[Federal Register Volume 77, Number 168 (Wednesday, August 29, 2012)]
[Proposed Rules]
[Pages 52279-52292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21311]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 10-90; DA 12-1199]
Wireline Competition Bureau Seeks Comment on Proposed Urban Rates
Survey and Issues Relating to Reasonable Comparability Benchmarks and
the Local Rate Floor
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Wireline Competition Bureau seeks
comment on a proposed survey of urban rates for fixed voice and fixed
broadband residential services. The Bureau also seeks comment
concerning how, using data from the urban rates survey, to determine
the local voice rate floor and the reasonable comparability benchmarks
for fixed voice and fixed broadband services.
DATES: Comments are due on or before September 28, 2012.
ADDRESSES: Interested parties may file comments. All pleadings are to
reference WC Docket 10-90. Comments may be filed using the Commission's
Electronic Filing System (ECFS) or by filing paper copies, by any of
the following methods:
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number.
[ssquf] People with Disabilities: To request materials in
accessible formats for people with disabilities (Braille, large print,
electronic files, audio format), send an email to [email protected] or
call the Consumer & Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (tty).
[ssquf] In addition, one copy of each pleading must be sent to each
of the following:
(1) Jay Schwarz, Industry Analysis and Technology Division,
Wireline Competition Bureau, 445 12th Street, SW., 6-A134, Washington,
DC 20554; email: [email protected].
(2) Alexander Minard, Telecommunications Access Policy Division,
Wireline Competition Bureau, 445 12th Street, SW., 5-A334, Washington,
DC 20554; email: [email protected].
FOR FURTHER INFORMATION CONTACT: Jay Schwarz, Wireline Competition
Bureau, (202) 418-0948; Alexander Minard, Wireline Competition Bureau,
(202) 418-7400, or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice, WC
Docket No. 10-90; DA 12-1199, released on July 26, 2012. The full text
of this document is available for public inspection during regular
business hours in the FCC Reference Center, Room CY-A257, 445 12th
Street, SW., Washington, DC 20554. The document may also be purchased
from the Commission's duplicating contractor, Best Copy and Printing,
Inc. 445 12th Street, SW., Room CY-B402, Washington, DC 20554,
telephone number (800) 378-3160 or (202) 863-2898, or via the Internet
at http://www.bcpiweb.com.
I. Synopsis of Public Notice
1. In this public notice, the Wireline Competition Bureau seeks
comment on a proposed survey of urban rates for fixed voice and fixed
broadband residential services. The Bureau also seeks comment
concerning how, using data from the urban rates survey, to determine
the local voice rate floor and the reasonable comparability
[[Page 52280]]
benchmarks for fixed voice and fixed broadband services.
2. Background. On November 18, 2011 the Commission released the
USF/ICC Transformation Order and FNPRM, 76 FR 73830 (November 29,
2011), 76 FR 78384 (December 16, 2011), which comprehensively reforms
and modernizes the universal service and intercarrier compensation
systems. In the Order, among other things, the Commission directed the
Wireline Competition Bureau and Wireless Telecommunications Bureau to
conduct a survey of residential urban rates for fixed voice, fixed
broadband, mobile voice, and mobile broadband services. In the Further
Notice, the Commission sought comment on various issues associated with
determining reasonable comparability for voice and broadband rates.
3. The rate survey, conducted once each year, will be used to
establish a rate floor that carriers receiving high-cost loop support
(HCLS) or high-cost model support must meet in order to receive their
full support amounts, beginning in 2014. In addition, the rate survey
will be used to develop reasonable comparability benchmarks for voice
and broadband rates that carriers will annually certify their rates do
not exceed, with the first certification due July 1, 2013.
4. Content of Rate Survey. Section A to this Public Notice contains
the survey instrument that the Bureau proposes to gather data regarding
fixed voice and fixed broadband rates. We seek comment on the details
of the proposed rate survey as described below.
5. In the fixed voice section of the survey, the Bureau proposes
that providers will separately report non-discounted rates and other
charges (i.e. taxes, fees, etc.) for their unlimited or flat-rate local
service, unlimited all-distance service, and measured or messaged local
service. If the provider does not offer such service, it will indicate
as such and not report data for that item. Providers will report rates
for both public switched telephone network (PSTN) and Voice over
Internet Protocol (VoIP) service, to the extent each is offered.
