Free Motion to Dismiss - District Court of California - California

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140. We reject NARUC's and the State Consumer Advocates' argument that we must, under section 254(k), require incumbent LECs to reallocate a portion of their joint and common loop costs from "universal services" as a group to wireline broadband Internet access transmission 429 The State Consumer Advocates submit a cost allocation proposal (which it characterizes as "market-driven") that differs from the current part 64 rules 430 BellSouth and SBC assert that cost allocations are not relevant under price cap regulation and that the Commission should reject the State Consumer Advocates' proposal asz 141. We find that section 254(k) of the Act does not mandate allocation of interstate loop costs to noncommon carrier broadband Internet access transmission. Under the CALLS access charge plan, the interstate loop costs of price cap carriers are not assigned to the different services that subscribers may receive over the loop, but are recovered directly from end users through the subscriber line charge. The Commission explicitly found that section 254(k) did not prohibit this cost recovery mechanism,432 and the Fifth Circuit upheld this finding 433 142. The subscriber line charge is not itself a "service included in the definition of universal service." The interstate loop costs recovered through the subscriber line charge represent the costs of all jurisdictionally interstate uses of the loop. Since 1998, those uses have included both services supported by universal service, such as access to interexchange service, and broadband special access services, which are not supported by universal service. Costs need not be reallocated at this time from the subscriber line charge to non-common carrier, broadband Internet access transmission in order to prevent imposition of an unreasonable level of joint and common costs on services included in the definition of universal services. This is not, as State Consumer Advocates claim, unreasonable. Rather, it is a reasonable and rational cost allocation approach.434 We can take additional steps to address cost allocation issues in the future if the need arises. 143. We observe that NARUC and the State Consumer Advocates appear to assume that any reallocation of loop costs to broadband Internet access transmission would be given effect in the ratemaking process in such a way that consumers who do not receive wireline broadband Internet access service over their loops would have their tariffed rates reduced. This ratemaking approach would likely produce a relatively small per-line rate reduction for the large number of consumers who do not receive this broadband service, while leaving a larger per -line amount to be recovered from the smaller number of consumers who receive both narrowband and broadband services over their loops. This form of cost reallocation produces anomalous results, and we do not adopt it. It would cause a consumer who buys the 429 NARUC Comments at 12-13; State Consumer Advocates Comments at 24-25. 430 State Consumer Advocates Comments at 26. This proposal would require allocation to broadband Internet access of an amount of cost equal to the difference between the competitor's wholesale price and the incumbent LEC's incremental cost for broadband transmission service. Id. at 27. 431 BellSouth Comments at 27-29; SBC Reply at 63-64. 432 See Access Charge Reform, CC Docket Nos. 96-262 and 94-1, Sixth Report and Order, 15 FCC Rcd 12962, 12998-13001, paras. 91-97 (2000) (subsequent history omitted) (CALLS Order).
433 Texas Office of Public Utility Counsel v. FCC, 265 F.3d 313, 323-324 (51" Cir. 2001).

434 State Consumer Advocates argue that the need to assign costs among all services using the loop will become even more important as incumbent LEC networks are engineered to deliver a variety of integrated services. State Consumer Advocates Comments at 33-34. We conclude instead that as more services are offered over a single loop, cost allocations are likely to become more arbitrary and thus less reasonable.
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two services over the same loop to pay much more for that facility than a consumer who buys only narrowband service, even though the cost of that facility is fixed and does not vary in proportion to usage. It would be possible to devise a scheme in which costs were reallocated only with respect to those loops on which both services are being provided, but this would seem to produce only a shifting of charges from one part of the customer's bill to another. 144. We note that the question whether there should be any changes to the jurisdictional allocation of loop costs in light of use of the loop for broadband services was referred to the Federal-State Joint Board on Separations in 1999 43s Specifically, in the wake of the Commission's determination in its 1999 tariff investigation that GTE's ADSL service was an interstate special access service subject to federal tariffing, NARUC filed a petition for clarification regarding the proper allocation under Part 36 of the Commission's rules of loop costs associated with DSL services .41' Noting that issues associated with how to allocate local loop plant between voice and data services for purposes of jurisdictional separations were beyond the scope of the limited investigation in the tariff proceeding, the Commission stated that it would address these important issues in conjunction with the Joint Board 437 This issue remains pending. In any event, separations is now subject to a five-year freeze, and the Joint Board is working on the approach that should follow this freeze; the issues we describe in this Order already fall within this context ass After the Joint Board makes its recommendation, we can reexamine the question of how any additional costs that might be assigned to the interstate jurisdiction may be recovered by local exchange carriers. VII. ENFORCEMENT 145. We intend to swiftly and vigorously enforce the terms of this Order. Significantly, through review of consumer complaints and other relevant information, we will monitor all consumer-related problems arising in this market and take appropriate enforcement action where necessary. Similarly, we will continue to monitor the interconnection 4" and interoperability practices" of all industry participants, including facilities-based Internet access providers, and reserve the ability to act under our ancillary authority in the event of a pattern of anti-competitive conduct." VIII. NOTICE OF PROPOSED RULEMAKING 146. The broadband marketplace before us today is an emerging and rapidly changing one. Nevertheless, consumer protection remains a priority for the Commission. We have a duty to ensure that consumer protection objectives in the Act are met as the industry shifts from narrowband to broadband services. Through this Notice, we thus seek to develop a framework for consumer protection in the broadband age - a framework that ensures that consumer protection needs are met by all providers of 435 GTE DSL Reconsideration Order, 17 FCC Red at 27412, para. 9; see also Jurisdictional Separations and Referred to the Federal-State Joint Board, CC Docket No. 80-286, Report and Order, 16 FCC Red 11382, 1139798, para. 31 (2001). 436 GTE DSL Reconsideration Order, 17 FCC Red at 27411, para. 7.
437 Id. at 27412, para. 9. 438 See Jurisdictional Separations and Referral to the Federal-State Joint Board, CC Docket No. 80-286, Report and Order, 16 FCC Red 11382 (2001).
439 47 U.S.C. § 251(a). 440 47 U.S.C. § 256.

