[Federal Register Volume 76, Number 251 (Friday, December 30, 2011)]
[Proposed Rules]
[Pages 82240-82264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31160]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 14
[CG Docket No. 10-213; WT Docket No. 96-198; CG Docket No. 10-145; FCC
11-151]
Implementing the Provisions of the Communications Act of 1934, as
Enacted by the Twenty-First Century Communications and Video
Accessibility Act of 2010
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission seeks comment on the
implementation of certain provisions in sections 716, 717, and 718 of
the Twenty-First Century Communications and Video Accessibility Act of
2010 (CVAA), the most significant piece of accessibility legislation
since the passage of the Americans with Disabilities Act in 1990.
Specifically, this document seeks comment on whether to adopt a
permanent exemption for small entities that provide advanced
communications services (ACS). The document also seeks comment on
implementing section 718 of the Act which requires Internet browsers
built into mobile phones to be accessible to and usable by persons who
are blind or have a visual impairment, unless doing so is unachievable.
This inquiry includes the recordkeeping and enforcement requirements
related to section 718. People with disabilities have often faced
technical challenges associated with the use of Internet browsers,
video conferencing services, and the accessibility of information
content. The CVAA attempts to bring existing communications laws
protecting people with disabilities in line with 21st Century
technologies while providing flexibility to the industry by allowing
for new and innovative ways to meet the needs of people with
disabilities. These actions will promote rapid deployment of and
universal access to broadband services for all Americans across the
country, which will in turn stimulate economic growth and provide
opportunity.
DATES: Submit comments on or before February 13, 2012, and reply
comments on or before March 14, 2012. Written comments on the proposed
information collection requirements, subject to the Paperwork Reduction
Act (PRA) of 1995, Public Law 104-13, should be submitted on or before
February 28, 2012.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554. You may submit comments, identified by FCC 11-
151, or by CG Docket Nos. 10-213 and 10-145, and WT Docket No. 96-198,
by any of the following methods:
Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-
0530 or TTY: (202) 418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Rosaline Crawford, Consumer and
Governmental Affairs Bureau, at (202) 418-2075 or
[email protected]; Brian Regan, Wireless Telecommunications
Bureau, at (202) 418-2849 or [email protected]; or Janet Sievert,
Enforcement Bureau, at (202) 418-1362 or [email protected]. For
additional information concerning the Paperwork Reduction Act
information collection requirements contained in this document, contact
Cathy Williams, Federal Communications Commission, at (202) 418-2918,
or via email [email protected].
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Further Notice of Proposed Rulemaking (FNPRM), document FCC 11-151,
adopted October 7, 2011, and released October 7, 2011, in CG Docket
Nos. 10-213 and 10-145, and WT Docket No. 96-198. Simultaneously with
the FNPRM, the Commission issued a Report and Order in CG Docket Nos.
10-213 and 10-145, and WT Docket No. 96-198 (``Accessibility Report and
Order''). The full text of FCC 11-151 and copies of any subsequently
filed documents in this matter will be available for public inspection
and copying during regular business hours at the FCC Reference
Information Center, Portals II, 445 12th Street SW., Room CY-A257,
Washington, DC 20554. FCC 11-151 and copies of subsequently filed
documents in this matter may also be purchased from the Commission's
duplicating contractor at Portals II, 445 12th Street SW., Room CY-
B402, Washington, DC 20554. Customers may contact the Commission's
duplicating contractor at its web site, www.bcpiweb.com, or by calling
1-(800) 378-3160. FCC-11-151 can also be downloaded in Word or Portable
Document Format (PDF) at: http://hraunfoss.fcc.gov/edocs_public/attachment/FCC-11-151A1doc.
Pursuant to 47 CFR 1.415 and 1.419, interested parties may file
comments and reply comments on or before the dates indicated in the
DATES section of this document. Comments may be filed using: (1) The
Commission's Electronic Comment Filing System (ECFS); or (2) by filing
paper copies. All filings should reference the docket numbers of this
proceeding, CG Docket No's. 10-213 and 10-145, and WT Docket No. 96-
198.
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions provided on the Web site
for submitting comments. In completing the transmittal screen, ECFS
filers should include their full name, U.S. Postal Service mailing
address, and CG Docket No.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. Filings can be
[[Page 82241]]
sent by hand or messenger delivery, by commercial overnight courier, or
by first class or overnight U.S. Postal Service mail. All filings must
be addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th Street SW., Room TW-A325, Washington, DC 20554. The filing
hours are 8 a.m. to 7 p.m. All hand deliveries must be held together
with rubber bands or fasteners. Any envelopes or boxes must be disposed
of before entering the building.
Commercial overnight mail (other than U.S. Postal Service Express
Mail and Priority Mail) must be sent to 9300 East Hampton Drive,
Capitol Heights, MD 20743. The complete text is also available on the
Commission's Web site at http://wireless.fcc.gov/edocs_public/attachment/FCC-11-151A1doc. This full text may also be downloaded at:
http://wireless.fcc.gov/releases.html. In addition, parties must serve
one copy of each pleading with the Commission's duplicating contractor,
Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402,
Washington, DC 20554, or via email to [email protected].
To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an email to [email protected] or call the Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), or (202) 418-0432 (TTY).
Document FCC 11-151 contains proposed information collection
requirements subject to the PRA. It will be submitted to the Office of
Management and Budget (OMB) for review under section 3507 of the PRA.
OMB, the general public, and other Federal agencies are invited to
comment on the proposed information collection requirements contained
in this document. PRA comments should be submitted to Cathy Williams,
Federal Communications Commission via email at [email protected] and
[email protected], and to Nicholas A. Fraser, Office of Management
and Budget, via fax at (202) 395-5167, or via email to [email protected].
To view a copy of this information collection request (ICR)
submitted to OMB: (1) Go to the web page http://www.reginfo.gov/public/do/PRAMain, (2) look for the section of the Web page called ``Currently
Under Review,'' (3) click on the downward-pointing arrow in the
``Select Agency'' box below the ``Currently Under Review'' heading, (4)
select ``Federal Communications Commission'' from the list of agencies
presented in the ``Select Agency'' box, (5) click the ``Submit'' button
to the right of the ``Select Agency'' box, (6) when the list of FCC
ICRs currently under review appears, look for the Title of this ICR and
then click on the ICR Reference Number. A copy of the FCC submission to
OMB will be displayed.
Initial Paperwork Reduction Act of 1995 Analysis
The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and OMB to comment on the
proposed information collection requirements contained in this
document, as required by the PRA. Public and agency comments are due
February 28, 2012. Comments should address: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
burden estimates; (c) ways to enhance the quality, utility, and clarity
of the information collected; (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology; and (e) ways to further reduce the information collection
burden on small business concerns with fewer than 25 employees. In
addition, pursuant to the Small Business Paperwork Relief Act of 2002,
Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks
specific comment on how it may ``further reduce the information
collection burden for small business concerns with fewer than 25
employees.''
OMB Control Number: 3060-XXXX.
Title: Accessible Telecommunications and Advanced Communications
Services and Equipment FNPRM.
Form No.: N/A.
Type of Review: New collection.
Respondents: Individuals or households; Businesses or other for-
profit entities; Not-for-profit Institutions.
Number of Respondents and Responses: 10,642 respondents and 37,917
responses.
Estimated Time per Response: .50 to 40 hours.
Frequency of Response: Annual, one time, and on occasion reporting
requirements; Recordkeeping requirement; Third-party disclosure
requirement.
Obligation to Respond: Mandatory. Statutory authority for this
information collection is contained in sections 1-4, 255, 303(r), 403,
503, 716, 717, and 718 of the Act, 47 U.S.C. 151-154, 255, 303(r), 403,
503, 617, 618, and 619.
Total Annual Burden: 272,168 hours.
Total Annual Costs: $236,814.
Nature and Extent of Confidentiality: Confidentiality is an issue
to the extent that individuals and households provide personally
identifiable information, which is covered under the FCC's system of
records notice (SORN), FCC/CGB-1, ``Informal Complaints and
Inquiries.'' As required by the Privacy Act, 5 U.S.C. 552a, the
Commission also published a SORN, FCC/CGB-1 ``Informal Complaints and
Inquiries,'' in the Federal Register on December 15, 2009 (74 FR 66356)
which became effective on January 25, 2010.
In addition, upon the service of an informal or formal complaint, a
service provider or equipment manufacturer must produce to the
Commission, upon request, records covered by 47 CFR 14.31 of the
Commission's rules and may assert a statutory request for
confidentiality for these records. All other information submitted to
the Commission pursuant to subpart D of part 14 of the Commission's
rules or to any other request by the Commission may be submitted
pursuant to a request for confidentiality in accordance with 47 CFR
0.459 of the Commission's rules.
Privacy Impact Assessment: Yes. The Privacy Impact Assessment (PIA)
was completed on June 28, 2007. It may be reviewed at: http://www.fcc.gov/omd/privacyact/Privacy_Impact_Assessment.html. The
Commission is in the process of updating the PIA to incorporate various
revisions made to the SORN.
Note: The Commission will prepare a revision to the SORN and PIA
to cover the PII collected related to this information collection,
as required by OMB's Memorandum M-03-22 (September 26, 2003) and by
the Privacy Act, 5 U.S.C. 552a.
Needs and Uses: In document FCC 11-151, the Commission released an
FNPRM seeking comment on the implementation of sections 716, 717, and
718 of the Communications Act (Act), as amended, which were added to
the Act by the ``Twenty-First Century Communications and Video
Accessibility Act of 2010'' (CVAA). See Public Law 111-260, Sec. 104.
Section 716 of the Act requires providers of advanced communications
services and manufacturers of equipment used for advanced
communications services to make their services and equipment accessible
to individuals with
[[Page 82242]]
disabilities, unless doing so is not achievable. See 47 U.S.C. 617.
Section 717 of the Act establishes new recordkeeping requirements and
enforcement procedures for service providers and equipment
manufacturers that are subject to sections 255, 716, and 718 of the
Act. See 47 U.S.C. 617. Section 255 requires telecommunications and
interconnected voice over Internet protocol (VoIP) services and
equipment to be accessible, if readily achievable. Section 718 of the
Act requires web browsers included on mobile phones to be accessible to
and usable by individuals who are blind or have a visual impairment,
unless doing so is not achievable. See 47 U.S.C. 619.
Specifically, the Commission seeks comment on the adoption of a
permanent exemption for small entities, the meaning of
``interoperable'' video conferencing services, the accessibility of
information content, the adoption of performance objectives and safe
harbors, and related issues. In addition, the Commission proposes rules
to implement section 718 of the Act.
For purposes of the FNPRM information collection analysis, the
Commission assumes that the FNPRM proceeding will result in the
adoption of a permanent small entity exemption for accessibility
obligations under section 716 of the Act that is identical to the
temporary small entity exemption adopted in the Accessibility Report
and Order, 47 CFR 14.4 of the Commission's rules, that will expire on
October 8, 2013. The adoption of such a small entity exemption rule may
impact the following possible related information collection
requirements:
(a) Petitions for waivers from the accessibility obligations of
section 716 of the Act and, in effect, waivers from the recordkeeping
requirements and enforcement procedures of section 717 of the Act that
may be filed by advanced communications service providers and equipment
manufacturers. Waiver requests may be submitted for individual or class
offerings of services or equipment which are designed for multiple
purposes, but are designed primarily for purposes other than using
advanced communications services. All such waiver petitions will be put
on public notice for comments and oppositions.
(b) The requirement for service providers and equipment
manufacturers that are subject to sections 255, 716, or 718 of the Act
to maintain records of the following: (1) Their efforts to consult with
people with disabilities; (2) descriptions of the accessibility
features of their products and services; and (3) information about the
compatibility of their products with peripheral devices or specialized
customer premises equipment commonly used by individuals with
disabilities to achieve access.
(c) The requirement for an officer of service providers and
equipment manufacturers that are subject to sections 255, 716, or 718
of the Act to certify annually to the Commission that records are kept
in accordance with the recordkeeping requirements. The certification
must also identify the name and contact details of the person or
persons within the company that are authorized to resolve accessibility
complaints, and the agent designated for service of process. The
certification must be updated when necessary to keep the contact
information current.
(d) The filing of formal and informal complaints alleging
violations of sections 255, 716, or 718 of the Act. As a prerequisite
to filing an informal complaint, complainants must first request
dispute assistance from the Consumer and Governmental Affairs Bureau's
Disability Rights Office.
Summary
I. Introduction and Overview
1. In this FNPRM, we seek comment on whether to adopt a permanent
exemption for small entities and, if so, whether it should be based on
the temporary exemption or some other criteria. We seek comment on the
impact of a permanent exemption on providers of ACS and manufacturers
of ACS equipment, including the compliance costs for small entities
absent a permanent exemption. We also seek comment on the impact of a
permanent exemption on consumers, including on the availability of
accessible ACS and ACS equipment and on the accessibility of new ACS
innovations or ACS equipment innovations. We propose to continually
monitor the impact of any small entity exemption, including whether it
promotes innovation or whether it has unanticipated negative
consequences on the accessibility of ACS.
2. We propose to clarify that Internet browsers are software
generally subject to the requirements of section 716, with the
exception of the discrete category of Internet browsers built into
mobile phones used by individuals who are blind or have a visual
impairment, which Congress singled out for particular treatment in
section 718. We seek to further develop the record on the technical
challenges associated with ensuring that Internet browsers built into
mobile phones and those browsers incorporated into computers, laptops,
tablets, and devices other than mobile phones are accessible to and
usable by persons with disabilities.
3. With regard to section 718, which is not effective until 2013,
we seek comment on the best way(s) to implement section 718 so as to
afford affected manufacturers and service providers the opportunity to
provide input at the outset, as well as to make the necessary
arrangements to achieve compliance at such time as the provisions of
section 718 become effective.
4. To ensure that we capture all the equipment Congress intended to
fall within the scope of section 716, we seek comment on alternative
proposed definitions of ``interoperable'' as used in the term
``interoperable video conferencing.'' Additionally, we ask whether we
should require that video mail service be accessible to individuals
with disabilities when provided along with a video conferencing
service. We seek to further develop the record regarding specific
activities that impair or impede the accessibility of information
content. We also seek comment on whether performance objectives should
include certain testable criteria. In addition, we seek comment on
whether certain safe harbor technical standards will allow the various
components in the ACS architecture to work together more efficiently,
thereby facilitating accessibility. We also seek comment on the
definition of ``electronically mediated services,'' the extent to which
electronically mediated services are covered under section 716, and how
they can be used to transform ACS into an accessible form.
A. Small Entity Exemption
5. As we explained in the Accessibility Report and Order, section
716(h)(2) of the Act authorizes the Commission to exempt small entities
from the requirements of section 716, and as an effect, the concomitant
obligations of section 717. The exemption relieves from section 716
small entities that may lack the legal, technical, or financial ability
to incorporate accessibility features, conduct an achievability
analysis, or comply with the section 717 recordkeeping and
certification requirements. In the Accessibility Report and Order, we
found the record insufficient to adopt a permanent exemption or to
adopt the criteria to be used to determine which small entities to
exempt. Instead, we exercised our authority to temporarily exempt all
manufacturers of ACS equipment and providers of ACS that are small
business
[[Page 82243]]
concerns under applicable SBA rules and size standards. The temporary
exemption will expire on the earlier of: (1) the effective date of
small entity exemption rules adopted pursuant to the FNPRM; or (2)
October 8, 2013.
