The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions are impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance.

We anticipate that seats with non-traditional, large, non-metallic panels will be installed in other makes and models of airplanes. We have made the determination to require special conditions for all applications requesting the installation of seats with non-traditional, large, non-metallic panels until the airworthiness requirements can be revised to address this issue. Having the same standards across the range of airplane makes and models will ensure consistent ruling for the aviation industry.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

On April 17, 2012, Embraer S.A. applied for a change to Type Certificate No. T00011AT to offer a new passenger seat type that, according to the applicant, is lightweight, comfortable, and slim in profile, maximizing passenger space in the Models EMB-135 and EMB-145 series airplanes. The Embraer S.A. Models EMB-135 and EMB-145 series airplanes are pressurized, low-wing, “T” tail, transport category airplanes with tricycle landing gear. They are powered by two Rolls Royce model AE3007A series engines, and carry a maximum of 50 passengers.

The applicable regulations, Title 14, Code of Federal Regulations (14 CFR) part 25, do not require seats to meet the more stringent flammability standards required of large, non-metallic panels in the cabin interior. At the time the applicable rules were written, seats were designed with a metal frame covered by fabric, not with large, non-metallic panels. Seats also met the then-recently adopted standards for flammability of seat cushions. With the seat design being mostly fabric and metal, the contribution to a fire in the cabin had been minimized and was not considered a threat. For these reasons,seats did not need to be tested to heat-release and smoke-emission requirements.

Seat designs have now evolved to occasionally include non-traditional, large, non-metallic panels. Taken in total, the surface area of these panels is on the same order as the sidewall and overhead stowage bin interior panels. To provide the level of passenger protection intended by the airworthiness standards, these non-traditional, large, non-metallic panels in the cabin must meet the standards of part 25, Appendix F, parts IV and V, heat-release and smoke-emission requirements.

Under the provisions of 14 CFR 21.101, Embraer S.A. must show that the Model EMB-135 and EMB145 series airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. T00011AT or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” Refer to Type Certificate No. T00011AT for the certification basis.

Only airplanes associated with new seat certification programs approved after the effective date of these special conditions will be affected by the requirements in these special conditions. Previously certificated interiors on the existing airplane fleet and follow-on deliveries of airplanes with previously certificated interiors are not affected.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Embraer S.A. Models EMB-135 and EMB-145 series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Embraer S.A. Models EMB-135 and EMB-145 series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

The Embraer S.A. Models EMB-135 and EMB-145 series airplanes will incorporate the following novel or unusual design feature: These models offer interior arrangements that include passenger seats that incorporate non-traditional, large, non-metallic panels in lieu of the traditional metal frame covered by fabric. The flammability properties of these panels have been shown to significantly affect the survivability of the cabin in the case of fire. These seats are considered a novel design for transport-category airplanes that include Amendment 25-61 and Amendment 25-98 in the certification basis, and were not considered when those airworthiness standards were established.

The existing regulations do not provide adequate or appropriate safety standards for seat designs that incorporate non-traditional, large, non-metallic panels in their designs. To provide a level of safety that is equivalent to that afforded to the balance of the cabin, additional airworthiness standards, in the form of special conditions, are necessary. These special conditions supplement § 25.853. The requirements contained in these special conditions consist of applying the identical test conditions, required of all other large panels in the cabin, to seats with non-traditional, large, non-metallic panels.

A non-traditional, large, non-metallic panel, in this case, is defined as a panel with exposed surface areas greater than 1.5 square feet installed per seat place. The panel may consist of either a single component or multiple components in a concentrated area. Examples of parts of the seat where these non-traditional panels are installed include, but are not limited to: seat backs, bottoms and leg/foot rests, kick panels, back shells, credenzas, and associated furniture. Examples of traditional exempted parts of the seat include: Arm caps, armrest close-outs such as end bays and armrest-styled center consoles, food trays, video monitors, and shrouds.

“Exposed” is considered to include panels that are directly exposed to the passenger cabin in the traditional sense, and panels that are enveloped, such as by a dress cover. Traditional fabrics or leathers currently used on seats are excluded from these special conditions. These materials must still comply with §§ 25.853(a) and 25.853(c) if used as a covering for a seat cushion, or § 25.853(a) if installed elsewhere on the seat. Non-traditional, large, non-metallic panels covered with traditional fabrics or leathers will be tested without their coverings or covering attachments.

In the early 1980s, the FAA extensively researched the effects of post-crash flammability in the passenger cabin. As a result of this research and service experience, the FAA adopted new rules for interior surfaces associated with large surface area parts. Specifically, the rules require measurement of heat release and smoke emission (part 25, Appendix F, parts IV and V) for the affected parts. Heat release has been shown to have a direct correlation with post-crash fire survival time. The materials that comply with the standards (i.e., § 25.853 titled “Compartment interiors” as amended by Amendments 25-61 and 25-66) extend survival time by approximately two minutes over materials that do not comply.

When Amendment 25-61 was written, the potential application of the requirement to seats was explored. The seat frame itself was not a concern because it was made primarily of aluminum, and there were only small amounts of non-metallic materials (e.g., a food tray table and armrest closeout, approximate total surface area of 1.5 square feet). The overall effect on survivability was negligible if these panels met the heat release and smoke requirements. Therefore the requirements did not address seats, and the preambles to both Notice of Proposed Rule Making (NPRM) 85-10 and the final rule (Amendment 25-61) specifically note that they were excluded because the recently-adopted standards for flammability of seat cushions will greatly inhibit involvement of the seats.

In the late 1990s, when seat designs were evolving to include large non-metallic panels with surface areas that would impact survivability during a cabin fire event comparable to partitions or galleys, the FAA issued Policy Memorandum 97-112-39, “Guidance for Flammability Testing of Seat/Console Installations,” dated October 17, 1997. The memo noted that large surface area panels must comply with heat release and smoke emissionrequirements, even if they were attached to a seat. If the FAA had not issued such policy, seat designs could have been viewed as a loophole to the airworthiness standards that would result in an unacceptable decrease in survivability during a cabin fire event.

The following paragraphs are the pertinent regulatory information involving § 25.853.

NPRM 85-10 (50 FR 15038, April 16, 1985): “Seats would not be tested [to heat release and smoke emission] because the recently-adopted standards for flammability of seat cushions will greatly inhibit involvement of the seats.”

Final Rule at Amendment 25-61 (51 FR 26206, August 20, 1986): “The primary purpose of the new flammability standards [heat release and smoke emission] is to ensure that interior materials with large outer surface areas will not become involved rapidly and contribute to a fire when exposed to flames.”

Final Rule at Amendment 25-66 (53 FR 32584, September 26, 1988): “Two commentors suggest editorial changes for clarity. One believes that a new [section] should be added to state that, `smaller items, such as windows, window shades, or curtains, as well as floor coverings, floor structure, seats, and service items, are not included and do not have to meet the requirements in (a-1) [heat release and smoke emission]. All of such materials have to meet the flammability requirements prescribed in paragraph (a) [Bunsen burner] of this part.' As discussed in the preamble to Notice 85-10, these would be correct statements. It does not appear, however, that clarity would be enhanced by their addition. These items are clearly not required to comply with the new standards [heat release and smoke emission] due to their absence in Sec. 25.853(a-1).”

14 CFR 25.853,Compartment interiors,at Amendment 25-72 (55 FR 29774, July 20, 1990):

(c) For airplanes with passenger capacities of 20 or more, interior ceiling and wall panels (other than lighting lenses), partitions, and the outer surfaces of galleys, large cabinets and stowage compartments (other than under seat stowage compartments and compartments for stowing small items, such as magazines and maps) must also meet the test requirements of parts IV [heat release] and V [smoke emission] of Appendix F of this part, or other approved equivalent method, in addition to the flammability requirements prescribed in paragraph (a) [Bunsen burner] of this section.

Final Rule at Amendment 25-83 (March 6, 1995):

“The distinction between parts with large surface areas, which must meet the new standards [heat release and smoke emission], and those with smaller surface areas is very difficult * * * It is not possible to cite a specific size that will apply in all installations; however, as a general rule, components with exposed-surface areas of one square foot or less may be considered small enough that they do not have to meet the new standards. Components with exposed-surface areas greater than two square feet may be considered large enough that they do have to meet the new standards. Those with exposed-surface areas greater than one square foot, but less than two square feet, must be considered in conjunction with the areas of the cabin in which they are installed before a determination could be made.”

