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Rule2023-24679

Numbering Policies for Modern Communications

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Published

November 20, 2023

Effective

December 20, 2023

Issuing agencies

Federal Communications Commission

Abstract

In this document, the Federal Communications Commission (Commission) adopts rules regarding direct access to numbers by providers of interconnected Voice over internet Protocol (VoIP) services. The Commission takes this action in furtherance of Congress' directive in the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act to examine ways to reduce access to telephone numbers by potential perpetrators of illegal robocalls. These actions safeguard U.S. numbering resources and consumers, protect national security interests, promote public safety, and reduce opportunities for regulatory arbitrage.

Full Text

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<title>Federal Register, Volume 88 Issue 222 (Monday, November 20, 2023)</title>
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[Federal Register Volume 88, Number 222 (Monday, November 20, 2023)]
[Rules and Regulations]
[Pages 80617-80638]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-24679]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[WC Docket Nos. 13-97, 07-243, 20-67; IB Docket No. 16-155; FCC 23-75;
FR ID 183540]

Numbering Policies for Modern Communications

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission
(Commission) adopts rules regarding direct access to numbers by
providers of interconnected Voice over internet Protocol (VoIP)
services. The Commission takes this action in furtherance of Congress'
directive in the Pallone-Thune Telephone Robocall Abuse Criminal
Enforcement and Deterrence (TRACED) Act to examine ways to reduce
access to telephone numbers by potential perpetrators of illegal
robocalls. These actions safeguard U.S. numbering resources and
consumers, protect national security interests, promote public safety,
and reduce opportunities for regulatory arbitrage.

DATES: Effective December 20, 2023, except for the amendments to 47 CFR
52.15(g)(3)(ii)(B) through (F), (I), (K), (L), and (N) and (g)(3)(x)(A)
(amendatory instruction 3), which are delayed indefinitely. The
amendments to 47 CFR

[[Page 80618]]

52.15(g)(3)(ii)(B) through (F), (I), (K), (L), and (N) and (g)(3)(x)(A)
will become effective following publication of a document in the
Federal Register announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau,
Competition Policy Division, Mason Shefa, at (202) 418-2494,
<a href="/cdn-cgi/l/email-protection#d2bfb3a1bdbcfca1bab7b4b392b4b1b1fcb5bda4">[email&#160;protected]</a>. For additional information concerning the
Paperwork Reduction Act information collection requirements contained
in this document, send an email to <a href="/cdn-cgi/l/email-protection#9ececcdfdef8fdfdb0f9f1e8">[email&#160;protected]</a> or contact Nicole
Ongele, <a href="/cdn-cgi/l/email-protection#743a1d171b18115a3b1a13111811341217175a131b02">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Report and Order (Second Report and Order) in WC Docket Nos. 13-97, 07-
243, 20-67, and IB Docket No. 16-155, FCC 23-75, adopted on September
21, 2023, and released on September 22, 2023. The document is available
for download at <a href="https://docs.fcc.gov/public/attachments/FCC-23-75A1.pdf">https://docs.fcc.gov/public/attachments/FCC-23-75A1.pdf</a>. To request materials in accessible formats for people with
disabilities (e.g., Braille, large print, electronic files, audio
format, etc.), send an email to <a href="/cdn-cgi/l/email-protection#b3f5f0f0868387f3d5d0d09dd4dcc5">[email&#160;protected]</a> or call the Consumer &
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432
(TTY).

Final Paperwork Reduction Act of 1995 Analysis

This document may contain new or modified information collection
requirements subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. This document will be 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 will be
invited to comment on the new or modified information collection
requirements contained in this proceeding.