Various non-recurring charges will also be surveyed. We seek comment on
the proposed data to be collected in the fixed voice section of the
survey.
6. In the fixed broadband section of the survey, the Bureau
proposes that providers will separately report non-discounted rates and
other charges for four specific advertised speed tiers of broadband
service. Are the four proposed speed tiers a reasonable set on which to
collect rates? For each offering, the provider will also report on any
capacity limits and what action is taken if the capacity limit is
reached. Such actions may include overage charges, blocking traffic,
and rate limiting. Are there any other service provider practices
regarding capacity limits that should be included? Do the survey's
questions about capacity limits adequately capture market offerings
given the current market for residential, fixed broadband? Is the
proposed format appropriate for collecting information on usage-based
broadband pricing for fixed services, and, if not, how should the
format be modified?
7. The Bureau intends to implement this survey through an online
reporting form accessible to those urban providers of fixed voice and
broadband services who are selected to participate. Urban providers
will be chosen to create a statistically valid sample for the purpose
of setting a reasonable comparability benchmark for fixed voice and
fixed broadband services and a rate floor for fixed voice service.
Independent samples will be chosen for the fixed voice and fixed
broadband sections of the survey. The proposed survey will use as a
population from which to sample all terrestrial providers of
residential voice or broadband services in urban areas. The Bureau
proposes defining ``urban'' for the purposes of this survey as all 2010
Census urban areas and urban clusters that sit within a Metropolitan
Statistical Area (MSA). We seek comment on this approach.
8. For each section (fixed voice and fixed broadband), urban
providers will be chosen in order to generate a statistically valid
sample for the purpose of calculating benchmarks and rate floors.
Responding providers will be asked for rates in a specified geographic
area. We propose specifying, for each surveyed provider, a 2010 Census
tract (that is ``urban,'' as explained above) for which rates should be
reported. For sampling purposes, the Bureau will use in-house data to
determine which providers are serving a Census tract. To aid providers
in locating the specified Census tract when completing the survey, the
survey will include hyperlinks where the respondent can look up the
Census tract on a map. Will this approach allow respondents to easily
and accurately report rates?
9. In the interest of simplicity, the proposed survey will not
collect rates for bundles of applications (i.e., voice and broadband
bundle; voice, broadband, and TV bundle, etc.). The survey will also
only collect non-discounted rates that are available to potential
customers rather than actual rates paid by existing customers. For the
survey's intended purposes, obtaining information about bundles,
discounts and promotional pricing of limited duration would
unnecessarily increase the complexity and burden of the data collection
on service providers that are selected to respond to the survey. We
seek comment on this approach.
10. To the extent commenters contend that we should modify the
content of the proposed survey, they should specify with particularity
how the proposed survey should be altered and explain why their
preferred approach better serves to accomplish the Commission's
objectives. Should any of the survey's questions or terminology be
altered for clarity or accuracy? Should we modify proposed sampling and
collection process in any way? Are there any other changes that should
be made?
11. Use of Data for Urban Rate Floor. The Bureau also seeks comment
on how the information collected in the proposed urban rates survey
should be used to establish the local rate floor. Historically, the
Bureau surveyed local rates (both flat-rate and measured local service)
and developed a single urban local rate average. For purposes of the
rate floor, we propose to use the urban flat local rate data to derive
a population-weighted national urban average that will be used as the
local rate floor in 2014 and updated annually thereafter. We seek
comment on this proposal.
12. Use of Data for Reasonable Comparability of Voice Service. In
the USF/ICC Transformation Order, the Commission required that carriers
certify that their voice rates are within two standard deviations of
``the national average'' for voice service. We request comment on how
rate survey data should be used to determine this national average.
13. For fixed voice service, the Bureau seeks comment on deriving
the national average for rate comparability purposes solely from data
collected regarding local, flat rate voice service in urban areas.