441 See supra n.339 (citing NCTA v. Brand X, slip op. at 25, regarding the Commission's Title I authority).
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broadband Internet access service, regardless of the underlying technology. 42 This framework necessarily will be built on our ancillary jurisdiction under Title I; as we explain in the Order,aa' this jurisdiction is ample to accomplish the consumer protection goals we identify below, and we will not hesitate to exercise it 444 147. For each of the specific areas of Commission regulation described below, we ask commenters to address whether the imposition of regulations pursuant to our ancillary jurisdiction, and the corresponding ability of consumers to take advantage of Commission avenues for resolution of consumer protection issues, is desirable and necessary as a matter of public policy, or whether we should rely on market forces to address some or all of the areas listed. Are these types of regulations more or less relevant in the context of broadband Internet access service than they are for traditional telephony services? We ask commenters to describe any technical, economic, or other impediments that may affect the ability of broadband Internet access service providers to comply with such regulations. Are there areas of consumer protection not listed above for which the Commission should impose regulations? If so, commenters should describe the nature of the concern and address the questions posed in this paragraph.
A. CPNI

148. Consumers' privacy needs are no less important when consumers communicate over and use broadband Internet access than when they rely on telecommunications services. For example, a consumer may have questions about whether a broadband Internet access service provider will treat his or her account and usage information as confidential, or whether the provider reserves the right to use account information for marketing and other purposes. Section 222 of the Act establishes the regulatory framework governing telecommunications carriers' use and disclosure of CPNI and other customer information obtained by those carriers in their "provision of a telecommunications service."445 That section requires, in general, that telecommunications carriers use or disclose CPNI only in the provision of the telecommunications service from which the CPNI is derived, or in the provision of services necessary to, or used in, the provision of such telecommunications services.446 149. We seek comment on whether we should extend privacy requirements similar to the Act's CPNI requirements to providers of broadband Internet access services. For example, should we adopt rules under our Title I authority that forbid broadband Internet access providers from disclosing, without their 442 We note that questions regarding necessary regulatory obligations of cable modem providers have previously been raised in the Cable Modem Declaratory Ruling and NPRM, 17 FCC Rcd at 4848-54, paras. 96-112. To the extent that our inquiry here is duplicative of those questions, we ask commenters to refresh the record by filing comments in this instant proceeding in WC Docket No. 05-271.
443 See supra paras. 108-111.

444 Indeed, this Commission has already shown its willingness to rely on ancillary jurisdiction in the face of a demonstrated need. See VoIP E911 Order at paras. 26-32. 445 47 U.S.C. § 222(c)(1) (emphasis added). The Commission has adopted rules implementing section 222, including rules defining the scope of the phrase "telecommunications service" in section 222(e)(1)(A) as well as rules specifying which services are included in the phrase "services necessary to, or used in the provision of telecommunications service" in section 222(c)(1)(B). See 47 C.F.R. §§ 64.2001-64.2008; see also Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer Information, CC Docket No. 96-115, Third Report and Order and Third Further Notice of Proposed Rulemaking, 17 FCC Rcd 14860 (2002) (CPNI Remand Order).
446 47 U.S.C. § 222(c)(1).

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customers' approval, information about their customers that they learn through the provision of their broadband Internet access service? We seek comment on what sort of customer proprietary information broadband Internet access providers possess, e.g., information about consumers' service plans, installed equipment, or patterns of Internet access use. We note that long before Congress enacted section 222 of the Act, the Commission had recognized the need for privacy requirements associated with the provision of enhanced services and had adopted CPNI-related requirements in conjunction with other Computer Inquiry obligations.aa' B. Slamming 150. Section 258 of the Act prohibits telecommunications carriers from submitting or executing an unauthorized change in a subscriber's selection of a provider of telephone exchange service or telephone toll service, a practice commonly known as "slamming."448 In a series of orders, the Commission adopted various rules to implement section 258, and concluded that state authorities should have primary responsibility for administering the rules 444 By providing for state administration of slamming rules, the
447 See Computer III Phase II Order, 2 FCC Red at 3094-95, paras. 152-56 (1987). Specifically, in the Computer III proceeding, the Commission adopted a framework governing CPNI not only to protect independent enhanced service providers from anticompetitive use of customers' local and long distance services information gained by the dominant telephone service providers to advance their enhanced services provisioning, but also to protect legitimate customer expectations of confidentiality. Under the pre-1996 Act CPNI framework, which was eliminated in its entirety when the Commission implemented section 222, customer information derived from the provision of enhanced services was not subject to CPNI protections. See Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer Information, CC Docket No. 96-115, Second Report and Order and Further Notice of Proposed Rulemaking, 13 FCC Red 8061, 8184-93, paras. 176-89 (1998) (CPNI Order), on recon., 14 FCC Red 14409 (1999) (CPNI Reconsideration Order), vacated sub nom. U.S. West v. FCC, 182 F.3d 1224 (10`' Cir. 1999), cert. denied, 530 U.S. 1213 (2000). 44' 47 U.S.C. § 258(a) (mandating that "[n]o telecommunications carrier shall submit or execute a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification procedures as the Commission shall prescribe"). Prior to the adoption of section 258 of the Act, the Commission had recognized that slamming was a significant problem, and had taken various steps to address the issue; the adoption of section 258 expanded the Commission's authority in this area. See, e.g., Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94-129, Report and Order, 10 FCC Red 9560 (1995), stayed in part, 11 FCC Red 856 (1995); Policies and Rules Concerning Changing Long Distance Carriers, CC Docket No. 91-64, Report and Order, 7 FCC Red 1038 (1992), recon. denied, 8 FCC Red 3215 (1993); Investigation of Access and Divestiture Related Tams, CC Docket No. 83-1145, Phase 1, Memorandum Opinion and Order, 101 FCC 2d 935, recon., 102 FCC 2d 503 (1985); see also, e.g., Cherry Communications, File No. ENF -93-045, Order, 9 FCC Red 2086 (1994) (adopting consent decree enforcing the Commission's anti-slamming rules). 449 Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94129, Second Report and Order and Further Notice of Proposed Rulemaking, 14 FCC Rcd 1508 (1998) (Second Report and Order), stayed in part, MCI WorldCom v. FCC, No. 99-1125 (D.C. Cir. May 18, 1999) (Stay Order), motion to dissolve stay granted, MCI WorldCom v. FCC, No. 99-1125 (D.C. Cir. June 27, 2000) (Order Lifting Stay); Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94-129, First Order on Reconsideration, 15 FCC Red 8158 (2000) (First Reconsideration Order); Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94129, Third Report and Order and Second Order on Reconsideration, 15 FCC Red 15996 (2000) (Third Report and Order); Errata, DA 00-2163 (rel. Sept. 25, 2000); Erratum, DA 00-292 (rel. Oct. 4, 2000); Implementation of the (continued ...)
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Commission recognized that state authorities are particularly well-equipped to handle such complaints because states are close to consumers and are familiar with trends in their regions.450 The Commission also recognized, however, that all states may not have the resources available to handle slamming complaints 451 Accordingly, the Commission's rules allow consumers in states that do not "opt-in" to administer the slamming rules to file slamming complaints with the Commission asa 151. We seek comment on whether we should exercise our Title I authority to impose similar requirements on providers of broadband Internet access service. Commenters should explain in what circumstances subscribers to broadband Internet access could get "slammed .,,453 Is the provisioning process for broadband Internet access service such that an unauthorized change in provider is more likely in situations where the provider relies on third-party broadband transmission facilities? C. Truth-in-Billing 152. The Commission has adopted truth-in-billing rules to ensure that consumers receive accurate, meaningful information on their telecommunications bills that will allow consumers to better understand their bills, compare service offerings, and thereby promote a more efficient, competitive marketplace.asa In general, the Commission's rules require that a telecommunication carrier's bill must: (1) be accompanied by a brief, clear, non-misleading, plain language description of the service or services rendered; (2) identify the service provider associated with each charge; (3) clearly and conspicuously identify any change in service provider; (4) identify those charges for which failure to pay will not result in disconnection of basic local service; and (5) provide a toll-free number for consumers to inquire or dispute any charges.455 The Commission's rules on truth-in-billing are designed to reduce slamming,456