Congressional Review Act

The Commission sent a copy of the Second Report and Order to
Congress and the Government Accountability Office pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

Amendatory Instructions

Amendatory instructions are the standard terms that the Office of
the Federal Register uses to give specific instructions on how to
change the CFR. Due to the extensive number of technical and conforming
amendments to 47 CFR 52.15(g)(3), including redesignations of existing
paragraphs within the current rule, that will become effective 30 days
following publication of this document, the Commission is utilizing the
Office of the Federal Register's amendatory instruction ``revise and
republish'' to codify the revisions to that paragraph. Use of this
combined instruction allows the Commission to republish 47 CFR
52.15(g)(3) 30 days following publication of this document instead of
using piecemeal amendments to revise the CFR. All other amendments,
including subsequent amendments to 47 CFR 52.15(g)(3) that are delayed
indefinitely, are made pursuant to specific amendatory instructions.

Synopsis

1. We adopt the Second Report and Order to further stem the tide of
illegal robocalls perpetrated by interconnected VoIP providers, to
protect the Nation's numbering resources from abuse by foreign bad
actors, and to advance other important public policy objectives tied to
the use of our Nation's limited numbering resources. To that end, we
strategically update the Commission's direct access to numbering
process. First, we require applicants seeking direct access to
numbering resources to make robocall-related certifications to help
ensure compliance with our rules targeting illegal robocalls. Second,
we require applicants to disclose and keep current information about
their ownership, including foreign ownership, to mitigate the risk of
providing bad actors abroad with access to our numbering resources.
Third, we require applicants to certify to their compliance with other
Commission rules applicable to interconnected VoIP providers to bolster
awareness and compliance with such rules. Fourth, we require applicants
to comply with state laws and registration requirements that are
applicable to businesses in each state in which numbers are requested.
Fifth, we require applicants to include a signed declaration that their
applications are true and accurate. Sixth, and finally, we codify the
Wireline Competition Bureau's (Bureau) application review, application
rejection, and authorization revocation processes.
2. Section 52.15(g)(2) of the Commission's rules governs the
application process for numbering resources. It limits access to
telephone numbers to entities that demonstrate they are authorized to
provide service in the area for which they are requesting numbers. The
North American Numbering Plan (NANP) is the basic numbering scheme for
telecommunications networks located in the United States and its
territories, Canada, and parts of the Caribbean. NANP telephone numbers
are ten-digit numbers consisting of a three-digit area code, followed
by a three-digit central office code, followed by a four-digit line
number. The Commission has interpreted Sec. 52.15(g)(2) to require
evidence of either a state certificate of public convenience and
necessity (CPCN) or a Commission license or authorization. Because only
telecommunications carriers were able to provide this proof of
authorization, in 2015, the Commission revised its numbering rules and
adopted a process by which interconnected VoIP providers could satisfy
this authorization requirement and thus obtain numbers directly from
the Numbering Administrator. In the Second Report and Order, we refer
to both the North American Numbering Plan Administrator and the Pooling
Administrator as the Numbering Administrator. Although these functions
are described separately in our rules, see, e.g., 47 CFR 52.13, 52.20,
they are currently combined under a single Commission contract. The
Commission found that permitting interconnected VoIP providers to
obtain telephone numbers directly from the Numbering Administrator
would improve responsiveness in the number porting process and improve
the visibility and accuracy of number utilization, which would in turn
enable the Commission to more effectively protect our Nation's limited
numbering resources. Moreover, the Commission found that this change to
its authorization process would enhance its ability to enforce rules
governing interconnected VoIP providers, and help stakeholders and the
Commission identify the source of routing problems and take corrective
actions.
3. The Commission's rules now require interconnected VoIP providers
obtaining numbering resources to comply with both the requirements
applicable to telecommunications carriers seeking to obtain numbering
resources and certain interconnected VoIP-specific requirements for
applying for, and maintaining, a Commission authorization for direct
access to numbering resources. Section 52.15(g) currently requires an
interconnected VoIP applicant for direct access to numbering resources
to: provide its company name, headquarters address, Operating Company
Number (OCN), parent company's OCN(s), and the primary type of business
in which the numbering resources will be used; provide contact
information for personnel qualified to address issues relating to
regulatory requirements, numbering, compliance, 911, and law

