[Federal Register Volume 79, Number 237 (Wednesday, December 10, 2014)]
[Rules and Regulations]
[Pages 73227-73237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28898]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[WC Docket No. 13-39; FCC 14-175]
Rural Call Completion
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document affirms the Commission's commitment to ensuring
that high quality telephone service must be available to all Americans.
In the underlying Order, the Commission established rules to combat
extensive problems with successfully completing calls to rural areas,
and created a framework to improve the ability to monitor call problems
and take appropriate enforcement action. In the Order on
Reconsideration, the Commission denies several petitions for
reconsideration that, if granted, would impair the Commission's ability
to monitor, and take enforcement action against, call completion
problems. The Commission does, however, grant one petition for
reconsideration because the Commission finds that modifying its
original determination will significantly lower providers' compliance
costs and burdens without impairing the Commission's ability to obtain
reliable and extensive information about rural call completion
problems.
DATES: Effective January 9, 2015, except for amendments to Sec. Sec.
64.2101, 64.2103, and 64.2105, which contain new or modified
information collection requirements that will not be effective until
approved by the Office of Management and Budget. The Federal
Communications Commission will publish a document in the Federal
Register announcing the effective date.
ADDRESSES: Federal Communications Commission, 445 12th Street SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Claude Aiken, Wireline Competition
Bureau, Competition Policy Division, (202) 418-1580, or send an email
to [email protected]
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
on Reconsideration in WC Docket No. 13-39, adopted and released
November 13, 2014. The full text of this document is available for
public inspection during regular business hours in the FCC Reference
Information Center, Portals II, 445 12th Street SW., Room CY-A257,
Washington, DC 20554. The document may also be purchased from the
[[Page 73228]]
Commission's duplicating contractor, Best Copy and Printing, Inc., 445
12th Street SW., Room CY-B402, Washington, DC 20554, telephone (800)
378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via the
Internet at http://www.bcpiweb.com. It is available on the Commission's
Web site at http://www.fcc.gov.
Summary
1. In the Order on Reconsideration, October 28, 2013, the
Commission adopted the Rural Call Completion Order, WC Docket No. 13-
39, Report and Order and Further Notice of Proposed Rulemaking, 28 FCC
Rcd 16154 (2013), Rural Call Completion Order or (Order). That Order
established rules to combat extensive problems with successfully
completing calls to rural areas, and created a framework to improve the
ability to monitor call problems and take appropriate enforcement
action. The Rural Call Completion Order reflected the Commission's
commitment to ensuring that high quality telephone service must be
available to all Americans. In this Order on Reconsideration, we affirm
that commitment. We deny several petitions for reconsideration that, if
granted, would impair the Commission's ability to monitor, and take
enforcement action against, call completion problems. We do, however,
grant one petition for reconsideration because we find that modifying
our original determination will significantly lower providers'
compliance costs and burdens without impairing the Commission's ability
to obtain reliable and extensive information about rural call
completion problems.
2. Specifically, we grant the petition filed by USTelecom and ITTA.
In doing so, we modify rules adopted in the Order so that the
recordkeeping, retention, and reporting requirements adopted in the
Order do not apply to a limited subset of calls: intraLATA toll calls
that are carried entirely over the covered provider's network, and
intraLATA toll calls that are handed off by the covered provider
directly to the terminating local exchange carrier (LEC) or to the
tandem that the terminating LEC's end office subtends. The decision to
grant reconsideration reflects a focused analysis of the costs of
applying the rules to this limited set of traffic, the fact that this
traffic represents a small portion of total toll traffic, and the
modest incremental benefit that such data would likely yield.
3. We deny the petitions for reconsideration filed by Carolina West
and COMPTEL, deny and dismiss the petition for reconsideration filed by
Sprint Corporation, as described below, and dismiss the petition for
reconsideration filed by Transcom Enhanced Services, Inc.
I. Background
4. In a February 2013 Notice of Proposed Rulemaking (NPRM), the
Commission sought comment on how to address rural call completion
issues and sought comment on proposed rules. In October 2013, the
Commission adopted recordkeeping, retention, reporting, and ring
signaling rules designed to help the Commission and communications
providers ensure that long-distance calls to rural Americans are
completed.
5. The recording, retention, and reporting rules we adopted in the
Rural Call Completion Order apply to providers of long-distance voice
service that make the initial long-distance call path choice for more
than 100,000 domestic retail subscriber lines, counting the total of
all business and residential fixed subscriber lines and mobile phones
and aggregated over all of the providers' affiliates. These ``covered
providers'' must record and retain specific information about each call
attempt to a rural operating company number (OCN) from subscriber lines
for which the providers make the initial long-distance call path
choice. This information must be stored in a readily retrievable form
and must include the six most recent complete calendar months. Covered
providers must submit to the Commission, on a quarterly schedule, a
certified report containing information on long-distance call attempts
from subscriber lines for which the covered providers make the initial
call path choice. The reports must separate out call attempts by month.
The Commission adopted a safe harbor to reduce certain qualifying
providers' reporting obligations and reduce their data retention
obligations from six months to three months. Further, the Commission
adopted a process enabling covered providers that have taken additional
steps, beyond the safe harbor requirements, to ensure that calls to
rural areas are being completed to receive a waiver of the data
reporting and retention obligations. The Commission also adopted a rule
prohibiting false audible ringing that applies to all originating long-
distance voice service providers and intermediate providers. This ring
signaling rule prohibits providers from causing audible ringing to be
sent to the caller before the terminating provider has signaled that
the called party is being alerted to the existence of an inbound call.
6. The Commission received five petitions for reconsideration of
portions of the Rural Call Completion Order. Various parties filed
comments in support of or in opposition to the petitions.
II. Discussion
A. USTelecom/ITTA Petition: IntraLATA Toll Calls
7. The requirements described above apply to ``intraLATA toll
traffic and interLATA traffic carried on [the covered provider's] own
network and handed off directly by the originating provider to the
terminating LEC.'' The Commission initially declined to exclude this
traffic, ``[e]ven if [such traffic] would incur fewer call completion
issues,'' because data on this traffic would ``provide[] an important
benchmark for issue-free performance,'' especially ``where a provider
may be using both on-net and off-net routes to deliver calls to the
same terminating provider.
8. In their petition for reconsideration, USTelecom and ITTA
(USTelecom/ITTA or Petitioners) request that the Commission reconsider
the decision to require recordkeeping, retention, and reporting of
``on-network'' intraLATA interexchange/toll calls. Specifically,
Petitioners seek reconsideration of application of the recordkeeping,
retention, and reporting rules adopted in the Order for ``intraLATA
interexchange/toll calls that are either carried entirely over the
originating LEC's network (that is, originated and terminated by the
same carrier) or handed off by the originating LEC directly to the
terminating LEC.''
9. We remain committed to both the goals of the Rural Call
Completion Order, and the rules the Commission adopted therein to
identify and address rural call completion and call quality problems.