(continued from previous page)
Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94-129, Order, 16 FCC Red 4999 (2001); Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94-129, Third Order on Reconsideration and Second Further Notice of Proposed Rule Making, 18 FCC Red 5099 (2003) (Third Reconsideration Order and/or Second FNPRAI). The rules adopted by the Commission to implement section 258 are codified in part 64. See 47 C.F.R. §§ 64.1100 et seq. 450 First Reconsideration Order, 15 FCC Red at 8169-80, paras. 22-43. asi Id at 8165-66, paras. 25-28. 452 Id.

ass Typically, in order to subscribe to broadband Internet access service, a consumer must install, or have installed, equipment (i.e., a modem that the ISP provides to the consumer and that is specific to that ISP) that, along with a proprietary password, enables the consumer to utilize that particular ISP's Internet access service. We therefore seek comment on whether, given the manner in which broadband Internet access service is provisioned, slamming could actually occur from a technical perspective.
asa See 47 C.F.R. §§ 64.2400-2401.

ass 47 C.F.R. § 64.2401.

456 See supra Part VIII.B.
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cramming,457 and other telecommunications fraud by setting standards for accuracy on bills for telecommunications service 458 153. We seek comment on whether we should exercise our Title I authority to impose requirements on broadband Internet access service providers that are similar to our truth-in-billing requirements or are otherwise geared toward reducing slamming, cramming, or other types of telecommunications-related fraud. For example, during 2005, the Commission's Consumer and Governmental Affairs Bureau has received complaints about the billing practices of broadband Internet access services providers, including complaints related to double billing, billing for unexplained charges, and billing for cancelled services 4ss Overall, parties should explain what problems customers of broadband Internet access service are likely to have with their bills and whether we should address these problems through truth-in-billing-type requirements. D. Network Outage Reporting 154. The Commission requires certain communications providers to notify the Commission of outages of thirty or more minutes that affect a substantial number of customers or involve major airports, major military installations, key government facilities, nuclear power plants, or 911 facilities.460 We seek comment on whether we should exercise our Title I authority to impose any similar requirements on broadband Internet access service providers. Do the purposes of our network outage reporting requirements apply to outages of broadband Internet access service? Should we adopt requirements that differ depending on the nature of the facility or the type of customer served? E. Section 214 Discontinuance 155. Section 214 of the Act limits a telecommunications carrier's ability to discontinue unilaterally its service to customers.46' The Commission's implementing rules generally require that domestic carriers wishing to "discontinue, reduce, or impair" services must first request authority to do so from the Commission462 and must notify affected customers and others of their plans 461

457 "Cramming" is the practice of placing unauthorized, misleading, or deceptive charges on a telecommunications bill. Cramming is most likely to occur when a carrier does not clearly or accurately describe all of the relevant charges on the consumer's bill.
458 See 47

C.F.R. § 64.2400(a).

459 Operations Support for Complaint Analysis and Resolution (OSCAR) System, Consumer & Governmental Affairs Bureau (Aug. 4, 2005).
460 47 C.F.R. § 63.100(a)-(e); see also New Part 4 of the Commission's Rules Concerning Disruptions to Communications, ET Docket No. 04-35, Report and Order and Further Notice of Proposed Rulemaking, 19 FCC Rcd 16830, 16867, para. 65 (2004).