[[Page 80619]]

enforcement; comply with applicable Commission rules related to
numbering, including, among others, numbering utilization and
optimization requirements (in particular, filing Numbering Resource
Utilization and Forecast (NRUF) Reports); comply with guidelines and
procedures adopted pursuant to numbering authority delegated to the
states; and comply with industry guidelines and practices applicable to
telecommunications carriers with regard to numbering; file requests for
numbers with the relevant state commission(s) at least 30 days before
requesting numbers from the Numbering Administrator; provide proof it
is or will be capable of providing service within sixty (60) days of
the numbering resources activation date in accordance with 47 CFR
52.15(g)(2), i.e., ``facilities readiness''; certify that it complies
with its Universal Service Fund contribution obligations, its
Telecommunications Relay Service contribution obligations, its NANP and
local number portability administration contribution obligations, its
obligations to pay regulatory fees, and its 911 obligations; certify
that it has the requisite technical, managerial, and financial capacity
to provide service; include the name of its key management and
technical personnel, such as the Chief Operating Officer and the Chief
Technology Officer, or equivalent; and state that none of the
identified personnel are being or have been investigated by the
Commission or any law enforcement or regulatory agency for failure to
comply with any law, rule, or order; and certify that no party to the
application is subject to a denial of Federal benefits pursuant to
section 5301 of the Anti-Drug Abuse Act of 1988.
4. The Commission directed and delegated authority to the Bureau to
``implement and maintain the authorization process.'' Bureau staff
review applications for conformance with procedural rules, and if the
rule requirements are satisfied, release an ``Accepted-for-Filing
Public Notice'' seeking comment on the application. Applications are
deemed granted by the Commission on the 31st day after the release of
the public notice, unless the Bureau notifies the applicant that the
grant will not be automatically effective. The Bureau may halt the
auto-grant process if (1) an applicant fails to respond promptly to
Commission inquiries, (2) an application is associated with a non-
routine request for waiver of the Commission's rules, (3) timely filed
comments on the application raise public interest concerns that require
further Commission review, or (4) the Bureau determines that the
request requires further analysis to determine whether the application
serves the public interest.
5. Once an interconnected VoIP provider has Commission
authorization to obtain numbering resources, it may request numbers
directly from the Numbering Administrator. Interconnected VoIP
providers that apply for and receive Commission authorization for
direct access to numbering resources ``are subject to, and acknowledge,
Commission enforcement authority.'' Failure to comply with the
obligations set out by the Commission ``could result in revocation of
the Commission's authorization, the inability to obtain additional
numbers pending that revocation, reclamation of unassigned numbers
already obtained directly from the Numbering Administrators, or
enforcement action.'' The Commission delegated authority to both the
Bureau and the Enforcement Bureau to order the revocation of
authorization and to direct the Numbering Administrator to reclaim any
of the service provider's unassigned numbers.
6. Based on lessons learned from reviewing scores of direct access
applications since the 2015 VoIP Direct Access Order, 80 FR 66454 (Oct.
29, 2015), the Commission began to consider ways to update the
interconnected VoIP provider application requirements to add important
information that is useful or necessary to the Bureau's public interest
review. To date, the Bureau has requested such information from
applicants on a case-by-case basis where appropriate. For example,
certain applications with significant foreign ownership that raise
potential national security and/or law enforcement issues have been
filed. Additionally, direct access applications have been challenged by
commenters raising concerns about intercarrier compensation and call
routing or call blocking practices.
7. In August 2021, the Commission adopted a Further Notice of
Proposed Rulemaking (FNPRM), 86 FR 51081, seeking comment on how to
improve the interconnected VoIP direct access application process to
address the identified gaps in the direct access application process,
the continued scourge of illegal robocalls, national security, and
number resource exhaust. We received comments from a wide range of
stakeholders, including state public utility commissions,
interconnected VoIP providers, industry standards groups and trade
associations, and consumer advocates.