The intent of the heat release and smoke emission standards is to include minimum panel sizes on the order of one to two square feet. This panel size sets the acceptable level of safety in the cabin. Traditional seat designs have approximately 1.5 square feet of nonmetallic panel material per seat place (a food tray table and armrest closeout) and previously have been excluded from the heat release and smoke standards. For example, for a traditional economy class triple place seat assembly, the exclusion is 4.5 square feet. The intent of the Special Conditions is to maintain this accepted level of safety and be consistent with the average minimum panel size in the balance of the cabin interior. Therefore, we are allowing up to 1.5 square feet of nonmetallic panel material per seat place to be excluded from the heat release and smoke emission standards. However, this exclusion from heat release and smoke emission does not provide the material additional relief from the other standards such as 14 CFR part 25 Appendix F, parts I and II. There are no changes to how those standards are applied.

The FAA recognizes that different manufacturing techniques have associated cost differences and therefore are allowing the applicant to designate which nonmetallic panels comprise the 1.5 square foot exclusion. This determination will allow for flexibility in design and a manufacturing cost savings.

As discussed above, these special conditions are applicable to the Embraer S.A. Models EMB-135 and EMB-145 series airplanes. Should Embraer S.A. apply at a later date for a change to the type certificate to include another model on the same type certificate incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in theFederal Register; however, as the certification date for the Embraer S.A. Models EMB-135 and EMB-145 series airplanes is imminent, the FAA finds that good cause exists to make these special conditions effective upon issuance.

This action affects only certain novel or unusual design features on the Embraer S.A. Models EMB-135 and EMB-145 series of airplanes. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Embraer S.A. Models EMB-135 and EMB-145 series airplanes.

1. Compliance with 14 CFR part 25 Appendix F, parts IV and V, heat release and smoke emission, is required for seats that incorporate non-traditional, large, nonmetallic panels that may either be a single component or multiple components in a concentrated area in their design.

2. The applicant may designate up to and including 1.5 square feet of non-traditional, nonmetallic panel material per seat place that does not have to comply with No. 1. A triple seat assembly may have a total of 4.5 square feet excluded on any portion of the assembly (e.g., outboard seat place 1 sq. ft., middle 1 sq. ft., and inboard 2.5 sq. ft.)

3. Seats need not meet the test requirements of 14 CFR part 25 Appendix F, parts IV and V when installed in compartments that are not otherwise required to meet these requirements. Examples include:

a. Airplanes with passenger capacities of 19 or less,

b. Airplanes that do not have smoke and heat release in their certificationbasis and do not need to comply with the requirements per 14 CFR 121.312,

c. Airplanes exempted from smoke and heat release requirements.

Definition of “non-traditional, large, nonmetallic panel”—A non-traditional, large, nonmetallic panel, in this case, is defined as a panel with exposed surface areas greater than 1.5 square feet installed per seat place. The panel may consist of either a single component or multiple components in a concentrated area. Examples of parts of the seat where these non-traditional areas are installed include, but are not limited to, seat backs, bottoms and leg/foot rests, kick panels, back shells, credenzas, and associated furniture. Examples of traditional exempted areas are: arm caps, armrest close-outs such as end bays and armrest-styled center consoles, food trays, video monitors and shrouds.

Clarification of “exposed”—Exposed is considered to include panels that are directly exposed to the passenger cabin in the traditional sense, plus those panels enveloped, such as by a dress cover. Traditional fabrics or leathers currently used on seats are excluded from these special conditions. These materials must still comply with §§ 25.853(a) and 25.853(c) if used as a covering for a seat cushion, or § 25.853(a) if installed elsewhere on the seat. Non-traditional large, nonmetallic panels covered with traditional fabrics or leathers will be tested without their coverings or covering attachments.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in theFederal Registeron June 25, 2012 (77 FR 37829), and proposed to supersede AD 2005-25-21, Amendment 39-14414 (70 FR 73919, December 14, 2005). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (77 FR, 37829, June 25, 2012), or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (77 FR 37829, June 25, 2012) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (77 FR 37829, June 25, 2012).

We estimate that this AD will affect about 17 products of U.S. registry.

We estimate that it will take about 48 work-hours per product to comply with the new basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $69,360, or $4,080 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I,section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet athttp://www.regulations.gov;or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (77 FR 37829, June 25, 2012), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in theADDRESSESsection. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Part 233 establishes policy and assigns responsibilities for the Federal Voting Assistance Program. It establishes policy and assigns responsibilities for the development and implementation of installation voter assistance (IVA) offices. This part establishes policy for the development and implementation, jointly with each State, of procedures for persons to apply to register to vote at recruitment offices of the Military Services.

It has been certified that 32 CFR part 233 does not:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a section of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in these Executive Orders.

It has been certified that 32 CFR part 233 does not contain a Federal mandatethat may result in expenditure by State, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year.

It has been certified that 32 CFR part 233 is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities.

It has been certified that 32 CFR part 233 does impose reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995. Two surveys are conducted after the election cycle. OMB has approved these surveys under the following OMB Control Numbers: 0704-0125, “Post-Election Survey of Local Election Officials,” and 0704-0476, “Post-Election Survey of Overseas Citizens.” A 60-day notice requesting comments on the revised collections will be published in January 2012 and the revised collections should be ready for submission to OMB in the May/June 2012 timeframe.

It has been certified that 32 CFR part 233 does not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on:

(1) The States;

(2) The relationship between the National Government and the States; or

(3) The distribution of power and responsibilities among the various levels of Government.

The Coast Guard is issuing this final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Union Pacific railroad swing bridge requiring the draw operations in 33 CFR 117.449 (a) was modified to be a fixed span bridge in May of 2012.

The bridge operator and those transiting in the vicinity of this bridge have not executed any draw operations since the regulation that governs the bridge was changed to state that “the draw * * * need not be opened for the passage of vessels” on February 23, 1976. At that time, all of the internal workings of the bridge were removed.

The Coast Guard has also determined that the waterway is non-tidal and not susceptible to interstate or foreign commerce thus making the bridge exempt from bridge permit requirements under Section 107 of the Coast Guard Authorization Act of 1982 (33 U.S.C. 530). That determination allowed the bridge owner to modify the existing bridge to permanently remove the machinery from the bridge and make modification to the swing span portion of the bridge to render it as a fixed bridge without a permit. Because of the modification from a swing bridge to a fixed bridge, the current regulation is no longer applicable and should be removed from publication. For these reasons, good cause exists for not publishing a NPRM with respect to this rule because it is unnecessary.

For similar reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective in less than 30 days after publication in theFederal Register(FR). The railroad bridge has had no openings in 61 years. It has effectively been a fixed bridge for 36 years due to the lack of internal machinery. This bridge has now been modified to a fixed bridge. As such, the bridge is not required to have an operating regulation. This rule only makes a minor change to the Code of Federal Regulations (CFR), omitting a regulatory requirement that is no longer applicable or necessary. Therefore, providing a 30 day notice before making this rule effective is unnecessary.

The Union Pacific railroad swing bridge across Grosse Tette Bayou, mile 14.7, was modified into a fixed bridge in May of 2012. The modification of this bridge from a drawbridge to a fixed bridge necessitates the removal of the drawbridge operation regulation pertaining to this bridge.

The regulation governing the operation of this bridge is found in 33 CFR 117.449(a). The purpose of this rule is to remove the existing regulation from the CFR since it governs a bridge that no longer requires a drawbridge regulation.

The Coast Guard is changing the regulation in 33 CFR 117.449 by removing restrictions and the regulatory burden related to the draw operations for the Union Pacific railroad swing bridge, which has been modified from a moveable to a fixed bridge, without publishing an NPRM. The change removes the section of the regulation governing the bridge since the bridge will no longer be required to comply with 33 CFR part 117. This change does not affect vessel operators using the waterway as this bridge has not opened since 1951 and has not had the ability to open since 1976.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

The bridge has been unable to open since 1976. The removal of the drawbridge regulation does not impact vessel traffic because the current conditions have been in place for decades. Additionally, the bridge has been modified to be a fixed bridge so it cannot accommodate vessel traffic.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

Since the drawbridge across the Grosse Tete Bayou, mile 14.7, in Iberia Parish, LA has been modified to a fixed bridge; the regulation governing draw operations for this bridge is no longer needed. There is no new restriction or regulation being imposed by this rule; therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in theFOR FURTHER INFORMATION CONTACT, above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actionsannually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in theFOR FURTHER INFORMATION CONTACTsection to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that might disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (32)(e), of the Instruction.