6. We first seek comment on whether to permanently exempt from the
obligations of section 716, manufacturers of ACS equipment and
providers of ACS that qualify as small business concerns under the
SBA's rules and size standards and, if so whether to utilize the size
standards for the primary industry in which they are engaged under the
SBA's rules. The SBA criteria were established for the purpose of
determining eligibility for SBA small business loans. Are these same
criteria appropriate for the purpose of relieving covered entities from
the obligations associated with achievability analyses, recordkeeping,
and certifications? If these size criteria are not appropriate for a
permanent exemption, what are the appropriate size criteria? Are there
other criteria that should form the basis of a permanent exemption?
7. As explained in the Accessibility Report and Order, small
business concerns under the SBA's rules must meet the SBA size standard
for six-digit NAICS codes for the industry in which the concern is
primarily engaged. To determine an entity's primary industry, the SBA
``considers the distribution of receipts, employees and costs of doing
business among the different industries in which business operations
occurred for the most recently completed fiscal year. SBA may also
consider other factors, such as the distribution of patents, contract
awards, and assets.'' We seek comment on the applicability of this rule
for the permanent small entity exemption.
8. We seek comment on the applicability of the SBA definition of
``business concern.'' Under SBA's rules, a business concern is an
``entity organized for profit, with a place of business located in the
United States, and which operates primarily within the United States or
which makes a significant contribution to the U.S. economy through
payment of taxes or use of American products, materials or labor.'' We
also seek comment on the applicability of other SBA rules for
determining whether a business qualifies as a small business concern,
including rules for determining annual receipts or employees and
affiliation between businesses.
9. We also seek comment on alternative size standards that the
Commission has adopted in other contexts. In establishing eligibility
for spectrum bidding credits, the Commission has adopted alternative
size standards for ``very small'' and ``small'' businesses. The
Commission has defined ``very small'' businesses for these purposes as
entities that, along with affiliates, have average gross revenues over
the three preceding years of either $3 million or less, or $15 million
or less, depending on the service. The Commission has defined ``small''
businesses in this context as entities that, along with affiliates,
have average gross revenues over the three preceding years of either
$15 million or less, or $40 million or less, depending on the service.
The Commission has also adopted detailed rules for determining
affiliation between an entity claiming to be a small business and other
entities. Finally, in at least one instance, the Commission defined a
small business in the spectrum auction context as an entity that, along
with its affiliates, has $6 million or less in net worth and no more
than $2 million in annual profits (after federal income tax and
excluding carry over losses) each year for the previous two years. We
seek comment on whether these alternatives--in whole, in part, or in
combination--should form the basis for a permanent small entity
exemption from the requirements of section 716.
10. The Commission has also used different size standards to define
small cable companies and small cable systems, and the Act includes a
definition of small cable system operators. The Commission has defined
small cable companies as a cable company serving 400,000 or fewer
subscribers nationwide, and small cable systems as a cable system
serving 15,000 or fewer subscribers. The Act defines small cable system
operators as ``a cable operator that, directly or through an affiliate,
serves in the aggregate fewer than 1 percent of all subscribers in the
United States and is not affiliated with any entity or entities whose
gross annual revenues in the aggregate exceed $250,000,000.'' We seek
comment on whether these alternatives--in whole, in part, or in
combination--should form the basis for a permanent small entity
exemption from the requirements of section 716.
11. In addition, we seek comment on any other criteria that might
form all or part of a permanent small entity exemption. For example,
the SBA primarily uses two measures to determine business size--the
maximum number of employees or maximum annual receipts of a business
concern--but it has also applied other measures that represent the
magnitude of operations of a business within an industry, including
``total assets'' held by an entity and the ``net worth'' and ``net
income'' for an entity. Does an exemption based on some criterion other
than employee count or revenues better meet Congressional intent?
Commenters are encouraged to explain fully any alternative--including
the alternative of adopting no exemption for small entities--and to
specifically support any alternative criteria proffered, including by
demonstrating the anticipated impact on consumers and small entities.
12. We also seek comment on whether to limit the exemption to only
the equipment or service that is designed while an entity meets the
requirements of any small business exemption we may adopt. If an entity
offers for sale a new version, update or other iteration of the
equipment or service, we seek comment on whether the update
automatically should be covered by the exemption or whether the
exemption should turn on whether the entity was still capable of
meeting the exemption during the design phase of the new version,
iteration, or update.
13. We seek comment on whether to make a permanent small entity
exemption self-executing. If self-executing, entities would be able to
raise the exemption during an enforcement proceeding but would
otherwise not be required to formally seek the exemption before the
Commission. In this scenario, the entity seeking the exemption would be
required to determine on its own whether it qualifies as a small
business concern.
14. We seek comment on the impact of a permanent exemption on
providers of ACS, manufacturers of ACS equipment, and consumers. What
percentage of, or which non-interconnected VoIP providers, wireline or
wireless service providers, electronic messaging providers, and ACS
equipment manufacturers would qualify as small business concerns under
each size standard? Conversely, what percentage of or which providers
of ACS or manufacturers of equipment used for ACS are not small
business concerns under each size standard? For each ACS and ACS
equipment market segment, what percentage of the market is served by
entities that are not exempt using each size standard?
15. We seek comment on the compliance costs that ACS providers and
ACS equipment manufacturers would incur absent a permanent exemption.
What would the costs be for compliance with section 716 and section 717
across different providers of ACS and ACS equipment manufacturers if we
decline to adopt any permanent
[[Page 82244]]
exemption or decline to make the temporary exemption permanent? In
particular, what are the costs of conducting an achievability analysis,
recordkeeping, and providing certifications?
16. We seek comment generally on the impact of a small business
exemption on consumers. Are there ACS or ACS equipment that may
significantly benefit people with disabilities that are provided or
manufactured by entities that might be exempt? If so, what are the
services or equipment or the types of services or equipment, and how
would the exemption impact people with disabilities? Would a permanent
exemption disproportionately impact people with disabilities in rural
areas versus urban or suburban areas? How would a permanent exemption
impact people with disabilities living on tribal lands? To what extent
would a permanent exemption impact the ability of people with
disabilities to access new ACS innovations or ACS equipment
innovations? Will a permanent exemption have a greater impact on the
accessibility of some segments of ACS or ACS equipment than others?
17. We intend to monitor the impact of any exemption, including
whether it is promoting innovation as Congress intended or whether it
is having unanticipated negative consequences on accessibility of ACS.
While we propose not to time limit any exemption, we retain the ability
to modify or repeal the exemption if doing so would serve the public
interest and is consistent with Congressional intent. We seek comment
on these proposals.
B. Section 718 Implementation
18. Under section 718, a mobile phone manufacturer that includes a
browser, or a mobile phone service provider that arranges for a browser
to be included on a mobile phone, must ensure that the browser
functions are accessible to and usable by individuals who are blind or
have a visual impairment, unless doing so is not achievable. Congress
provided that the effective date for these requirements is three years
after the enactment of the CVAA, i.e., October 8, 2013.
19. In enacting section 718, we believe that Congress carved out an
exception to section 716 and delayed the effective date to address a
special class of browsers for a specific subset of the disabilities
community because of the unique challenges of achieving non-visually
accessible solutions in a mobile phone and the relative youth of
accessible development for mobile platforms. This technical complexity
arises because three accessibility technologies, often developed by
different parties, must be synchronized effectively together for a
browser to be accessible to a blind user of a mobile phone: (1) An
accessibility API of the operating system; (2) the implementation of
that API by the browser; and (3) its implementation by a screen reader.
Because non-visual accessibility is generally the most technically
challenging form of accessibility to accomplish, an accessibility API
is needed to render the underlying meaning of key elements of a
graphical user interface in an alternate, non-visual form, such as
synthetic speech or refreshable Braille. For example, while Microsoft
has developed Microsoft Active Accessibility (MSAA), the dominant
accessibility API on Windows desktop computers, it has not yet defined
and deployed an accessibility API for the current Windows phone
platform that can be utilized by browser and screen reader developers
for that platform. Even after an API becomes available, a significant
process of coordination, testing, and refinement is needed to ensure
that the browser/server and screen reader/client components can
interact in a comprehensive and robust manner.
20. Additional lead-time must also be built-in as this kind of
technical development and coordination is needed on each mobile
platform. Present technological trends have resulted in relatively
short generations of mobile platforms, each benefiting from increasing
miniaturization of hardware components and increased bandwidth for
transmitting data to and from the cloud. Experimentation and innovation
with new ways of maximizing the productivity of mobile platforms, given
these technological trends, has made accessibility coordination
difficult. Finally, additional challenges are presented by the
technical limitations posed by mobile platforms (lower memory capacity,
low-bandwidth constraints, smaller screens) coupled with the fact that
web content often has to be specially formatted to run on mobile
platforms.
21. In the context of discussing the development of accessible
mobile phone options for persons who are blind, deaf-blind, or have low
vision, the industry has acknowledged the technological shortcomings in
the ability of both hardware and software to incorporate accessibility
features in mobile phones. Specifically, TIA has indicated that ``[not]
all mobile devices can support the additional fundamental components
needed to provide a full screen reader feature; there may be
limitations in the software platform or limitations in the accompanying
hardware, e.g., processing power, memory limitations.'' TIA also
indicated that more advanced accessibility features are not easily
integrated and require the development of specific software codes for
each feature on each device. Sprint, however, asserts that over time,
mobile phones will eventually evolve like personal computers have, from
``out-of-the-box'' systems to today's dynamic, highly customizable
systems, as mobile device performance metrics such as processing speed,
power, and memory capacity improve. In short, as mobile device
technologies continue to evolve over time, corresponding improvements
in hardware and software will improve accessibility in the future.
22. We seek comment on our proposed clarification that Congress
added section 718 as an exception to the general coverage of Internet
browsers as software subject to the requirements of section 716 for
Internet browsers built in or installed on mobile phones used by
individuals who are blind or have a visual impairment because of the
unique challenges associated with achieving mobile access for this
particular community. We also seek comment on the best way(s) to
implement section 718, so as to afford affected manufacturers and
service providers the opportunity to provide input at the outset, as
well as to make the necessary arrangements to achieve compliance by the
time the provisions go into effect.
23. We seek further comment on Code Factory's recommendation that
manufacturers and operating system developers develop an accessibility
API to foster the incorporation of screen readers into mobile platforms
across different phones, which would render the web browser and other
mobile phone functions accessible to individuals who are blind or
visually impaired. Would an accessibility API simplify the process for
developing accessible screen readers for mobile phones and if so,
should there be a separate API for each operating system that supports
a browser? Is there a standard-setting body to develop such APIs or
would such a process have to be driven by the manufacturers of mobile
operating system software? What are the technical challenges, for both
software developers and manufacturers, involved in developing an
accessibility API?
24. What are the specific technical challenges involved in
developing screen reader software applications for each mobile platform
(e.g., iPhone,
[[Page 82245]]
Android, Windows Mobile)? What security questions are raised by the use
of screen readers? Are there specific security risks posed to operating
systems by the presence of screen readers? What types of technical
support/customer service will mobile phone operators need to provide to
ensure initial and continued accessibility in browsers that are built
into mobile phones? Are there steps the Commission could take to
facilitate effective, efficient, and achievable accessibility
solutions?
25. We seek to better understand these technical complexities and
how we can encourage effective collaboration among the service
providers, and the manufacturers of end user devices, the operating
system, the browser, screen readers and other stakeholders. We
particularly welcome input on how the Commission can facilitate the
development of solutions to the technical challenges associated with
ensuring access to Internet browsers in mobile phones.
26. With respect to equipment and services covered by section 716,
the Accessibility Report and Order gradually phases in obligations of
covered entities with full compliance required on October 8, 2013 in
order to encourage covered entities to implement accessibility features
early in product development cycles, to take into account the
complexity of these regulations, and to temper our regulations' effect
on previously unregulated entities. We found this approach to be
consistent with Commission precedent where we have utilized phase-in
periods in similarly complex rulemakings. As we have stated above, we
believe that Congress drafted section 718 as a separate provision from
section 716 to emphasize the importance of ensuring access to mobile
browsers for people who are blind or visually impaired because of the
unique technical challenges associated with ensuring effective
interaction between browsers and screen readers operating over a mobile
platform. Given these complex technical issues, we seek comment on what
steps we should take to ensure that the mobile phone industry will be
prepared to implement accessibility features when section 718 becomes
effective on October 8, 2013.
C. Interoperable Video Conferencing Services
1. Meaning of Interoperable
27. In the Accessibility NPRM, the Commission asked how to define
``interoperable'' in a manner that is faithful to both the statutory
language and the broader purposes of the CVAA, to ensure that ``such
services may, by themselves, be accessibility solutions'' and ``that
individuals with disabilities are able to access and control these
services'' as Congress intended. Many commenters appear to consider
``inter-platform, inter-network, and inter-provider'' as requisite
characteristics of interoperability. ITI suggests that
``interoperability between platforms is not currently achievable,'' but
that Congress recognized that some forms of accessibility will take
time and that ``[t]his is an example of such a situation.'' We are
concerned that this proposed definition would exclude virtually all
existing video conferencing services and equipment from the
accessibility requirements of section 716, which we believe would be
contrary to Congressional intent.
28. We believe that interoperability is a characteristic of
usability for many individuals who are deaf or hard of hearing and for
whom video conferencing services are, by themselves, accessibility
solutions. We also agree with Consumer Groups that ``[w]ithout
interoperability, communication networks [are] segmented and require
consumers to obtain access to multiple, closed networks using
particularized equipment.'' For example, video relay service (``VRS'')
equipment users must obtain and use other video conferencing services
and equipment to engage in real-time video communication with non-VRS-
equipment users. In addition to possibly defining ``interoperable'' as
``inter-platform, inter-network, and inter-provider,'' ITI also
suggests that the term ``interoperable'' could be defined as
``interoperable with [VRS] or among different video conferencing
services.'' As an alternative, the IT and Telecom RERCs suggest that a
system that publishes its standard and allows other manufacturers or
service providers to build products or services to work with it should
be considered interoperable.
29. Accordingly, we seek comment on the following alternative
definitions of ``interoperable'' in the context of video conferencing
services and equipment used for those services: (1) ``Interoperable''
means able to function inter-platform, inter-network, and inter-
provider; (2) ``interoperable'' means having published or otherwise
agreed-upon standards that allow for manufacturers or service providers
to develop products or services that operate with other equipment or
services operating pursuant to the standards; or (3) ``interoperable''
means able to connect users among different video conferencing
services, including VRS.