Excluding on-net intraLATA toll traffic from the recordkeeping,
retention, and reporting requirements will reduce the burden of
compliance without undermining these goals. Based on new information
that was not available to the Commission when the Rural Call Completion
Order was adopted, we conclude that the burdens associated with
applying our rules to on-net intraLATA toll calls exceed the marginal
benefit of obtaining this limited incremental information. Accordingly,
we grant USTelecom/ITTA's petition for reconsideration.
10. Excluding on-net intraLATA toll traffic from the scope of these
rules will not undermine the goals of the Rural Call Completion Order
and will not impair the Commission's ability to
[[Page 73229]]
monitor and address problems associated with completing calls to rural
areas. First, the Commission will continue to have access to
information about on-net interLATA toll traffic, as well as all off-net
traffic, and this traffic comprises the significant majority of all
calls. Petitioners assert that the volume of on-network intraLATA toll
traffic is relatively small--less than three percent of the total
traffic on the network of one of USTelecom's largest members.
CenturyLink estimates that less than one percent of its traffic is on-
net intraLATA toll traffic. Although the data samples available to
establish on-net delivery benchmarks will be slightly reduced by
removing the intraLATA toll component, we are persuaded both by new
evidence from Petitioners and supporting commenters and by the nature
of these on-net intraLATA toll calls that on-net delivery benchmarks
will not significantly change. Covered providers remain obligated to
follow our recordkeeping, retention, and reporting rules for all
interLATA and off-net intraLATA toll traffic. Second, the Commission
will still be able to use on-net interLATA traffic as a benchmark for
assessing off-net traffic performance, which was the stated reason for
requiring providers to record, retain and report on-net traffic data.
Because the vast majority of on-net long distance traffic is interLATA
traffic, the Commission will continue to have an effective benchmark by
which to compare off-net long distance call failure rates for a
particular carrier.
11. The cost of including on-net intraLATA toll traffic in the
recording and reporting requirements exceeds the limited incremental
benefit from collecting this data. After analyzing the requirements of
the Rural Call Completion Order, USTelecom/ITTA and Verizon provided
new information regarding the compliance costs of applying the
recordkeeping, retention, and reporting obligations to on-net intraLATA
toll traffic and the compliance cost reductions associated with
excluding on-net intraLATA toll traffic from these requirements.
Petitioners explain that their members currently lack the ability to
capture call attempt information for this traffic because their members
generally only collect data for billable calls and consequently had no
reason to record this information. While this category of traffic
reportedly represents a relatively small percentage of Petitioner's
traffic, Petitioners estimate that, industry-wide, implementing such
capability into legacy networks to comply with recordkeeping,
retention, and reporting requirements for this traffic would take ``at
least 18 to 24 months and cost in excess of $100 million.'' In comments
supporting the USTelecom/ITTA Petition, Verizon states that it would
cost in excess of $20 million and take two years to collect and report
data for intraLATA interexchange/toll traffic. As explained above, the
Commission can establish an on-net benchmark against which to compare
off-net performance without on-net intraLATA toll traffic data.
Therefore, we find that at this time the compliance costs for reporting
information on this small category of calls are not justified. We are
committed to balancing the costs and benefits of regulatory obligations
in the public interest.
12. The Commission considered and denied a broader request to
exclude both intraLATA and interLATA on-net information in the Rural
Call Completion Order; USTelecom/ITTA's reconsideration request is much
narrower and does not seek exclusion of on-net interLATA call data.
Moreover, when it made that decision, the Commission did not have the
benefit of data regarding the costs and benefits specifically
associated with retaining and reporting on on-net intraLATA toll
traffic. As a result, the new evidence regarding both: (1) The
compliance cost reductions associated with excluding on-net intraLATA
toll traffic from our rules; and (2) the fact that on-net intraLATA
toll traffic is only a small fraction of on-network traffic, are
relevant to our decision to reconsider and we find that consideration
of this data is in the public interest.
13. Petitioners also assert that on-net intraLATA toll traffic is
unlikely to be a source of call completion problems. Petitioners report
that the on-network intraLATA toll traffic for which they seek relief
in their petition does not involve the use of intermediate providers
and that, rather than having multiple carriers in the call completion
path, these calls are typically carried by a single provider on its own
network or are handed off directly to the terminating LEC. We need not
and do not decide whether on-net traffic might ever present concerns
about call quality or completion. Our decision to exclude on-network
intraLATA toll traffic from our recordkeeping, retention, and reporting
requirements reflects an overall balancing of the costs and benefits,
including consideration of the small portion of traffic that is on-net
intraLATA toll traffic. Moreover, our rules remain in effect for the
remainder of covered provider traffic, which includes on-net interLATA
toll traffic, as well as off-net intraLATA toll traffic and off-net
interLATA traffic.
14. We implement the exclusion discussed above by amending the
recordkeeping, retention, and reporting rules adopted in the Order to
exclude their applicability to intraLATA toll calls carried entirely
over the covered provider's network or handed off by the covered
provider directly to the terminating LEC or directly to the tandem
switch serving the terminating LEC's end office. We also amend the
definition of ``long-distance voice service'' in section 64.2101 of our
rules to include intraLATA toll voice services. We make this amendment
to harmonize the rule language with the Commission's intent expressed
in the Order, where it defined ``long-distance voice service provider''
for purposes of the Order as any person engaged in the provision of
specific voice services, including intraLATA toll voice services.
15. Some entities argue that the Commission should not make these
changes to its new call completion rules until it collects and analyzes
a year's worth of call data or opens an inquiry into the matter. As
explained above, the industry-wide costs of compliance are substantial,
and exceed the potential value of the incremental data we would
collect. A large portion of the costs associated with complying with
the recordkeeping, retention and reporting would occur at the outset,
because providers would have to develop and implement systems to
collect this information. Having concluded that the potential value of
the data is outweighed by the significant burden of compliance, we
cannot conclude that such costs are justified on a one-time or short-
term basis. While we decline to impose the burden of collecting and
reporting data on such traffic on a temporary basis, we can revisit
this decision if evidence later suggests that on-net intraLATA calls to
rural areas are not being completed properly. For example, we will
continue to monitor information and complaints submitted about call
completion problems and will be attentive to the jurisdictional nature
about such complaints.
16. All parties generally agree that any relief granted should be
limited to calls carried on-network or handed off directly from the
originating carrier to the terminating carrier. USTelecom/ITTA and
Verizon assert that the relief should encompass calls delivered
directly to the terminating tandem, as well as to the terminating
carrier. USTelecom/ITTA and Verizon state that many rural LECs can only
be reached through these tandems, and that covered providers have no
involvement in the
[[Page 73230]]
selection or performance of these tandems. USTelecom/ITTA note that
these tandems exist largely due to the legacy structure of the networks
and are the equivalent of a direct network connection. They note that
the Commission declined to count the tandem as an additional
intermediate provider for purposes of safe harbor eligibility. The
Rural Associations did not specifically address whether any relief
granted on reconsideration should include calls delivered directly to
the terminating tandem. We find Petitioner's arguments compelling and
grant the request for relief from the recordkeeping, retention, and
reporting requirements for intraLATA toll calls that are delivered by
the covered provider directly to the tandem that the terminating LEC's
end office subtends.
