Office of the General Counsel
B-272939
August 8, 1996
The Honorable Larry Pressler Chairman The Honorable Ernest F.
Hollings Ranking Minority Member Committee on Commerce, Science,
and Transportation United States Senate
The Honorable Thomas J. Bliley, Jr. Chairman The Honorable John
D. Dingell Ranking Minority Member Committee on Commerce House of
Representatives
Subject: Federal Communications Commission: Interconnection and
Resale Obligations Pertaining to Commercial Mobile Radio
Services
Pursuant to section 801(a)(2)(A) of title 5, United States Code,
this is our report on a major rule promulgated by the Federal
Communications Commission, entitled "First Report and Order:
Interconnection and Resale Obligations Pertaining to Commercial
Mobile Radio Services" (FCC-96-263). We received the rule on July
23, 1996. It was published in the Federal Register as a final rule
on July 24, 1996. 61 Fed. Reg. 38399.
In this First Report and Order, the Commission adopts a
transitional rule requiring all cellular and broadband personal
communications services and certain specialized mobile radio
providers to permit unlimited resale of their services. The First
Report and Order also eliminates an exception to an existing rule
which permitted cellular licensees under some circumstances to
restrict resale by their licensed cellular competitors. It also
provides that the resale rule will sunset 5 years after the last
group of licenses for currently allotted personal communications
services spectrum is awarded (expected to occur within a year).
GAO/OGC-96-32
According to the Commission, the purpose of the above actions is
to make the mass market for two-way switched voice mobile services
more competitive while that market is in a transitional state as
well as to encourage new entrants into the market by allowing them
to resell their competitors' services while they build out their
networks.
Enclosed is our assessment of the Federal Communications
Commission's compliance with the procedural steps required by
sections 801(a)(1)(B)(i) through
(iv) of title 5 with respect to this First Report and Order. Our
review indicates that the Federal Communications Commission
complied with the applicable requirements.
If you have any questions about this report, please contact
Kathleen E. Wannisky, Associate General Counsel for Operations, at
(202) 512-5207. The official responsible for GAO evaluation work
relating to the Federal Communications Commission is John Anderson,
Director of Transportation and Telecommunications Issues. Mr.
Anderson can be reached at (202) 512-2834.
Robert P. Murphy General Counsel
Enclosure
cc: Mr. Andrew S. Fishel Managing Director Federal
Communications Commission
Page 2 GAO/OGC-96-32
ENCLOSURE
ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY THE FEDERAL COMMUNICATIONS COMMISSION ENTITLED "FIRST
REPORT AND ORDER: INTERCONNECTION AND RESALE OBLIGATIONS PERTAINING
TO COMMERCIAL MOBILE RADIO SERVICES" (FCC-96-263)
(i)
Cost-benefit analysis
The Commission stated in its submission to us that it was not
required to prepare and did not prepare a cost-benefit analysis of
the rule.
(ii)
Agency actions relevant to the Regulatory Flexibility
Act, 5 U.S.C. §§ 603-605, 607 and 609
Section 603: Initial Regulatory Flexibility Analysis
The Federal Communications Commission initiated this proceeding
with a Notice of Proposed Rulemaking and Notice of Inquiry that
addressed a number of commercial mobile radio services regulatory
issues. (Equal Access and Interconnection Obligations Pertaining to
Commercial Mobile Radio Services, CC Docket No. 94-54, 9 FCC Rcd
5408 (1994)). The Commission subsequently modified its proposal
regarding resale in a Second Notice of Proposed Rulemaking
(Interconnection and Resale Obligations Pertaining to Commercial
Mobile Radio Services, CC Docket No. 94-54, 10 FCC Rcd 10666
(1995)).
In both notices, the Commission prepared and published an
Initial Regulatory Flexibility Analysis and invited written public
comments on the proposed rulemaking, including comments on the
initial regulatory flexibility analysis.
The analysis included in the proposed rulemaking provides the
information required by sections 603(b)(1) and (2). It describes
the reasons for the proposed agency action and its objectives and
legal basis. The information required by sections 603(b)(3) and (4)
concerning the estimate of the classes of small entities subject to
the Report and Order and the projected reporting, recordkeeping and
other compliance requirements of the proposed rule is also
included. In accordance with section 605(b)(5), the Commission
notes that the proposed Rule and Order does not duplicate, overlap
or conflict with any other relevant federal rule.
Finally, the Commission solicited comments on a variety of
alternatives regarding interconnection, roaming and resale
obligations for commercial mobile radio service providers in
compliance with section 603(c).
GAO/OGC-96-32
Section 604: Final Regulatory Flexibility Analysis
The Supplementary Information published in the Federal Register
includes the full text of the Commission's Final Regulatory
Flexibility Analysis. 61 Fed. Reg. 38399. This analysis includes
information required by section 604 including a description of the
need for and purpose of this Report and Order and a discussion of
comments received in regard to the Initial Regulatory Flexibility
Analysis.
Although no comments were filed in direct response to the
initial analysis, the Commission stated that some general comments
related to issues that could affect small entities. The Commission
discussed these comments in its final analysis and concluded that
the comments were not well-founded.
The analysis further describes the small entities affected by
the Report and Order; summarizes the projected reporting,
recordkeeping and other compliance requirements; and describes the
steps taken to minimize the economic impact on small
businesses.
Finally, the analysis discusses several significant alternatives
that were considered and rejected by the Commission, including
expanding the universe of providers covered by the rule, more
narrowly defining the universe of providers, and continuing the
resale rule indefinitely.
We have confirmed that copies of both the Initial and the Final
Regulatory Flexibility Analyses were provided to the Chief Counsel
for Advocacy at the Small Business Administration as required by
section 605.
Section 607: Preparation of analysis
The Commission's analysis addressed the effects of the rule on
small entities in a general manner, consistent with the
requirements of section 607. It also points out that the rule
imposes no affirmative compliance actions by any entities to which
it applies. Rather, the rule operates in a manner that prohibits
restrictions on the resale of service.
Section 609: Participation by small entities
The Commission offered the opportunity to comment on both the
initial and the second proposed rule and order to any interested
parties, including small entities. The Commission's submission to
GAO did not highlight any other actions taken to encourage small
entity participation in the rulemaking process.
(iii) Agency actions relevant to sections 202-205 of the
Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532-1535
Page 2 GAO/OGC-96-32
As an independent regulatory agency, the Commission is not
subject to Title II of the Unfunded Mandates Reform Act of
1995.
(iv) Other relevant information or requirements under Acts and
Executive orders
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
The Commission promulgated this rule under the notice and
comment procedures of 5 U.S.C. § 553. An initial notice of proposed
rulemaking was released on July 1, 1994 (9 FCC Rcd 5408) and a
second notice of proposed rulemaking was released on April 20, 1995
(10 FCC Rcd 10666). Summaries of the notices of these proposed
rulemakings were published in the Federal Register. (See 59 Fed.
Reg. 35664 and 60 Fed. Reg. 20949). Fifty-one parties filed
comments and 34 parties filed replies in response to comments. The
Commission indicates that it gave full consideration to the
comments filed by the parties. A detailed discussion of the
Commission's consideration of these comments is considered in the
full text of the Report and Order.
Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520
The rule does not impose information collection requirements
subject to the Act.
Statutory authorization for the rule
Authorization for this rulemaking is contained in sections 1,
4(i), 4(j), 201, 202, 303(r), 309, 332, and 403 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i),
154(j), 201, 202, 303(r), 309, 332, and 403.
The Commission did not identify any other statutes or executive
orders imposing requirements relevant to the Report and Order.
Page 3 GAO/OGC-96-32