Under figure 2-1, paragraph (32)(e), of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

The Coast Guard will enforce a 100 foot safety zone around a fireworks barge during the loading, transit, and arrival of the fireworks barge to the display location and until the start of the fireworks display. From 11 a.m. until 8 p.m. on October 6, 2012, the fireworks barge will be loading pyrotechnics off of Pier 50 in position 37°46′28″ N, 122°23′06″ W (NAD 83). From 8 p.m. to 8:30 p.m. on October 6, 2012, the loaded barge will transit from Pier 50 to the launch site near Pier 3 in approximate position 37°48′00″ N, 122°23′27″ W (NAD83). Upon the commencement of the fireworks display, scheduled to take place from 9:30 p.m. to 9:40 p.m. on October 6, 2012, the safety zone will increase in size and encompass the navigable waters around and under the fireworks barge within a radius 1,000 feet at the launch site near Pier 3 in approximate position 37°48′00″ N, 122°23′27″ W (NAD83) for the Fleet Week Fireworks in 33 CFR 165.1191, Table 1, item number 25. This safety zone will be in effect from 11 a.m. to 9:50 p.m. on October 6, 2012. Under the provisions of 33 CFR 165.1191, unauthorized persons or vessels are prohibited from entering into, transiting through, or anchoring in the safety zone during all applicable effective dates and times, unless authorized to do so by the PATCOM. Additionally, each person who receives notice of a lawful order or direction issued by an official patrol vessel shall obey the order or direction. The PATCOM is empowered to forbid entry into and control the regulated area. The PATCOM shall be designated by the Commander, Coast Guard Sector San Francisco. The PATCOM may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so. This notice is issued under authority of 33 CFR 165.1191 and 5 U.S.C. 552(a). In addition to this notice in theFederal Register, the Coast Guard will provide the maritime community with extensive advance notification of the safety zone and its enforcement period via the Local Notice to Mariners.

If the Captain of the Port determines that the regulated area need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the regulated area.

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 (“CERCLA” or “the Act”), in response to the dangers of uncontrolled releases or threatened releases of hazardous substances, and releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. CERCLA was amended on October 17, 1986, by the Superfund Amendments and Reauthorization Act (“SARA”), Public Law 99-499, 100 Stat. 1613et seq.

To implement CERCLA, the EPA promulgated the revised National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”), 40 CFR Part 300, on July 16, 1982 (47 FR 31180), pursuant to CERCLA section 105 and Executive Order 12316 (46 FR 42237, August 20, 1981). The NCP sets guidelines and procedures for responding to releases and threatened releases of hazardous substances, or releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. The EPA has revised the NCP on several occasions. The most recent comprehensive revision was on March 8, 1990 (55 FR 8666).

As required under section 105(a)(8)(A) of CERCLA, the NCP also includes “criteria for determining priorities among releases or threatened releases throughout the United States for the purpose of taking remedial action and, to the extent practicable, taking into account the potential urgency of such action, for the purpose of taking removal action.” “Removal” actions are defined broadly and include a wide range of actions taken to study, clean up, prevent or otherwise address releases and threatened releases of hazardous substances, pollutants or contaminants (42 U.S.C. 9601(23)).

The NPL is a list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States. The list, which is appendix B of the NCP (40 CFR Part 300), was required under section 105(a)(8)(B) of CERCLA, as amended. Section 105(a)(8)(B) defines the NPL as a list of “releases” and the highest priority “facilities” and requires that the NPL be revised at least annually. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is of only limited significance, however, as it does not assign liability to any party or to the owner of any specific property. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

For purposes of listing, the NPL includes two sections, one of sites that are generally evaluated and cleaned up by the EPA (the “General Superfund Section”) and one of sites that are owned or operated by other federal agencies (the “Federal Facilities Section”). With respect to sites in the Federal Facilities Section, these sites are generally being addressed by other federal agencies. Under Executive Order 12580 (52 FR 2923, January 29, 1987) and CERCLA section 120, each federal agency is responsible for carrying out most response actions at facilities under its own jurisdiction, custody or control, although the EPA is responsible for preparing a Hazard Ranking System (“HRS”) score and determining whether the facility is placed on the NPL.

There are three mechanisms for placing sites on the NPL for possible remedial action (see 40 CFR 300.425(c) of the NCP): (1) A site may be included on the NPL if it scores sufficiently high on the HRS, which the EPA promulgated as appendix A of the NCP (40 CFR Part 300). The HRS serves as a screening tool to evaluate the relative potential of uncontrolled hazardous substances, pollutants or contaminants to pose a threat to human health or the environment. On December 14, 1990 (55 FR 51532), the EPA promulgated revisions to the HRS partly in response to CERCLA section 105(c), added by SARA. The revised HRS evaluates four pathways: ground water, surface water, soil exposure and air. As a matter of agency policy, those sites that score 28.50 or greater on the HRS are eligible for the NPL. (2) Pursuant to 42 U.S.C. 9605(a)(8)(B), each state may designate a single site as its top priority to be listed on the NPL, without any HRS score. This provision of CERCLA requires that, to the extent practicable, the NPL include one facility designated by each state as the greatest danger to public health, welfare or the environment among known facilities in the state. This mechanism for listing is set out in the NCP at 40 CFR 300.425(c)(2). (3) The third mechanism for listing, included in the NCP at 40 CFR 300.425(c)(3), allows certain sites to be listed without any HRS score, if all of the following conditions are met:

• The Agency for Toxic Substances and Disease Registry (ATSDR) of the U.S. Public Health Service has issued a health advisory that recommends dissociation of individuals from the release.

• The EPA determines that the release poses a significant threat to public health.

• The EPA anticipates that it will be more cost-effective to use its remedial authority than to use its removal authority to respond to the release.

The EPA promulgated an original NPL of 406 sites on September 8, 1983 (48 FR 40658) and generally has updated it at least annually.

A site may undergo remedial action financed by the Trust Fund established under CERCLA (commonly referred to as the “Superfund”) only after it is placed on the NPL, as provided in the NCP at 40 CFR 300.425(b)(1). (“Remedial actions” are those “consistent with a permanent remedy, taken instead of or in addition to removal actions. * * *” 42 U.S.C. 9601(24).) However, under 40 CFR 300.425(b)(2), placing a site on the NPL “does not imply that monies will be expended.” The EPA may pursue other appropriate authorities to respond to the releases, including enforcement action under CERCLA and other laws.

The NPL does not describe releases in precise geographical terms; it would be neither feasible nor consistent with the limited purpose of the NPL (to identify releases that are priorities for further evaluation), for it to do so. Indeed, the precise nature and extent of the site are typically not known at the time of listing.

Although a CERCLA “facility” is broadly defined to include any area where a hazardous substance has “come to be located” (CERCLA section 101(9)), the listing process itself is not intended to define or reflect the boundaries of such facilities or releases. Of course, HRS data (if the HRS is used to list a site) upon which the NPL placement was based will, to some extent, describe the release(s) at issue. That is, the NPL site would include all releases evaluated as part of that HRS analysis.

When a site is listed, the approach generally used to describe the relevant release(s) is to delineate a geographical area (usually the area within an installation or plant boundaries) and identify the site by reference to that area. However, the NPL site is not necessarily coextensive with the boundaries of the installation or plant, and the boundaries of the installation or plant are not necessarily the “boundaries” of the site. Rather, the site consists of all contaminated areas within the area used to identify the site, as well as any other location where that contamination has come to be located, or from where that contamination came.

In other words, while geographic terms are often used to designate the site (e.g.,the “Jones Co. plant site”) in terms of the property owned by a particular party, the site, properly understood, is not limited to that property (e.g.,it may extend beyond the property due to contaminant migration), and conversely may not occupy the full extent of the property (e.g.,where there are uncontaminated parts of the identified property, they may not be, strictly speaking, part of the “site”). The “site” is thus neither equal to, nor confined by, the boundaries of any specific property that may give the site its name, and the name itself should not be read to imply that this site is coextensive with the entire area within the property boundary of the installation or plant. In addition, the site name is merely used to help identify the geographic location of the contamination, and is not meant to constitute any determination of liability at a site. For example, the name “Jones Co. plant site,” does not imply that the Jones company is responsible for the contamination located on the plant site.