Discussion

8. The application process for interconnected VoIP providers'
direct access to numbering is the first line of defense in mitigating
the risk of providing scarce numbering resources to bad actors. It is
thus critically important that the rules governing this process
prevent, to the greatest extent possible, interconnected VoIP providers
that engage in unlawful robocalling or spoofing, or otherwise threaten
the national security and law enforcement interests of the United
States, from accessing or retaining our Nation's numbering resources.
While our direct access rules currently contemplate that the Bureau may
request supplemental information as necessary to conduct a thorough
public interest review, the rule changes we adopt in this document make
certain previously supplemental showings a mandatory prerequisite
before the Bureau accepts new applications for filing and grants such
applications in the public interest. The rules we adopt in this
document strike an appropriate balance between establishing necessary
checks on interconnected VoIP direct access applicants and
authorization holders and fostering an efficient direct access process
that has, in part, facilitated the ongoing technological transition to
advanced IP communications networks.

Ensuring That Authorization Approvals Serve the Public Interest

9. First, we tighten our application requirements to ensure that
the Bureau receives sufficient detail from interconnected VoIP
applicants to make informed, public-interest-driven decisions about
their direct access applications and thereby protect the public from
bad actors. These new requirements will also increase our enforcement
capabilities should we find that providers are skirting our rules. Upon
the effective date of these rules, we require explicit acknowledgment
of compliance with all robocall regulations; implement disclosure and
update requirements regarding ownership and control; require
certification of compliance with other applicable Commission
regulations and certain state law; and add a declaration requirement to
hold applicants accountable for the truthfulness and accuracy of their
direct access applications.

[[Page 80620]]