Alternatively, should we instead develop the national average based
solely on urban data for unlimited, all-Distance service, as determined
from the survey? A reason to adopt a national average based on the
urban unlimited, all-distance rates rather than the local, flat rate is
that the unlimited, all-distance service best reflects the varied
ways--in terms of call frequency, duration, and distance--that
households typically communicate using voice services. We seek comment
on these two alternatives and the implications of each in terms of the
ability of carriers to meet the certification requirement. Under
[[Page 52281]]
either approach, we propose to develop a population-weighted average.
We seek comment on this approach. How, if at all, should we take into
account non-recurring charges when computing the fixed voice benchmark?
14. The Bureau proposes to establish a single benchmark for fixed
voice service by which supported carriers would certify their rates,
for purposes of reasonable comparability, regardless of the voice
service offered (i.e. flat, local; unlimited, all-distance; measured
local). One reason for doing so is that the urban availability of some
services may diminish over time and reduce the available sample
population for a given service. This in turn could increase the year-
to-year variability in the benchmarks, while also creating, as a
statistical artifact, wide deviations in the benchmarks for different
types of voice services.
15. Another alternative would be to develop a separate national
average for each voice service surveyed (i.e. flat, local; unlimited,
all distance; measured, local). To the extent commenters believe the
Bureau should establish multiple, service-specific reasonable
comparability benchmarks for voice rather than simply developing a
single average for urban voice service, they should explain why such an
approach is preferable and consistent with the framework established by
the Commission in the USF/ICC Transformation Order. The Bureau also
proposes not combining multiple service rates collected in the survey
into a single benchmark because this would require weighting each
service's rate by its number of subscribers. Collecting such subscriber
information would unnecessarily impose more burden on the carriers
surveyed. To the extent commenters contend that the Bureau should
combine multiple services' rates into a single benchmark, how should
the rates be combined and what measures could be taken to minimize
burden on those providers that are surveyed?
16. The Further Notice sought comment on whether to adopt a
presumption that if a given provider is offering the same rates, terms
and conditions (including capacity limits) to both urban and rural
customers, that is sufficient to meet the statutory requirement that
services be reasonably comparable. Under such a presumption, providers
that serve both rural and urban markets would not be required to
certify their voice rates against a national urban benchmark derived
from the proposed rate survey. We seek further focused comment on this
potential approach. In particular, commenters are encouraged to
identify the universe of providers that would be able to utilize the
presumption, under the proposed survey approach that would define urban
areas as MSAs.
17. Calculation of Voice Rates for Certifying Carriers Offering
Measured Service. We also seek comment on how a fixed voice provider
offering only measured service will determine its rate that should be
compared to the national urban average for voice service, for purposes
of rate comparability. The Bureau proposes allowing such carriers to
calculate a ``blended'' rate which will be compared to the national
urban rate voice average, consistent with the approach adopted by the
Commission for purposes of the local rate floor. In particular, we
propose that a supported carrier with measured service should use its
average minutes of use data during each rate period (e.g. peak, off-
peak) to calculate its rate for reasonable comparability purposes. We
seek comment on this approach.
18. Use of Data for Reasonable Comparability of Fixed Broadband
Service. To the extent there were a presumption that offering the same
service in both rural and urban areas meets the reasonable
comparability requirements of the statute, there would be no need for
some providers to compare their broadband rates to a national average
urban rate benchmark derived from the results of the proposed rate
survey. For fixed broadband, the Bureau proposes using the surveyed
rate data for each speed tier to set reasonable comparability
benchmarks for those providers that are required to certify against a
national urban benchmark. Each speed tier would have its own benchmark,
and providers would certify their rates against the speed tier
corresponding to the slowest broadband service they offer. We are
proposing to establish different benchmarks for different speed tiers
so that supported providers offering substantially faster broadband
service than the minimum required under the Commission's public
interest obligations can certify their rates against a more comparable
urban service, rather than an urban benchmark for a much slower service
or an average of rates for both slower and faster services. We seek
comment on this approach. Would such an approach be a workable way to
determine reasonable comparability for providers that do not offer
broadband services in urban areas?
19. Alternatively, should the several speed tiers be combined to
form a single benchmark? How, if at all, should we take into account
non-recurring charges when computing the fixed broadband benchmark?