EPA regulations provide that the Remedial Investigation (“RI”) “is a process undertaken * * * to determine the nature and extent of the problem presented by the release” as more information is developed on site contamination, and which is generally performed in an interactive fashion with the Feasibility Study (“FS”) (40 CFR 300.5). During the RI/FS process, the release may be found to be larger or smaller than was originally thought, as more is learned about the source(s) and the migration of the contamination. However, the HRS inquiry focuses on an evaluation of the threat posed and therefore the boundaries of the release need not be exactly defined. Moreover, it generally is impossible to discover the full extent of where the contamination “has come to be located” before all necessary studies and remedial work are completed at a site. Indeed, the known boundaries of the contamination can be expected to change over time. Thus, in most cases, it may be impossible to describe the boundaries of a release with absolute certainty.

Further, as noted above, NPL listing does not assign liability to any party or to the owner of any specific property. Thus, if a party does not believe it is liable for releases on discrete parcels of property, it can submit supporting information to the agency at any time after it receives notice it is a potentially responsible party.

For these reasons, the NPL need not be amended as further research reveals more information about the location of the contamination or release.

The EPA may delete sites from the NPL where no further response is appropriate under Superfund, as explained in the NCP at 40 CFR 300.425(e). This section also provides that the EPA shall consult with states on proposed deletions and shall consider whether any of the following criteria have been met:

(i) Responsible parties or other persons have implemented all appropriate response actions required;

(ii) All appropriate Superfund-financed response has been implemented and no further response action is required; or

(iii) The remedial investigation has shown the release poses no significant threat to public health or the environment, and taking of remedial measures is not appropriate.

In November 1995, the EPA initiated a policy to delete portions of NPL sites where cleanup is complete (60 FR 55465, November 1, 1995). Total site cleanup may take many years, while portions of the site may have been cleaned up and made available for productive use.

The EPA also has developed an NPL construction completion list (“CCL”) to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities (58 FR 12142, March 2, 1993). Inclusion of a site on the CCL has no legal significance.

Sites qualify for the CCL when: (1) Any necessary physical construction is complete, whether or not final cleanup levels or other requirements have been achieved; (2) the EPA has determined that the response action should be limited to measures that do not involve construction (e.g.,institutional controls); or (3) the site qualifies for deletion from the NPL. For the most up-to-date information on the CCL, see the EPA's Internet site athttp://www.epa.gov/superfund/cleanup/ccl.htm.

The Sitewide Ready for Anticipated Use measure represents important Superfund accomplishments and themeasure reflects the high priority the EPA places on considering anticipated future land use as part of the remedy selection process. See Guidance for Implementing the Sitewide Ready-for-Reuse Measure, May 24, 2006, OSWER 9365.0-36. This measure applies to final and deleted sites where construction is complete, all cleanup goals have been achieved, and all institutional or other controls are in place. The EPA has been successful on many occasions in carrying out remedial actions that ensure protectiveness of human health and the environment for current and future land uses, in a manner that allows contaminated properties to be restored to environmental and economic vitality. For further information, please go tohttp://www.epa.gov/superfund/programs/recycle/pdf/sitewide_a.pdf.

In order to maintain close coordination with states and tribes in the NPL listing decision process, the EPA's policy is to determine the position of the states and tribes regarding sites that the EPA is considering for listing. This consultation process is outlined in two memoranda that can be found at the following Web site:http://www.epa.gov/superfund/sites/npl/hrsres/policy/govlet.pdf.The EPA is improving the transparency of the process by which state and tribal input is solicited. The EPA will be using the web and where appropriate more structured state and tribal correspondence that (1) explains the concerns at the site and the EPA's rationale for proceeding; (2) requests an explanation of how the state intends to address the site if placement on the NPL is not favored; and (3) emphasizes the transparent nature of the process by informing states that information on their responses will be publicly available.

A model letter and correspondence from this point forward between the EPA and states and tribes where applicable, will be added to the EPA's Web site athttp://www.epa.gov/superfund/sites/query/queryhtm/nplstcor.htm.

Yes, documents relating to the evaluation and scoring of the sites in this final rule are contained in dockets located both at the EPA Headquarters and in the Regional offices.

An electronic version of the public docket is available throughwww.regulations.gov(see table below for Docket Identification numbers). Although not all Docket materials may be available electronically, you may still access any of the publicly available Docket materials through the Docket facilities identified below in section II D.

The Headquarters Docket for this rule contains, for each site, the HRS score sheets, the Documentation Record describing the information used to compute the score, pertinent information regarding statutory requirements or the EPA listing policies that affect the site and a list of documents referenced in the Documentation Record. For sites that received comments during the comment period, the Headquarters Docket also contains a Support Document that includes the EPA's responses to comments.

The Regional Dockets contain all the information in the Headquarters Docket, plus the actual reference documents containing the data principally relied upon by the EPA in calculating or evaluating the HRS score for the sites located in their Region. These reference documents are available only in the Regional Dockets. For sites that received comments during the comment period, the Regional Docket also contains a Support Document that includes the EPA's responses to comments.

You may view the documents, by appointment only, after the publication of this rule. The hours of operation for the Headquarters Docket are from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal holidays. Please contact the Regional Dockets for hours. For addresses for the Headquarters and Regional Dockets, seeADDRESSESsection in the beginning portion of this preamble.

You may obtain a current list of NPL sites via the Internet athttp://www.epa.gov/superfund/sites/npl/index.htmor by contacting the Superfund Docket (see contact information in the beginning portion of this notice).

This final rule adds the following 12 sites to the NPL, all to the General Superfund Section. All of the sites included in this final rulemaking are being added to the NPL based on HRS scores of 28.50 or above with the exception of Cedar Chemical Corporation, which has been designated as the state's one-time top priority site. The sites are presented in the table below:

The EPA reviewed all comments received on the sites in this rule and responded to all relevant comments. This rule adds 12 sites to the NPL.

The EPA received two comments relating to all sites proposed for NPL addition in the March 2012 NPL proposed rule (77 FR 15344, March 15, 2012). One commenter approved of listing sites on the NPL but urged the EPA to develop a more reasoned and significant HRS score threshold for listing sites (see docket number EPA-HQ-SFUND-2012-0071-0005). The commenter questioned whether the EPA can protect human health and the environment without a “reasoned threshold for remediation” and whether 28.50 is the “exact point where risk becomes too great for the government to allow the contamination to continue.” The commenter expressed that she was unable to locate any resource indicating the rationale of the 28.50 threshold, then cited in part the EPA's rationale from the 1990 revisions to the HRS at 55 FR 51569. The commenter questioned whether the rationale is still valid given that 220 sites currently on the Superfund list (16.9% of the total listed sites) fall within 5 points of the 28.50 cutoff.

In response, the commenter is incorrect that the 28.50 cutoff score is intended as a “reasoned threshold for remediation” and is incorrect in stating that the 28.50 cutoff score is intended as “the exact point where risk becomes too great to allow contamination to continue.” It is neither. The EPA's rationale for retaining the 28.50 cutoff score is addressed in the preamble to the 1990 revisions to the HRS (55 FR 51569, December 14, 1990). There, after requesting public comments on the issue, the Agency stated:

An HRS evaluation is not a risk assessment and is not a decision to remediate a specific site. Remediation decisions are made later in the Superfund process after additional investigation. The HRS is intended to be a “rough list” of prioritized hazardous sites; a “first step in a process—nothing more, nothing less”Eagle Picher Indus.v.EPA,759 F.2d 922, 932 (D.C. Cir. 1985) (Eagle Picher II). The EPA would like to investigate each possible site completely and thoroughly prior to evaluating them for proposal for NPL, but it must reconcile the need for certainty before action with the need for inexpensive, expeditious procedures to identify potentially hazardous sites. The courts have found the EPA's approach to solving this conundrum to be “reasonable and fully in accord with Congressional intent”Eagle Picher Industries, Inc.v.EPA,(759 F.2d 905 (D.C. Cir. 1985) Eagle Picher I). When scoring sites during an HRS evaluation, the EPA does not score multiple pathways when scoring an additional pathway will not affect the listing decision, even though it might add to a site score. Therefore, the HRS score represents a threshold score—sites that score within 5 points could actually score significantly higher if additional pathways were investigated; thus, the commenter's basis for claiming that the rationale is no longer valid is flawed.

This rulemaking adds specific sites to the NPL and does not propose to change the process for determining the eligibility of sites for the NPL. This comment, which supports the placement of the sites to the NPL, results in no change to the HRS scores of the sites at issue and no change in the decision to place them on the NPL.