30. We seek comment on each of the above proposed definitions of
``interoperable.'' Should only one of the proposed definitions be
adopted, and should we reject the other two definitions, or should we
adopt multiple definitions and find that video conferencing services
are interoperable as long as any one of the three definitions is
satisfied? In other words, should we consider the three proposed
definitions as three alternative tests for interoperability? In regard
to the first alternative--``inter-platform, inter-network, and inter-
provider''--we seek comment on the extent to which video conferencing
services or equipment must be different or distinct to qualify under
this definition. In regard to the second alternative, when does a
standard determine interoperability? Is publication by a standards-
setting body enough, even if only one manufacturer or service provider
follows that standard? If a manufacturer or service provider publishes
a standard and invites others to utilize it, is that enough to
establish interoperability? If not, is interoperability established as
soon as a second manufacturer or service provider utilizes the
standard? If not, what is enough to establish interoperability? If two
or more manufacturers or service providers agree to a standard without
publication, is interoperability established? If not, is
interoperability established if they invite others to receive a private
copy of the standards, but do not publish the standards for public
consumption? If video conferencing services can be used to communicate
with public safety answering points, does that establish
interoperability? If not, what else must be done to establish
interoperability? Does the ability to connect to VRS make a video
conferencing service ``interoperable'' or ``accessible'' or both? If
users of different video conferencing services, including VRS, can
communicate with each other, does that establish interoperability, even
if there are no set standards? If communications among different
services is not enough, what then is enough to establish
interoperability?
31. Interest in and consumer demand for cross-platform, network,
and provider video conferencing services and equipment continues to
rise. We do not believe that interoperability among different platforms
will ``hamper service providers' attempts to distinguish themselves in
the marketplace and thus hinder innovation.'' While we consider this
matter more fully in this FNPRM,
[[Page 82246]]
we urge industry ``to develop standards for interoperability between
video conferencing services as it has done for text messaging, picture
and video exchange among carriers operating on different technologies
and equipment.'' We also urge industry, consumers, and other
stakeholders to identify performance objectives that may be necessary
to ensure that ``such services may, by themselves, be accessibility
solutions'' and ``that individuals with disabilities are able to access
and control these services'' as Congress intended. In other words, what
does ``accessible to and usable by individuals with disabilities'' mean
in the context of interoperable video conferencing services and
equipment? Are accessibility performance and other objectives different
for ``interoperable'' video conferencing services? For example, does
accessibility for individuals who are deaf or hard of hearing include
being enabled to connect with an interoperable video conferencing
service call through a relay service other than VRS? How can we ensure
that video conferencing services and equipment are accessible to people
with other disabilities, such as people who are blind or have low
vision, or people with mobility, dexterity, cognitive, or intellectual
disabilities? Notwithstanding existing obligations under the Act, we
propose that industry considers accessibility alongside the technical
requirements and standards that may be needed to achieve
interoperability so that as interoperable video conferencing services
and equipment come into existence, they are also accessible.
Interoperable video conferencing services and equipment, when offered
by providers and manufacturers, must be accessible to and usable by
individuals with disabilities, as required by section 716, and such
providers and manufacturers are subject to the recordkeeping and annual
certification requirements of section 717 starting on the effective
date of these rules.
2. Coverage of Video Mail
32. In the Accessibility NPRM, the Commission sought comment on
whether services that otherwise meet the definition of interoperable
video conferencing services but that also provide non-real-time or near
real-time functions (such as ``video mail'') are covered and subject to
the requirements of section 716. If such functions are not covered, the
Commission asked whether it should, similar to what it did in the
section 255 context, assert its ancillary jurisdiction to cover video
mail.
33. We agree with commenters that non-real-time or near-real-time
features or functions of a video conferencing service, such as video
mail, do not meet the definition of ``real-time'' video communications.
Nonetheless, we do not have a sufficient record as to whether we should
exercise our ancillary jurisdiction to require that a video mail
service be accessible to individuals with disabilities when provided
along with a video conferencing service as the Commission did in the
context of section 255 in regard to voice mail, and we now seek comment
on this issue. The record is also insufficient to decide whether our
ancillary jurisdiction extends to require other features or functions
provided along with a video conferencing service, such as recording and
playing back video communications on demand, to be accessible, and we
seek comment on this issue as well. Do we have other sources of direct
authority, besides section 716, to require that video mail and other
features, such as recording and playing back video communications, are
accessible to individuals with disabilities? Would the failure to
ensure accessibility of video mail and the related equipment that
performs these functions undermine the accessibility and usability of
interoperable video conferencing services? Similarly, would the failure
to ensure accessibility of recording and playing back video
communications on demand and the related equipment that performs these
functions undermine the accessibility and usability of interoperable
video conferencing services?
D. Accessibility of Information Content
34. Section 716(e)(1)(B) of the Act requires the Commission to
promulgate regulations providing that advanced communications services
and the equipment and networks used with these services may not impair
or impede the accessibility of information content when accessibility
has been incorporated into that content for transmission through such
services, equipment or networks. In the Accessibility Report and Order,
we adopt this broad rule, incorporating the text of section
716(e)(1)(B), as proposed in the Accessibility NPRM. Here, we seek
comment on the IT and Telecom RERCs' suggestion that we interpret the
phrase ``may not impair or impede the accessibility of information
content'' to include the concepts set forth below. IT and Telecom RERC
has submitted a proposal regarding how we should interpret and apply
our accessibility of information content guidelines, including the
following recommendations that covered entities:
[cir] Shall not install equipment or features that can't or don't
support accessibility information;
[cir] Shall not configure network equipment such that it would
block or discard accessibility information;
[cir] Shall display any accessibility related information that is
present in an industry recognized standard format;
[cir] Shall not block users from substituting accessible versions
of content; and
[cir] Shall not prevent the incorporation or passing along of
accessibility related information.
E. Electronically Mediated Services
35. In the Accessibility Report and Order, we declined to expand
our definition of peripheral devices to mean ``devices employed in
connection with equipment covered by this part, including software and
electronically mediated services, to translate, enhance, or otherwise
transform advanced communications services into a form accessible to
people with disabilities'' as the IT and Telecom RERCs propose).
Because the record is insufficient, we seek further comment on the IT
and Telecom RERCs' proposal and on the definition of ``electronically
mediated services.'' We also seek comment on the extent to which
electronically mediated services are covered under section 716 and how
they can be used to transform ACS into an accessible form.
F. Performance Objectives
36. Section 716(e)(1)(A) of the Act provides that in prescribing
regulations for this section, the Commission shall ``include
performance objectives to ensure the accessibility, usability, and
compatibility of advanced communications services and the equipment
used for advanced communications services by individuals with
disabilities.'' In the Accessibility NPRM, the Commission sought
comment on how to make its performance standards testable, concrete,
and enforceable. In the Accessibility Report and Order, we incorporated
into the performance objectives the definitions of accessible,
compatibility, and usable, in Sec. Sec. 6.3 and 7.3 of the
Commission's rules. In their Reply Comments, however, the IT and
Telecom RERCs argued that, instead of relying on our part 6
requirements, the Commission's performance objectives should include
testable criteria. The IT and Telecom RERCs proposed specific
``Aspirational Goal and Testable Functional Performance Criteria'' in
[[Page 82247]]
their Reply Comments. We seek comment on those criteria.
G. Safe Harbors
37. As explained in the Accessibility Report and Order, we decline
at this time to adopt technical standards as safe harbors. However, we
recognize the importance of the various components in the ACS
architecture working together to achieve accessibility and seek comment
on whether certain safe harbor technical standards can further this
goal.
38. Specifically, we seek comment on whether, as ITI proposes, ACS
manufacturers can ensure compliance with the Act ``by programmatically
exposing the ACS user interface using one or more established APIs and
specifications which support the applicable provisions in ISO/IEC
13066-1:2011.'' Other standards may also form the basis of a safe
harbor for compliance with section 716, including the ``W3C/WAI Web
Content Accessibility Guidelines, Version 2.0 and section 508 of the
Rehabilitation Act of 1973, as amended.'' We seek comment on the use of
these standards, and any others, as safe harbors for compliance with
section 716.
39. For the purpose of keeping safe harbors up-to-date with
technology and ensuring ongoing compliance with the Act, we seek
comment on whether ``it should be the responsibility of the appropriate
manufacturer or standards body to inform the Commission when new,
relevant APIs and specifications are made available to the market that
meet the * * * standard.'' If we decide to adopt a safe harbor based on
recognized industry standards, we seek comment on how the industry,
consumers, and the Commission can verify compliance with the standard.
Should entities be required to self-certify compliance with a safe
harbor? Is there a standard for which consumers can easily test
compliance with an accessible tool? What are the compliance costs for
ACS manufacturers and service providers of the Commission adopting safe
harbor technical standards based on recognized industry standards? Will
adopting safe harbor technical standards based on recognized industry
standards reduce compliance costs for ACS manufacturers and service
providers?
40. We recognize tension may exist between the relatively slow
standards setting process and the rapid pace of technological
innovation. How should the Commission account for the possibility that
the continued development of a standard on which a safe harbor is based
may be outpaced by technology? Should we for purposes of determining
compliance with a safe harbor apply only safe harbors that were
recognized industry standards at the time of the design phase for the
equipment or service in question? Is there another time period in the
development of the equipment or service that is more appropriate?
H. Section 718 Recordkeeping and Enforcement
41. Background. In the Accessibility NPRM, the Commission invited
comment on recordkeeping requirements for section 718 covered entities.
The Commission noted that recordkeeping requirements for section 718
entities would be considered further in light of comments on general
section 718 implementation. The Commission also sought comment on
informal complaint, formal complaint, and other general requirements
for complaints alleging violations of section 718 and the Commission's
implementing rules.
42. Discussion. In the Accessibility Report and Order, we adopt the
same recordkeeping and complaint procedures for section 718 covered
entities that we adopt for section 716 covered entities. Specifically,
we adopt recordkeeping requirements for section 718 covered entities
that go into effect one year after the effective date of the rules
adopted in the Accessibility Report and Order. We also adopt informal
complaint and formal complaint procedures as well as other general
requirements for complaints filed against section 718 covered entities
for violations of section 718 and the Commission's implementing rules.
These complaint procedures go into effect for section 718 covered
entities on October 8, 2013, three years after the CVAA was enacted.
43. In this FNPRM, we seek comment on the implementation of section
718 specifically. In this section, we invite comment on whether the
section 718 recordkeeping requirements, which we adopt in the
Accessibility Report and Order, should be retained or altered in light
of the record developed in response to this FNPRM on section 718. We
ask that parties suggesting changes to the rules provide an assessment
of the relative costs and benefits associated with (1) the rule they
wish to see changed and (2) the alternative that they propose.
II. Procedural Matters
Ex Parte Rules--Permit-But-Disclose Proceeding
44. Pursuant to 47 CFR 1.1200 et seq., this matter shall be treated
as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Persons making ex parte presentations must
file a copy of any written presentation or a memorandum summarizing any
oral presentation within two business days after the presentation
(unless a different deadline applicable to the Sunshine period
applies). Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must: (1) List all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made; and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with Sec. 1.1206(b) of the Commission's rules. In
proceedings governed by Sec. 1.49(f) of the Commission's rules or for
which the Commission has made available a method of electronic filing,
written ex parte presentations and memoranda summarizing oral ex parte
presentations, and all attachments thereto, must be filed through the
electronic comment filing system available for that proceeding, and
must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission's ex parte rules.
Initial Regulatory Flexibility Analysis
45. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA''), the Commission has prepared this present Initial
Regulatory Flexibility Analysis (``IRFA'') of the possible significant
economic impact on a substantial number of small entities that might
result from adoption of the rules proposed in the Further Notice of
Proposed Rulemaking (``FNPRM''). Written public comments are requested
on this IRFA. Comments must be identified as responses to the IRFA and
must be filed by the applicable deadlines for initial comments, or
reply comments, as specified in the FNPRM.
[[Page 82248]]
The Commission will send a copy of the FNPRM, including this IRFA, to
the Chief Counsel for Advocacy of the Small Business Administration
(``SBA''). In addition, the FNPRM and this IRFA (or summaries thereof)
will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
46. The Accessibility Report and Order implements Congress' mandate
that people with disabilities have access to advanced communications
services (``ACS'') and ACS equipment. Specifically, the rules adopted
in the Accessibility Report and Order implement sections 716 and 717 of
the Communications Act of 1934, as amended, which were added by the
``Twenty-First Century Communications and Video Accessibility Act of
2010'' (``CVAA'').
47. The Accessibility Report and Order implements the requirements
of section 716 of the Act, which requires providers of ACS and
manufacturers of equipment used for ACS to make their products
accessible to people with disabilities, unless accessibility is not
achievable. The Commission also adopts rules to implement section 717
of the Act, which requires the Commission to establish new
recordkeeping and enforcement procedures for manufacturers and
providers subject to sections 255, 716, and 718.
48. The Accessibility Report and Order finds the record
insufficient to adopt a permanent exemption or to adopt the criteria to
be used to determine which small entities to exempt. The Accessibility
Report and Order therefore temporarily exempts all manufacturers of ACS
equipment and all providers of ACS from the obligations of section 716
if they qualify as small business concerns under the SBA rules and size
standards for the industry in which they are primarily engaged. The
Accessibility Report and Order indicated that such an exemption was
necessary to avoid the possibility of unreasonably burdening ``small
and entrepreneurial innovators and the significant value that they add
to the economy.'' This self-executing exemption would be applied until
the development of a record to determine whether small entities should
be permanently exempted and, if so, what criteria should be used to
define small entities.
49. The Accessibility Report and Order indicated that SBA has
established maximum size standards used to determine whether a business
concern qualifies as a small business concern in its primary industry.
The SBA has generally adopted size standards based on the maximum
number of employees or maximum annual receipts of a business concern.
The SBA categorizes industries for its size standards using the North
American Industry Classification System (``NAICS''), a ``system for
classifying establishments by type of economic activity.'' The
Accessibility Report and Order identified some NAICS codes for possible
primary industry classifications of ACS equipment manufacturers and ACS
providers and the relevant SBA size standards associated with the
codes. The definitions for each NAICS industry classification can be
found by entering the six digit NAICS code in the ``2007 NAICS Search''
function available at the NAICS homepage, http://www.census.gov/eos/www/naics/index.html. The U.S. Office of Management and Budget has
revised NAICS for 2012, however, the codes and industry categories
listed herein are unchanged. OMB anticipates releasing a 2012 NAICS
United States Manual or supplement in January 2012. See 13 CFR 121.201
for a full listing of SBA size standards by six-digit NAICS industry
code. The standards listed in this column establish the maximum size an
entity in the given NAICS industry may be to qualify as a small
business concern.
------------------------------------------------------------------------
NAICS classification NAICS code SBA size standard
------------------------------------------------------------------------
Services
------------------------------------------------------------------------
Wired Telecommunications 517110 1,500 or fewer
Carriers. employees.
Wireless Telecommunications 517210 1,500 or fewer
Carriers (except satellites). employees.
Telecommunications Resellers.... 517911 1,500 or fewer
employees.
All Other Telecommunications.... 517919 $25 million or less in
annual receipts.
Software Publishers............. 511210 $25 million or less in
annual receipts.
Internet Publishing and 519130 500 or fewer
Broadcasting and Web Search employees.
Portals.
Data Processing, Hosting, and 518210 $25 million or less in
Related Services. annual receipts.
------------------------------------------------------------------------
Equipment
------------------------------------------------------------------------
Radio and Television 334220 750 or fewer
Broadcasting and Wireless employees.
Communications Equipment
Manufacturing.
Electronic Computer 334111 1,000 or fewer
Manufacturing. employees.
Telephone Apparatus 334210 1,000 or fewer
Manufacturing. employees.
Other Communications Equipment 334290 750 or fewer
Manufacturing. employees.
Software Publishers............. 511210 $25 million or less in
annual receipts.