17. The Rural Associations also assert that any relief should be
limited to ``only the intraLATA traffic that is originated by the LEC's
retail customers.'' The Rural Associations did not, however, provide
any reasons for limiting relief to retail traffic. Verizon opposes such
limitation, arguing that it ``has wholesale arrangements through which
it provides intraLATA interexchange/toll service in the same manner as
it carries traffic for its [retail] customers'' and that the same
implementation obstacles exist for this traffic. In the absence of
specific or substantiated arguments to support limiting relief to calls
originated by retail customers, we decline to do so.
B. COMPTEL Petition: Smaller Covered Provider Exception
18. COMPTEL seeks reconsideration of the smaller covered provider
exception. As noted above, in the Order, the Commission concluded that
it should require only providers of long-distance voice service that
make the initial long-distance call path choice for more than 100,000
domestic retail subscriber lines to comply with the recording,
retention, and reporting rules. COMPTEL argues, on various grounds,
that the Commission should reconsider this conclusion, so that more
providers qualify for the smaller provider exception. For the reasons
set forth below, we deny COMPTEL's Petition.
1. Administrative Procedure Act
19. COMPTEL asserts that the Commission violated the Administrative
Procedure Act (APA) because the Commission (1) did not provide an
explanation for the change in the smaller covered provider exception
from the proposal in the NPRM that referred to ``subscribers'' to the
rule ultimately adopted that instead refers to ``subscriber lines,''
and (2) did not give adequate notice and opportunity to comment on the
definition of smaller provider adopted in the Rural Call Completion
Order. We find these arguments to be without merit.
20. Reasoned Explanation. The rule that the Commission adopted to
except smaller providers from recordkeeping and reporting requirements
was reasonable, and the Commission's decision to base the exception on
the number of a provider's subscriber lines for which the provider
makes the initial long-distance call path choice, rather than the
number of its subscribers, was also reasonable. The purpose of the
exception, as COMPTEL recognized in its petition for reconsideration,
was to exempt smaller providers from the record-keeping and reporting
requirements. In the notice, the Commission asked commenters about ways
to minimize burdens on smaller providers, ``without compromising the
goals of [the] rules.'' The rule that the Commission selected was a
reasonable means of achieving this balance. Although COMPTEL objects to
the decision to adopt an exception based on the number of subscriber
lines, it does not assert that the adoption of such an exception will
compromise the Commission's goals when implementing these rules.
21. Excepting providers on the basis of subscriber lines, rather
than subscribers, is reasonably designed to minimize burdens on smaller
providers without compromising the effectiveness of the rules. The
number of lines better reflects a provider's size and share of traffic
than does the number of subscribers. For example, a provider that
serves a modest number of very large business customers (each with
hundreds of subscriber lines) may handle a substantial portion of
traffic to rural areas. Thus, excepting providers on the basis of
subscribership would not have been as well suited, relative to an
exclusion based on subscriber lines, to ensure that only smaller
covered providers are subject to the exception. In addition, the
Commission noted that the 100,000 subscriber-line threshold should
capture as much as 95 percent of all callers. Thus, the exception will
not compromise the effectiveness of the rules.
22. Additionally, the use of ``subscriber lines'' is easier to
administer than a subscriber-based exception would be. The Commission
collects data, via FCC Form 477, on subscriber lines. The Commission
does not routinely collect data that provides an equally reliable count
of ``subscribers.'' By defining the smaller covered provider exception
in terms consistent with the Commission's Form 477 collection of voice
telephony data, the Commission will be able to verify that entities
claiming the exception are in fact eligible for it.
23. COMPTEL argues that far more smaller providers will be required
to comply with the adopted recordkeeping, retention, and reporting
requirements, and that compliance will be expensive and burdensome for
providers to implement, especially smaller providers. We recognize
that, as a result of the change from subscribers to subscriber lines,
some additional providers will need to expend the resources necessary
to comply with these rules. However, we find that the importance of
obtaining the data necessary to address rural call completion problems
and the benefits described above of the adopted exception outweigh the
burden these providers will encounter. We note that only providers that
actually make the initial call path choice for more than 100,000
subscriber lines are required to comply with the rules. Additionally,
in the Order, the Commission reduced the compliance burden, relative to
the proposed rules, in a number of ways. We further reduce compliance
burdens today by excluding intraLATA on-net toll traffic from the
recordkeeping, retention, and reporting requirements. Finally, although
COMPTEL argues that far more providers will be required to comply with
the recordkeeping, retention, and reporting requirements as a result of
the change from ``subscribers'' to ``subscriber lines'' we believe that
the number of affected providers will be more modest. COMPTEL's
assertion is premised on an erroneous interpretation of Paperwork
Reduction Act of 1995 (PRA) filings. While suggesting that there could
be more, COMPTEL has identified only four entities affected by this
change.
24. NPRM. COMPTEL alleges that the Commission's decision to exclude
from the requirements providers that make the initial long-distance
call path choice for 100,000 or fewer subscriber lines, rather than
adopting the specific proposal set forth in the NPRM, failed to provide
adequate notice and opportunity to comment. COMPTEL asserts that no
commenter advocated adoption of a rule that defined smaller provider
based on ``subscriber lines,'' and that far fewer providers are
eligible for the exception as a result of the change.
25. We disagree that the Commission failed to provide adequate
notice and an opportunity to comment. We find that
[[Page 73231]]
the smaller covered provider exception adopted in the Order is a
logical outgrowth of the smaller provider exception proposed in the
NPRM and is well within the scope of the inquiry initiated by the NPRM.
As discussed below, the Commission determined that a smaller covered
provider exception, albeit a revised version of the originally proposed
exception, is warranted.
26. Section 553(b) and (c) of the APA requires agencies to give
public notice of a proposed rulemaking that includes ``either the terms
or substance of the proposed rule or a description of the subjects and
issues involved'' and to give interested parties an opportunity to
submit comments on the proposal. The notice ``need not specify every
precise proposal which [the agency] may ultimately adopt as a rule'';
it need only ``be sufficient to fairly apprise interested parties of
the issues involved.'' In particular, the APA's notice requirements are
satisfied where the final rule is a ``logical outgrowth'' of the
actions proposed. As long as parties could have anticipated that the
rule ultimately adopted was possible, it is considered a ``logical
outgrowth'' of the original proposal, and there is no violation of the
APA's notice requirements.
27. The Commission provided the required notice by seeking comment
on the proposed smaller covered provider exception. The Commission
provided notice that it might exclude smaller providers, and proposed a
threshold of 100,000 subscribers, but it also sought comment on whether
the proposed exception would compromise the Commission's ability to
monitor rural call completion problems. Among other things, the
Commission explained that it was proposing rules to ``help [it] monitor
originating providers' call-completion performance and ensure that
telephone service to rural consumers is as reliable as service to the
rest of the country.''