The second commenter stated that the EPA should have provided additional information as to why these sites were being listed, and that this lack of information was inconsistent with the Administrative Procedure Act (“APA”) (see docket number EPA-HQ-SFUND-2012-0071-0006). In particular, the commenter questions the adequacy of the Narrative Summary for each proposed site. The commenter states that the Narrative Summaries should provide more discussion of the rationale and purpose of listing a site; more discussion of alternatives to listing; and more opportunity for notice and comment as required by the APA. The commenter requests re-proposal of the sites in accordance with their request for additional information.

In response, the Agency notes that the commenter submitted similar comments to a NPL rulemaking in 2008 (see document number EPA-HQ-SFUND-2008-0081-0005). The Agency reaffirms its response to those comments in 2008 and continues to hold that its process for adding sites to the NPL complies with the APA and CERCLA. As stated in 2008, for prospective sites under consideration for listing on the NPL, the EPA follows NCP procedures by conducting a preliminary assessment (PA) report of the site. Depending on the results, that may be followed up by a site inspection report (SI), which involves gathering more information about the site by contacting the state and interested parties on and around the site. When a site is proposed to the NPL, the EPA provides its detailed rationalein documents (i.e.,the HRS documentation record and supporting materials) publicly available at the EPA Headquarters in Washington, DC, in the Regional offices, and by electronic access athtpp://www.regulations.gov.If the site is affected by any particular statutory requirements or the EPA listing policies, such requirements or policies are discussed and included in the docket materials for each site, which are made available for public review and comment. Commenters have the opportunity to raise any comments they may have on the proposed listing, supporting documentation, and rationale (typically over a 60-day comment period). In kind, the EPA responds to such comments in writing before making a final decision to place a site on the NPL.

Section 553 of the APA authorizes “informal” rulemaking, which encourages and relies on the participation of the public, including potentially responsible parties. The process outlined in the paragraph above clearly complies with informal rulemaking under the APA. The commenter mistakenly argues that the EPA should put the basis or rationale for its listing decision in the Narrative Summary in theFederal Register. The detailed rationale and additional information the commenter seeks, however, is in the HRS documentation record itself. The EPA believes that theFederal Registernotice and the documentation record give the notice required by the APA. The commenter does not explain why the APA requires the Narrative Summary to be published in theFederal Register. The HRS codifies or implements the criteria the EPA considers pursuant to CERCLA § 105(a)(8)(A) when placing a site on the NPL. As discussed above, courts have found the EPA's approach reasonable and consistent with congressional intent.

Finally, while the commenter has made general assertions that the information presented at proposal for the sites was inadequate, the commenter has not explained why the information provided was not adequate to list the sites or any specific site. The commenter requests re-proposal of the sites but fails to specify or explain the inadequacies of the HRS documentation record of each site, and fails to provide any information the Agency should consider. As the commenter itself states: “Notice-and-Comment Rulemaking Must Be a Dialogue.” Courts, however, have held that the “dialogue between administrative agencies and the public is a two-way street.”Northside Sanitary Landfill, Inc.v.Thomas,849 F.2d 1516, 1520 (D.C. Cir. 1988) (citingHome Box Office, Inc.v.FCC,567 F.2d 9 (D.C. Cir. 1977)). The commenter “cannot merely state that a particular mistake was made,” rather it must show “why the mistake was of possible significance in the result the agency reaches.” Seeid.at 1519. In this case, the commenter has not explained what other information the Agency needs to consider or why the information the Agency has considered is not sufficient to place the sites on the NPL.

This rulemaking adds specific sites to the NPL and does not propose to change the process for determining the eligibility of sites for the NPL. This comment results in no change to the HRS scores of the sites presented and no change in the decision to place them on the NPL.

Other than these two general comments, the EPA received no additional comments on seven sites included in the March 2012 proposal and so the EPA is including them in this final rule. Those sites are Fairfax St. Wood Treaters (Jacksonville, FL), Holcomb Creosote Co (Yadkinville, NC), Bautsch-Gray Mine (Galena, IL), West Troy Contaminated Aquifer (Troy, OH), Cedar Chemical Corporation (West Helena, AR), EVR-Wood Treating/Evangeline Refining Company (Jennings, LA) and Circle Court Ground Water Plume (Willow Park, TX).

For the Orange Valley Regional Ground Water Contamination site (West Orange/Orange, NJ), the EPA also received a comment supporting listing of the site, and providing additional sampling data which the commenter stated demonstrated an even greater risk at the site than indicated by the proposed score. In response, the EPA is adding the site to the NPL, as the commenter advocates, and will consider the data provided as it performs the RI/FS to more fully assess the contamination and develop cleanup options, if deemed necessary.

Four sites in this rule received site-specific comments that are addressed in response to comments support documents placed in the docket and accompanying the release of this rule. These four sites are Leeds Metal (Leeds, ME), Alabama Plating Company, Inc. (Vincent, AL), Peters Cartridge Factory (Kings Mills, OH) and US Oil Recovery (Pasadena, TX).

The EPA received no comments on its March 15, 2012 proposal to remove the Construction Completion List column note and footnote description (77 FR 15344, Docket # EPA-HQ-SFUND-2012-0146). This final rule amends the notes column and footnote description of Appendix B to 40 CFR Part 300 to remove the note that references “sites on the construction completion list.” The EPA developed the Construction Completion List (CCL) (58 FR 12142, March 2, 1993) “to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities.” Notes were added to Table 1 (General Superfund Section) and Table 2 (Federal Facilities Section) of the NPL to identify those sites on the CCL. With today's easy public accessibility to the Internet and the availability of the most current data on the EPA's Web site, the EPA is removing the construction completion list note. For information on the construction completion list, please visit the EPA's Web site athttp://www.epa.gov/superfund/cleanup/ccl.htm.

The EPA received no comments on its March 15, 2012 proposal to correct the partial deletion notation in Table 1 (77 FR 15344, Docket # EPA-HQ-SFUND-2012-0147). Therefore, this final rule corrects an error in the column note symbol used to designate sites with partial deletions in Appendix B to CFR Part 300. The correct column note symbol for a site with a partial deletion is “P”. The Mouat Industries site in Montana has its partial deletion incorrectly designated by a column note symbol of “* * *P”. In addition, this incorrect symbol was erroneously added to the footnote descriptions at the end of Table 1 as “* * *P = Sites with deletion(s)”. The EPA is correcting the column note for the Mouat Industries site by changing it to “P” and is removing the erroneous footnote description.

Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the agency must determine whether a regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector ofthe economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities or the principles set forth in the Executive Order.

No. The listing of sites on the NPL does not impose any obligations on any entities. The listing does not set standards or a regulatory regime and imposes no liability or costs. Any liability under CERCLA exists irrespective of whether a site is listed. It has been determined that this action is not a “significant regulatory action” under the terms of Executive Order 12866 and is therefore not subject to OMB review.

According to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501et seq.,an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information that requires OMB approval under the PRA, unless it has been approved by OMB and displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations, after initial display in the preamble of the final rules, are listed in 40 CFR Part 9.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501et seq.the EPA has determined that the PRA does not apply because this rule does not contain any information collection requirements that require approval of the OMB.

Burden means the total time, effort or financial resources expended by persons to generate, maintain, retain or disclose or provide information to or for a federal agency. This includes the time needed to review instructions; develop, acquire, install and utilize technology and systems for the purposes of collecting, validating and verifying information, processing and maintaining information and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR Part 9.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601et seq.,as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996) whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e.,small businesses, small organizations and small governmental jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities.

This rule listing sites on the NPL does not impose any obligations on any group, including small entities. This rule also does not establish standards or requirements that any small entity must meet, and imposes no direct costs on any small entity. Whether an entity, small or otherwise, is liable for response costs for a release of hazardous substances depends on whether that entity is liable under CERCLA 107(a). Any such liability exists regardless of whether the site is listed on the NPL through this rulemaking. Thus, this rule does not impose any requirements on any small entities. For the foregoing reasons, I certify that this rule will not have a significant economic impact on a substantial number of small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local and tribal governments and the private sector. Under section 202 of the UMRA, the EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “federal mandates” that may result in expenditures by state, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Before the EPA promulgates a rule where a written statement is needed, section 205 of the UMRA generally requires the EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before the EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of the EPA regulatory proposals with significant federal intergovernmental mandates and informing, educating and advising small governments on compliance with the regulatory requirements.

