
sector * * *,'' choose ``Information.'' Under ``Subject Series,''
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.''
Click ``Next'' and find data related to NAICS code 517110 in the
left column for ``Wired telecommunications carriers'') (last visited
March 2, 2011).
\24\ See Trends in Telephone Service at Table 5.3.
\25\ See id.
---------------------------------------------------------------------------

29. According to the 2009 circuit-status report, 75 U.S.
international facility-based carriers filed information pursuant to 47
CFR 43.82.\26\ The report does not report employee or revenue
statistics, so it is impossible for us to determine how many carriers
could be considered small entities. Each of the 75 carriers, however,
reported a small amount of capacity. Although it is possible that a
carrier could report a small amount of capacity and have significant
revenues, we will consider those 75 carriers to be small entities at
this time. In addition, of the 79 carriers that filed an annual
circuit-status report for 2009, there were at least four carriers that
reported no circuits owned or in use at the end of 2009.\27\
---------------------------------------------------------------------------

\26\ See International Bureau Releases 2009 Year-End Circuit
Status Report for U.S. Facilities-Based International Carriers;
Capacity Use Shows Modest Growth, rel. Dec. 21, 2010. The report is
available on the FCC website at http://www.fcc.gov/ib/pd/pf/csmanual.html.
\27\ Id.
---------------------------------------------------------------------------

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

30. The First Report and Order retains the annual traffic and
revenue report and the annual circuit-status report because the
collection and public reporting of this information continues to be
necessary and in the public interest. Because carriers currently are
required to file the 47 CFR 43.61 annual traffic and revenue report and
the 47 CFR 43.82 annual circuit-status report, the decision to retain
those reports will not impose an additional significant economic burden
on small carriers. Similarly, the decision to retain the reporting of
IMTS and international private lines on a route-by-route basis
continues the requirement found in 47 CFR 43.61, and therefore will not
impose any significant additional burden on small carriers.
31. The decision in the First Report and Order to no longer require
carriers to report separately their traffic and revenues for traffic
between the conterminous 48 states and off-shore U.S. points will
reduce the burden on carriers large and small. The First Report and
Order recognizes that the Commission has integrated rates for off-shore
U.S. points into the domestic rate structure. As a result, such traffic
is no longer considered to be international and, thus, need not be
reported in an international traffic and revenue report. Similarly, the
First Report and Order no longer requires carriers to separately report
their international traffic to or from such off-shore points from or to
foreign points. Rather, the Commission concluded that such traffic
should be combined with the carriers'' traffic and revenues to and from
the conterminous 48 states. As a result, this decision will also not
impose any significant additional burden on small carriers.
32. The Commission's decision to eliminate the current Large-
Carrier Quarterly Report in 47 CFR 43.61(b) will reduce the burden on
those large carriers that are now required to file the report. Because
the quarterly reporting requirement was limited to large, dominant
facilities-based and facilities-resale international carriers, the
elimination of the report has no impact on small carriers. Similarly,
the decision in the FR&O to eliminate the Foreign-Affiliated Carrier
Quarterly Report in 47 CFR 43.61(c) will reduce the burden on the
mostly, if not exclusively, large, dominant U.S. carriers that are now
required to file the report. The current reporting requirement applies
to U.S.-authorized providers of IMTS resale that are affiliated with a
foreign telecommunications provider that (1) has sufficient market
power in its home market that it could distort competition in the U.S.
market and (2) collects money from U.S. carriers for traffic between
the United States and its home market.
33. The Commission's decision to eliminate the circuit-addition
report under 47 CFR 63.23(e) and the telegraph division of tolls report
under 47 CFR 43.51 will reduce the burden on large and small carriers.
As such, it will not impose any significant additional burdens on small
businesses.