How, if at all, should the capacity limit data be used for determining
reasonable comparability? Given the emergence of usage-based broadband
pricing, how should such rates be incorporated into the benchmark?
Should the Bureau collect usage data on such plans so a ``blended''
rate can be calculated? How might a supported broadband provider with a
usage-based service certify its rates?
II. Procedural Matters
20. Filing Requirements. Pursuant to Sec. Sec. 1.415 and 1.419 of
the Commission's rules, interested parties may file comments on or
before the dates indicated on the first page of this document. Comments
may be filed using the Commission's Electronic Comment Filing System
(ECFS).
21. Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW., Washington, DC 20554.
22. The proceeding this Notice initiates 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
[[Page 52282]]
consisted in whole or in part of the presentation of data or arguments
already reflected in the presenter's written comments, memoranda or
other filings in the proceeding, the presenter may provide citations to
such data or arguments in his or her prior comments, memoranda, or
other filings (specifying the relevant page and/or paragraph numbers
where such data or arguments can be found) in lieu of summarizing them
in the memorandum. Documents shown or given to Commission staff during
ex parte meetings are deemed to be written ex parte presentations and
must be filed consistent with rule Sec. 1.1206(b). In proceedings
governed by rule Sec. 1.49(f) or for which the Commission has made
available a method of electronic filing, written ex parte presentations
and memoranda summarizing oral ex parte presentations, and all
attachments thereto, must be filed through the electronic comment
filing system available for that proceeding, and must be filed in their
native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize themselves with the Commission's
ex parte rules.
23. Paperwork Reduction Act. This document contains proposed new
information collection requirements. The new requirements will be
submitted to the Office of Management and Budget (OMB) for review under
section 3507(d) of the Paperwork Reduction Act (PRA). The Bureau, as
part of its continuing effort to reduce paperwork burdens, invites the
general public and OMB to comment on the information collection
requirements contained in this document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), the Bureau seeks specific comment on how it might
further reduce the information collection burden for small business
concerns with fewer than 25 employees.
24. Initial Regulatory Flexibility Analysis. As required by the
Regulatory Flexibility Act of 1980 (RFA), the Bureau has prepared this
Initial Regulatory Flexibility Analysis (IRFA) of the possible
significant economic impact on a substantial number of small entities
by the policies and rules proposed in this Notice. Written comments are
requested on this IRFA. Comments must be filed as responses to the IRFA
and must be filed by the deadlines for comments on the Public Notice.
The Commission will send a copy of the Public Notice, including this
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA). In addition, the Public Notice and IRFA (or
summaries thereof) will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
25. The Public Notice seeks comment on a proposed survey of urban
rates for fixed voice and fixed broadband residential services. The
Bureau also seeks comment concerning how, using data from the urban
rates survey, to determine the local voice rate floor and the
reasonable comparability benchmarks for fixed voice and fixed broadband
services. The rate survey, and benchmarks and rate floors based on the
survey, is part of implementing the USF/ICC Transformation Order to
insure supported provider's rates are not unreasonably high or
unnecessarily low.
B. Legal Basis
26. The legal basis for any action that may be taken pursuant to
the Notice is contained in sections 1, 2, 4(i), 214, 254, 303(r), 403,
and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
152, 154(i), 214, 254, 303(r), 403, and 706, and Sec. Sec. 1.1 and
1.1421 of the Commission's rules, 47 CFR 1.1, 1.421.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
27. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. A small-business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the SBA.
28. Small Businesses. Nationwide, there are a total of
approximately 27.5 million small businesses, according to the SBA.
29. Wired Telecommunications Carriers. The SBA has developed a
small business size standard for Wired Telecommunications Carriers,
which consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 2007, there were 3,188 firms in
this category, total, that operated for the entire year. Of this total,
3,144 firms had employment of 999 or fewer employees, and 44 firms had
employment of 1000 employees or more. Thus, under this size standard,
the majority of firms can be considered small.
30. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 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 and policies proposed in
the Public Notice.
31. Incumbent Local Exchange Carriers (incumbent LECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to incumbent local exchange
services. The closest applicable size standard under SBA rules is for
Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees. According to
Commission data, 1,307 carriers reported that they were incumbent local
exchange service providers. Of these 1,307 carriers, an estimated 1,006
have 1,500 or fewer employees and 301 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of incumbent
local exchange service are small businesses that may be affected by
rules adopted pursuant to the Public Notice.