This final rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local and tribal governments, in the aggregate, or the private sector in any one year. Listing a site on the NPL does not itself impose any costs. Listing does not mean that the EPA necessarily will undertake remedial action. Nor does listing require any action by a private party or determine liability for response costs. Costs that arise out of site responses result from site-specific decisions regarding what actions to take,not directly from the act of placing a site on the NPL. Thus, this rule is not subject to the requirements of section 202 and 205 of UMRA.

This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. As is mentioned above, site listing does not impose any costs and would not require any action of a small government.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires the EPA to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This final rule does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it does not contain any requirements applicable to states or other levels of government. Thus, the requirements of the Executive Order do not apply to this final rule.

The EPA believes, however, that this final rule may be of significant interest to state governments. In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA therefore consulted with state officials and/or representatives of state governments early in the process of developing the rule to permit them to have meaningful and timely input into its development. All sites included in this final rule were referred to the EPA by states for listing. For all sites in this rule, the EPA received letters of support either from the governor or a state official who was delegated the authority by the governor to speak on their behalf regarding NPL listing decisions.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires the EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” are defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the federal government and the Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes.”

This final rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). Listing a site on the NPL does not impose any costs on a tribe or require a tribe to take remedial action. Thus, Executive Order 13175 does not apply to this final rule.

Executive Order 13045: “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that the EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the agency.

This rule is not subject to Executive Order 13045 because it is not an economically significant rule as defined by Executive Order 12866, and because the agency does not have reason to believe the environmental health or safety risks addressed by this section present a disproportionate risk to children.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use” (66 FR 28355, May 22, 2001), requires federal agencies to prepare a “Statement of Energy Effects” when undertaking certain regulatory actions. A Statement of Energy Effects describes the adverse effects of a “significant energy action” on energy supply, distribution and use, reasonable alternatives to the action and the expected effects of the alternatives on energy supply, distribution and use.

This action is not a “significant energy action” as defined in Executive Order 13211, because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. Further, the agency has concluded that this final rule is not likely to have any adverse energy impacts because adding a site to the NPL does not require an entity to conduct any action that would require energy use, let alone that which would significantly affect energy supply, distribution or usage. Thus, Executive Order 13211 does not apply to this action.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note), directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards.

No. This rulemaking does not involve technical standards. Therefore, the EPAdid not consider the use of any voluntary consensus standards.

Executive Order (EO) 12898 (59 FR 7629, Feb. 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United States.

The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. As this rule does not impose any enforceable duty upon state, tribal or local governments, this rule will neither increase nor decrease environmental protection.

The Congressional Review Act, 5 U.S.C. 801et seq.,as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA has submitted a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General of the United States prior to publication of the rule in theFederal Register. A “major rule” cannot take effect until 60 days after it is published in theFederal Register. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Provisions of the Congressional Review Act (CRA) or section 305 of CERCLA may alter the effective date of this regulation.

The EPA has submitted a report under the CRA for this rule. The rule will take effect, as provided by law, within 30 days of publication of this document, since it is not a major rule. NPL listing is not a major rule because, by itself, imposes no monetary costs on any person. It establishes no enforceable duties, does not establish that the EPA necessarily will undertake remedial action, nor does it require any action by any party or determine liability for site response costs. Costs that arise out of site responses result from site-by-site decisions about what actions to take, not directly from the act of listing itself. Section 801(a)(3) provides for a delay in the effective date of major rules after this report is submitted.

Under 5 U.S.C. 801(b)(1), a rule shall not take effect, or continue in effect, if Congress enacts (and the President signs) a joint resolution of disapproval, described under section 802.

Another statutory provision that may affect this rule is CERCLA section 305, which provides for a legislative veto of regulations promulgated under CERCLA. AlthoughINSv.Chadha,462 U.S. 919,103 S. Ct. 2764 (1983), andBd. of Regents of the University of Washingtonv.EPA,86 F.3d 1214,1222 (DC Cir. 1996), cast the validity of the legislative veto into question, the EPA has transmitted a copy of this regulation to the Secretary of the Senate and the Clerk of the House of Representatives.

If action by Congress under either the CRA or CERCLA section 305 calls the effective date of this regulation into question, the EPA will publish a document of clarification in theFederal Register.

40 CFR Part 300 is amended as follows:

This is a summary of the Commission's Report and Order in WC Docket No. 05-25, RM-10593, FCC 12-92, adopted on August 15, 2012 and released on August 22, 2012. The summary is based on the public redacted version of the document, the full text of which is available electronically via the Electronic Comment Filing System athttp://fjallfoss.fcc.gov/ecfs/or may be downloaded athttp://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0823/FCC-12-92A1.pdf.The full text of this document is also available for public inspection during regular business hours in the Commission's Reference Center, 445 12th Street SW., Room CY-A257, Washington, DC 20554. The complete text may be purchased from Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request alternate formats for persons with disabilities (e.g.Braille, large print, electronic files, audio format, etc.) or reasonable accommodations for filing comments (e.g.accessible format documents, sign language interpreters, CARTS, etc.), send an email tofcc504@fcc.govor call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY).

1. In this Report and Order, we suspend, on an interim basis, our rulesallowing for automatic grants of pricing flexibility for special access services in light of significant evidence that these rules, adopted in 1999, are not working as predicted, and widespread agreement across industry sectors that these rules fail to accurately reflect competition in today's special access markets. We set forth a path to update our rules to better target regulatory relief to competitive areas, including extending relief to areas that are likely competitive but have been denied regulatory relief under our existing framework. We provide for targeted relief in the interim through the forbearance process set forth in sec. 10 of the 1996 Act, and will soon issue a comprehensive data collection order that will help craft permanent replacement rules.

2. Special access continues to play a critical role in our economy. Four of the largest incumbent LECs recently reported that their combined 2010 revenues from sales of DS1s and DS3s exceeded $12 billion. Competitive carriers rely heavily on special access to reach customers; a large competitive local exchange carrier (LEC) that offers enterprise services to businesses using special access services as a critical input has reported that it purchases [REDACTED] times as many special access as Ethernet circuits. Enterprise customers across the country rely on special access—directly or indirectly—to conduct their business. Schools, libraries, and other institutions of state and local government depend on special access to provide services to their constituents.

3. We continue to strongly believe, consistent with the goals set forth in thePricing Flexibility Order,that regulation should be reduced wherever evidence demonstrates that actual or potential competition is acting as a constraint to ensure just and reasonable rates, terms and conditions for special access services. In the record of this proceeding, however, there is compelling evidence that our current pricing flexibility rules are not properly matching relief to such areas, combined with allegations that this mismatch is causing real harm to American consumers and businesses and hindering investment and innovation. Price cap carriers argue that they are still subject to burdensome regulation in areas where it is apparent that competition is thriving. The United States Small Business Administration asserts that “promoting competition in the business broadband market is essential in order to provide small businesses with affordable access and choice regarding the services they need to grow and create new jobs.” The American Petroleum Institute expresses concern that, because its member companies' facilities are frequently located in isolated locations where facilities-based competition is scarce, they are highly sensitive to incumbent LECs extracting supra-competitive profits. Competitive carriers argue that the terms and conditions of special access contract tariffs “lock up” demand, preventing competitors from entering markets and investing in new facilities. Wireless providers argue that high special access prices hinder their ability to hire employees, invest in their networks, and conduct research and development. While we cannot yet evaluate these claims of competitive harm based on the evidence to date in the record, our finding that the competitive showings the Commission adopted as a proxy for competition are not working as predicted leads us to suspend the triggers and further evaluate the marketplace.

4. The approach we take is based on our evaluation of our 1999 rules, the predictive judgments upon which they were based, and market developments since their adoption. As discussed in greater detail below, the Commission decided in 1999 to use an administratively simple proxy for the presence of actual or potential competition in special access markets—the extent of collocation within broad geographic regions. The Commission predicted that certain levels of collocation within a Metropolitan Statistical Area (MSA) would serve as an accurate indicator of competitive pressure sufficient to constrain prices throughout that area.

5. Based on the evidence in the record and thirteen years of experience with this regime, we now conclude that the Commission's existing collocation triggers are a poor proxy for the presence of competition sufficient to constrain special access prices or deter anticompetitive practices throughout an MSA. We therefore suspend, on an interim basis, the operation of those rules pending adoption of a new framework that will allow us to ensure that special access prices are fair and competitive in all areas of the country.

6. Although we currently lack the necessary data to identify a permanent reliable replacement approach to measure the presence of competition for special access services, we emphasize that the forbearance process set forth by Congress in the 1996 Act provides an avenue for targeted relief based on a complete analysis of competitive conditions in a geographic area.