Certifying Compliance With Robocall-Related Rules

10. We adopt our proposal to require a direct access applicant to
certify that it will use numbering resources lawfully and will not
encourage, assist, or facilitate illegal robocalls, illegal spoofing,
or fraud. Protecting Americans from the harmful effects of unwanted and
illegal robocalls remains the Commission's top consumer protection
priority. More than just a nuisance, illegal robocalls continue to
expose millions of American consumers to harmful risks. The Commission
has estimated that $10.5 billion is lost annually by consumers due to
illegal robocalls, not accounting for the non-quantifiable losses
suffered by consumers and the erosion of confidence in the Nation's
telephone network. The Commission has also found that the potential
benefits resulting from eliminating the wasted time and nuisances
caused by illegal scam robocalls would exceed $3 billion annually. The
Commission receives more complaints about such unwanted calls than
about anything else--approximately 119,000 last year alone. The
Commission received approximately 193,000 such complaints in 2019,
157,000 in 2020, 164,000 in 2021, and 119,000 in 2022.
11. To help curb illegal robocalls and enhance the Bureau staff's
ability to protect the public interest from such calls, the VoIP Direct
Access FNPRM, 86 FR 51081 (Sept. 14, 2021), proposed requiring
applicants to certify in their direct access applications to numerous
statements regarding illegal robocalls and the Robocall Mitigation
Database and to disclose whether they are subject to a robocall-related
action, investigation, or inquiry from various enforcement entities. We
proposed requiring applicants for direct access to certify that they:
(1) will use numbering resources lawfully; (2) will not encourage nor
assist and facilitate illegal robocalls, illegal spoofing, or fraud;
(3) will take reasonable steps to cease origination, termination, and/
or transmission of illegal robocalls once discovered; (4) will
cooperate with the Commission, Federal, and state law enforcement and
regulatory agencies with relevant jurisdiction, and the industry-led
registered consortium, regarding efforts to mitigate illegal or harmful
robocalling or spoofing and tracebacks; (5) have filed in the Robocall
Mitigation Database; (6) have either (A) fully implemented the STIR/
SHAKEN caller ID authentication protocols and framework or (B) have
implemented either STIR/SHAKEN caller ID authentication or a robocall
mitigation program for all calls for which it acts as a voice service
provider, and if the latter, have described in the Database the
detailed steps they are taking regarding number use that can reasonably
be expected to reduce the origination and transmission of illegal
robocalls. We also proposed requiring direct access applicants or
authorization holders to inform the Commission if they are subject to a
Commission, law enforcement, or regulatory action, investigation, or
inquiry due to their robocall mitigation plan being deemed insufficient
or problematic, or due to suspected unlawful robocalling or spoofing,
and to acknowledge this requirement in their applications. We received
substantial opposition from a wide range of commenters in response to
these proposals. Many commenters argued that our proposed approach
would risk creating redundancies and cause confusion because
interconnected VoIP providers are already subject to the Commission's
comprehensive framework to combat illegal robocalls. Some commenters
also argued that our proposals would not effectively reduce the
origination of illegal robocalls, or would impact interconnected VoIP
providers' competitiveness with other types of providers by imposing on
them unique burdens. Upon consideration of the record, we adopt a more
straightforward approach that avoids these concerns and instead cross-
references the relevant Commission rules targeting illegal robocalls in
our new certifications.
12. Robocall-related certifications. We revise Sec. 52.15(g)(3) of
the Commission's rules to require an interconnected VoIP provider
seeking direct access to numbering resources to certify that: the
applicant will not use the numbers obtained pursuant to an
interconnected VoIP provider numbering authorization to knowingly
transmit, encourage, assist, or facilitate illegal robocalls, illegal
spoofing, or fraud, in violation of robocall, spoofing, and deceptive
telemarketing obligations under 47 CFR 64.1200, 64.1604, and 64.6300
through 64.6308 and 16 CFR 310.3(b) [As voice service providers,
interconnected VoIP providers must comply with all regulations that
target illegal robocalls that are generally applicable to all voice
service providers. Additionally, interconnected VoIP providers acting
as terminating, originating, intermediate, and/or gateway providers
must accordingly also comply with the specific regulations targeting
illegal robocalls that are applicable to each type of provider. Some
commenters propose additional changes to the robocalling rules that are
not necessarily tied to direct access to numbers or limited to
interconnected VoIP providers. We decline to adopt or address these
proposals, as they are beyond the scope of this proceeding]; the
applicant has fully complied with all applicable STIR/SHAKEN caller ID
authentication and robocall mitigation program requirements and filed a
certification in the Robocall Mitigation Database as required by 47 CFR
64.6301 through 64.6305 [Accordingly, should the Commission deem the
applicant's filing insufficient and remove it from the Robocall
Mitigation Database, the applicant may not validly certify to this
statement. As noted above, we proposed requiring interconnected VoIP
providers to certify that they will cooperate with various governmental
agencies and the industry-led registered consortium regarding efforts
to mitigate illegal or harmful robocalling or spoofing and tracebacks.
In our recent Caller ID Authentication Sixth Report and Order, 88 FR
29035 (May 5, 2023), we expanded the scope of a similar Robocall
Mitigation Database certification requirement to cover all providers.
We thus decline to adopt our proposal here to avoid imposing redundant
requirements]; and neither the applicant nor any of its key personnel
identified in the application are or have been subject to a Commission,
law enforcement, or any regulatory agency investigation for failure to
comply with any law, rule, or order, including the Commission's rules
applicable to unlawful robocalls or unlawful spoofing. Our rules
already require interconnected VoIP direct access applicants to certify
that none of the key personnel identified in their applications are or
have been subject to a Commission, law enforcement, or regulatory
agency investigation for failure to comply with any law, rule, or
order. By adding the language regarding the Commission's rules
applicable to unlawful robocalls or unlawful spoofing to the end of the
provision, we do not narrow the broader scope of the certification, as
VON suggests, but rather place additional emphasis on the need for
applicants to disclose robocalling compliance issues to the Commission.
Additionally, we note that this certification is consistent with the
reporting requirements recently adopted by the Commission for all
providers to certify as to whether they have been the subject of a
formal Commission, law enforcement, or regulatory agency action or
investigation with accompanying findings of actual or