28. We find that it is a logical outgrowth of such notice that the
Commission would, and did, adopt a rule that represents a compromise
position. Interested parties could reasonably anticipate that the
Commission might consider the pros and cons of excluding smaller
carriers and adopt a narrower exception than the one specifically
proposed. Indeed, numerous parties responded to this opportunity to
comment, some supporting the exception as proposed, some opposing any
exception, and some arguing for a narrower exception. In fact, two
commenters specifically noted that the Commission could define the
smaller covered provider exception using lines. These comments support
our conclusion that relying on subscriber lines rather than subscribers
represents an adjustment that parties reasonably could have
anticipated.
29. As discussed above, beyond seeking comment on a proposed
100,000 subscriber cut-off, the Commission gave notice that it might
not exclude any providers, or might only exclude some different
universe of providers. Commenters were on notice that any exclusion
would be designed to ensure that it did not ``compromise the
Commission's ability to monitor rural call completion problems
effectively.'' In the Order, the Commission made clear that it wanted
``a complete picture of the rural call completion problem'' in order to
``address it effectively.'' The 100,000 subscriber line threshold
ultimately adopted better ensures ``the Commission's ability to monitor
rural call completion problems effectively'' than the exclusion
proposed in the Notice because a subscriber line-based threshold is
more verifiable and administrable than a subscriber-based threshold.
Moreover, the exclusion reflects and reasonably balances the range of
views in the record regarding the scope of any exclusion--including
some advocating no exclusion at all.
30. In short, the Notice contained sufficient notice to generate a
full record on the smaller covered provider exception. The final rule,
which reflects input from commenters, deviated from the proposal in the
Notice only in ways specifically designed to ensure that the exemption
did not ``compromise the Commission's ability to monitor rural call
completion problems effectively.'' The exception adopted in the Order
was thus a logical outgrowth of the original proposal in the Notice.
There is no violation of the APA's notice requirements and thus,
contrary to COMPTEL's assertion, no need for an additional round of
comments on the smaller covered provider exception.
2. Regulatory Flexibility Act
31. For many of the same reasons it challenged the Commission's
decision to adopt a smaller covered provider exception based on 100,000
subscriber lines instead of 100,000 subscribers, COMPTEL argues that
the Commission failed to comply with section 604 of the Regulatory
Flexibility Act. COMPTEL asserts that the FRFA attached to the Rural
Call Completion Order did not include a statement of the factual,
policy or legal reasons for selecting the 100,000 subscriber line
threshold or explain why the 100,000 subscriber threshold proposed in
the Notice was rejected. As discussed below, the FRFA complies with the
Regulatory Flexibility Act.
32. The Commission has complied with the Regulatory Flexibility
Act, and COMPTEL's argument on this issue is without merit. We
therefore deny COMPTEL's Petition. In the FRFA, the Commission
specifically noted that ``[t]o the extent we received comments raising
general small business concerns during this proceeding, those comments
are discussed throughout the Order.'' Subsection E of the FRFA
specifically addresses steps taken to minimize the significant economic
impact on small entities, and references the smaller covered provider
exception as one factor that reduces the economic impact of the rules
on small entities.
33. As addressed above, the Commission provided an explanation for
the smaller covered provider exception adopted in the Order, and we
respond to further relevant comments regarding that exception. The
Commission noted that some commenters argued that the threshold should
be lowered, that the 100,000 subscriber-line threshold should capture
as much as 95 percent of all callers, and that many providers that have
fewer than 100,000 subscriber lines would not be covered providers even
without the smaller provider exception because they are reselling long-
distance service from other providers that make the initial long-
distance call path choice. The Commission also noted that exclusion of
smaller providers should not compromise our ability to monitor rural
call completion problems effectively.
34. Accordingly, the Commission did provide factual, policy, and
legal reasons for selecting the 100,000 subscriber line threshold over
the proposal in the Notice for the smaller covered provider exception.
COMPTEL's Regulatory Flexibility Act argument amounts essentially to a
restatement of its earlier argument that the Commission failed to
provide an adequate explanation for the threshold it adopted.
C. Sprint Petition
35. Sprint raises several issues in its Petition. First, Sprint
asks us to reconsider the Commission's decision ``to use the required
call completion reports as the basis for subsequent enforcement action.
Second, Sprint asserts that the Commission largely relied on summaries
of surveys performed by the RLECs and urges the Commission to make the
RLEC surveys available in their entirety for independent review.
Finally, Sprint argues that the Commission's compliance burden estimate
is too low.
[[Page 73232]]
For the reasons discussed below, we deny Sprint's Petition.
1. Use of Call Completion Reports for Enforcement Action
36. Sprint argues that the Commission should reconsider its
decision ``to use the required call completion reports as the basis for
subsequent enforcement action,'' asserting that the Commission ``has
provided no guidance as to what behaviors by covered carriers it
considers unreasonable, or what performance results are actionable and
therefore could trigger enforcement action.'' Sprint suggests that the
Commission should ``make public a list of call completion practices it
deems acceptable.'' For the reasons discussed below, we deny Sprint's
Petition on this issue.
37. First we note that, although the Commission adopted the
recordkeeping, retention, and reporting rules to ``substantially
increase [its] ability to monitor and redress problems associated with
completing calls to rural areas,'' the Order did not suggest that the
reports covered providers file with the Commission would constitute the
sole basis for an enforcement action. Rather, the Order stated that the
recording, retention, and reporting requirements may ``aid[ ],''
``enhance,'' and ``inform'' enforcement actions. This language makes
clear that the reports are intended as a means for identifying possible
areas for further inquiry, not for forming the sole basis for
enforcement actions. Any action initiated by the Enforcement Bureau
would offer providers the evidentiary opportunities afforded in any
enforcement proceeding. Furthermore, the Order emphasizes that
enforcement actions are not the only reason for adopting the rules; the
rules will also help the providers themselves identify and correct call
completion problems. The Order explains that, once providers begin
collecting call completion data under the rural call completion rules,
``many will have greater insight into their performance and that of
their intermediate providers than they have had in the past.''
38. Second, the Commission has provided ample guidance regarding
what it considers unacceptable call completion practices. The Wireline
Competition Bureau has issued two declaratory rulings clarifying that
carriers are prohibited from blocking, choking, reducing, or
restricting traffic in any way, including to avoid termination charges,
and clarifying the scope of the Commission's longstanding prohibition
on blocking, choking, reducing, or restricting telephone traffic, which
may violate section 201 or 202 of the Act. The failure of a carrier to
investigate evidence of a rural call delivery problem or to correct a
problem of degraded service about which it knows or should know also
may lead to enforcement action. In the 2011 USF/ICC Transformation
Order, the Commission addressed the prohibition on call blocking and,
inter alia, made clear that the prohibition applies to VoIP-to-PSTN
traffic and providers of interconnected VoIP and ``one-way'' VoIP
services. We thus reject Sprint's assertion that the Commission has not
adequately identified prohibited practices.
39. Finally, Sprint asserts that the required reports will not, in
many cases, identify the reason a call failed to complete, and there
are multiple factors that cause rural call completion failures, many of
which are beyond the control of the long-distance provider. As we have
explained, any enforcement action would give a covered provider an
opportunity to provide exculpatory evidence. Furthermore, Sprint's
assertion that the rules impose ``the burden of an investigation, and
the threat of enforcement action, entirely on long distance carriers''
is incorrect. On the contrary, the Order emphasized that while the
recording, retention, and reporting requirements do not apply to
intermediate providers, ``the Enforcement Bureau continues to have the
authority to investigate and collect additional information from
intermediate providers when pursuing specific complaints and
enforcement actions.'' The Commission also encouraged rural ILECs to
report specific information and sought comment on whether the
Commission should adopt or encourage additional rural ILEC reporting.