32. We have included small incumbent LECs in this present RFA
analysis. As noted above, a ``small business'' under the RFA is one
that, inter alia, meets the pertinent small business size standard
(e.g., a telephone communications business having 1,500 or fewer
employees), and ``is not dominant in its field of operation.'' The
SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope. We have therefore included
small incumbent LECs in this RFA analysis, although we emphasize that
this RFA action has no effect on Commission analyses and determinations
in other, non-RFA contexts.
[[Page 52283]]
33. Competitive Local Exchange Carriers (competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 1,442 carriers reported that they were
engaged in the provision of either competitive local exchange services
or competitive access provider services. Of these 1,442 carriers, an
estimated 1,256 have 1,500 or fewer employees and 186 have more than
1,500 employees. In addition, 17 carriers have reported that they are
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500
or fewer employees. In addition, 72 carriers have reported that they
are Other Local Service Providers. Of the 72, seventy have 1,500 or
fewer employees and two have more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and Other Local Service Providers are small entities that
may be affected by rules adopted pursuant to the Public Notice.
34. Wireless Telecommunications Carriers (except Satellite). Since
2007, the SBA has recognized wireless firms within this new, broad,
economic census category. Prior to that time, such firms were within
the now-superseded categories of Paging and Cellular and Other Wireless
Telecommunications. Under the present and prior categories, the SBA has
deemed a wireless business to be small if it has 1,500 or fewer
employees. For this category, census data for 2007 show that there were
1,383 firms that operated for the entire year. Of this total, 1,368
firms had employment of 999 or fewer employees and 15 had employment of
1000 employees or more. Similarly, according to Commission data, 413
carriers reported that they were engaged in the provision of wireless
telephony, including cellular service, Personal Communications Service
(PCS), and Specialized Mobile Radio (SMR) Telephony services. Of these,
an estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
35. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (``LMDS'') is a fixed broadband point-to-
multipoint microwave service that provides for two-way video
telecommunications. The auction of the 986 LMDS licenses began and
closed in 1998. The Commission established a small business size
standard for LMDS licenses as an entity that has average gross revenues
of less than $40 million in the three previous calendar years. An
additional small business size standard for ``very small business'' was
added as an entity that, together with its 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 in the context of LMDS auctions. There were 93 winning
bidders that qualified as small entities in the LMDS auctions. A total
of 93 small and very small business bidders won approximately 277 A
Block licenses and 387 B Block licenses. In 1999, the Commission re-
auctioned 161 licenses; there were 32 small and very small businesses
winning that won 119 licenses.
36. Cable and Other Program Distribution. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: all such firms having 1,500 or fewer
employees. According to Census Bureau data for 2007, there were a total
of 955 firms in this previous category that operated for the entire
year. Of this total, 939 firms had employment of 999 or fewer
employees, and 16 firms had employment of 1000 employees or more. Thus,
under this size standard, the majority of firms can be considered small
and may be affected by rules adopted pursuant to the Public Notice.
37. Cable Companies and Systems. The Commission has developed its
own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that, of 7,208 systems nationwide,
6,139 systems have under 10,000 subscribers, and an additional 379
systems have 10,000-19,999 subscribers. Thus, under this second size
standard, most cable systems are small and may be affected by rules
adopted pursuant to the Public Notice.
38. Cable System Operators. The Act also contains a size standard
for small cable system operators, which is ``a cable operator that,
directly or through an affiliate, serves in the aggregate fewer than 1
percent of all subscribers in the United States and is not affiliated
with any entity or entities whose gross annual revenues in the
aggregate exceed $250,000,000.'' 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.
39. Open Video Services. The open video system (``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. According to Census Bureau data for
2007, there were a total of 955 firms in this previous category that
operated for the entire year. Of this total, 939 firms had employment
of 999 or fewer employees, and 16 firms had employment of 1000
employees or more. Thus, under this second size standard, most OVS
operators are small
[[Page 52284]]
and may be affected by rules adopted pursuant to the Public Notice. In
addition, we note that the Commission has certified some OVS operators,
with some now providing service. Broadband service 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, again, at least
some of the OVS operators may qualify as small entities.