7. Going forward, in the absence at this time of clear evidence to establish reasonable and reliable proxies to determine where regulatory relief is appropriate, we will collect necessary data and undertake a robust competition analysis that may identify reliable proxies for competition in the market for special access services going forward. We will issue a comprehensive data collection order within 60 days to facilitate this market analysis. We anticipate that during the pendency of the data request, we will continue to analyze the information submitted in the record, and may issue further decisions as warranted by the evidence. Nonetheless, the record in this proceeding demonstrates that a comprehensive evaluation of competition in the market for special access services is necessary, and that further data to assist us in that evaluation is needed with respect to establishing a new framework for pricing flexibility.

8. Through the end of 1990, interstate access charges were governed by “rate-of-return” regulation, under which incumbent LECs calculated their access rates using projected costs and projected demand for access services. An incumbent LEC was limited to recovering its costs plus a prescribed return on investment. It also was potentially obligated to provide refunds if its interstate rate of return exceeded the authorized level. However, a rate of return regulatory structure bases a firm's allowable rates directly on the firm's reported costs and was thus subject to criticisms that it removed the incentive to reduce costs and improve productive efficiency.

9. Consequently, in 1991 the Commission implemented a system of price cap regulation that altered the manner in which the largest incumbent LECs (often referred to today as price cap LECs) established their interstate access charges. The Commission's price cap plan for LECs was intended to avoid the perverse incentives of rate-of-return regulation in part by divorcing the annual rate adjustments from the cost performance of each individual LEC, and provide for sharing efficiency gains with customers in part by adjusting the cap based on industry productivity experience.

10. In contrast to rate-of-return regulation, which focuses on an incumbent LEC's costs and fixes the profits an incumbent LEC may earn based on those costs, price cap regulation focuses primarily on the prices that an incumbent LEC maycharge. The access charges of price cap LECs originally were set at levels based on the rates that existed at the time the LECs entered the price cap regime. Increases in their rates have, however, been limited over the course of price cap regulation by price indices that are adjusted annually pursuant to formulae set forth in Part 61 of our rules. Price cap regulation is a form of incentive regulation that seeks to “harness the profit-making incentives common to all businesses to produce a set of outcomes that advance the public interest goals of just, reasonable, and nondiscriminatory rates, as well as a communications system that offers innovative, high quality services.” A core component of our price cap regulation is the Price Cap Index (PCI). As the Commission has explained previously, the PCI is designed to limit the prices LECs charge for service. The PCI provides a benchmark of LEC cost changes that encourages price cap LECs to become more productive and innovative by permitting them to retain reasonably higher earnings. The PCI has three basic components: (1) A measure of inflation, i.e., the Gross Domestic Product (chain weighted) Price Index (GDP-PI); (2) a productivity factor or “X-Factor,” that represents the amount by which LECs can be expected to outperform economy-wide productivity gains; and (3) adjustments to account for “exogenous” cost changes that are outside the LEC's control and not otherwise reflected in the PCI.

11. Pursuant to the pro-competitive, deregulatory mandates of the 1996 Act, the Commission in 1996 began exploring whether and how to remove price cap LECs' access services from price cap and tariff regulation once they are subject to substantial competition. Three years later, in 1999, the Commission adopted thePricing Flexibility Orderin an effort to ensure that the Commission's interstate access charge regulations did not unduly interfere with the operation of interstate access markets as competition developed in those markets. The Commission developed competitive showings (also referred to as “triggers”) designed to measure the extent to which competitors had made irreversible, sunk investment in collocation and transport facilities. Price cap carriers that demonstrated the competitive showings were met in their serving areas could obtain so-called “pricing flexibility,” namely the ability to offer special access services at unregulated rates through generally available and individually negotiated tariffs (i.e.,contract tariffs). The operation of the pricing flexibility rules is discussed in greater detail in section 0 below.

12. In 2000, after a comprehensive examination of the interstate access charge and universal service regulatory regimes for price cap carriers, the Commission adopted the industry-proposed CALLS plan. This plan represented a five-year interim regime designed to phase down implicit subsidies and (as it pertained to switched and special access charges) to move towards a more market-based approach to rate setting. In adopting the CALLS plan, the Commission offered price cap carriers the choice of completing the forward-looking cost studies required by theAccess Charge Reform Orderor voluntarily making the rate reductions required under the five-year CALLS plan. The Commission permitted carriers to defer the planned forward-looking cost studies in favor of the CALLS plan because it found the plan to be “a transitional plan that move[d] the marketplace closer to economically rational competition, and it [would] enable [the Commission], once such competition develops, to adjust our rules in light of relevant marketplace developments.” All price cap carriers opted for the CALLS plan.

13. The CALLS plan separated special access services into their own basket and applied a separate X-factor to the special access basket. The X-factor under the CALLS plan, unlike under prior price cap regimes, is not a productivity factor. Rather, it represents “a transitional mechanism * * * to lower rates for a specified period of time for special access.” The special access X-factor was 3.0 percent in 2000 and 6.5 percent in 2001, 2002, and 2003. In addition to the X-factor, access charges under CALLS are adjusted for inflation as measured by the GDP-PI. For the final year of the CALLS plan (July 1, 2004-June 30, 2005), the special access X-factor was set equal to inflation, thereby freezing rate levels. Thus, in the absence of a new price cap regime post-CALLS, price cap LECs' special access rates have remained frozen at 2003 levels (excluding any necessary exogenous cost adjustments). The Commission hoped that, by the end of the five-year CALLS plan, competition would exist to such a degree that deregulation of access charges (switched and special) for price cap LECs would be the next logical step.

14. On October 15, 2002, AT&T Corp. filed a petition for rulemaking requesting that the Commission revoke the pricing flexibility rules and revisit the CALLS plan as it pertains to the rates that price cap LECs, and the BOCs in particular, charge for special access services. AT&T claimed that the competitive showings required to obtain pricing flexibility failed to predict price-constraining competitive entry and, rather, that significant competitive entry had not occurred. It further contended that, based on Automated Reporting Management Information System (ARMIS) data, the BOCs' interstate special access revenues had more than tripled, from $3.4 billion to $12.0 billion, between 1996 and 2001 and that the BOCs' returns on special access services were between 21 and 49 percent in 2001. Further, AT&T stated that, in every MSA for which pricing flexibility was granted, BOC special access rates either remained flat or increased. Thus, AT&T contended both that the predictive judgment at the core of thePricing Flexibility Orderhad not been confirmed by marketplace developments, and that BOC special access rates exceeded competitive levels and hence were unjust and unreasonable in violation of § 201 of the Communications Act. Because the predictive judgment had proven wrong, AT&T asserted, the Commission was compelled to revisit its pricing flexibility rules in a rulemaking proceeding.

15. Price cap LECs generally opposed theAT&T Petition for Rulemaking.They claimed that their special access rates were reasonable and therefore lawful, that there was robust competition for special access services, that the collocation-based competitive showings were an accurate metric for competition, and that the data relied upon by AT&T were unreliable in the context used by AT&T. SBC noted that AT&T only provided (and could only provide) data from a single year (2001) that post-dated the initial implementation of Phase II pricing flexibility in 2001, and SBC and Verizon claimed that ARMIS data were not designed to evaluate the reasonableness of rates. The BOCs contended, moreover, that special access revenues per line declined between 1996 and 2001.

16. On January 31, 2005, the Commission released theSpecial Access NPRM.TheSpecial Access NPRMinitiated a broad examination of what regulatory framework to apply to price cap LECs' interstate special accessservices following the expiration of the CALLS plan, including whether to maintain or modify the Commission's pricing flexibility rules for special access services. As part of our review of the pricing flexibility rules, which were adopted, in part, based on the Commission's predictive judgment, the Commission sought to examine whether the available marketplace data supported maintaining, modifying, or repealing these rules. The Commission noted its commitment to re-examine periodically rules that were adopted on the basis of predictive judgments to evaluate whether those judgments are, in fact, corroborated by marketplace developments. Accordingly, the Commission sought data and comments on whether actual marketplace developments supported the predictive judgments used to support the special access pricing flexibility rules.

17. TheSpecial Access NPRMalso responded to AT&T's request for interim relief. AT&T asked, in addition to initiating a rulemaking, that the Commission reinitialize Phase II pricing flexibility special access rates at an 11.25 percent rate of return, and impose a temporary moratorium on further pricing flexibility applications. These requests were denied; however, the Commission sought comment on whether to adopt any interim requirements in the event that the Commission was unable to conclude the NPRM in time for any adopted rule changes to be implemented in the 2005 annual tariff filings.