46' 47 U.S.C. § 214(a). Part 63 of the Commission's rules implements this section of the Act, establishing comprehensive rules with which telecommunications carriers must comply in seeking to discontinue telecommunications services. These rules vary depending on whether the carrier in question is a dominant or nondominant provider of the telecommunications services it is seeking to discontinue. See 47 C.F.R. §§ 63.60 et seq. 46' 47 U.S.C. § 63.71.
461 47 U.S.C. § 63.71(a).

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156. We seek comment on whether we should exercise our Title I authority to impose discontinuancetype requirements on providers of broadband Internet access service. As customers grow more dependent on broadband Internet access services, does the need for notice to customers grow stronger?464 Or do the multiplicity and availability of broadband Internet access providers mitigate the need for such notice? F. Section 254(8) Rate Averaging Requirements 157. Finally, we seek to ensure that our actions today do not jeopardize the policies of section 254(g). That section required the Commission to adopt rules "to require that the rates charged by providers of interexchange telecommunications services to subscribers in rural and high cost areas ... be no higher than the rates charged by each such provider to its subscribers in urban areas.i" The provision further required that the rules "require that a provider of interstate interexchange telecommunications services ... provide such services to its subscribers in each State at rates no higher than the rates charged to its subscribers in any other State."466 The Commission has forborne from the requirements of section 254(g) with regard to private line services, of which DSL is one 467 Because the policies underlying section 254(g) remain important, however, we ask whether we should exercise our Title I authority to impose any similar requirements on providers of broadband Internet access services, particularly as consumers substitute broadband services and applications for narrowband services that were covered by section 254(g). G. Federal and State Involvement 158. We recognize that the states play an important role in ensuring that public safety and consumer protection goals are met. The Commission has recently announced the creation of a federal-state task force on VolP 8911 enforcement,468 and we believe that this Notice may give rise to additional areas in which cooperation between this Commission and the states can achieve the best results. We note in this regard that NARUC has recently advocated for a "functional" approach to questions of federal and state jurisdiction, particularly with respect to consumer protection issues 469 For example, with respect to CPNI, NARUC recommends that the Commission be primarily responsible for establishing rules, while state or local authorities assume responsibility for enforcing those rules.470 To the extent that the
464 For example, in 2001, a large provider of broadband Internet access services, @Home, sought bankruptcy court protection and announced plans to sell its high-speed network. Within a relatively brief period of time, the company requested and received permission from the United States Bankruptcy Court to shut down its network, causing its subscribers to switch to other providers. News reports described the many problems the subscribers encountered during the transition, including service outages, inadequate customer support, and loss of high-speed access. See Bill Bergstrom, Comcast Fields Internet Complaints, Tallahassee Democrat, Jan. 9, 2002; Bill Bergstrom, Internet Switch Problems Annoy Comcast Customers, Fort Wayne Journal-Gazette, Jan. 7, 2002.
41' 47 U.S.C. § 254(g). 466

Id.

467 See Policy and Rules Concerning the Interstate, Interexchange Marketplace, Report and Order, 11 FCC Rcd

9564, 9577, para. 27 (1996) (forbearing from application of section 254(g) "to the extent necessary to permit carriers to depart from geographic rate averaging to offer ... private line services").
468 See, e.g., FCC Announces Joint Federal/State Vo1P Enhanced 911 Enforcement Task Force, Press Release, 2005 Westlaw 1750445 (July 25, 2005). 469 See generally NARUC Legislative Task Force Report on Federalism and Telecom (July 2005). 470 See id at 8.
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Commission finds it necessary to impose consumer protection and related regulations on broadband Internet access service providers, we seek comment on how best to harmonize federal regulations with the states' efforts and expertise in these areas. Do commenters support NARUC's functional approach? In what other ways can the federal and state governments cooperate in order to ensure the best results for consumers? H. Consumer Options for Enforcement 159. We note that consumers have various methods of pursuing complaints with the Commission against entities subject to our jurisdiction. In particular, the Commission's informal complaint process permits consumers to submit complaints to the Commission by any reasonable means, including by telephone, facsimile, postal mail, email and an Internet complaint form. Consumer Center representatives, known as Consumer Advocacy and Mediation Specialists or CAMSs, are available to assist consumers in filing complaints if needed. CAMSs staff review complaints for subject matter content and determine appropriate handling of the complaints. IX. PROCEDURAL MATTERS A. Final Paperwork Reduction Act Analysis 160. This Report and Order does not contain any information collection subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified "information collection burden for small business concerns with fewer than 25 employees," pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
§ 3506(c)(4).

B. Regulatory Flexibility 161. As required by the Regulatory Flexibility Act, see 5 U.S.C. § 603, the Commission has prepared a Final Regulatory Flexibility Certification of the possible significant economic impact on small entities of the policies and rules addressed in this Report and Order. This certification is set forth in Appendix B. 162. As required by the Regulatory Flexibility Act, 5 U.S.C. § 603, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this Notice of Proposed Rulemaking. The IRFA is set forth in Appendix B. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments filed in response to this Notice of Proposed Rulemaking and must have a separate and distinct heading designating them as responses to the IRFA. C. Other Procedural Matters 1. Ex Parte Presentations 163. The rulemaking this Notice initiates shall be treated as a "permit-but-disclose" proceeding in accordance with the Commission's ex parte rules. 71 Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence
471 47 C.F.R. §§ 1. 200 et seq.