[[Page 80621]]

suspected wrongdoing due to the filing entity transmitting,
encouraging, assisting, or otherwise facilitating illegal robocalls or
spoofing. We decline at this time to adopt our proposal to expand the
sphere of proceedings (i.e., to include ``actions'' and ``inquiries''
in addition to investigations) covered by this certification, as we
agree with RingCentral that the proposal was vaguely worded and
therefore did not ``provide[ ] sufficient notice to enable providers to
comply.'' Additionally, we emphasize that being subject to an
investigation would not necessarily disqualify an applicant from
receiving direct access authority. In the event an applicant is not
able to certify that it is not subject to a Commission, law
enforcement, or regulatory agency investigation, an applicant can
explain in its application why the investigation should not disqualify
the applicant from receiving direct access authorization. For example,
an applicant could provide information rebutting a warning letter
(e.g., a cease-and-desist letter) of suspected illegal robocalling
received from the Commission or Federal Trade Commission (FTC) and/or a
description of the steps the applicant has taken to respond to such a
letter.
13. The additional certifications we adopt in this document strike
a balance between acknowledging interconnected VoIP providers'
disproportionate role in the facilitation of illegal robocalls, and
ensuring that our approach is minimally burdensome and competitively
neutral. This approach accords with our recent decision in the Caller
ID Authentication Sixth Report and Order, 88 FR 29035 (May 5, 2023),
not to adopt heightened robocall mitigation standards for
interconnected VoIP providers. Consistent with the record here, we do
not adopt new obligations regarding STIR/SHAKEN caller ID
authentication or robocall mitigation specifically for interconnected
VoIP providers, but instead merely require those providers to certify
that they will comply, or have complied, with certain preexisting
requirements. By requiring applicants to certify compliance with
preexisting rule sections, we ensure that our approach does not cause
confusion, and remains accurate should we decide to revise the
robocall-related obligations applicable to voice service providers in
the Call Authentication Trust Anchor or other robocall-related dockets.
These certifications are not redundant and serve an important proactive
educational function--alerting interconnected VoIP providers at the
outset of the direct access application process of important
obligations, thereby helping to ensure robust compliance and foster a
more trustful numbering ecosystem. As explained below, the
certifications carry the weight of the Commission's requirement that an
officer or responsible official of the company attests under penalty of
perjury, pursuant to Sec. 1.16 of the Commission's rules, that all
statements in the application are true and accurate. These
certifications will thus serve the public interest by further deterring
direct access applicants from engaging in unlawful robocalling or
spoofing, and by giving the Commission another enforcement mechanism to
use against bad actors. Our requirement that applicants certify that
they are not subject to an investigation, including a robocall-related
investigation, paired with our preexisting rule that authorization
holders must maintain the accuracy of their certifications, will keep
us informed of such investigations as they arise. The Commission
publishes an up-to-date list of robocall-related cease-and-desist
letters that it has sent to voice service providers. Due to the
persistence of robocalls and associated complaints nationwide, we
unsurprisingly received broad support for adding robocall-specific
certifications to direct access applications from governmental
entities. RingCentral additionally supports our approach of
strengthening our enforcement of already existing requirements.
14. Some commenters contend that these new certifications could
incentivize interconnected VoIP providers to obtain numbers from the
secondary market, rather than by applying for direct access. This, they
posit, would be a negative outcome because direct access to numbers
facilitates traceback requests and gives regulators better visibility
into number utilization. While we agree with commenters regarding the
benefits of direct access, we disagree that our new certifications will
push interconnected VoIP providers into the secondary market. The
additional certifications we adopt in this document are minimally
burdensome as they do not add any new substantive obligations, and are
only incremental to the existing certifications required by the
Commission's rules. We are therefore confident that the incremental
cost of filing such certifications will not materially impact an
interconnected VoIP provider's decision regarding numbering resource
acquisition. We note the other issues raised by TelSwitch are outside
the scope of this proceeding.
15. Notification of investigations post-grant. In the VoIP Direct
Access FNPRM, 86 FR 51081 (Sept. 14, 2021), we proposed requiring
direct access authorization holders to inform the Commission if the
authorization holder is subject--either at the time of its application
or after its filing or its grant--to a Commission, law enforcement, or
regulatory agency action, investigation, or inquiry due to its robocall
mitigation plan being deemed insufficient or problematic, or due to
suspected unlawful robocalling or spoofing. We decline to adopt our
proposal at this time. Because we adopt a new certification in this
regard (as explained above), and because the Commission's rules already
contain a requirement that an authorization holder ``[m]aintain the
accuracy of all . . . certifications in its application,'' and ``file a
correction with the Commission . . . within thirty (30) days'' of any
changes, adopting this proposal is unnecessary. By taking this
approach, we address RingCentral's concern regarding adding a
potentially confusing additional layer of reporting requirements beyond
what is already required by the current rule. We are satisfied that our
current requirement to keep all certifications up-to-date will capture
our new robocall-related certifications, and will keep us apprised of
any new investigations involving interconnected VoIP direct access
authorization holders.