Internet Publishing and 519130 500 or fewer
Broadcasting and Web Search employees.
Portals.
------------------------------------------------------------------------
50. The Accessibility Report and Order indicated that this
temporary exemption is self-executing. Under this approach, covered
entities must determine whether they qualify for the exemption based
upon their ability to meet the SBA's rules and the size standard for
the relevant NAICS industry category for the industry in which they are
primarily engaged. Entities that manufacture ACS equipment or provide
ACS may raise this temporary exemption as a defense in an enforcement
proceeding. Entities claiming the exemption must be able to demonstrate
that they met the exemption criteria during the estimated start of the
design phase of the lifecycle of the product or service that is the
subject of the complaint. The Accessibility Report and Order stated
that if an entity no longer meets the exemption criteria, it must
comply with section 716 and section 717 for all subsequent products or
services or substantial upgrades of products or services that are in
the development phase of the product or service lifecycle, or any
earlier stages of development, at the time they no longer meet the
criteria. The temporary exemption will begin on the effective date of
the rules adopted in the Accessibility Report and
[[Page 82249]]
Order and will expire the earlier of the effective date of small entity
exemption rules adopted pursuant to the FNPRM or October 8, 2013. The
Accessibility Report and Order states that the temporary exemption
enables us to provide relief to those entities that may possibly lack
legal, financial, or technical capability to comply with the Act until
we further develop the record to determine whether small entities
should be subject to a permanent exemption and, if so, the criteria to
be used for defining which small entities should be subject to such
permanent exemption.
51. In the FNPRM we seek comment on whether to make permanent the
temporary exemption for manufacturers of ACS equipment and providers of
ACS, adopt one or part of alternative size standards the Commission
adopted in other contexts, or to adopt any permanent exemption for such
entities, subject to repeal or modification by the Commission as
necessary to meet Congress's intent. The FNPRM also seeks comment on
the impact of an exemption on providers of ACS, manufacturers of ACS
equipment, and consumers.
52. Specifically, the FNPRM seeks comment on whether to permanently
exempt from the obligations of section 716, manufacturers of ACS
equipment and providers of ACS that qualify as small business concerns
under the SBA's rules and size standards and, if so, whether to utilize
the size standards for the primary industry in which they are engaged
under the SBA's rules as set forth in the Accessibility Report and
Order as explained above. The FNPRM notes that SBA criteria were
established for the purpose of determining eligibility for SBA small
business loans and asks whether these same criteria are appropriate for
the purpose of relieving covered entities from the obligations
associated with achievability analyses, recordkeeping, and
certifications.
53. The FNPRM also seeks comment on alternative size standards that
the Commission has adopted in other contexts. The Commission has
adopted alternative size standards for very small and small businesses
for eligibility for spectrum bidding credits. These alternative sizes
include average gross revenue over the preceding three years of $3
million, $15 million, or $40 million, depending on the wireless
service. The Commission has also used a different size standard in the
spectrum context, specifically for entities that, along with
affiliates, have $6 million or less in net worth and no more than $2
million in annual profits (after federal income tax and excluding carry
over losses) each year for the previous two years. The Commission has
also used different size standards to define small cable companies and
small cable systems, and the Act includes a definition of small cable
system operators. The Commission has defined small cable companies as a
cable company serving 400,000 or fewer subscribers nationwide, and
small cable systems as a cable system serving 15,000 or fewer
subscribers. The Act defines small cable system operators as ``a cable
operator that, directly or through an affiliate, serves in the
aggregate fewer than 1 percent of all subscribers in the United States
and is not affiliated with any entity or entities whose gross annual
revenues in the aggregate exceed $250,000,000.'' The FNPRM seeks
comment on whether any of these alternatives--in whole, in part, or in
combination--should form the basis for a permanent small entity
exemption from the requirements of section 716.
54. The FNPRM also asks if these size criteria are not appropriate
for a permanent exemption, what the appropriate size criteria would be,
and whether there are other criteria that should form the basis of a
permanent exemption?
55. The FNPRM seeks comment on the impact of a permanent exemption
on providers of ACS, manufacturers of ACS equipment, and consumers.
Specifically, the FNPRM seeks comment on the qualitative and
quantitative impact of a permanent exemption based on the temporary
exemption, on any of the alternatives discussed, or on some other
possible size standard will impact industry sectors engaged in ACS. For
example, what percentage of, or which non-interconnected VoIP
providers, wireline or wireless service providers, electronic messaging
providers, and ACS equipment manufacturers would qualify as small
business concerns under each size standard? Conversely, what percentage
of or which providers of ACS or manufacturers of equipment used for ACS
are not small business concerns under each size standard? For each ACS
and ACS equipment market segment, what percentage of the market is
served by entities that are not exempt using each size standard?
56. The FNPRM also seeks comment on the compliance costs that ACS
providers and ACS equipment manufacturers would incur absent a
permanent exemption. What would the costs be for compliance with
section 716 and section 717 across different providers of ACS and ACS
equipment manufacturers if we decline to adopt any permanent exemption
or decline to make the temporary exemption permanent? In particular,
what are the costs of conducting an achievability analysis,
recordkeeping, and providing certifications?
57. We note that, in addition to the small entity exemption
provision, the CVAA sets forth achievability factors that may also
mitigate adverse impacts and reduce burdens on small entities. Under
the achievability factors, an otherwise covered entity can demonstrate
that accessibility is unachievable and therefore avoid compliance. The
first and second factors are particularly relevant to small entities
and the special circumstances they face. The first factor considers the
nature and cost of the steps needed to meet the requirements with
respect to the specific equipment or service in question, and the
second considers the technical and economic impact on the operation of
the manufacturer or provider and on the operation of the specific
equipment or service in question.
58. The FNPRM seeks further comment on several issues raised in the
implementation of sections 716 and 717 of the Act, as well as to seek
initial comment on implementing section 718 of the Act. Specifically,
the FNPRM seeks comment on three proposed alternative definitions for
the term ``interoperable'' in the context of video conferencing
services and equipment used for those services: (1) ``Interoperable''
means able to function inter-platform, inter-network, and inter-
provider; (2) ``interoperable'' means having published or otherwise
agreed-upon standards that allow for manufacturers or service providers
to develop products or services that operate with other equipment or
services operating pursuant to the standards; or (3) ``interoperable''
means able to connect users among different video conferencing
services, including VRS. The FNPRM also seeks comment on whether we
should exercise our ancillary jurisdiction to require that a video mail
service be accessible to individuals with disabilities when provided
along with a video conferencing service as we did in the context of
section 255 in regard to voice mail. The FNPRM seeks comment on several
proposals to (1) extend our accessibility of information content
guidelines to cover additional concepts; (2) expand our definition of
peripheral devices to include electronically mediated services; (3)
expand our Part 6 requirements to include testable criteria. We also
seek to develop a record on a proposal to define technical standards
for safe harbors using the W3C/WAI Web guidelines or ISO/IEC
[[Page 82250]]
13066-1:2011. Finally, we seek comment on our proposal to implement
section 718 of the CVAA consistent with the recordkeeping requirements
adopted in the Accessibility Report and Order.
59. We seek comment on the preceding topics because even though at
present we do not have enough information to propose a specific rule,
we believe that during the effective period of the temporary small
business exemption, information about these topics will in all
likelihood become crucial and indeed determinative of how the
implementation of the exemption will be carried out in concrete terms.
For example, within the exemption period, technological innovations and
advances may make interoperability more available in providing improved
access to the deaf/blind community in service areas where
interoperability is not yet feasible for technological reasons. Also,
technological advances in coverage of video mail or in the availability
of safe harbors may become more available and more efficiently
operational after the exemption period than they are at present, and
thus, during the temporary exemption, these various areas of increased
availability and increased effective impact may affect the provision of
ACS to the deaf and/or blind community. Hence, because these topics may
become pivotal and crucial after the exemption period, we choose to
seek comment on these topics at this time because based on our
assessment of the admittedly scant record to date, we conclude that
such comment may effectively guide the Commission toward a more
comprehensive and efficient implementation of the temporary exemption.
We also seek comment on implementing section 718, which requires a
mobile phone manufacturer that includes a browser, or a mobile phone
service provider that arranges for a browser to be included on a mobile
phone, to ensure that the browser functions are accessible to and
usable by individuals who are blind or have a visual impairment, unless
doing so is not achievable. Under section 718, mobile phone
manufacturers or service providers may achieve compliance by relying on
third party applications, peripheral devices, software, hardware, or
customer premises equipment. Congress provided that the effective date
for these requirements is three years after the enactment of the CVAA,
i.e., October 8, 2013.
B. Legal Basis
60. The legal basis for any action that may be taken pursuant to
the FNPRM is contained in sections 1-4, 255, 303(r), 403, 503, 716,
717, 718 of the Communications Act of 1934, as Amended, 47 U.S.C. 151-
154, 255, 303(r), 403, 503, 617, 618, 619.
C. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
61. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that face
possible significant economic impact by the adoption of proposed rules.
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 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 SBA.
62. To assist the Commission in analyzing the total number of small
entities potentially affected by the proposals in the FNPRM, we ask
commenters to estimate the number of small entities that may be
affected. To assist in assessing the nature and number of small
entities that face possible significant economic impact by the
proposals in the FNPRM, we seek comment on the industry categories
below and our estimates of the entities in each category that can,
under relevant SBA standards or standards previously approved by the
SBA for small businesses, be classified as small. Where a commenter
proposes an exemption from the requirements of section 716 and in
effect section 717, we also seek estimates from that commenter on the
number of small entities in each category that would be exempted from
compliance with section 716 and in effect section 717 under the
proposed exemption, the percentage of market share for the service or
product that would be exempted, and the economic impact, if any, on
those entities that are not covered by the proposed exemption. While
the FNPRM and this IRFA seek comment on whether and how the Commission
should permanently exempt small entities from the requirements of
section 716 and in effect section 717 for the purposes of building a
record on that issue, we will assume, for the narrow purpose of
including a thorough regulatory impact analysis in this IRFA, that no
such exemptions will be provided.
63. Many of the issues raised in the FNPRM relate to clarifying
obligations on entities already covered by the Accessibility Report and
Order, which may affect a broad range of service providers and
equipment manufacturers. The FNPRM seeks comment on making permanent a
temporary exemption for small entities that qualify as small business
concerns under the SBA's rules and small business size standards, or
some other criteria. Therefore, it is possible that all entities that
would be required to comply with section 716 and section 717, but are
small business concerns or qualify as small entities under some other
criteria, will be exempt from the provisions of the proposed rules
implementing section 716 and section 717. The CVAA, however, does not
provide the flexibility for the Commission to adopt an exemption for
small entities from compliance with section 718. Therefore, we estimate
below the impact on small entities absent a permanent exemption from
section 716 and section 717, and small entities that may have to comply
with section 718. Specifically, we analyze the number of small
businesses engaged in manufacturing that may be affected by the FNPRM,
absent a permanent small entity exemption, including manufacturers of
equipment used to provide interconnected and non-interconnected VoIP,
electronic messaging, and interoperable video conferencing services. We
then analyze the number of small businesses engaged as service
providers that may be affected by the Accessibility Report and Order,
absent a permanent small entity exemption, including providers of
interconnected and non-interconnected VoIP, electronic messaging
services, interoperable video conferencing services, wireless services,
wireline services, and other relevant services.
64. Small Businesses, Small Organizations, and Small Governmental
Jurisdictions. Our action may, over time, affect small entities that
are not easily categorized at present. We therefore describe here, at
the outset, three comprehensive, statutory small entity size standards.
First, nationwide, there are a total of approximately 27.5 million
small businesses, according to the SBA. In addition, a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
Nationwide, as of 2007, there were approximately 1,621,315 small
organizations. Finally, the term ``small governmental jurisdiction'' is
defined generally as ``governments of cities, towns, townships,
villages, school districts, or special districts, with a
[[Page 82251]]
population of less than fifty thousand.'' Census Bureau data for 2011
indicate that there were 89,476 local governmental jurisdictions in the
United States. We estimate that, of this total, as many as 88,506
entities may qualify as ``small governmental jurisdictions.'' Thus, we
estimate that most governmental jurisdictions are small.
1. Equipment Manufacturers
a. Manufacturers of Equipment To Provide VoIP
65. Entities manufacturing equipment used to provide interconnected
VoIP, non-interconnected VoIP, or both are generally found in one of
two Census Bureau categories, ``Electronic Computer Manufacturing'' or
``Telephone Apparatus Manufacturing.'' We include here an analysis of
the possible significant economic impact of our proposed rules on
manufacturers of equipment used to provide both interconnected and non-
interconnected VoIP because it is not possible to separate available
data on these two manufacturing categories for VoIP equipment. Our
estimates below likely greatly overstate the number of small entities
that manufacture equipment used to provide ACS, including
interconnected VoIP. However, in the absence of more accurate data, we
present these figures to provide as thorough an analysis of the impact
on small entities as possible.
66. Electronic Computer Manufacturing. The Census Bureau defines
this category to include ``establishments primarily engaged in
manufacturing and/or assembling electronic computers, such as
mainframes, personal computers, workstations, laptops, and computer
servers. Computers can be analog, digital, or hybrid. * * * The
manufacture of computers includes the assembly or integration of
processors, coprocessors, memory, storage, and input/output devices
into a user-programmable final product.''
67. In this category, the SBA deems and electronic computer
manufacturing business to be small if it has 1,000 employees or less.
For this category of manufacturers, Census data for 2007 show that
there were 421 establishments that operated that year. Of those 421,
384 had 100 or fewer employees and 37 had 100 or more employees. On
this basis, we estimate that the majority of manufacturers of equipment
used to provide electronic messaging services in this category are
small.
68. Telephone Apparatus Manufacturing. The Census Bureau defines
this category to comprise ``establishments primarily engaged in
manufacturing wire telephone and data communications equipment. These
products may be standalone or board-level components of a larger
system. Examples of products made by these establishments are central
office switching equipment, cordless telephones (except cellular), PBX
equipment, telephones, telephone answering machines, LAN modems, multi-
user modems, and other data communications equipment, such as bridges,
routers, and gateways.''
69. In this category, the SBA deems a telephone apparatus
manufacturing business to be small if it has 1,000 or fewer employees.
For this category of manufacturers, Census data for 2007 shows there
were 398 such establishments in operation. Of those 398 establishments,
393 (approximately 99%) had 1,000 or fewer employees and, thus, would
be deemed small under the applicable SBA size standard. On this basis,
the Commission estimates that approximately 99% or more of the
manufacturers of equipment used to provide VoIP in this category are
small.
b. Manufacturers of Equipment To Provide Electronic Messaging
70. Entities that manufacture equipment (other than software) used
to provide electronic messaging services are generally found in one of
three Census Bureau categories: ``Radio and Television Broadcasting and
Wireless Communications Equipment Manufacturing,'' ``Electronic
Computer Manufacturing,'' or ``Telephone Apparatus Manufacturing.''
71. Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing. The Census Bureau defines this category as
follows: ``This industry comprises establishments primarily engaged in
manufacturing radio and television broadcast and wireless
communications equipment. Examples of products made by these
establishments are: transmitting and receiving antennas, cable
television equipment, GPS equipment, pagers, cellular phones, mobile
communications equipment, and radio and television studio and
broadcasting equipment.'' The SBA has developed a small business size
standard for Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing which is: all such firms having
750 or fewer employees. According to Census Bureau data for 2007, there
were a total of 919 establishments in this category that operated for
part or all of the entire year. Of this total, 771 had less than 100
employees and 148 had more than 100 employees. Thus, under this size
standard, the majority of firms can be considered small.