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description of the views and arguments presented is generally required.472 Other requirements pertaining to oral and written presentations are set forth in section 1.1206(b) of the Commission's rules. 2. Comment Filing Procedures 164. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R §§ 1.415, 1.419, interested parties may file comments and reply comments regarding the Notice of Proposed Rulemaking on or before the dates indicated on the first page of this document. All filings related to this Notice of Proposed Rulemaking should refer to WC Docket No. 05-271 and need not reference the other docket numbers appearing in the caption to this document. Comments may be filed using: (1) the Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). · Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: hitp://www.revulations.i4ov. Filers should follow the instructions provided on the website for submitting comments. · ECFS filers must transmit one electronic copy of the comments for WC Docket No. 05-271. In completing the transmittal screen, filers should include their full name, U.S. Postal Service mailing address, and the applicable docket number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions, filers should L send an e-mail to ecfs (c^r tcc.gov, and include the following words in the body of the message, "get form." A sample form and directions will be sent in response. · Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Marlene H. Dortch, Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554. · The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, N.E., Suite 110, Washington, D.C. 20002. The filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. · Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, Md. 20743. · U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, S.W., Washington D.C. 20554. 165. Parties should send a copy of their filings to Janice Myles, Competition Policy Division, Wireline Competition Bureau, Federal Communications Commission, Room 5-C140, 445 12th Street, S.W.,
412 See 47

C.F.R. § 1.1206(b)(2).
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Washington, D.C. 20554, or by e-mail to [email protected] . Parties shall also serve one copy with the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street, S.W., Room CY-13402, Washington, D.C. 20554, (202) 488-5300, or via e-mail to [email protected] . 166. Documents in WC Docket No. 05-271 will be available for public inspection and copying during business hours at the FCC Reference Information Center, Portals II, 445 12th Street S.W., Room CYA257, Washington, D.C. 20554. The documents may also be purchased from BCPI, telephone (202) 4885300, facsimile (202) 488-5563, TTY (202) 488-5562, e-mail [email protected] . 3. Accessible Formats 167. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY). Contact the FCC to request reasonable accommodations for filing comments (accessible format documents, sign language interpreters, CART, etc.) by e-mail: [email protected]; phone: 202-418-0530 or TTY: 202-418-0432. X. ORDERING CLAUSES 168. Accordingly, IT IS ORDERED that, pursuant to Sections 1-4, 10, 201-205, 214, 222, 225, 251, 252, 254-256, 258, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201-205, 214, 222, 225, 251, 252, 254-256, 258, 303( r), and Section 706 of the Telecommunications Act of 1996,47 U.S.C. § 157 nt, the Report and Order and Notice of Proposed Rulemaking ARE ADOPTED. 169. IT IS FURTHER ORDERED, pursuant to Sections 1-4, 10, 201 -205, 214, 222, 225, 251, 252, 254-256, 258, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201205, 214, 222, 225, 251, 252, 254-256, 258, 303( r), and Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt, that wireline broadband Internet access transmission providers ARE GRANTED blanket certification to discontinue the provision of common carrier broadband Internet access transmission services to existing customers as set forth and subject to the conditions stated in this Order. 170. IT IS FURTHER ORDERED, pursuant to Sections 1-4, 10, 201-205, 214, 222, 225, 251, 252, 254-256, 258, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201= 205, 214, 222, 225, 251, 252, 254-256, 258, 303(r), and Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt, that the Conditional Petition for Forbearance Under 47 U.S.C. § 160(c) filed by the Verizon Telephone Companies in WC Docket No. 04-242 on June 28, 2004, IS DENIED AS MOOT. 171. IT IS FURTHER ORDERED, pursuant to Sections 1-4,10, 201-205, 214, 222, 225, 251, 252, 254-256, 258, 303 (r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201205, 214, 222, 225, 251, 252, 254-256, 258, 303( r), and Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt, that the Petition for Declaratory Ruling or, Alternatively, for Interim Waiver filed in WC Docket No. 04-242 by the Verizon Telephone Companies on June 28, 2004, IS DISMISSED AS MOOT. 172. IT IS FURTHER ORDERED, pursuant to sections 1.103(a) and 1.427(b) of the Commission's rules, 47 C.F.R. §§ L 103(a), 1.427(b), that this Report and Order SHALL BE EFFECTIVE 30 days after publication of the Report and Order in the FEDERAL REGISTER. 173. IT IS FURTHER ORDERED that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Order, including the Final
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Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration. 174. IT IS FURTHER ORDERED that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration 473
FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch Secretary

473 See 5

U.S.C. § 603(a).
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Federal Communications Commission APPENDIX A LIST OF COMMENTERS Commenters WC Docket No. 02-33 Comments Alcatel USA, Inc. Allegiance Telecom, Inc. Alvarion, Inc. American Foundation for the Blind American ISP Association American Public Power Association AOL Time Warner Inc. Arizona Consumer Council, Center for Digital Democracy, Citizen Action of Illinois, Citizens Utility Board of Oregon, Consumer Action, the Consumer Federation of America, Consumers Union, Democratic Process Center, Florida Consumer Action Network, Illinois Pirg, Massachusetts Consumer Coalition, Media Access Project, New Jersey Citizen Action, Texas Consumer Association, Texas Office of Public Utility Counsel, USAction Association of Communications Enterprises AT&T Corporation Beacon Telecommunications Advisors, LLC BellSouth Corporation Big Planet, Inc. Business Telecom, Inc., CTC Communications Corp., Florida Digital Network, Inc., Globalcom, Inc., and RCN Telecom Services, Inc. California Internet Service Providers Association Catena Networks, Inc. Cbeyond Communications, LLC, EL Paso Networks, LLC, Focal Communications Corporation, New Edge Network, Inc., and Pac-West Telecomm, Inc. Charter Communications, Inc. Ciner Communications Company Covad Communications Company Cox Communications, Inc. David R. Hughes DirectTV Broadband, Inc. DSLnet Communications, LLC EarthLink, Inc. Federal Bureau of Investigation FBI and Department of Justice Florida Public Service Commission Fred Williamson and Associates, Inc. General Communication Inc. GVNW Consulting, Inc. Hugh Carter Donahue
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Abbreviation Alcatel Allegiance Alvarion AFB AISPA APPA AOL Arizona Consumer Council
al.

et

ASCENT AT&T Beacon BellSouth Big Planet Business Telecom et al. CISPA Catena Cbeyond

et al.