For all of these reasons, we decline to reconsider our recognition of
the potential use of call completion reports in enforcement actions,
and we deny Sprint's Petition on this issue.
2. Availability of RLEC Surveys for Independent Review
40. Sprint argues that, to justify adopting the recording,
retention, and reporting rules, the Commission relied largely on
summaries of surveys of RLECs' call completion experiences filed with
the Commission by NTCA. It asserts that the Commission should make
these surveys available in their entirety for independent review.
Sprint also asserts that the Commission should reconsider whether a
more limited data collection, such as one-time sample studies, would be
a more appropriate first step to address rural call completion
problems.
41. Sprint's Petition overstates the Commission's reliance on the
RLEC surveys. The Commission based its decision to promulgate rural
call completion rules on a broad array of information filed in this
proceeding and in predecessor dockets. This base of information
included, among other things, numerous comments and filings in the
docket and preceding dockets, the Commission's experience with and
investigations of rural call completion complaints, and the information
gained from a workshop held at the Commission which addressed rural
call completion problems. The Commission found comments and ex parte
letters filed with the Commission by the Rural Associations and the
Commission's state partners to be especially persuasive, ``given their
direct experience with complaints about call completion performance.''
The Commission did rely, in part, on the results of a test conducted by
NECA in two of the Rural Association filings, but these results were
only one piece of information that the Commission relied upon as a
basis for adopting the Order. Other entities also filed comments noting
the existence of call completion problems in rural areas. The
Commission also relied on its own significant experience receiving and
investigating informal call completion complaints. Rather than being
critical factual information on which our decision hinged, the
information submitted about the RLEC surveys was supplementary data
that confirmed the various other pieces of evidence in the record. Even
absent these surveys, we would find a strong basis in the record to
adopt the recording, retention, and reporting rules. For these reasons,
we are not persuaded that we should revisit the Commission's use of
NECA's summaries of its RLEC surveys, the availability of the NECA RLEC
survey results for independent review, or the implementation of a new
data sample before the rules take effect. We also separately affirm our
conclusion that ongoing data collection, rather than a one-time
collection, is more likely to address call completion problems, which
have been ongoing and extensive. We therefore deny Sprint's petition on
this issue.
3. Industry Compliance Costs
42. Sprint reiterates arguments about the burden of compliance that
it made during the pendency of the rulemaking. These arguments do not
warrant consideration by the Commission because Sprint relies on
arguments that the Commission considered and rejected
[[Page 73233]]
in the Order. Accordingly, we dismiss this part of Sprint's Petition.
43. Evaluating Sprint's arguments on the merits, however, we find
that reconsideration of the Commission's burden analysis is not
warranted and deny this part of Sprint's Petition. In the Order, the
Commission determined that the benefits of these rules outweigh the
burdens. Sprint asserts that the Commission should re-evaluate the
estimated industry-wide compliance costs these rules impose on covered
providers. Sprint asserts that insufficient data has been submitted to
calculate the total on-going costs likely to be incurred by covered
providers to comply with the new rules. It argues that numerous
carriers currently do not collect at least some of the information
required under the new rules and at least three carriers have estimated
that it would cost each of them millions of dollars to comply with
those rules.
44. As explained further below, the Commission adopted the Order
only after carefully weighing the costs and benefits of the new
requirements, including record evidence alleging compliance costs on
the part of covered providers. Sprint nonetheless contends that the
Commission should ``assess factually the relative costs and benefits of
its data collection retention and reporting rules.'' Pursuant to the
Paperwork Reduction Act of 1995 (PRA), the Commission will conduct a
careful analysis of any reporting and recordkeeping requirements
imposed on the public. The Commission has begun that analysis, and five
entities have submitted comments, including Sprint and HyperCube. The
recordkeeping, retention, and reporting requirements adopted in the
Order will not become effective until an announcement is published in
the Federal Register of the Office of Management and Budget (OMB)
approval and an effective date of the rules. While we deny Sprint's
Petition, several of the concerns raised by Sprint, XO and HyperCube
will be addressed in the context of the PRA analysis.
45. Sprint contends that industry compliance costs will exceed $100
million and that it has updated its burden analysis to reflect new
compliance cost information and the impact of the rules adopted. Much
of the information Sprint provides to support these assertions,
including its own cost estimates, are not new and were submitted prior
to the Commission's adoption of the rules in the Order. This
information includes estimates of compliance costs that do not take
into account ways the Commission reduced the burden of the proposed
rules in the Order. For example, the Commission changed the rule
requiring retention of call detail records to apply only to call
attempts to rural ILECs, a relatively small percentage of total call
attempts, and determined that call attempts to nonrural incumbent LECs
need not be retained. Sprint also refers to a cost estimate in a
request for waiver filed by Midcontinent Communications after the Order
was released, but that estimate is consistent with or less than other
estimates already considered by the Commission. Moreover, the changes
we adopt in this Reconsideration Order will reduce providers' costs.
The USTelecom/ITTA cost estimate that Sprint refers to includes the
cost of collecting, retaining, and reporting data for on-net intraLATA
interexchange toll traffic that we now exempt from the rules.
46. Sprint states that the Commission's PRA analysis estimates that
225 entities will be required to file the new call completion reports,
all of those entities will incur some compliance costs, some will need
to make system and/or staffing changes to comply with the new rules,
and covered providers will continue to incur recurring compliance costs
for years to come. Sprint over-estimates the number of entities
required to comply with the new rules. It misunderstands the PRA
analysis, which, as noted above, includes voluntary quarterly reporting
by RLECs of a reduced set of data. The majority of the 225 entities are
RLECs that may voluntarily file and that may have this information
readily available.
47. Finally, Sprint states that the information provided pursuant
to the new rules will provide limited information on the root cause of
any call termination problems and, if the likely costs exceed the
anticipated benefits, the Commission should adopt more limited
measures, such as allowing covered providers to perform a statistically
significant sample study or to retain fewer months of data. These
arguments were fully addressed and disposed of in the Order, and Sprint
provides no new information warranting reconsideration. XO and
HyperCube support Sprint's Petition and argue that not all providers
collect the information required, but neither provides new information
or arguments warranting reconsideration.
48. HyperCube asserts that the Commission ``overlooked the
substantial burden imposed on many providers to determine whether they
are in fact `covered providers' and, as a result, has also greatly
underestimated the number of burdened providers.'' We disagree. The
Commission recognized the burden of determining if a provider is a
covered provider. In the Order, the Commission attempted to minimalize
any such burden, by providing examples of how to determine whether a
provider is a covered provider and noting that some providers will need
to segregate originated traffic from intermediary traffic. HyperCube's
assertions that we underestimated the number of burdened providers
because we did not include the substantial burden imposed on many
providers just to determine whether they are in fact ``covered
providers'' is more appropriately addressed in the PRA context.