72. Electronic Computer Manufacturing. The Census Bureau defines
this category to include ``establishments primarily engaged in
manufacturing and/or assembling electronic computers, such as
mainframes, personal computers, workstations, laptops, and computer
servers. Computers can be analog, digital, or hybrid. * * * The
manufacture of computers includes the assembly or integration of
processors, coprocessors, memory, storage, and input/output devices
into a user-programmable final product.''
73. In this category the SBA deems an electronic computer
manufacturing business to be small if it has 1,000 or fewer employees.
For this category of manufacturers, Census data for 2007 show that
there were 421 such establishments that operated that year. Of those
421 establishments, 384 had 1,000 or fewer employees. On this basis, we
estimate that the majority of the manufacturers of equipment used to
provide electronic messaging services in this category are small.
74. Telephone Apparatus Manufacturing. The Census Bureau defines
this category to comprise ``establishments primarily engaged in
manufacturing wire telephone and data communications equipment. These
products may be stand alone or board-level components of a larger
system. Examples of products made by these establishments are central
office switching equipment, cordless telephones (except cellular), PBX
equipment, telephones, telephone answering machines, LAN modems, multi-
user modems, and other data communications equipment, such as bridges,
routers, and gateways.''
75. In this category the SBA deems a telephone apparatus
manufacturing business to be small if it has 1,000 or fewer employees.
For this category of manufacturers, Census data for 2007 shows that
there were 398 such establishments that operated that year. Of those
398 establishments, 393 (approximately 99%) had 1,000 or fewer
employees and, thus, would be deemed small under the applicable SBA
size standard. On this basis, the Commission estimates that
approximately 99% or more of the manufacturers of equipment used to
provide electronic messaging services in this category are small.
[[Page 82252]]
c. Manufacturers of Equipment Used To Provide Interoperable Video
Conferencing Services
76. Entities that manufacture equipment used to provide
interoperable and other video conferencing services are generally found
in the Census Bureau category: ``Other Communications Equipment
Manufacturing.'' The Census Bureau defines this category to include:
``establishments primarily engaged in manufacturing communications
equipment (except telephone apparatus, and radio and television
broadcast, and wireless communications equipment).''
77. Other Communications Equipment Manufacturing. In this category,
the SBA deems a business manufacturing other communications equipment
to be small if it has 750 or fewer employees. For this category of
manufacturers, Census data for 2007 show that there were 452
establishments that operated that year. Of the 452 establishments 406
had fewer than 100 employees and 46 had more than 100 employees.
Accordingly, the Commission estimates that a substantial majority of
the manufacturers of equipment used to provide interoperable and other
video-conferencing services are small.
2. Service Providers
a. Providers of VoIP
78. Entities that provide interconnected or non-interconnected VoIP
or both are generally found in one of two Census Bureau categories,
``Wired Telecommunications Carriers'' or ``All Other
Telecommunications.''
79. Wired Telecommunications Carriers. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged in operating and/or providing access to transmission
facilities and infrastructure that they own and/or lease for the
transmission of voice, data, text, sound, and video using wired
telecommunications networks. Transmission facilities may be based on a
single technology or a combination of technologies. 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.''
80. In this category, the SBA deems a wired telecommunications
carrier to be small if it has 1,500 or fewer employees. Census data for
2007 shows 3,188 firms in this category. Of these 3,188 firms, only 44
had 1,000 or more employees. While we could not find precise Census
data on the number of firms with in the group with 1,500 or fewer
employees, it is clear that at least 3,144 firms with fewer than 1,000
employees would be in that group. On this basis, the Commission
estimates that a substantial majority of the providers of
interconnected VoIP, non-interconnected VoIP, or both in this category,
are small.
81. All Other Telecommunications. Under the 2007 U.S. Census
definition of firms included in the category ``All Other
Telecommunications (NAICS Code 517919)''comprises ``establishments
primarily engaged in providing specialized telecommunications services,
such as satellite tracking, communications telemetry, and radar station
operation. This industry also includes establishments primarily engaged
in providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems. Establishments providing Internet services or
VoIP services via client-supplied telecommunications connections are
also included in this industry.''
82. In this category, the SBA deems a provider of ``all other
telecommunications'' services to be small if it has $25 million or less
in average annual receipts. For this category of service providers,
Census data for 2007 shows that there were 2,383 such firms that
operated that year. Of those 2,383 firms, 2,346 (approximately 98%) had
$25 million or less in average annual receipts and, thus, would be
deemed small under the applicable SBA size standard. On this basis,
Commission estimates that approximately 98% or more of the providers of
interconnected VoIP, non-interconnected VoIP, or both in this category
are small.
b. Providers of Electronic Messaging Services
83. Entities that provide electronic messaging services are
generally found in one of the following Census Bureau categories,
``Wireless Telecommunications Carriers (except Satellites),'' ``Wired
Telecommunications,'' or ``Internet Publishing and Broadcasting and Web
Search Portals.''
84. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007
shows that there were 1,383 firms that operated that year. 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, PCS, and Specialized Mobile Radio (``SMR'') Telephony
services. Of these, an estimated 261 have 1,500 or fewer employees and
152 have more than 1,500 employees. Consequently, the Commission
estimates that approximately half or more of these firms can be
considered small. Thus, using available data, we estimate that the
majority of wireless firms can be considered small.
85. Wired Telecommunications Carriers. For the 2007 US Census
definition of firms included in the category, ``Wired
Telecommunications Carriers (NAICS Code 517110),'' see paragraph 35
above.
86. In this category, the SBA deems a wired telecommunications
carrier to be small if it has 1,500 or fewer employees. Census data for
2007 shows 3,188 firms in this category. Of these 3,188 firms, only 44
(approximately 1%) had 1,000 or more employees. While we could not find
precise Census data on the number of firms in the group with 1,500 or
fewer employees, it is clear that at least the 3,188 firms with fewer
than 1,000 employees would be in that group. Thus, at least 3,144 of
these 3,188 firms (approximately 99%) had 1,500 or fewer employees. On
this basis, the Commission estimates that approximately 99% or more of
the providers of electronic messaging services in this category are
small.
87. Internet Publishing and Broadcasting and Web Search Portals.
The Census Bureau defines this category to include ``establishments
primarily engaged in (1) publishing and/or broadcasting content on the
Internet exclusively or (2) operating Web sites that use a search
engine to generate and
[[Page 82253]]
maintain extensive databases of Internet addresses and content in an
easily searchable format (and known as Web search portals). The
publishing and broadcasting establishments in this industry do not
provide traditional (non-Internet) versions of the content that they
publish or broadcast. They provide textual, audio, and/or video content
of general or specific interest on the Internet exclusively.
Establishments known as Web search portals often provide additional
Internet services, such as email, connections to other web sites,
auctions, news, and other limited content, and serve as a home base for
Internet users.''
88. In this category, the SBA deems an Internet publisher or
Internet broadcaster or the provider of a web search portal on the
Internet to be small if it has 500 or fewer employees. For this
category of manufacturers, Census data for 2007 shows that there were
2,705 such firms that operated that year. Of those 2,705 firms, 2,682
(approximately 99%) had 500 or fewer employees and, thus, would be
deemed small under the applicable SBA size standard. On this basis, the
Commission estimates that approximately 99% or more of the providers of
electronic messaging services in this category are small.
89. Data Processing, Hosting, and Related Services. The Census
Bureau defines this category to include ``establishments primarily
engaged in providing infrastructure for hosting or data processing
services. These establishments may provide specialized hosting
activities, such as web hosting, streaming services or application
hosting; provide application service provisioning; or may provide
general time-share mainframe facilities to clients. Data processing
establishments provide complete processing and specialized reports from
data supplied by clients or provide automated data processing and data
entry services.''
90. In this category, the SBA deems a data processing, hosting, or
related services provider to be small if it has $25 million or less in
annual receipts. For this category of providers, Census data for 2007
shows that there were 14,193 such establishments that operated that
year. Of those 14,193 firms, 12,985 had less than $10 million in annual
receipts, and 1,208 had greater than $10 million. Although no data is
available to confirm the number of establishments with greater than $25
million in receipts, the available data confirms the majority of
establishments in this category were small. On this basis, the
Commission estimates that approximately 96% of the providers of
electronic messaging services in this category are small.
c. Providers of Interoperable Video Conferencing Services
91. Entities that provide interoperable video conferencing services
are found in the Census Bureau Category ``All Other
Telecommunications.''
92. All Other Telecommunications. For the 2007 U.S. Census
definition of firms included in the category, ``All Other
Telecommunications (NAICS Code 517919),'' see paragraph 37 above.
93. In this category, the SBA deems a provider of ``all other
telecommunications'' services to be small if it has $25 million or less
in average annual receipts. Census data for 2007 show that there were
2,383 such firms that operated that year. Of those 2,383 firms, 2,346
(approximately 98%) had $25 million or less in average annual receipts
and, thus, would be deemed small under the applicable SBA size
standard. On this basis, Commission estimates that approximately 98% or
more of the providers of interoperable video conferencing services are
small.
3. Additional Industry Categories
a. Certain Wireless Carriers and Service Providers
94. Cellular Licensees. The SBA has developed a small business size
standard for small businesses in the category ``Wireless
Telecommunications Carriers (except satellite).'' Under that SBA
category, a business is small if it has 1,500 or fewer employees. The
census category of ``Cellular and Other Wireless Telecommunications''
is no longer used and has been superseded by the larger category
``Wireless Telecommunications Carriers (except satellite).'' The Census
Bureau defines this larger category to include ``establishments engaged
in operating and maintaining switching and transmission facilities to
provide communications via the airwaves. Establishments in this
industry have spectrum licenses and provide services using that
spectrum, such as cellular phone services, paging services, wireless
Internet access, and wireless video services.''
95. Census data for 2007 shows 1,383 firms in this category. Of
these 1,383 firms, only 15 (approximately 1%) had 1,000 or more
employees. While there is no precise Census data on the number of firms
the group with 1,500 or fewer employees, it is clear that at least the
1,368 firms with fewer than 1,000 employees would be found in that
group. Thus, at least 1,368 of these 1,383 firms (approximately 99%)
1,500 or fewer employees. On this basis, Commission estimates that
approximately 99% or more of the providers of electronic messaging
services in this category are small.
96. Specialized Mobile Radio. The Commission awards ``small
entity'' bidding credits in auctions for SMR geographic area licenses
in the 800 MHz and 900 MHz bands to firms that had revenues of no more
than $15 million in each of the three previous calendar years. The
Commission awards ``very small entity'' bidding credits to firms that
had revenues of no more than $3 million in each of the three previous
calendar years. The SBA has approved these small business size
standards for the 900 MHz Service. The Commission has held auctions for
geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz
SMR auction began on December 5, 1995, and closed on April 15, 1996.
Sixty bidders claiming that they qualified as small businesses under
the $15 million size standard won 263 geographic area licenses in the
900 MHz SMR band. The 800 MHz SMR auction for the upper 200 channels
began on October 28, 1997, and was completed on December 8, 1997. Ten
bidders claiming that they qualified as small businesses under the $15
million size standard won 38 geographic area licenses for the upper 200
channels in the 800 MHz SMR band. A second auction for the 800 MHz band
was held on January 10, 2002 and closed on January 17, 2002 and
included 23 licenses. One bidder claiming small business status won
five licenses.
97. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels began on August 16, 2000, and was
completed on September 1, 2000. Eleven bidders that won 108 geographic
area licenses for the General Category channels in the 800 MHz SMR band
qualified as small businesses under the $15 million size standard. In
an auction completed on December 5, 2000, a total of 2,800 Economic
Area licenses in the lower 80 channels of the 800 MHz SMR service were
sold. Of the 22 winning bidders, 19 claimed ``small business'' status
and won 129 licenses. Thus, combining all three auctions, 40 winning
bidders for geographic licenses in the 800 MHz SMR band claimed status
as small business.
98. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. The Commission does not know how many firms
provide 800 MHz or 900 MHz
[[Page 82254]]
geographic area SMR services pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues. In
addition, we do not know how many of these firms have 1,500 or fewer
employees. The Commission assumes, for purposes of this analysis, that
all of the remaining existing extended implementation authorizations
are held by small entities.
99. AWS Services (1710-1755 MHz and 2110-2155 MHz bands (AWS-1);
1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands
(AWS-2); 2155-2175 MHz band (AWS-3)). For the AWS-1 bands, the
Commission has defined a ``small business'' as an entity with average
annual gross revenues for the preceding three years not exceeding $40
million, and a ``very small business'' as an entity with average annual
gross revenues for the preceding three years not exceeding $15 million.
In 2006, the Commission conducted its first auction of AWS-1 licenses.
In that initial AWS-1 auction, 31 winning bidders identified themselves
as very small businesses. Twenty-six of the winning bidders identified
themselves as small businesses. In a subsequent 2008 auction, the
Commission offered 35 AWS-1 licenses. Four winning bidders identified
themselves as very small businesses, and three of the winning bidders
identified themselves as a small business. For AWS-2 and AWS-3,
although we do not know for certain which entities are likely to apply
for these frequencies, we note that the AWS-1 bands are comparable to
those used for cellular service and personal communications service.
The Commission has not yet adopted size standards for the AWS-2 or AWS-
3 bands but has proposed to treat both AWS-2 and AWS-3 similarly to
broadband PCS service and AWS-1 service due to the comparable capital
requirements and other factors, such as issues involved in relocating
incumbents and developing markets, technologies, and services.
100. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
the Commission adopted size standards for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments. A small business in this service is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $40 million for the preceding three years.
Additionally, a ``very small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues that are not more than $15 million for the preceding three
years. SBA approval of these definitions is not required. In 2000, the
Commission conducted an auction of 52 Major Economic Area (``MEA'')
licenses. Of the 104 licenses auctioned, 96 licenses were sold to nine
bidders. Five of these bidders were small businesses that won a total
of 26 licenses. A second auction of 700 MHz Guard Band licenses
commenced and closed in 2001. All eight of the licenses auctioned were
sold to three bidders. One of these bidders was a small business that
won a total of two licenses.
101. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and
Order, the Commission revised its rules regarding Upper 700 MHz
licenses. On January 24, 2008, the Commission commenced Auction 73 in
which several licenses in the Upper 700 MHz band were available for
licensing: 12 Regional Economic Area Grouping licenses in the C Block,
and one nationwide license in the D Block. The auction concluded on
March 18, 2008, with 3 winning bidders claiming very small business
status (those with attributable average annual gross revenues that do
not exceed $15 million for the preceding three years) and winning five
licenses.
102. Lower 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits. The Commission defined a ``small business'' as an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $40 million for the preceding three years.
A ``very small business'' is defined as an entity that, together with
its affiliates and controlling principals, has average gross revenues
that are not more than $15 million for the preceding three years.