Enhanced Disclosure and Review of Ownership and Control of Applicants

16. We adopt rules to require the disclosure and review of foreign
ownership and control of interconnected VoIP direct access applicants.
The Commission has recognized that ``[i]llegal robocalling often
originates from sources outside the United States,'' and ``[t]he
Commission and Congress have long acknowledged that illegal robocalls
that originate abroad are a significant part of the robocall problem.''
Indeed, in 2020, the North American Numbering Council (NANC), the
Commission's advisory committee of outside experts on telephone
numbering matters, stated that ``it is a long-standing problem that
international gateway traffic is a significant source of fraudulent
traffic.'' The Commission accordingly strives to stay abreast of
foreign companies using U.S. telephone numbers. For example, it has
stressed that ``[e]nsuring that foreign voice service providers using
U.S. telephone numbers comply with the certification requirements prior
to being listed in the database is especially important in light of the
prevalence of foreign-originated illegal robocalls aimed at U.S.
consumers and the

[[Page 80622]]

difficulty in eliminating such calls.'' Foreign ownership of providers
serving our Nation's consumers also is a matter of concern for the
Commission generally, as it may pose national security and/or law
enforcement risks to the United States. VoIP providers require
particular scrutiny in the robocall area as well, given that ``[t]he
rising tide of robocalls and the emergence of VoIP go hand in hand.''
In fact, ``[t]oday, widely available VoIP software can allow bad actors
with malicious intent to make spoofed calls with minimal technical
experience and cost.'' As a result, ``[a]llowing [VoIP providers with
foreign ownership or control] direct access to numbers and critical
numbering databases raises a number of potential risks, including the
impact to number conservation requirements; questions related to
jurisdiction, oversight, and enforcement of numbering rules;
consideration of assessment of taxes and fees upon foreign-owned
entities; and potential national security and law enforcement risks
with access to U.S. telecommunications network operations.'' These
factors make it important for the Commission to know about foreign
ownership of interconnected VoIP providers seeking direct access to our
Nation's finite numbering resources, especially because a number of
providers with substantial foreign ownership have applied to obtain
direct access to numbering resources since the 2015 VoIP Direct Access
Order, 80 FR 66454 (Oct. 29, 2015).
17. The current rules on direct access applications, however, do
not require interconnected VoIP providers to disclose any information
about their ownership or affiliation, nor do they specify a process to
evaluate applications with substantial foreign ownership. The VoIP
Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021), therefore proposed
requirements aimed at ascertaining the foreign ownership and control of
interconnected VoIP applicants and tentatively concluded that
applicants should disclose any 10% or greater ``equity and/or voting
interest, or a controlling interest.'' It also proposed requiring such
applicants to identify any interlocking directorates with a foreign
carrier, as well as any affiliation with a foreign carrier. As
discussed below, we now adopt ownership disclosure requirements for
interconnected VoIP direct access applicants, and relatedly conclude
that applications from such providers will be placed on a ``non-
streamlined'' processing track if the applicant has a foreign owner
whose interest exceeds the reporting threshold set forth in Sec.
63.18(h) of the Commission's rules, which we incorporate for purposes
of ownership reporting here.
18. Ownership disclosure requirements. We adopt a rule to require
interconnected VoIP applicants for a Commission direct access
authorization to provide all of the information, disclosures, and
certifications required by Sec. 63.18(h) and (i) of the Commission's
rules. If the applicant does not have information required to be
provided under Sec. 63.18(h) and (i), the application must include a
statement to that effect. This approach ensures the requirements for
interconnected VoIP direct access applicants match the requirements for