Charter Ciner Covad Cox David R. Hughes DirectTV DSLnet EarthLink DOJlFBI Florida Commission FW&A GCI GVNW Donahue

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Hughes Network Systems, Inc., Hughes Communications, Inc., and Hughes Communications Galaxy, Inc. Illinois Commerce Commission Independent Telephone and Telecommunications Alliance Information Technology Association of America Kenneth Arrow et al. JMC Telecom and NuVox Communications McLeodUSA Telecommunications Services, Inc. Mescalero Apache Telecom, Inc. Michigan Public Service Commission Minnesota Department of Commerce Monet Mobile Networks, Inc. M power Communications Corp. Mutual Data Services, Inc., National Association of Regulatory Utility Commissioners National Cable & Telecommunications Association National Exchange Carrier Association, Inc. National Rural Telecom Association Nebraska Independent Companies New Hampshire ISP Association NewSouth Communications New York State Department of Public Service Office of the Attorney General of Texas, Consumer Protection Division Ohio Internet Service Providers Association, Texas Internet Services Providers Association, and Washington Association of Internet Service Providers Oregon Public Utility Commission Organization for the Promotion and Advancement of Small Telecommunications Companies Oregon Public Utility Commission Part-15 Organization, Inc. People of the State of California and the California Public Utilities Commission Pennsylvania Office of Consumer Advocate, Maine Public Advocate, Maryland Office of People's Counsel, Ohio Consumers' Counsel, Utility Reform Network, California Office of Ratepayer Advocates, Connecticut Office of Consumer Counsel, and New Hampshire Office of Consumer Advocate Public Service Commission of Wisconsin Public Utilities Commission of Ohio Public Utilities Commission of Texas west Communications International Inc. Rehabilitation Engineering Research Center on Telecommunications Access Rub Ranch Internet Cooperative Association SBC Communications Inc. Secretary of Defense
88

Hughes Illinois Commission ITTA ITAA Arrow et al. JMC/NuVox McLeodUSA MATI Michigan Commission Minnesota Commerce Dept. Monet Mower Mutual Data NARUC NCTA NECA NRTA Nebraska Independents New Hampshire ISPs NewSouth New York Commission Texas Attorney General Ohio ISP Assoc. et al.

Oregon Commission OPASTCO Oregon Commission Part- 15.Or California Commission Pennsylvania Consumer Advocate et al.

Wisconsin Commission Ohio Commission Texas Commission west RERC-TA Rub SBC Secretary of Defense

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Federal Communications Commission SES AMERICOM, Inc. Socket Holdings Corporation Sprint Corporation State Members of the Federal-State Joint Board on Separations Statement of 43 Economists SureWest Communications TDS Telecommunications Corporation, Madison River Communications, and North Pittsburgh Systems Inc. Telecommunications for The Deaf, Inc. TeleTruth Texas Office of Public Utility Counsel, Consumer Federation of America, Consumers Union, Media Access Project, and the Center for Digital Democracy Time Warner Telecom Pennsylvania Office of Consumer Advocate, Maine Public Advocate, Maryland Office of People's Counsel, Ohio Consumers' Counsel, Utility Reform Network, California Office of Ratepayer Advocates, Connecticut Office of Consumer Counsel, and New Hampshire Office of Consumer Advocate United Church of Christ, Office of Communication,; Association of Independent Video and Filmmakers; National Association of Media Arts and Culture United States Internet Indust Association United States Telecom Association US LEC Corp. Verizon telephone companies Verizon Wireless Vermont Public Service Board WaveRider Communications Inc. Western Alliance Whizwireless, LLC Wireless Communications Association International, Inc. WorldCom, Inc., The Competitive Telecommunications Association, and the Association for Local Telecommunications Services Z-Tel Communications, Inc.

FCC 05-1508

SES AMERICOM Socket Sprint Federal-State Joint Board Economists SureWest TDS et al. Telecom for the Deaf TeleTruth Texas Counsel et al.

Time Warner Pennsylvania Consumer Advocate et al.

United Church of Christ et al.

USIIA USTA US LEC Verizon Verizon Wireless Vermont Commission WaveRider Western Alliance Whizwireless WCA MCI et al. Z-Tel

Reply Commenters WC Docket No. 02-33 Comments Ad Hoc Telecommunications Users Committee Alaska Telephone Association Allegiance Telecom, Inc. American Library Association AOL Time Warner Inc. Association for Local Telecommunication Services
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Abbreviation Ad Hoc Alaska Allegiance American Library AOL ALTS

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Federal Communications Commission Association of Communications Enterprises, AT&T, Big Planet, Inc., Business Telecom, Inc., Cbeyond Communications, LLC, CTC Communications Corp., DSLNet Communications, LLC, El Paso Networks, LLC, Focal Communications Corporation, Florida Digital Network, New Edge Network, Inc., Pac-West Telecomm, Inc., RCN Telecom Services, Inc., and US LEC Co rp. AT&T Corporation Attorney General to Texas, Consumer Protection Division Beacon Telecommunications Advisors, LLC BellSouth Corporation Cablevision Systems Corporation California Internet Service Providers Association Charter Communications, Inc. City of Ketchikan d/b/a Ketchikan Public Utilities - Tele phone Division Comcast Corporation Communications Workers of America Covad Communications Com pany DirectTV Broadband, Inc. DSLnet Communications, LLC EarthLink, Inc. Fred Williamson and Associates, Inc. General Communication Inc. GVNW Consulting , Inc. High Tech Broadband Coalition Independent Telep hone and Telecommunications Alliance Information Technology Association of America Kenneth Arrow et al. KMC Telecom and NuVox Communications McLeodUSA Telecommunications Services, Inc. Mescalero Apache Telecom, Inc. National Association of Broadcasters National Cable & Telecommunications Association National Rural Telecom Association National Telecommunications Coo perative Association Nebraska Independent Companies New York State Attorne y General New York State De partment of Public Service Next Level Communications Ohio Internet Service Providers Association, Texas Internet Services Providers Association, and Washington Association of Internet Service Providers Organization for the Promotion.and Advancement of Small Telecommunications Com panies Pennsylvania Office of Consumer Advocate, Maine Public Advocate, Maryland Office of People's Counsel, Ohio Consumers' Counsel, Utility Reform Network, California Office of Ratepayer Advocates, and New Hamp shire Office of Consumer Advocate west Communications International Inc.
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ASCENT

et al.