Additionally, the lower 700 MHz Service had a third category of small
business status for Metropolitan/Rural Service Area (MSA/RSA)
licenses--``entrepreneur''--which is defined as an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $3 million for the preceding
three years. The SBA approved these small size standards. An auction of
740 licenses (one license in each of the 734 MSAs/RSAs and one license
in each of the six Economic Area Groupings (EAGs)) was conducted in
2002. Of the 740 licenses available for auction, 484 licenses were won
by 102 winning bidders. Seventy-two of the winning bidders claimed
small business, very small business or entrepreneur status and won
licenses. A second auction commenced on May 28, 2003, closed on June
13, 2003, and included 256 licenses. Seventeen winning bidders claimed
small or very small business status, and nine winning bidders claimed
entrepreneur status. In 2005, the Commission completed an auction of 5
licenses in the Lower 700 MHz band. All three winning bidders claimed
small business status.
103. In 2007, the Commission reexamined its rules governing the 700
MHz band in the 700 MHz Second Report and Order. An auction of A, B and
E block 700 MHz licenses was held in 2008. Twenty winning bidders
claimed small business status (those with attributable average annual
gross revenues that exceed $15 million and do not exceed $40 million
for the preceding three years). Thirty three winning bidders claimed
very small business status (those with attributable average annual
gross revenues that do not exceed $15 million for the preceding three
years).
104. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico. There are presently approximately 55 licensees in this
service. The Commission is unable to estimate at this time the number
of licensees that would qualify as small under the SBA's small business
size standard for the category of Wireless Telecommunications Carriers
(except Satellite). Under that SBA small business size standard, a
business is small if it has 1,500 or fewer employees. Census data for
2007 show that there were 1,383 firms that operated that year. 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.
105. Government Transfer Bands. The Commission adopted small
business size standards for the unpaired 1390-1392 MHz, 1670-1675 MHz,
and the paired 1392-1395 MHz and 1432-1435 MHz bands. Specifically,
with respect to these bands, the Commission defined an entity with
average annual gross revenues for the three preceding years not
exceeding $40 million as a ``small business,'' and an entity with
average annual gross revenues for the three preceding years not
exceeding $15 million as a ``very small business.'' SBA has approved
these small business size
[[Page 82255]]
standards for the aforementioned bands. Correspondingly, the Commission
adopted a bidding credit of 15 percent for ``small businesses'' and a
bidding credit of 25 percent for ``very small businesses.'' This
bidding credit structure was found to have been consistent with the
Commission's schedule of bidding credits, which may be found at Sec.
1.2110(f)(2) of the Commission's rules. The Commission found that these
two definitions will provide a variety of businesses seeking to provide
a variety of services with opportunities to participate in the auction
of licenses for this spectrum and will afford such licensees, who may
have varying capital costs, substantial flexibility for the provision
of services. The Commission noted that it had long recognized that
bidding preferences for qualifying bidders provide such bidders with an
opportunity to compete successfully against large, well-financed
entities. The Commission also noted that it had found that the use of
tiered or graduated small business definitions is useful in furthering
its mandate under section 309(j) of the Act to promote opportunities
for and disseminate licenses to a wide variety of applicants. An
auction for one license in the 1670-1674 MHz band commenced on April
30, 2003 and closed the same day. One license was awarded. The winning
bidder was not a small entity.
b. Certain Equipment Manufacturers and Stores
106. Part 15 Handset Manufacturers. Manufacturers of unlicensed
wireless handsets may also become subject to requirements in this
proceeding for their handsets used to provide VoIP applications. The
Commission has not developed a definition of small entities applicable
to unlicensed communications handset manufacturers. Therefore, we will
utilize the SBA definition applicable to Radio and Television
Broadcasting and Wireless Communications Equipment Manufacturing. The
Census Bureau defines this category as follows: ``This industry
comprises establishments primarily engaged in manufacturing radio and
television broadcast and wireless communications equipment. Examples of
products made by these establishments are: Transmitting and receiving
antennas, cable television equipment, GPS equipment, pagers, cellular
phones, mobile communications equipment, and radio and television
studio and broadcasting equipment.'' The SBA has developed a small
business size standard for Radio and Television Broadcasting and
Wireless Communications Equipment Manufacturing, which is: All such
firms having 750 or fewer employees. According to Census Bureau data
for 2007, there were a total of 939 establishments in this category
that operated for part or all of the entire year. Of this total, 784
had less than 500 employees and 155 had more than 100 employees. Thus,
under this size standard, the majority of firms can be considered
small.
107. Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing. The Census Bureau defines this category as
follows: ``This industry comprises establishments primarily engaged in
manufacturing radio and television broadcast and wireless
communications equipment. Examples of products made by these
establishments are: Transmitting and receiving antennas, cable
television equipment, GPS equipment, pagers, cellular phones, mobile
communications equipment, and radio and television studio and
broadcasting equipment.'' The SBA has developed a small business size
standard for Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing which is: All such firms having
750 or fewer employees. According to Census Bureau data for 2007, there
were a total of 939 establishments in this category that operated for
part or all of the entire year. Of this total, 784 had less than 500
employees and 155 had more than 100 employees.'' Thus, under this size
standard, the majority of firms can be considered small.
108. Radio, Television, and Other Electronics Stores. The Census
Bureau defines this economic census category as follows: ``This U.S.
industry comprises: (1) Establishments known as consumer electronics
stores primarily engaged in retailing a general line of new consumer-
type electronic products; (2) establishments specializing in retailing
a single line of consumer-type electronic products (except computers);
or (3) establishments primarily engaged in retailing these new
electronic products in combination with repair services.'' The SBA has
developed a small business size standard for Radio, Television, and
Other Electronics Stores, which is: All such firms having $9 million or
less in annual receipts. According to Census Bureau data for 2007,
there were 24,912 firms in this category that operated for the entire
year. Of this total, 22,701 firms had annual sales of under $5 million;
570 had annual sales and 533 firms had sales of $5 million or more but
less than $10 million, and 1,641 had annual sales of over 10 million.
Thus, the majority of firms in this category can be considered small.
c. Wireline Carriers and Service Providers
109. 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 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. Census Bureau data for
2007 shows 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 employment of 1000 or more. According to
Commission data, 1,307 carriers reported that they were incumbent local
exchange service providers. Of these 1,307 carriers, an estimated 1,006
have 1,500 or fewer employees and 301 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of local
exchange service are small entities that may be affected by the rules
proposed in the NPRM. Thus under this category, the majority of these
incumbent local exchange service providers can be considered small.
110. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
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 employment of 1,000
employees or more. Thus under this category and the associated small
business size standard, the majority of these Competitive LECs, CAPs,
Shared-Tenant Service Providers, and Other Local Service Providers can
be considered 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 and 186 have more
[[Page 82256]]
than 1,500 employees. In addition, 17 carriers have reported that they
are Shared-Tenant Service Providers, and all 17 are estimated to have
1,500 or fewer employees. In addition, 72 carriers have reported that
they are Other Local Service Providers. Of the 72, seventy have 1,500
or fewer employees and two have more than 1,500 employees.
Consequently, the Commission estimates that most providers of
competitive local exchange service, competitive access providers,
Shared-Tenant Service Providers, and Other Local Service Providers are
small entities that may be affected by rules adopted pursuant to the
NPRM.
111. 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.
Census Bureau data for 2007 shows 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 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. According to Commission data, 359
companies reported that their primary telecommunications service
activity was the provision of interexchange services. Of these 359
companies, an estimated 317 have 1,500 or fewer employees and 42 have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of interexchange service providers are small entities that
may be affected by rules adopted pursuant to the NPRM.
112. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. 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 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. According to Commission
data, 33 carriers have reported that they are engaged in the provision
of operator services. Of these, an estimated 31 have 1,500 or fewer
employees and 2 have more than 1,500 employees. Consequently, the
Commission estimates that the majority of OSPs are small entities that
may be affected by our proposed rules.
113. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2007 show that 1,523 firms provided resale
services during that year. Of that number, 1,522 operated with fewer
than 1000 employees and one operated with more than 1,000. Thus under
this category and the associated small business size standard, the
majority of these local resellers can be considered small entities.
According to Commission data, 213 carriers have reported that they are
engaged in the provision of local resale services. Of these, an
estimated 211 have 1,500 or fewer employees and two have more than
1,500 employees. Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
rules adopted pursuant to the Notice.
114. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2007 show that 1,523 firms provided resale
services during that year. Of that number, 1,522 operated with fewer
than 1,000 employees and one operated with more than 1,000. 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 these, an estimated 857 have
1,500 or fewer employees and 24 have more than 1,500 employees.
Consequently, the Commission estimates that the majority of toll
resellers are small entities that may be affected by our proposed
rules.
115. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
payphone services providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census Bureau data for 2007 shows 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
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these PSPs can
be considered small entities. According to Commission data, 657
carriers have reported that they are engaged in the provision of
payphone services. Of these, an estimated 653 have 1,500 or fewer
employees and four have more than 1,500 employees. Consequently, the
Commission estimates that the majority of payphone service providers
are small entities that may be affected by our action.
116. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
Census data for 2007 show that 1,523 firms provided resale services
during that year. Of that number, 1,522 operated with fewer than 1000
employees and one operated with more than 1,000. Thus under this
category and the associated small business size standard, the majority
of these prepaid calling card providers can be considered small
entities. According to Commission data, 193 carriers have reported that
they are engaged in the provision of prepaid calling cards. Of these,
all 193 have 1,500 or fewer employees and none have more than 1,500
employees. Consequently, the Commission estimates that the majority of
prepaid calling card providers are small entities that may be affected
by rules adopted pursuant to the Notice.
117. 800 and 800-Like Service Subscribers. Neither the Commission
nor the SBA has developed a small business size standard specifically
for 800 and 800-like service (``toll free'') subscribers. The
appropriate size standard under SBA rules is for the category
Telecommunications Resellers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. Census data for 2007 show
that 1,523 firms provided resale services during that year. Of that
number, 1,522 operated with fewer than 1000 employees and one operated
with more than 1,000. Thus under this category and the associated small
business size standard, the majority of resellers in this
classification can be considered small entities. To focus specifically
on the
[[Page 82257]]
number of subscribers than on those firms which make subscription
service available, the most reliable source of information regarding
the number of these service subscribers appears to be data the
Commission collects on the 800, 888, 877, and 866 numbers in use.
According to our data for September 2009, the number of 800 numbers
assigned was 7,860,000; the number of 888 numbers assigned was
5,888,687; the number of 877 numbers assigned was 4,721,866; and the
number of 866 numbers assigned was 7,867,736. The Commission does not
have data specifying the number of these subscribers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of toll free subscribers that would qualify as small businesses
under the SBA size standard. Consequently, the Commission estimates
that there are 7,860,000 or fewer small entity 800 subscribers;
5,888,687 or fewer small entity 888 subscribers; 4,721,866 or fewer
small entity 877 subscribers; and 7,867,736 or fewer small entity 866
subscribers.
d. Wireless Carriers and Service Providers
118. Below, for those services where licenses are 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 a
given 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.
119. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007
shows that there were 1,383 firms that operated that year. 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, PCS, and SMR Telephony services. Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
120. 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. 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, and one bidder won one
license that qualified as a small business entity.
121. Common Carrier Paging. The SBA considers paging to be a
wireless telecommunications service and classifies it under the
industry classification Wireless Telecommunications Carriers (except
satellite). Under that classification, the applicable size standard is
that a business is small if it has 1,500 or fewer employees. For the
general category of Wireless Telecommunications Carriers (except
Satellite), Census data for 2007 shows that there were 1,383 firms that
operated that year. 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. The 2007 census also contains data for the
specific category of ``Paging'' ``that is classified under the seven-
number NAICS code 5172101. According to Commission data, 291 carriers
have reported that they are engaged in Paging or Messaging Service. Of
these, an estimated 289 have 1,500 or fewer employees, and 2 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of paging providers are small entities that may be affected by
our action.
122. 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. Census data for 2007 shows
that there were 1,383 firms that operated that year. 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. According
to Trends in Telephone Service data, 434 carriers reported that they
were engaged in wireless telephony. Of these, an estimated 222 have
1,500 or fewer employees and 212 have more than 1,500 employees.
Therefore, approximately half of these entities 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, PCS, and SMR Telephony services. Of these,
an estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
123. Broadband Personal Communications Service. The broadband PCS
spectrum is divided into six frequency blocks designated A through F,
and the Commission has held auctions for each block. The Commission
initially defined a ``small business'' for C- and F-Block licenses as
an entity that has average gross revenues of $40 million or less in the
three previous calendar years. For F-Block licenses, an additional
small business size standard for ``very small business'' was added and
is defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. These small business size standards, in the context of
broadband PCS auctions, have been approved by the SBA. No small
businesses within the SBA-approved small business size standards bid
successfully for licenses in Blocks A and B. There were 90 winning
bidders that claimed small business status in the first two C-Block
auctions. A total of 93 bidders that claimed small business status won
approximately 40 percent of the 1,479 licenses in the first auction for
[[Page 82258]]
the D, E, and F Blocks. On April 15, 1999, the Commission completed the
re-auction of 347 C-, D-, E-, and F-Block licenses in Auction No. 22.
Of the 57 winning bidders in that auction, 48 claimed small business
status and won 277 licenses.
124. On January 26, 2001, the Commission completed the auction of
422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35
winning bidders in that auction, 29 claimed small business status.
Subsequent events concerning Auction 35, including judicial and agency
determinations, resulted in a total of 163 C and F Block licenses being
available for grant. On February 15, 2005, the Commission completed an
auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of
the 24 winning bidders in that auction, 16 claimed small business
status and won 156 licenses. On May 21, 2007, the Commission completed
an auction of 33 licenses in the A, C, and F Blocks in Auction No. 71.
Of the 12 winning bidders in that auction, five claimed small business
status and won 18 licenses. On August 20, 2008, the Commission
completed the auction of 20 C-, D-, E-, and F-Block Broadband PCS
licenses in Auction No. 78. Of the eight winning bidders for Broadband
PCS licenses in that auction, six claimed small business status and won
14 licenses.
125. Narrowband Personal Communications Services. To date, two
auctions of narrowband PCS licenses have been conducted. For purposes
of the two auctions that have already been held, ``small businesses''
were entities with average gross revenues for the prior three calendar
years of $40 million or less. Through these auctions, the Commission
has awarded a total of 41 licenses, out of which 11 were obtained by
small businesses. To ensure meaningful participation of small business
entities in future auctions, the Commission has adopted a two-tiered
small business size standard in the Narrowband PCS Second Report and
Order. A ``small business'' is an entity that, together with affiliates
and controlling interests, has average gross revenues for the three
preceding years of not more than $40 million. A ``very small business''
is an entity that, together with affiliates and controlling interests,
has average gross revenues for the three preceding years of not more
than $15 million. The SBA has approved these small business size
standards. A third auction of Narrowband PCS licenses was conducted in
2001. In that auction, five bidders won 317 Metropolitan Trading Areas
and nationwide licenses. Three of the winning bidders claimed status as
a small or very small entity and won 311 licenses.
126. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, the Commission applies the
small business size standard under the SBA rules applicable. The SBA
has deemed a wireless business to be small if it has 1,500 or fewer
employees. For this service, the SBA uses the category of Wireless
Telecommunications Carriers (except Satellite). Census data for 2007,
which supersede data contained in the 2002 Census, show that there were
1,383 firms that operated that year. 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.
127. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service, and is subject to spectrum auctions. In the 220 MHz
Third Report and Order, the Commission adopted a small business size
standard for defining ``small'' and ``very small'' businesses for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments. This small business
standard indicates that a ``small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $15 million for the preceding three years.
A ``very small business'' is defined as an entity that, together with
its affiliates and controlling principals, has average gross revenues
that do not exceed $3 million for the preceding three years. The SBA
has approved these small size standards. Auctions of Phase II licenses
commenced on and closed in 1998. In the first auction, 908 licenses
were auctioned in three different-sized geographic areas: three
nationwide licenses, 30 Regional Economic Area Group (EAG) Licenses,
and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693
were sold. Thirty-nine small businesses won 373 licenses in the first
220 MHz auction. A second auction included 225 licenses: 216 EA
licenses and 9 EAG licenses. Fourteen companies claiming small business
status won 158 licenses. A third auction included four licenses: 2 BEA
licenses and 2 EAG licenses in the 220 MHz Service. No small or very
small business won any of these licenses. In 2007, the Commission
conducted a fourth auction of the 220 MHz licenses. Bidding credits
were offered to small businesses. A bidder with attributed average
annual gross revenues that exceeded $3 million and did not exceed $15
million for the preceding three years (``small business'') received a
25 percent discount on its winning bid. A bidder with attributed
average annual gross revenues that did not exceed $3 million for the
preceding three years received a 35 percent discount on its winning bid
(``very small business''). Auction 72, which offered 94 Phase II 220
MHz Service licenses, concluded in 2007. In this auction, five winning
bidders won a total of 76 licenses. Two winning bidders identified
themselves as very small businesses won 56 of the 76 licenses. One of
the winning bidders that identified themselves as a small business won
5 of the 76 licenses won.
128. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The
Commission awards small business bidding credits in auctions for SMR
geographic area licenses in the 800 MHz and 900 MHz bands to entities
that had revenues of no more than $15 million in each of the three
previous calendar years. The Commission awards very small business
bidding credits to entities that had revenues of no more than $3
million in each of the three previous calendar years. The SBA has
approved these small business size standards for the 800 MHz and 900
MHz SMR Services. The Commission has held auctions for geographic area
licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction was
completed in 1996. Sixty bidders claiming that they qualified as small
businesses under the $15 million size standard won 263 geographic area
licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper
200 channels was conducted in 1997. Ten bidders claiming that they
qualified as small businesses under the $15 million size standard won
38 geographic area licenses for the upper 200 channels in the 800 MHz
SMR band. A second auction for the 800 MHz band was conducted in 2002
and included 23 BEA licenses. One bidder claiming small business status
won five licenses.
[[Page 82259]]
129. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels was conducted in 2000. Eleven bidders
won 108 geographic area licenses for the General Category channels in
the 800 MHz SMR band qualified as small businesses under the $15
million size standard. In an auction completed in 2000, a total of
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz
SMR service were awarded. Of the 22 winning bidders, 19 claimed small
business status and won 129 licenses. Thus, combining all three
auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR
band claimed status as small business.
130. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues. In
addition, we do not know how many of these firms have 1,500 or fewer
employees. We assume, for purposes of this analysis, that all of the
remaining existing extended implementation authorizations are held by
small entities, as that small business size standard is approved by the
SBA.
131. Air-Ground Radiotelephone Service. The Commission has
previously used the SBA's small business size standard applicable to
Wireless Telecommunications Carriers (except Satellite), i.e., an
entity employing no more than 1,500 persons. There are approximately
100 licensees in the Air-Ground Radiotelephone Service, and under that
definition, the Commission estimates that almost all of them qualify as
small entities under the SBA definition. For purposes of assigning Air-
Ground Radiotelephone Service licenses through competitive bidding, the
Commission has defined ``small business'' as an entity that, together
with controlling interests and affiliates, has average annual gross
revenues for the preceding three years not exceeding $40 million. A
``very small business'' is defined as an entity that, together with
controlling interests and affiliates, has average annual gross revenues
for the preceding three years not exceeding $15 million. These
definitions were approved by the SBA. In May 2006, the Commission
completed an auction of nationwide commercial Air-Ground Radiotelephone
Service licenses in the 800 MHz band (Auction No. 65). On June 2, 2006,
the auction closed with two winning bidders winning two Air-Ground
Radiotelephone Services licenses. Neither of the winning bidders
claimed small business status.
132. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio System (``BETRS''). For purposes of
its analysis of the Rural Radiotelephone Service, the Commission uses
the SBA small business size standard for the category Wireless
Telecommunications Carriers (except satellite),'' which is 1,500 or
fewer employees. Census data for 2007 shows that there were 1,383 firms
that operated that year. 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 in the Rural Radiotelephone Service can be considered small.
133. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (``VHF'')
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category Wireless Telecommunications Carriers
(except satellite),'' which is 1,500 or fewer employees. Census data
for 2007 shows that there were 1,383 firms that operated that year. 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.
134. Fixed Microwave Services. Microwave services include common
carrier, private-operational fixed, and broadcast auxiliary radio
services. They also include the Local Multipoint Distribution Service
(``LMDS''), the Digital Electronic Message Service (``DEMS''), and the
24 GHz Service, where licensees can choose between common carrier and
non-common carrier status. The Commission has not yet defined a small
business with respect to microwave services. For purposes of this IRFA,
the Commission will use the SBA's definition applicable to Wireless
Telecommunications Carriers (except satellite)--i.e., an entity with no
more than 1,500 persons is considered small. For the category of
Wireless Telecommunications Carriers (except Satellite), Census data
for 2007 shows that there were 1,383 firms that operated that year. 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.
The Commission notes that the number of firms does not necessarily
track the number of licensees. The Commission estimates that virtually
all of the Fixed Microwave licensees (excluding broadcast auxiliary
licensees) would qualify as small entities under the SBA definition.
135. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico. There are presently approximately 55 licensees in this
service. The Commission is unable to estimate at this time the number
of licensees that would qualify as small under the SBA's small business
size standard for the category of Wireless Telecommunications Carriers
(except Satellite). Under that SBA small business size standard, a
business is small if it has 1,500 or fewer employees. Census data for
2007 shows that there were 1,383 firms that operated that year. 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.
136. 39 GHz Service. The Commission created a special small
business size standard for 39 GHz licenses--an entity that has average
gross revenues of $40 million or less in the three previous calendar
years. An additional size standard for ``very small business'' is: an
entity that, together with affiliates, has average gross revenues of
not more than $15 million for the preceding three calendar years. The
SBA has approved these small business size standards. The auction of
the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8,
2000. The 18 bidders who claimed small business status won 849
licenses. Consequently, the Commission estimates that 18 or fewer 39
GHz licensees are small entities that may be affected by our action.
137. Wireless Cable Systems. Broadband Radio Service and
Educational Broadband Service. Broadband Radio Service systems,
previously referred to as Multipoint
[[Page 82260]]
Distribution Service (``MDS'') and Multichannel Multipoint Distribution
Service (``MMDS'') systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (``BRS'') and Educational Broadband Service (``EBS'')
(previously referred to as the Instructional Television Fixed Service
(``ITFS''). In connection with the 1996 BRS auction, the Commission
established a small business size standard as an entity that had annual
average gross revenues of no more than $40 million in the previous
three calendar years. The BRS auctions resulted in 67 successful
bidders obtaining licensing opportunities for 493 Basic Trading Areas
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small
business. BRS also includes licensees of stations authorized prior to
the auction. At this time, we estimate that of the 61 small business
BRS auction winners, 48 remain small business licensees. In addition to
the 48 small businesses that hold BTA authorizations, there are
approximately 392 incumbent BRS licensees that are considered small
entities. After adding the number of small business auction licensees
to the number of incumbent licensees not already counted, we find that
there are currently approximately 440 BRS licensees that are defined as
small businesses under either the SBA or the Commission's rules. In
2009, the Commission conducted Auction 86, the sale of 78 licenses in
the BRS areas. The Commission offered three levels of bidding credits:
(i) A bidder with attributed average annual gross revenues that exceed
$15 million and do not exceed $40 million for the preceding three years
(small business) will receive a 15 percent discount on its winning bid;
(ii) a bidder with attributed average annual gross revenues that exceed
$3 million and do not exceed $15 million for the preceding three years
(very small business) will receive a 25 percent discount on its winning
bid; and (iii) a bidder with attributed average annual gross revenues
that do not exceed $3 million for the preceding three years
(entrepreneur) will receive a 35 percent discount on its winning bid.
Auction 86 concluded in 2009 with the sale of 61 licenses. Of the ten
winning bidders, two bidders that claimed small business status won 4
licenses; one bidder that claimed very small business status won three
licenses; and two bidders that claimed entrepreneur status won six
licenses.
138. In addition, the SBA's Cable Television Distribution Services
small business size standard is applicable to EBS. There are presently
2,032 EBS licensees. All but 100 of these licenses are held by
educational institutions. Educational institutions are included in this
analysis as small entities. Thus, we estimate that at least 1,932
licensees are small businesses. Since 2007, Cable Television
Distribution Services have been defined within the broad economic
census category of Wired Telecommunications Carriers; that category is
defined as follows: ``This industry comprises establishments primarily
engaged in operating and/or providing access to transmission facilities
and infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired telecommunications
networks. Transmission facilities may be based on a single technology
or a combination of technologies.'' For these services, the Commission
uses the SBA small business size standard for the category ``Wireless
Telecommunications Carriers (except satellite),'' which is 1,500 or
fewer employees. To gauge small business prevalence for these cable
services we must, however, use the most current census data. Census
data for 2007 shows that there were 1,383 firms that operated that
year. 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. The Commission notes that the Census' use the
classifications ``firms'' does not track the number of ``licenses''.
139. In the 1998 and 1999 LMDS auctions, the Commission defined a
small business as an entity that has annual average gross revenues of
less than $40 million in the previous three calendar years. Moreover,
the Commission added an additional classification for a ``very small
business,'' which was defined as an entity that had annual average
gross revenues of less than $15 million in the previous three calendar
years. These definitions of ``small business'' and ``very small
business'' in the context of the LMDS auctions have been approved by
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of
the 104 auction winners, 93 claimed status as small or very small
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based
on this information, the Commission believes that the number of small
LMDS licenses will include the 93 winning bidders in the first auction
and the 40 winning bidders in the re-auction, for a total of 133 small
entity LMDS providers as defined by the SBA and the Commission's
auction rules.
140. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 174 entities winning licenses for 594 Metropolitan
Statistical Area (``MSA'') licenses. Of the 594 licenses, 567 were won
by 167 entities qualifying as a small business. For that auction, the
small business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years. In the
218-219 MHz Report and Order and Memorandum Opinion and Order, the
Commission established a small business size standard for a ``small
business'' as an entity that, together with its affiliates and persons
or entities that hold interests in such an entity and their affiliates,
has average annual gross revenues not to exceed $15 million for the
preceding three years. A ``very small business'' is defined as an
entity that, together with its affiliates and persons or entities that
hold interests in such an entity and its affiliates, has average annual
gross revenues not to exceed $3 million for the preceding three years.
These size standards will be used in future auctions of 218-219 MHz
spectrum.
141. 24 GHz--Incumbent Licensees. This analysis may affect
incumbent licensees who were relocated to the 24 GHz band from the 18
GHz band, and applicants who wish to provide services in the 24 GHz
band. For this service, the Commission uses the SBA small business size
standard for the category ``Wireless Telecommunications Carriers
(except satellite),'' which is 1,500 or fewer employees. To gauge small
business prevalence for these cable services we must, however, use the
most current census data. Census data for 2007 shows that there were
1,383 firms that operated that year. 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. The Commission notes
that the Census' use of the classifications ``firms'' does not track
the number of ``licenses''. The Commission believes that there are only
two licensees in the 24 GHz band that were relocated from the 18 GHz
band, Teligent and TRW, Inc. It is our understanding that Teligent and
its related companies have less than 1,500 employees, though this may
change in
[[Page 82261]]
the future. TRW is not a small entity. Thus, only one incumbent
licensee in the 24 GHz band is a small business entity.
142. 24 GHz--Future Licensees. With respect to new applicants in
the 24 GHz band, the small business size standard for ``small
business'' is an entity that, together with controlling interests and
affiliates, has average annual gross revenues for the three preceding
years not in excess of $15 million. ``Very small business'' in the 24
GHz band is an entity that, together with controlling interests and
affiliates, has average gross revenues not exceeding $3 million for the
preceding three years. The SBA has approved these small business size
standards. These size standards will apply to the future auction, if
held.
143. Satellite Telecommunications Providers. Two economic census
categories address the satellite industry. The first category has a
small business size standard of $15 million or less in average annual
receipts, under SBA rules. The second has a size standard of $25
million or less in annual receipts.
144. The category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing telecommunications
services to other establishments in the telecommunications and
broadcasting industries by forwarding and receiving communications
signals via a system of satellites or reselling satellite
telecommunications.'' Census Bureau data for 2007 show that 512
Satellite Telecommunications firms that operated for that entire year.
Of this total, 464 firms had annual receipts of under $10 million, and
18 firms had receipts of $10 million to $24,999,999. Consequently, the
Commission estimates that the majority of Satellite Telecommunications
firms are small entities that might be affected by our action.
145. The second category, i.e., ``All Other Telecommunications''
comprises ``establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing Internet services or VoIP services via client-
supplied telecommunications connections are also included in this
industry.'' For this category, Census Bureau data for 2007 shows that
there were a total of 2,383 firms that operated for the entire year. Of
this total, 2,347 firms had annual receipts of under $25 million and 12
firms had annual receipts of $25 million to $49,999,999. Consequently,
the Commission estimates that the majority of All Other
Telecommunications firms are small entities that might be affected by
our action.
e. Cable and OVS Operators
146. Because section 706 requires us to monitor the deployment of
broadband regardless of technology or transmission media employed, the
Commission anticipates that some broadband service providers may not
provide telephone service. Accordingly, the Commission describes below
other types of firms that may provide broadband services, including
cable companies, MDS providers, and utilities, among others.
147. Cable and Other Program Distributors. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: all such firms having 1,500 or fewer
employees. Census data for 2007 shows that there were 1,383 firms that
operated that year. 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 such firms
can be considered small.
148. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that, of 6,635 systems nationwide,
5,802 systems have under 10,000 subscribers, and an additional 302
systems have 10,000-19,999 subscribers. Thus, under this second size
standard, most cable systems are small.
149. Cable System Operators. 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 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' The Commission has determined that an operator serving
fewer than 677,000 subscribers shall be deemed a small operator, if its
annual revenues, when combined with the total annual revenues of all
its affiliates, do not exceed $250 million in the aggregate. Industry
data indicate that, of 1,076 cable operators nationwide, all but ten
are small under this size standard. We note that the Commission neither
requests nor collects information on whether cable system operators are
affiliated with entities whose gross annual revenues exceed $250
million, and therefore we are unable to estimate more accurately the
number of cable system operators that would qualify as small under this
size standard.