40. Internet Service Providers. 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. According to Census Bureau data for 2007, there were 3,188
firms in this category, total, that operated for the entire year. Of
this total, 3144 firms had employment of 999 or fewer employees, and 44
firms had employment of 1000 employees or more. Thus, under this size
standard, the majority of firms can be considered small. In addition,
according to Census Bureau data for 2007, there were a total of 396
firms in the category Internet Service Providers (broadband) that
operated for the entire year. Of this total, 394 firms had employment
of 999 or fewer employees, and two firms had employment of 1000
employees or more. Consequently, we estimate that the majority of these
firms are small entities that may be affected by rules adopted pursuant
to the Public Notice.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
41. In this Public Notice, the Commission seeks public comment on a
proposed survey of urban rates for fixed voice and fixed broadband
residential services. The Bureau also seeks comment concerning how,
using data from the urban rates survey, to determine the local voice
rate floor and the reasonable comparability benchmarks for fixed voice
and fixed broadband services. The Public Notice seeks comment on data
requirements that would require reporting by small entities.
Specifically, the Public Notice seeks comment on the collection of
advertised rates and product offerings from small entities in urban
areas that are included in the sample.
E. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
42. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rules for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
43. The Public Notice seeks comment on issues related to the rates
survey and how the benchmarks and rate floors should be determined. The
rate survey issues are not anticipated to have a significant economic
impact on small entities because the survey will only sample a small
number of providers. Furthermore, since the statistical sampling
methodology will result in larger entities being more likely to be
surveyed, we anticipate small entities will only compose a minor
portion of the overall sample. Moreover, the survey only asks about
advertised rates and product offerings which should be readily
available to entities of any size. Furthermore, any significant
economic impact cannot necessarily be minimized through alternatives
since the survey sample will already be restricted to a small set of
the total population of carriers necessary for generating a
statistically valid sample, and the survey will only ask for readily
available advertised rates and will be implemented in an easily
accessible online format.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
44. None.
Federal Communications Commission.
Trent B. Harkrader,
Division Chief, Telecommunications Access Policy Division Wireline
Competition Bureau.
Proposed Rate Survey Questions for Fixed Services Sections of Rate
Survey
Note: The below survey instrument is intended to be implemented
via an online interface accessible to survey participants. The
particular format used in this appendix is for explanatory purposes
only.
III. Survey Respondent Information
This survey asks questions about PROVIDER NAME's (FIXED VOICE,
FIXED BROADBAND, MOBILE) services and rates. Please answer all
questions as they pertain to the specific geographic location indicated
below on MONTH DAY, YEAR.
Enter identifying information below as it pertain to the location
identified in the bottom line of Section I.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
I. SURVEY RESPONDENT INFORMATION
----------------------------------------------------------------------------------------------------------------
Provider Name: Pre-populated by FCC
Provider FRN (used on Dec 31, 2011 Form 477):
Provider Study Area Code (if current USF recipient):
Name of Person Completing Form:
Contact Phone Number:
Contact Email Address:
Name of Certifying Official:
Certifying Official's Phone Number:
Certifying Official's Email Address:
----------------------------------------------------------------------------------------------------------------
Location for Which Reported Rates Apply: Pre-populated by FCC
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IV. Fixed Voice
Report rates on fixed voice service provided in GEOGRAPHIC
LOCATION. All reported rates should be non-discounted, residential
rates available on MONTH DAY, YEAR to any existing or potential
customer at the specified location. Report rates for fixed voice
service that is not bundled with any other product (e.g. Internet, TV).
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V. Fixed Broadband
Report rates on fixed broadband service provided in GEOGRAPHIC
LOCATION. All reported rates should be standard, non-discounted,
residential rates available on MONTH DAY, YEAR to any existing or
potential customer. Report rates for fixed broadband service that is
not bundled with any other product (e.g. telephone, TV). Exclude
residential broadband service that is provided via satellite.
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[FR Doc. 2012-21311 Filed 8-28-12; 8:45 am]
BILLING CODE 6712-01-C