HyperCube filed comments regarding the Commission's specific burden
estimate in the PRA context and these matters will be addressed in the
context of that Paperwork Reduction Analysis.
49. HyperCube also argues that the Commission did not consider the
possibility that providers could be covered providers even if they
operate primarily as intermediate providers. Although the Commission
did not apply these rules to entities acting exclusively as
intermediate providers, it did apply the rules to providers of long-
distance voice service that make the initial long-distance call path
choice for more than 100,000 domestic retail subscriber lines. The
Commission recognized that such providers might also serve as
intermediate providers and in fact stated that ``a covered provider
that also serves as an intermediate provider for other providers may--
but need not--segregate its originated traffic from its intermediary
traffic in its recording and reporting, given the additional burdens
such segregation may impose on such providers.'' Accordingly, the
Commission did not overlook the fact that providers that may be
intermediate providers in some instances and covered providers in other
instances.
50. For all of these reasons, we decline to reconsider the
Commission's finding that the benefits of these rules outweigh the
burdens of compliance. Burden arguments raised in the PRA context will
be considered and addressed in compliance with the PRA.
D. Transcom Petition: Application of Ring Signaling Rule to
Intermediate Providers That Are Not Common Carriers
51. In the Order, the Commission adopted a rule that prohibits
``originating and intermediate providers . . . from causing audible
ringing to be sent to the caller before the terminating provider has
signaled that the called party is being alerted.'' The Commission
applied this rule to, among others,
[[Page 73234]]
``intermediate providers that are not common carriers.'' Transcom
requests reconsideration of this rule ``insofar as [it] applies to
`intermediate providers' that are not common carriers,'' arguing that
the Commission exceeded its legal authority by extending the rule to
such providers. For the reasons discussed below, we dismiss Transcom's
Petition.
52. As an initial matter, we must determine whether consideration
of Transcom's petition is procedurally appropriate under section
1.429(b) of the Commission's rules. As Transcom notes, it did not
submit comments in response to the Notice or conduct any ex parte
meetings in this docket. Thus Transcom did not previously present any
of the facts or arguments in its Petition to the Commission, and our
review of the record indicates that no party to the proceeding raised
facts or arguments relating to the Commission's authority to require
intermediate providers that are not common carriers to comply with the
ring signaling rule. Transcom asserts that another entity presented the
relevant legal issue in an ex parte letter and that the Commission thus
considered and addressed the matter in the Order. However, the ex parte
letter from the VON Coalition that Transcom cites did not present the
same issues that Transcom now presents. Neither the VON Coalition's
letter cited by Transcom nor its comments and reply comments in this
proceeding, which the letter references, raised any facts or arguments
relating to the Commission's authority to require intermediate
providers that are not common carriers to comply with the ring
signaling rule.
53. Section 1.429(b) of the Commission's rules provides that a
petition for reconsideration that relies on facts or arguments which
have not previously been presented to the Commission will be granted
only if: (1) The facts or arguments relied on relate to events which
have occurred or circumstances which have changed since the last
opportunity to present such matters to the Commission; (2) the facts or
arguments relied on were unknown to petitioner until after his last
opportunity to present them to the Commission, and he could not through
the exercise of ordinary diligence have learned of the facts or
arguments in question prior to such opportunity; or (3) the Commission
determines that consideration of the facts or arguments relied on is
required in the public interest. Because Transcom's Petition ``relies
on facts or arguments which have not previously been presented to the
Commission,'' we may grant the Petition only if one of the three
criteria described above is met.
54. Transcom makes no effort in its Petition to argue that its
reconsideration request meets the requirements of section 1.429(b). In
its reply to an opposition filed by the Rural Associations, however,
Transcom argues that the United States Court of Appeals for the
District of Columbia Circuit's recent decision in Verizon v. FCC
constitutes an ``intervening event'' that justifies consideration of
its Petition under section 1.429(b)(1). We disagree. Transcom reads
Verizon to hold that ``the Commission cannot use Title I to justify
imposing common carrier duties on non-common carriers.'' But the idea
that the Commission cannot regulate services that have not been
classified as common carrier services in a way that result in per se
common carriage did not originate in the Verizon opinion; the courts
and the Commission have long recognized that concept. The Verizon court
merely applied this precedent to the Commission's Open Internet rules
and found that parts of those rules impermissibly required per se
common carriage in that context. For this reason, the fact that the
Verizon court discussed limitations on the Commission's ability to
regulate non-common carriers does not make the Verizon opinion an
``event[ ] which [has] occurred or circumstance[ ] which [has] changed
since the last opportunity to present such matters to the Commission''
for purposes of section 1.429(b)(1).
55. In this same set of reply comments, Transcom also argues that
reconsideration is appropriate under section 1.429(b)(2) because the
legal question was presented by the VON Coalition and disposed in the
Order. As we have explained, Transcom's assertion that the relevant
legal issue was raised in the record prior to adoption of the Order is
incorrect. Even if it were correct, however, whether or not ``the legal
question was presented and disposed'' is irrelevant to whether a
petition satisfies section 1.429(b)(2), which applies only where ``the
facts or arguments relied on were unknown to petitioner until after his
last opportunity to present them to the Commission.'' Transcom makes no
argument based on the requirements of section 1.429(b)(2); accordingly,
this argument also fails.
56. Transcom further argues that consideration of its petition is
required by the public interest and thus warrants consideration under
section 1.429(b)(3). But Transcom does not support this assertion
except to say that the Verizon decision ``directly undercuts the
primary rationale'' for the ring signaling rule. As we have explained,
the Verizon opinion did not change the law in any way bearing on the
Commission's decision to apply the ring signaling rule to intermediate
providers that are not common carriers. Moreover, we independently
discern no other fact or argument set forth in the Transcom Petition
that would require its petition to be considered. Accordingly,
consideration of Transcom's petition is not ``required in the public
interest.'' Because Transcom's Petition fails to satisfy any of the
criteria of section 1.429(b), we dismiss the Petition.
57. Carolina West asks us to modify the definition of ``covered
provider'' as it applies to the smaller covered provider exception to
our recordkeeping, retention, and reporting rules. Specifically,
Carolina West proposes that we replace ``aggregated over all of the
provider's affiliates'' in the definition of covered provider with
``aggregated over all entities under common control with such
provider'' Carolina West argues that, when determining whether a
provider makes the initial call path choice for more than 100,000
subscriber lines, a provider should not have to include ``lines served
by non-controlling minority owners.'' In support of its petition,
Carolina West states that it is ``common for rural wireless carriers to
have passive investors who are themselves carriers that provide long-
distance service'' and that these investors ``do not and cannot make
the ultimate determination regarding the call routing practices of the
providers in which they hold such passive investments.'' Carolina West
reports that, although it serves fewer than 100,000 subscriber lines,
it ``believes that it would be subject to the full scope of the new
retention and reporting requirements because one or more of its
minority investors provide long-distance service and make the initial
call path decision for enough customer lines such that, in the
aggregate, [Carolina West] and its `affiliates' would exceed the
100,000 line de minimis threshold.''