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

34. 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 rule for small entities; (3) the use
of performance, rather than design, standards; and (4) an exemption
from coverage or the rule, or any part thereof, for small entities.''
\28\
---------------------------------------------------------------------------

\28\ 5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

35. The First Report and Order retains the 47 CFR 43.61(a) traffic
and revenue and the 47 CFR 43.82 annual circuit-status reports. That
decision does not increase the burden of the reporting requirement on
either small or large carriers. Further, the Commission's decision to
eliminate the requirement that carriers report separately their traffic
between the conterminous 48

[[Page 42573]]

states and U.S. off-shore points or report separately the traffic
between U.S. off-shore points and foreign points will reduce the burden
of the annual traffic and revenue report and the circuit-status reports
for both large and small carriers. Further, the decision to eliminate
the large-carrier report under 47 CFR 43.61(b), the foreign-affiliated-
carrier quarterly reports under 47 CFR 43.61(c), the circuit-addition
report under 47 CFR 63.23(e), and the telegraph division-of-tolls
report under 47 CFR 43.51 will also reduce the burden of the
international reporting requirements on both large and small carriers.
As such, we believe that the policies adopted in the First Report and
Order will not significantly increase any burdens on small carriers.
Because this First Report and Order does not adopt additional
regulations for service providers, the Commission does not need to
consider any alternative approaches that would minimize the economic
impact of the reporting requirements on small businesses.

Report to Congress

36. The Commission will send a copy of this First Report and Order
and Further Notice of Proposed Rulemaking, including this FRFA, in a
report to be sent to Congress and the Government Accountability Office
pursuant to the Congressional review Act.\29\ In addition, the
Commission will send a copy of the First Report and Order and Further
Notice of Proposed Rulemaking, including a copy of this FRFA, to the
Chief Counsel for Advocacy of the SBA. A copy of the First Report and
Order and Further Notice of Proposed Rulemaking and FRFA (or summaries
thereof) will also be published in the Federal Register.\30\
---------------------------------------------------------------------------

\29\ See 5 U.S.C. 801(a)(1)(A).
\30\ See 5 U.S.C. 604(b).
---------------------------------------------------------------------------

Ordering Clauses

37. Accordingly, it is ordered that, pursuant to sections 1, 4(i)-
4(j), 11, 201-205, 211, 214, 219, 220, 303(r), 309 and 403 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-154(j),
161, 201-205, 211, 214, 219-220, 303(r), 309, 403, the policies, rules
and requirements discussed in this Report and Order are adopted and
Parts 43 and 63 of the Commission's rules, 47 CFR parts 43 and 63 are
amended as set forth below.
38. It is further ordered that the Motion for Leave to File Reply
Comments One Day Late filed by Kelley Drye & Warren LLP is granted.
39. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration in accordance with section 603(a) of the
Regulatory Flexibility Act, 5 U.S.C. 601 et seq.
40. It is further ordered that the Commission shall send a copy of
this First Report and Order in a report to be sent to Congress and the
General Accounting Office pursuant to the Congressional Review Act, see
5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 43 and 63

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

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR parts 43 and 63 as follows:

PART 43--REPORTS OF COMMUNICATION COMMON CARRIERS, PROVIDERS OF
INTERNATIONAL INTERCONNECTED VOICE OVER INTERNET PROTOCOL SERVICES
AND CERTAIN AFFILIATES

0
1. The authority citation for part 43 continues to read as follows:

Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub.
L. 104-104, sec. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended
unless otherwise noted. 47 U.S.C. 211, 219, 220 as amended.

Sec. 43.53 [Removed]

0
2. Remove Sec. 43.53.

0
3. Section 43.61 is amended by revising paragraph (a) introductory
text, removing and reserving paragraph (b), and removing paragraph (c).
The revision reads as follows:

Sec. 43.61 Reports of international telecommunications traffic.

(a) Each common carrier engaged in providing international
telecommunications service between the United States (as defined in the
Communications Act, as amended, 47 U.S.C. 153) and any country or point
outside that area shall file a report with the Commission not later
than July 31 of each year for service actually provided in the
preceding calendar year.
* * * * *

0
4. Sec. 43.82 is amended by revising paragraph (a) to read as follows:

Sec. 43.82 International circuit status reports.

(a) Each facilities-based common carrier engaged in providing
international telecommunications service between the United States (as
defined in the Communications Act, as amended, 47 U.S.C. 153) and any
country or point outside that area shall file a circuit-status report
with the Chief, International Bureau, not later than March 31 each year
showing the status of its circuits used to provide international
services as of December 31 of the preceding calendar year.
* * * * *

PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE,
REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND
GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS

0
5. The authority citation for part 63 continues to read as follows:

Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218,
403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless
otherwise noted.

Sec. 63.23 [Amended]

0
6. Section 63.23 is amended by removing paragraph (e) and redesignating
paragraph (f) as paragraph (e).

[FR Doc. 2011-18156 Filed 7-18-11; 8:45 am]
BILLING CODE 6712-01-P