AT&T Texas Attorney General Beacon BellSouth Cablevision CISPA Charter KPU Comcast CWA Covad DirectTV Broadband DSLnet EarthLink FW&A GCI GVNW HTBC ITTA ITAA Arrow et al. KMC/NuVox McLeodUSA MATT NAB NCTA NRTA NTCA Nebraska Independents New York Attorney General New York Commission Next Level Ohio ISP Assoc. et al.

OPASTCO Pennsylvania Consumer Advocates et al.

Qwest

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Federal Communications Commission Regulatory Commission of Alaska SBC Communications Inc. Satellite Indust Association SES AMERICOM, Inc. Sprint Corporation Time Warner Telecom United States Internet Industry Association United States Telecom Association Verizon telephone companies WorldCom, Inc., Competitive Telecommunications Association, and Association for Local Telecommunications Services XO Communications, Inc.

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Alaska Commission SBC SIA SES AMERICON Sprint Time Warner USIIA USTA Verizon MCI et al. XO

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Federal Communications Commission APPENDIX B REGULATORY FLEXIBILITY ANALYSES . FINAL REGULATORY FLEXIBILITY CERTIFICATION

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1. The Regulatory Flexibility Act of 1980, as amended (RFA),1 requires that a regulatory flexibility analysis be prepared for notice-and-comment rulemaking proceedings, unless the agency certifies that "the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities."2 The RFA generally defines the term "small entity" as having the same meaning as the terms "small business," "small organization," and "small governmental jurisdiction. ,3 In addition, the term "small business" has the same meaning as the term "small business concern" under the Small Business Act 4 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 Small Business Administration (SBA).' 2. In the Wireline Broadband NPRM, the Commission sought comment generally on the appropriate statutory classification for wireline broadband Internet access service provided over a provider's own facilities, and on what regulatory requirements, if any, should be imposed on the telecommunications component of wireline broadband Internet access service.6 Specifically, the Commission sought comment on whether the Computer Inquiry requirements should be modified or eliminated as applied to selfprovisioned wireline broadband Internet access service, as well as how the Commission's tentative conclusion that wireline broadband Internet access service is an information service would affect the CALEA assistance capabilities, the USA PATRIOT Act, other national security or emergency preparedness obligations, network reliability and interoperability, and existing consumer protection requirements, such as section 214 of the Act, CPNI requirements under section 222 of the Act, and requirements for access to persons with disabilities under section 255 of the Act.' The Commission also sought comment on how to continue to meet the goals of universal service under section 254 of the Act in a marketplace where competing providers are deploying broadband Internet access, including how the regulatory status of wireline broadband Internet access could impact the system of assessments and contributions to universal service.8 Finally, the Wireline Broadband NPRM also invited comment on the

' See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-12, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title 11, 110 Stat. 857 (1996). ' 5 U.S.C. § 605(b). 3 5 U.S.C. § 601(6). 4 5 U.S.C. § 601(3) (incorporating by reference the definition of "small-business concern" in the Small Business Act, 15 U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register." ' 15 U.S.C. § 632. 6 Wireline Broadband NMI, 17 FCC Red at 3029-48, paras. 17-64. ' Id. at 3035-47, paras. 30-61. ' Id. at 3043-54, paras. 54-78.
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relationship between the statutory classification of wireline broadband Internet access service and an incumbent LEC's obligation to provide access to UNEs under sections 251 and 252.9 3. The Order eliminates the Computer Inquiry requirements on facilities-based carriers in their provision of wireline broadband Internet access service. Consequently, BOCs are immediately relieved of the separate subsidiary, CEI, and ONA obligations with respect to wireline broadband Internet access services. In addition, subject to a one-year transition period for existing wireline broadband transmission services, all wireline broadband Internet access service providers are no longer subject to the Computer II requirement to separate out the underlying transmission from wireline broadband Internet access service and offer it on a common carrier basis. We determine in this Order that wireline broadband Internet access service is an information service, as that term is defined in the statute. To the extent that the regulatory obligations discussed above apply to the transmission component of wireline broadband Internet access service when provided to ISPs or others on a stand-alone common carrier basis, these obligations will continue to apply when carriers offer broadband Internet access service transmission on a common carrier basis, both during the transition and thereafter. 4. The rule changes adopted in this Order apply, for the most part, only to BOCs (Computer Inquiry separate subsidiary, CEI, and ONA obligations with respect to wireline broadband Internet access services). In addition, all facilities-based wireline broadband Internet access service providers are no longer subject to the Computer 11 requirement to separate out the underlying transmission. Neither the Commission nor the SBA has developed a small business size standard specifically applicable to providers of incumbent local exchange service and interexchange services. The closest applicable size standard under the SBA rules is for Wired Telecommunications Carriers.10 This provides that such a carrier is small entity if it employs no more than 1,500 employees." None of the four BOCs that would be affected by amendment of these rules meets this standard. To the extent that any other wireline provider would be classified as a small entity, it would not be negatively affected by the regulatory relief we grant in this Order. 5. Therefore, we certify that the requirements of the Order will not have a significant economic impact on a substantial number of small entities. We note that one party, Teletruth, filed comments in response to the IFRAs in the Wireline Broadband and Incumbent LEC Broadband proceedings. Teletruth argues that that these IRFAs are deficient because they fail to assess the potential impact of the actions proposed in those proceedings on small ISPs and small competitive LECs and that our implementation of the RFA is otherwise deficient.12 These arguments are identical to, and indeed filed as part of the same pleading as, arguments the Commission previously has rejected.13 We therefore again reject these arguments for the reasons stated in our prior Orders responding to TeleTruth's comments. 14