18. In July 2007, the Commission invited interested parties to update the record in the special access rulemaking in light of a number of recent developments in the industry, including several “significant mergers and other industry consolidation,” “the continued expansion of intermodal competition in the market for telecommunications services,” and “the release by GAO [the Government Accountability Office] of a report summarizing its review of certain aspects of the market for special access services.” While the special access rulemaking was pending, the Commission also addressed special access regulation for price cap carriers in several other proceedings. A petition for forbearance from dominant carrier regulation of enterprise broadband special access services (i.e., packet-based switched, high-speed telecommunications services for businesses) filed by Verizon was deemed granted in 2006. In orders issued in October 2007 and August 2008, the agency granted petitions filed by AT&T, Embarq, Frontier, and Qwest under 47 U.S.C. § 160 seeking similar forbearance relief, and, in August 2008, granted Qwest's petition for similar relief from regulation of enterprise broadband special access.

19. In November 2009, the Commission sought comment on the appropriate analytical framework for examining the issues that theSpecial Access NPRMraised. In July 2010, the Commission's Wireline Competition Bureau (Bureau) held a staff workshop on the economics of special access to gather further input from interested parties on the analytical framework the Commission should use—and the data it should collect—to evaluate whether the current special access rules are working as intended.

20. In October 2010, the Bureau issued a public notice inviting the public to submit data on the presence of competitive special access facilities to assist the Commission in evaluating the issues that theSpecial Access NPRMraised. Explaining that data “would need to be reviewed” before the Commission could address the issues raised by the proceeding, the Bureau asked that the requested data be submitted by January 27, 2011. The Bureau also noted that while it continued to develop an analytical framework, it would “ask for additional voluntary submissions of data in a second public notice.”

21. On September 19, 2011, the Bureau issued a second public notice requesting the submission of special access data. In this request, the Bureau sought detailed data on special access prices, revenues, and expenditures, as well as the nature of terms and conditions for special access services. The Bureau requested that the data be submitted to the Commission by December 5, 2011.

22. In thePricing Flexibility Order,the Commission adopted rules intended to allow price cap LECs to show, in an administratively workable way, that certain parts of the country were sufficiently competitive to warrant pricing flexibility for special access services. As discussed in greater detail below, we find that the record indicates that the administratively simple competitive showings we adopted in 1999 have not worked as intended, likely resulting in both over- and under- regulation of special access in parts of the country. We therefore suspend the pricing flexibility competitive showings, on an interim basis, until we obtain the requisite data and conduct the market analysis required to craft replacement rules.

23. In thePricing Flexibility Order,the Commission adopted rules that allow price cap LECs to obtain relief from pricing regulations as competition for special access services increased. The Commission concluded that relief should be granted in two phases. Phase I relief permits price cap LECs the ability to lower their rates through contract tariffs and volume and term discounts, but requires that they maintain their generally available price cap-constrained tariff rates to “protect those customers that lack competitive alternatives.” Phase II relief permits price cap LECs to raise or lower their rates throughout an area, unconstrained by the Commission's part 61 and part 69 rules.

24. The Commission found that different levels of collocation in an area would justify different levels of relief. Specifically, the Commission held that Phase I deregulatory relief would be appropriate in areas where the price cap LEC was able to show that competitors had made irreversible, sunk investment sufficient to “discourage[e] incumbent LECs from successfully pursuing exclusionary strategies,” such as “ `locking up' large customers by offering them volume and term discounts.”

25. The Commission held that Phase II deregulatory relief would be appropriate only in areas where a price cap LEC could show there was a higher level of collocation—specifically, that “competitors have established a significant market presence,i.e.,that competition for a particular service within the [area] is sufficient to preclude the incumbent from exploiting any monopoly power over a sustained period.” That is, competitors would have “sufficient market presence to constrain prices throughout the” area because “almost all special access customers have a competitive alternative” and “[i]f an incumbent LEC charges an unreasonably high rate for access to an area that lacks a competitive alternative, that rate will induce competitive entry, and that entry will in turn drive rates down.”

26.Geographic Area of Relief.The Commission chose to grant pricing flexibility relief on an MSA basis, finding that, among the proposed alternatives “MSAs best reflect the scope of competitive entry, and therefore are a logical basis for measuring the extent of competition” and avoiding the “increased expenses and administrative burdens associated with” proposals to grant relief in smaller geographic areas, such as wire centers. The Office of Management and Budget (OMB) defines MSAs as geographic entities that contain a core urban area of 50,000 or more population, and often includes adjacent counties that have a high degree of social and economic integration with the urban core, as measured by commuting to work. MSAs were developed not for the purposes of competition policy, but to meet the Federal Government's need to have “nationally consistent definitions for collecting, tabulating and publishing Federal statistics for a set of geographic areas.” OMB may add counties or principal cities to an MSA, remove them, or even create new MSAs if census and population estimates indicate changes in social and economic integration between outlying areas and the urban core.

27. In thePricing Flexibility Order,the Commission adopted a list of 306 MSAs based largely on data compiled from the 1980 census, and froze that list for use in all pricing flexibility petitions. Therefore, even if OMB subsequently expanded the geographic area of an MSA, a price cap LEC's grant of pricing flexibility remains within the borders of the applied-for MSA. The Commission also recognized that some price cap LEC study areas fall outside of MSA boundaries, and held that it would “grant price cap LECs pricing flexibility within the non-MSA parts of a study area if” they were able to make the required showings “throughout that area.”

28. MSAs can be geographically extensive and, in many cases, may encompass areas with vastly different business density within their borders. Some illustrative examples include the Pensacola, Florida MSA and the Atlanta, Georgia MSA.

29.Proxies for Competitive Showings.For the sake of administrative convenience, the Commission adopted proxies for competition designed to allow price cap LECs to make the required showings, “with a minimum of administrative burden for the industry and the Commission.” Specifically, the Commission chose to “rely on collocation as a proxy for irreversible, sunk investment” in special access facilities and services. Collocation—as used in the competitive showing rules—is an offering by an incumbent LEC whereby a requesting telecommunications carrier's transmission equipment is located, for a tariffed charge, at the incumbent LEC's central office. The Commission predicted that collocation by competitors in incumbent LEC wire centers would be a reliable indicator of competition because collocation typically represented a financial investment by a competitor to establish facilities within a wire center. The Commission predicted that the collocation-based competitive showings would “provide a bright-line rule to guide the industry” and “an administratively simple and readily verifiable mechanism for determining whether competitive conditions warrant the grant of pricing flexibility.”

30. The Commission established bright line “triggers” based on the extent of collocation within an MSA that it expected would allow a price cap LEC to demonstrate that market conditions in a given MSA would warrant relief. Specifically, the Commission held that price cap LECs would need to demonstrate

31. On February 2, 2001, the U.S. Court of Appeals for the DC Circuit upheld thePricing Flexibility Order,finding that the Commission made a reasonable policy determination and sufficiently explained its basis for adopting the competitive showing requirements.

32. The Commission's 1999Pricing Flexibility Orderchose MSAs as the basis for competitive analysis because the record at the time indicated “that MSAs best reflect the scope of competitive entry, and therefore are a logical basis for measuring the extent of competition.” The Commission rejected larger geographic areas such as states and LATAs “[b]ecause competitive LECs generally do not enter new markets on a statewide basis.” Accordingly, “granting pricing flexibility over such a large geographic area would increase the likelihood of exclusionary behavior by incumbent LECs, by granting them flexibility in areas where competitors have not yet made irreversible investment in facilities.”

33. The Commission rejected concerns from some parties that “competition may exist in only a small part of an MSA,” finding that “[t]he triggers we establish * * * are sufficient to ensure that competitors have made sufficient sunk investment within an MSA.” The Commission therefore rejected smaller geographies, such as wire centers, concluding that “the record does not suggest that this level of detail justifies the increased expenses and administrative burdens associated with these proposals.”

34. The Commission received little guidance from commenters on how to establish an appropriate geographic area for grants of pricing flexibility in areas that fall outside of MSAs. In the absence of such guidance, the Commission allowed price cap LECs to make a competitive showing for the entirety of the non-MSA portions of a study area for which they sought relief. It decided against requiring competitive showings at a more granular level—such as on a rural service area (RSA) basis, stating that