58. In the Order, the Commission concluded that the recordkeeping,
retention, and reporting rules should apply to ``covered providers,''
i.e., providers of long-distance voice service that make the initial
long-distance call path choice for more than 100,000 domestic retail
subscriber lines, including lines served by the providers' affiliates.
The 100,000 line threshold forms a basis for the ``exception for
smaller covered providers'' adopted in the Order. In adopting this
exception, the Commission noted that the recordkeeping, retention, and
reporting requirements would still ``capture as
[[Page 73235]]
much as 95 percent of all callers'' and that ``a covered provider
qualifies for this exception only if it and all its affiliates, as
defined in section 3(2) of the Act . . . together made the initial
long-distance call path choice for 100,000 or fewer total business or
residential subscriber lines.''
59. We acknowledge Carolina West's concerns about the burdens on
small providers associated with complying with the rule. On the record
before us, however, we are unable to conclude that the Commission's
goals would continue to be met if we changed our rules to exempt
additional providers from compliance. For example, the Commission noted
that it was not ``compromis[ing] our ability to monitor rural call
completion problems effectively'' in creating the exemption because we
could continue to capture ``as much as 95% of all callers.'' But the
record here does not reveal how many providers or how much call
completion data would be lost if we modified the rule as Carolina West
proposes. In addition, while Carolina West argues that minority
investors cannot dictate call routing for the carriers in which they
invest, this argument fails to take into account, for example, the
variety of stock classes and attendant voting rights that may allow a
minority investor to in fact to dictate call routing for an affiliate
because the affiliate may be relying on the minority investor to handle
its long distance traffic. Thus, a categorical decision to consider the
lines of only affiliates under common control could create a loophole
exempting carriers under common influence in their routing decisions,
making it more difficult for the Commission to identify the sources of
problems in rural call completion. Therefore, the record does not
persuade us to modify our rules as Carolina West requests, and we deny
their petition.
60. We do, however, recognize that there are burdens associated
with compliance with these rules, and there may be particular
circumstances that make application of the rules to Carolina West
inequitable or contrary to the public interest. We invite Carolina West
and other carriers to file waiver requests if they believe that the
public interest would be better served by not counting the lines of
some or all of their affiliates towards the 100,000 line threshold.
III. Procedural Matters
A. Paperwork Reduction Act
61. This document contains modified information collection
requirements subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. It has been submitted to the Office of Management
and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the
general public, and other Federal agencies are invited to comment on
the modified information collection requirements contained in this
proceeding. In addition, we note that pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4), we previously sought specific comment on how the Commission
might further reduce the information collection burden for small
business concerns with fewer than 25 employees.
62. In this present document, we have assessed the effects of
various requirements adopted in the Rural Call Completion Order and
determined that certain recordkeeping, retention, and reporting
requirements should not apply to intraLATA toll calls that are carried
entirely over the covered provider's network or that are handed off by
the covered provider directly to the terminating LEC or its terminating
tandem switch. We find that these actions are in the public interest
because they reduce the burdens of these recordkeeping, retention, and
reporting requirements without undermining the goals and objectives
behind the requirements. The amendments we adopt today will reduce the
burden on businesses with fewer than 25 employees.
B. Supplemental Final Regulatory Flexibility Analysis
63. As required by the Regulatory Flexibility Act of 1980 (RFA),
the Commission has prepared a Supplemental Final Regulatory Flexibility
Analysis (FRFA) relating to the Order on Reconsideration.
64. As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice
of Proposed Rulemaking (Notice) in WC Docket No. 13-39. The Commission
sought written public comment on the proposals in the Notice, including
comment on the IRFA. The Commission subsequently incorporated a Final
Regulatory Flexibility Analysis (FRFA), as well as a supplemental IRFA,
in the Report and Order and Further Notice of Proposed Rulemaking in WC
Docket No. 13-39. This Supplemental FRFA conforms to the RFA and
incorporates by reference the FRFA in the Order. It reflects changes to
the Commission's rules arising from the Order on Reconsideration.
C. Need for, and Objectives of, the Order on Reconsideration
65. The Order on Reconsideration affirms the Commission's
commitment to ensuring that high quality telephone service must be
available to all Americans. In the underlying Order, the Commission
established rules to combat extensive problems with successfully
completing calls to rural areas, and created a framework to improve the
ability to monitor call problems and take appropriate enforcement
action. In this Order on Reconsideration, the Commission denies several
petitions for reconsideration that, if granted, would impair the
Commission's ability to monitor, and take enforcement action against,
call completion problems. The Commission does, however, grant one
petition for reconsideration because the Commission finds that
modifying its original determination will significantly lower
providers' compliance costs and burdens without impairing the
Commission's ability to obtain reliable and extensive information about
rural call completion problems.
66. Specifically, in the Order on Reconsideration, the Commission
grants the petition for reconsideration of the Rural Call Completion
Order filed by USTelecom and ITTA. In doing so, the Commission modifies
rules adopted in the Rural Call Completion Order so that the
recordkeeping, retention, and reporting requirements adopted in the
Rural Call Completion Order do not apply to a limited subset of calls:
intraLATA toll calls that are carried entirely over the covered
provider's network, and intraLATA toll calls that are handed off by the
covered provider directly to the terminating local exchange carrier
(LEC) or to the tandem that the terminating LEC's end office subtends.
The decision to grant reconsideration reflects a focused analysis of
the costs of applying the rules to this limited set of traffic, the
fact that this traffic represents a small portion of total toll
traffic, and the modest incremental benefit that such data would likely
yield. Most notably, these limited rule modifications will reduce the
burdens on small business entities resulting from compliance with the
rules adopted in WC Docket No. 13-39.
D. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA and the Rural Call Completion Order
67. There were no comments filed that specifically addressed the
rules and policies proposed in the IRFA that was incorporated in the
Notice.
[[Page 73236]]
68. In a petition for reconsideration of the Rural Call Completion
Order, COMPTEL argued that the Commission's decision to adopt in the
Rural Call Completion Order a smaller covered provider exception to the
reporting rules, based on 100,000 subscriber lines rather than 100,000
subscribers, failed to comply with section 604 of the RFA. In the Order
on Reconsideration, the Commission denies COMPTEL's petition. The
Commission finds that the FRFA incorporated in the Rural Call
Completion Order complies with the RFA. Specifically, the Commission
recounts how section E of the FRFA specifically addresses steps taken
to minimize the significant economic impact on small entities, and
references the smaller covered provider exception as one factor that
reduces the economic impact of the rules on small entities, and that in
the Rural Call Completion Order, the Commission provided an explanation
for the smaller covered provider exception adopted therein.
E. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
69. Pursuant to the Small Business Jobs Act of 2010, the Commission
is required to respond to any comments filed by the Chief Counsel for
Advocacy of the Small Business Administration (SBA), and to provide a
detailed statement of any change made to the proposed rules as a result
of those comments. The Chief Counsel did not file any comments in
response to the proposed rules in this proceeding.
F. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
70. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. A ``small-business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the SBA.