91d. at 3047, para. 61. 10 13 C.F.R. § 121.201, NAICS code 517110. 11 Id. 12 See TeleTruth Comments passim. 13 See TeleTruth Comments passim. 14 See TeleTruth Comments passim.
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6. The Commission will send a copy of the Order, including a copy of this Final Regulatory Flexibility Certification, in a report to Congress pursuant to the Congressional Review Act. 15 In addition, the Order and this final certification will be sent to the Chief Counsel for Advocacy of the SBA, and a summary of the Order and final certification will be published in the Federal Register. 16 II. INITIAL REGULATORY FLEXIBILITY ANALYSIS 7. As required by the Regulatory Flexibility Act of 1980, as amended (RFA)," the Commission has prepared the present Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities that might result from this Notice. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Notice provided above. The Commission will send a copy of the Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration." In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register." A. Need for, and Objectives of, the Proposed Rules

8. The broadband marketplace before us today is an emerging and rapidly changing one. Nevertheless, consumer protection remains a priority for the Commission. We initiate this rulemaking to ensure that consumer protection objectives in the Act are met as the industry shifts from narrowband to broadband services. Through this Notice, the Commission's objective is to develop a framework for consumer protection in the broadband age - a framework that ensures that consumer protection needs are met by all providers of broadband Internet access service, regardless of the underlying technology.20 The Notice seeks comment on whether the Commission should impose, for example, privacy requirements similar to the Act's CPNI requirements, slamming, truth-in-billing, network outage reporting, section 214 discontinuance, or section 254(8) rate averaging requirements on providers of broadband Internet access service. We also seek comment on how best to harmonize federal regulations with the states' efforts and expertise in consumer protection issues. B. Legal Basis

9. The legal basis for any action that may be taken pursuant to the Notice is contained in sections 14, 201-205, 251, 252, 254, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 201-205, 251, 252, 254, 256, 303(r), and Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt.

"See 5 U.S.C. § 80 1 (a)(1)(A).
"See 5 U.S.C. § 605(b).

"See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-12, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, 110 Stat. 857 (1996). '$ See 5 U.S.C. § 603(a). 79 See 5 U.S.C. § 603(a). 20 See supra Notice at para. 146.
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Description and Estimate of the Number of Small Entities to Which the Proposed Rules May Apply

10. 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." 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 23 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 Small Business Administration (SBA) 24 11. Small Businesses. Nationwide, there are a total of approximately 22.4 million small businesses, according to SBA data.21 12. Small Organizations. Nationwide, there are approximately 1.6 million small organizations 26 13. Small Governmental Jurisdictions. The term "small governmental jurisdiction" is defined as "governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand .,,2' As of 1997, there were approximately 87,453 governmental jurisdictions in the United States.28 This number includes 39,044 county governments, municipalities, and townships, of which 37,546 (approximately 96.2%) have populations of fewer than 50,000, and of which 1,498 have populations of 50,000 or more. Thus, we estimate the number of small governmental jurisdictions overall to be 84,098 or fewer. 14. We note that the list of potentially affected entities below is perhaps more expansive than is necessary. We have, for instance, included services that are apparently currently not a part of the Internet industry, as well as manufacturers.

21 5 U.S.C. §§ 603(b)(3), 604(a)(3). 22 5 U.S.C. § 601(6).

23 5 U.S.C. § 601(3) (incorporating by reference the definition of "small business concern" in the Small Business Act, 15 U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such terms which are appropriate to the activities of the agency and publishes such definitions(s) in the Federal Register."
24 15 U.S.C. § 632.

25 See SBA, Programs and Services, SBA Pamphlet No. CO-0028, at page 40 (July 2002). 26 Independent Sector, The New Nonprofit Almanac & Desk Reference (2002).
2' 5 U.S.C. § 601(5).

28 U.S. Census Bureau, Statistical Abstract of the United States: 2000, Section 9, pages 299-300, Tables 490 and 492.
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Federal Communications Commission 1. Telecommunications Service Entities a. Wireline Carriers and Service Providers

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15. We have included small incumbent local exchange carriers in this present RFA analysis. As noted above, a "small business" under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and "is not dominant in its field of operation."" The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not "national" in scope.30 We have therefore included small incumbent local exchange carriers in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

1. Incumbent Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.31 According to Commission data,32 1,303 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,303 carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our action. In addition, limited preliminary census data for 2002 indicate that the total number of wired communications carriers increased approximately 34 percent from 1997 to 2002.33 16. Competitive Local Exchange Carriers, Competitive Access Providers (CAPs), "Shared-Tenant Service Providers," and "Other Local Service Providers." Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees." According to Commission data,3$
"

15 U.S.C. § 632.

30 Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small Business Act contains a definition of "small-business concern," which the RFA incorporates into its own definition of "small business." See 15 U.S.C. § 632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA). SBA regulations interpret "small business concern" to include the concept of dominance on a national basis. See 13 C.F.R. § 121.102(b). " 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in Oct. 2002). 32 FCC, Wireline Competition Bureau, Industry Analysis and Technology Division, "Trends in Telephone Service" at Table 5.3, page 5-5 (June 2004) ("Trends in Telephone Service"). This source uses data that are current as of October 1, 2004. 33 See U.S. Census Bureau, 2002 Economic Census, Industry Series: "Information," Table 2, Comparative Statistics for the United States (1997 NAICS Basis): 2002 and 1997, NAICS code 513310 (issued Nov. 2004). The preliminary data indicate that the total number of "establishments" increased from 20,815 to 27, 891. In this context, the number of establishments is a less helpful indicator of small business prevalence than is the number of "firms," because the latter number takes into account the concept of common ownership or control. The more helpful 2002 census data on firms, including employment and receipts numbers, will be issued in late 2005. 34 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in Oct. 2002).
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769 carriers have reported that they are engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Of these 769 carriers, an estimated 676 have 1,500 or fewer employees and 93 have more than 1,500 employees. In addition, 12 carriers have reported that they