150. Open Video Services. Open Video Service (OVS) systems provide
subscription services. The OVS framework was established in 1996, and
is one of four statutorily recognized options for the provision of
video programming services by local exchange carriers. The OVS
framework provides opportunities for the distribution of video
programming other than through cable systems. Because OVS operators
provide subscription services, OVS falls within the SBA small business
size standard covering cable services, which is ``Wired
Telecommunications Carriers.'' The SBA has developed a small business
size standard for this category, which is: all such firms having 1,500
or fewer employees. To gauge small business prevalence for the OVS
service, the Commission relies on data currently available from the
U.S. Census for the year 2007. According to that source, there were
3,188 firms that in 2007 were Wired Telecommunications Carriers. Of
these, 3,144 operated with less than 1,000 employees, and 44 operated
with more than 1,000 employees. However, as to the latter 44 there is
no data available that shows how many operated with more than 1,500
employees. Based on this data, the majority of these firms can be
considered small. In addition, we note that the Commission has
certified some OVS operators, with some now providing service.
Broadband service
[[Page 82262]]
providers (``BSPs'') are currently the only significant holders of OVS
certifications or local OVS franchises. The Commission does not have
financial or employment information regarding the entities authorized
to provide OVS, some of which may not yet be operational. Thus, at
least some of the OVS operators may qualify as small entities. The
Commission further notes that it has certified approximately 45 OVS
operators to serve 75 areas, and some of these are currently providing
service. Affiliates of Residential Communications Network, Inc. (RCN)
received approval to operate OVS systems in New York City, Boston,
Washington, DC, and other areas. RCN has sufficient revenues to assure
that they do not qualify as a small business entity. Little financial
information is available for the other entities that are authorized to
provide OVS and are not yet operational. Given that some entities
authorized to provide OVS service have not yet begun to generate
revenues, the Commission concludes that up to 44 OVS operators (those
remaining) might qualify as small businesses that may be affected by
the rules and policies adopted herein.
f. Internet Service Providers, Web Portals and Other Information
Services
151. Internet Service Providers, Web Portals and Other Information
Services. In 2007, the SBA recognized two new small business economic
census categories. They are (1) Internet Publishing and Broadcasting
and Web Search Portals, and (2) All Other Information Services.
152. Internet Service Providers. The 2007 Economic Census places
these firms, whose services might include VoIP, in either of two
categories, depending on whether the service is provided over the
provider's own telecommunications facilities (e.g., cable and DSL
ISPs), or over client-supplied telecommunications connections (e.g.,
dial-up ISPs). The former are within the category of Wired
Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. These are also labeled
``broadband.'' The latter are within the category of All Other
Telecommunications, which has a size standard of annual receipts of $25
million or less. These are labeled non-broadband.
153. The most current Economic Census data for all such firms are
2007 data, which are detailed specifically for ISPs within the
categories above. For the first category, the data show that 396 firms
operated for the entire year, of which 159 had nine or fewer employees.
For the second category, the data show that 1,682 firms operated for
the entire year. Of those, 1,675 had annual receipts below $25 million
per year, and an additional two had receipts of between $25 million and
$ 49,999,999. Consequently, we estimate that the majority of ISP firms
are small entities.
154. Internet Publishing and Broadcasting and Web Search Portals.
This industry comprises establishments primarily engaged in (1)
publishing and/or broadcasting content on the Internet exclusively or
(2) operating Web sites that use a search engine to generate and
maintain extensive databases of Internet addresses and content in an
easily searchable format (and known as Web search portals). The
publishing and broadcasting establishments in this industry do not
provide traditional (non-Internet) versions of the content that they
publish or broadcast. They provide textual, audio, and/or video content
of general or specific interest on the Internet exclusively.
Establishments known as Web search portals often provide additional
Internet services, such as email, connections to other web sites,
auctions, news, and other limited content, and serve as a home base for
Internet users. The SBA deems businesses in this industry with 500 or
fewer employees small. According to Census Bureau data for 2007, there
were 2,705 firms that provided one or more of these services for that
entire year. Of these, 2,682 operated with less than 500 employees and
13 operated with to 999 employees. Consequently, we estimate the
majority of these firms are small entities that may be affected by our
proposed actions.
155. Data Processing, Hosting, and Related Services. This industry
comprises establishments primarily engaged in providing infrastructure
for hosting or data processing services. These establishments may
provide specialized hosting activities, such as web hosting, streaming
services or application hosting; provide application service
provisioning; or may provide general time-share mainframe facilities to
clients. Data processing establishments provide complete processing and
specialized reports from data supplied by clients or provide automated
data processing and data entry services. The SBA has developed a small
business size standard for this category; that size standard is $25
million or less in average annual receipts. According to Census Bureau
data for 2007, there were 8,060 firms in this category that operated
for the entire year. Of these, 6,726 had annual receipts of under $25
million, and 155 had receipts between $25 million and $49,999,999
million. Consequently, we estimate that the majority of these firms are
small entities that may be affected by our proposed actions.
156. All Other Information Services. ``This industry comprises
establishments primarily engaged in providing other information
services (except new syndicates and libraries and archives).'' Our
action pertains to interconnected VoIP services, which could be
provided by entities that provide other services such as email, online
gaming, web browsing, video conferencing, instant messaging, and other,
similar IP-enabled services. The SBA has developed a small business
size standard for this category; that size standard is $7.0 million or
less in average annual receipts. According to Census Bureau data for
2007, there were 367 firms in this category that operated for the
entire year. Of these, 334 had annual receipts of under $5 million, and
an additional 11 firms had receipts of between $5 million and
$9,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
157. We summarize below the recordkeeping and certification
obligations of the Accessibility Report and Order. Additional
information on each of these requirements can be found in the
Accessibility Report and Order. These requirements will apply to all
entities that must comply with section 716 and section 718.
158. Recordkeeping. The Accessibility Report and Order requires,
beginning one year after the effective date of the Accessibility Report
and Order, that each manufacturer of equipment used to provide ACS and
each provider of such services subject to sections 255, 716, and 718
not otherwise exempt under the Accessibility Report and Order, maintain
certain records. These records document the efforts taken by a
manufacturer or service provider to implement sections 255, 716, and
718. The Accessibility Report and Order adopts the recordkeeping
requirements of the CVAA, which specifically include: (1) Information
about the manufacturer's or provider's efforts to consult with
individuals with disabilities; (2) descriptions of the accessibility
features of its products and services; and (3) information about the
compatibility of such products and services with peripheral devices or
specialized customer premise equipment commonly used by individuals
with disabilities to achieve
[[Page 82263]]
access. Additionally, while manufacturers and providers are not
required to keep records of their consideration of the four
achievability factors, they must be prepared to carry their burden of
proof, which requires greater than conclusory or unsupported claims.
Similarly, entities that rely on third party solutions to achieve
accessibility must be prepared to produce relevant documentation.
159. These recordkeeping requirements are necessary to facilitate
enforcement of the rules adopted in the Accessibility Report and Order
and proposed in the FNPRM. The Accessibility Report and Order builds
flexibility into the recordkeeping obligations by allowing covered
entities to keep records in any format, recognizing the unique
recordkeeping methods of individual entities. Because complaints
regarding accessibility of a product or service may not occur for years
after the release of the product or service, the Accessibility Report
and Order requires covered entities to keep records for two years from
the date the product ceases to be manufactured or a service is offered
to the public. The FNPRM seeks comment on whether any of the
recordkeeping and certification requirements should be modified for
entities covered under section 718.
160. Annual Certification Obligations. The CVAA and the
Accessibility Report and Order require an officer of providers of ACS
and ACS equipment submit to the Commission an annual certificate that
records are kept in accordance with the above recordkeeping
requirements, unless such manufacturer or provider is exempt from
compliance with section 716 under applicable rules. The certification
must be supported with an affidavit or declaration under penalty of
perjury, signed and dated by an authorized officer of the entity with
personal knowledge of the representations provided in the company's
certification, verifying the truth and accuracy of the information. The
certification must be filed with the Consumer and Governmental Affairs
Bureau on or before April 1 each year for records pertaining to the
previous calendar year. The FNPRM seeks comment on whether any of the
recordkeeping and certification requirements should be modified for
entities covered under section 718.
161. Costs of Compliance. There is an upward limit on the cost of
compliance. Under the CVAA and the Accessibility Report and Order
accessibility is required for entities under section 716 and section
718 unless it is not achievable. Under two of the four achievability
factors from the Act and adopted in the Accessibility Report and Order,
which also apply to any rules adopted pursuant to this FNPRM
implementing section 718, covered entities may demonstrate that
accessibility is not achievable based on the nature and cost of steps
needed or the technical and economic impact on the entity's operation.
Entities that are not otherwise exempt or excluded under the
Accessibility Report and Order, or subsequent to this FNPRM, must
nonetheless be able to demonstrate that they conducted an achievability
analysis, which necessarily requires the retention of some records.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
162. The RFA requires an agency to describe any significant
alternatives it considered in developing its 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 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.''
163. We note that the FNPRM continues and preserves the steps taken
in the Accessibility Report and Order to minimize adverse economic
impact on small entities. The FNPRM will continue to promote
flexibility for all entities in several ways. The FNPRM does not alter
the ability of an entity with obligations under section 716 to seek a
waiver for products or services that are not designed primarily for
ACS, and does not impact the conclusion in the Accessibility Report and
Order that customized equipment is excluded. Further, small entities
may continue to comply with both section 716 and section 718 by
demonstrating that accessibility is not achievable, or may rely on
third party software, applications, equipment, hardware, or customer
premises equipment to meet their obligations under section 716 and
section 718, if achievable. As stated below, the FNPRM also leaves
unchanged the requirements adopted in the Accessibility Report and
Order that allow covered entities to keep records in any format they
wish as this flexibility affords small entities the greatest
flexibility to choose and maintain the recordkeeping system that best
suits their resources and their needs.
164. The FNPRM also seeks comment on making permanent the temporary
exemption from the section 716 and section 717 obligations for all
small entities that was adopted in the Accessibility Report and Order.
Specifically, the Accessibility Report and Order minimized the economic
impact on small entities by temporarily exempting entities that
manufacture ACS equipment or provide ACS that, along with any
affiliates, meet the criteria for a small business concern for their
primary industry under SBA's rules and size standards. Correspondingly,
the FNPRM now seeks to develop a record that would allow the Commission
to determine whether to permanently minimize the impact on small
entities that are subject to the requirements of sections 716.
165. The FNPRM also seeks comment on alternative approaches to the
standards used to provide the temporary small business exemption even
as it seeks to develop a record on whether to make the existing
exemption a permanent one. In essence, the FNPRM looks to the temporary
exemption as a proposal for a permanent exemption and seeks to develop
record support for continuing to minimize the economic and regulatory
impact on small entities. In considering alternatives to the approach
proposed for a permanent exemption, the FNPRM seeks comment on how it
can refine the proposed approach.
166. With respect to recordkeeping and certification requirements,
and as described above, the FNPRM leaves unchanged the requirements
adopted in the Accessibility Report and Order that allow covered
entities to keep records in any format they wish. In the Accessibility
Report and Order, we found that this approach took into account the
variances in covered entities (e.g., size, experience with the
Commission), recordkeeping methods, and products and services covered
by the CVAA. Moreover, we found that it also provided the greatest
flexibility to small businesses and minimized the economic impact that
the statutorily mandated requirements impose on small businesses.
Correspondingly, we considered and rejected the alternative of imposing
a specific format or one-size-fits-all system for recordkeeping that
could potentially impose greater burdens on small businesses.
Furthermore, the certification requirement is possibly less burdensome
on small businesses than large, as it merely requires certification
from an officer that the necessary
[[Page 82264]]
records were kept over the previous year; this is presumably a less
resource intensive certification for smaller entities. The FNPRM seeks
comment on whether any of the recordkeeping requirements should be
modified for entities covered by section 718.
F. Federal Rules That May Duplicate, Overlap, or Conflict With Proposed
Rules
167. Section 255(e) of the Act, as amended, directs the United
States Access Board (``Access Board'') to develop equipment
accessibility guidelines ``in conjunction with'' the Commission, and
periodically to review and update those guidelines. We view the Access
Board's current guidelines as well as its draft guidelines as starting
points for our interpretation and implementation of sections 716 and
717 of the Act, as well as section 255, but because they do not
currently cover ACS or equipment used to provide or access ACS, we must
necessarily adapt these guidelines in our comprehensive implementation
scheme. As such, our rules do not overlap, duplicate, or conflict with
either Access Board Final Rules, or (if later adopted) the Access Board
Draft Guidelines. Where obligations under section 255 and section 716
overlap, for instance for accessibility requirements for interconnected
VoIP, we clarify in the Accessibility Report and Order which rules
govern the entities' obligations.
III. Ordering Clauses
168. It is ordered that, pursuant to the authority of sections 1-4,
255, 303(r), 403, 503, 716, 717, and 718 of the Communications Act of
1934, as amended, 47 U.S.C. 151-154, 255, 303(r), 403, 503, 617, 618,
and 619, this Further Notice of Proposed Rulemaking is hereby adopted.
169. It is further ordered that pursuant to applicable procedures
set forth in sections 1.415 and 1.419 of the Commission's Rules, 47 CFR
1.415, 1.419, interested parties may file comments on this Further
Notice of Proposed Rulemaking on or before 45 days after publication of
the Further Notice of Proposed Rulemaking in the Federal Register and
reply comments on or before 75 days after publication in the Federal
Register.
170. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Further Notice of Proposed Rulemaking, including the
Initial Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Part 14
Advanced communications services equipment, Individuals with
disabilities, Manufacturers of equipment used for advanced
communications services, Providers of advanced communications services,
Recordkeeping and enforcement requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 part 14, as added
elsewhere in this issue of the Federal Register, effective January 30,
2012 as follows:
PART 14--ACCESS TO ADVANCED COMMUNICATIONS SERVICES AND EQUIPMENT
BY PEOPLE WITH DISABILITIES
1. The authority citation for part 14 continues to read as follows:
Authority: 47 U.S.C. 151, 154(i), 154(j), 208, 255, 617, 618.
2. Add subpart E to part 14 to read as follows.
Subpart E--Internet Browsers Built Into Telephones Used With Public
Mobile Services
Sec. 14.60 Internet Browsers built into Mobile Phones.
(a) Accessibility. If a manufacturer of a telephone used with
public mobile services (as such term is defined in section 710(b)(4)(B)
of the Act) includes an Internet browser in such telephone, or if a
provider of mobile service arranges for the inclusion of a browser in
telephones to sell to customers, the manufacturer or provider shall
ensure that the functions of the included browser (including the
ability to launch the browser) are accessible to and usable by
individuals who are blind or have a visual impairment, unless doing so
is not achievable, except that this subpart shall not impose any
requirement on such manufacturer or provider--
(1) To make accessible or usable any Internet browser other than a
browser that such manufacturer or provider includes or arranges to
include in the telephone; or
(2) To make Internet content, applications, or services accessible
or usable (other than enabling individuals with disabilities to use an
included browser to access such content, applications, or services).
(b) Industry Flexibility. A manufacturer or provider may satisfy
the requirements of this subpart with respect to such telephone or
services by--
(1) Ensuring that the telephone or services that such manufacture
or provider offers is accessible to and usable by individuals with
disabilities without the use of third party applications, peripheral
devices, software, hardware, or customer premises equipment; or
(2) Using third party applications, peripheral devices, software,
hardware, or customer premises equipment that is available to the
consumer at nominal cost and that individuals with disabilities can
access.
[FR Doc. 2011-31160 Filed 12-29-11; 8:45 am]
BILLING CODE 6712-01-P