71. As noted, a FRFA was incorporated into the Rural Call
Completion Order. In that analysis, the Commission described in detail
the various small business entities that may be affected by the final
rules. Those entities consist of: Wired telecommunications carriers;
LECs; incumbent LECs; competitive LECs, competitive access providers,
shared-tenant service providers, and other local service providers;
interexchange carriers; prepaid calling card providers; local
resellers; toll resellers; other toll carriers; wireless
telecommunications carriers (except satellite); cable and other program
distribution; cable companies and systems; and all other
telecommunications. In this present Order on Reconsideration, the
Commission is amending the final rules adopted in the Rural Call
Completion Order and the small business entities described in the
underlying FRFA are the same that may be affected by this present Order
on Reconsideration. This Supplemental FRFA incorporates by reference
the description and estimate of the number of small entities from the
FRFA in this proceeding.
G. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
72. In Section D of the FRFA incorporated into the Rural Call
Completion Order, the Commission described in detail the projected
recording, recordkeeping, reporting and other compliance requirements
for small entities arising from the rules adopted in the Rural Call
Completion Order. This Supplemental FRFA incorporates by reference the
requirements described in Section D of the FRFA. In the Order on
Reconsideration, however, the Commission modifies rules adopted in the
Rural Call Completion Order so that the recordkeeping, retention, and
reporting requirements adopted in the Rural Call Completion Order do
not apply to a limited subset of calls: intraLATA toll calls that are
carried entirely over the covered provider's network, and intraLATA
toll calls that are handed off by the covered provider directly to the
terminating LEC or to the tandem that the terminating LEC's end office
subtends. The effect of such modifications is to reduce the compliance
requirements for this subset of small entities that carry intraLATA
toll traffic.
H. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
73. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rules for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.'' In Section E of the FRFA incorporated into the Rural Call
Completion Order, the Commission described in detail the steps taken to
minimize the significant economic impact on small entities, and the
significant alternatives considered in the Rural Call Completion Order.
This Supplemental FRFA incorporates by reference the steps taken and
alternatives described in Section E of the FRFA.
74. The Commission considered the economic impact on small entities
in reaching its final conclusions and taking action in the Rural Call
Completion Order, and it likewise does so here. While declining to
disturb the majority of the findings and conclusions in the underlying
Rural Call Completion Order, this Order mitigates burdens for smaller
entities that carry intraLATA toll traffic. By excluding intraLATA toll
calls that are carried entirely over the covered provider's network,
and intraLATA toll calls that are handed off by the covered provider
directly to the terminating LEC or to the tandem that the terminating
LEC's end office subtends, the Commission reduces burden of the
recordkeeping, retention, and reporting requirements it adopted in the
Rural Call Completion Order.
I. Report to Congress
75. The Commission will send a copy of the Order on
Reconsideration, including this Supplemental FRFA, in a report to be
sent to Congress pursuant to the Congressional Review Act. In addition,
the Commission will send a copy of the Order on Reconsideration,
including this Supplemental FRFA, to the Chief Counsel for Advocacy of
the SBA. A copy of the Order on Reconsideration and Supplemental FRFA
(or summaries thereof) will also be published in the Federal Register.
J. Congressional Review Act
76. The Commission will send a copy of the Order on Reconsideration
in a report to be sent to Congress and the Government Accountability
Office pursuant to the Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
[[Page 73237]]
IV. Ordering Clauses
77. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), and
405 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154(i), 405, and sections 1.1 and 1.429 of the Commission's rules, 47
CFR 1.1, 1.429, that the Order on Reconsideration IS ADOPTED, effective
January 9, 2015.
78. IT IS FURTHER ORDERED that part 64 of the Commission's rules,
47 CFR part 64, IS AMENDED as set forth in Appendix A, and that such
rule amendments SHALL BE EFFECTIVE after announcement in the Federal
Register of Office of Management and Budget (OMB) approval of the
rules, and on the effective date announced therein.
79. IT IS FURTHER ORDERED that the Petition of USTelecom and ITTA
for Reconsideration or, in the Alternative, for Waiver or Extension of
Time to Comply IS GRANTED to the extent described herein and otherwise
DISMISSED AS MOOT.
80. IT IS FURTHER ORDERED that the Petitions for Reconsideration
filed by Carolina West and COMPTEL ARE DENIED.
81. IT IS FURTHER ORDERED that the Petition for Reconsideration
filed by Sprint Corporation IS DENIED, as to Sections I and II.A of the
Petition. The Petition for Reconsideration filed by Sprint Corporation
is DISMISSED and DENIED on an independent and alternative basis, as to
Section II.B of the Petition.
82. IT IS FURTHER ORDERED that the Petition for Reconsideration
filed by Transcom Enhanced Services, Inc. is DISMISSED.
83. IT IS FURTHER ORDERED that the Petition for Waiver filed by
AT&T Services, Inc., IS DISMISSED AS MOOT, as to the portion of the
Petition requesting relief for on-net intraLATA toll traffic.
84. IT IS FURTHER ORDERED that the Petition for Waiver filed by
CenturyLink, Inc. IS DISMISSED AS MOOT, as to Section III.C.ii of the
Petition.
85. IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of
the Order on Reconsideration to Congress and to the Government
Accountability Office pursuant to the Congressional Review Act, see 5
U.S.C. 801(a)(1)(A). Part 64 of the Commission's rules ARE GRANTED to
the extent set forth herein, and this Order on Reconsideration SHALL BE
EFFECTIVE upon release.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 64 to read as follows:
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
0
1. The authority citation for part 64 continues to read as follows:
Authority: 47 U.S.C. 154, 254(k); 403(b)(2)(B), (c), Pub. L.
104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 222,
225, 226, 227, 228, 254(k), 616, and 620 unless otherwise noted.
0
2. Amend Sec. 64.2101 by revising paragraph (f) to read as follows:
Sec. 64.2101 Definitions.
* * * * *
(f) Long-distance voice service. For purposes of subparts V and W,
the term ``long-distance voice service'' includes interstate interLATA,
intrastate interLATA, interstate interexchange, intrastate
interexchange, intraLATA toll, inter-MTA interstate and inter-MTA
intrastate voice services.
0
3. Amend Sec. 64.2103 by redesignating paragraph (e) as paragraph (f)
and adding new paragraph (e) as follows.
Sec. 64.2103 Retention of Call Attempt Records.
* * * * *
(e) IntraLATA toll calls carried entirely over the covered
provider's network or handed off by the covered provider directly to
the terminating local exchange carrier or directly to the tandem switch
serving the terminating local exchange carrier's end office
(terminating tandem), are excluded from these requirements.
* * * * *
0
4. Amend Sec. 64.2105 by adding paragraph (e) to read as follows:
Sec. 64.2105 Reporting requirements.
* * * * *
(e) IntraLATA toll calls carried entirely over the covered
provider's network or handed off by the covered provider directly to
the terminating local exchange carrier or directly to the tandem switch
that the terminating local exchange carrier's end office subtends
(terminating tandem), are excluded from these requirements.
[FR Doc. 2014-28898 Filed 12-9-14; 8:45 am]
BILLING CODE 6712-01-P