international section 214 applications, as well as applications for
submarine cable landing licenses (which likewise cross-reference Sec.
63.18(h)). It also ensures the requirements for interconnected VoIP
direct access applicants will remain consistent with the requirements
for international section 214 applicants regardless of any
modifications to Sec. 63.18(h) or (i). For example, the Commission
adopted changes to Sec. 63.18(h) in 2020. The amendments to Sec.
63.18(h), however, are not yet effective. The Commission also has a
pending rulemaking proceeding seeking comment, among other things, on
whether to adopt a new ownership reporting threshold that would require
disclosure of certain 5% percent or greater direct and indirect equity
and/or voting interests with respect to applications for international
section 214 authority and modification, assignment, transfer of
control, and renewal of international section 214 authority, and on
whether to apply the 5% reporting threshold to encompass all equity and
voting interests, regardless of whether the interest holder is a
domestic or foreign individual or entity. In that proceeding, the
Commission stated, ``[t]he current 10% reporting threshold may not
capture all foreign interests that may present national security, law
enforcement, foreign policy, and/or trade policy concerns.'' If the
Commission amends Sec. 63.18(h) by adopting a 5% reporting threshold,
we direct the Bureau to seek comment on whether applicants for a direct
access authorization should disclose information, including the name,
address, citizenship, and principal business, of any individual or
entity that directly or indirectly owns 5% percent or greater equity
and/or voting interests, or a controlling interest, of the applicant.
Based upon the Bureau's review of the comments, we further delegate to
the Bureau the authority to address any such final threshold
requirement in a public notice. We find that adopting a reporting
threshold consistent with that used in other Commission application
processing regimes promotes certainty and transparency. This approach
also ensures there is no undue burden on direct access applicants,
since many companies already provide the same or similar information to
the Commission in other contexts.
19. Adopting the same standards that will be used for international
section 214 applications, [Note that applicants seeking assignment or
transfer of control of an international section 214 authorization are
also subject to the ownership-disclosure requirement in Sec. 63.18(h)
pursuant to Sec. 63.24.] in particular, is appropriate given our focus
on national security and law enforcement concerns and reducing risks of
illegal robocalling facilitated by potential bad actors abroad.
Requiring ownership information, from a U.S.- or foreign-owned
applicant, will assist Bureau staff in their existing practice of
identifying applications that require further review to determine
whether the direct access applicant's ownership, control, or
affiliation raises national security and/or law enforcement concerns.
Indeed, ``[i]t is axiomatic that the Commission needs accurate
information in order to carry out its work, and this is especially true
with regard to compliance with foreign ownership disclosures. In
several recent cases the Commission has found that foreign ownership of
telecommunications companies providing services in the United States
may pose a risk to national security, law enforcement interests, or the
safety of U.S. persons.'' As noted above, several providers with
substantial foreign ownership have applied to obtain direct access to
numbering resources since adoption of the 2015 VoIP Direct Access
Order, 80 FR 66454 (Oct. 29, 2015), making the initial review process
especially important to address the risk of providing access to our
numbering resources to potential bad actors abroad. This requirement
also will cause applicants to conduct robust due diligence, thus
increasing the reliability of their information.
20. The record largely supports instituting some form of ownership
disclosure for direct access applicants. We decline to adopt a higher
threshold because, as we recognized in the international section 214
context, ``although a 10-percent threshold is somewhat more burdensome
[than a

[[Page 80623]]

higher threshold], that increased burden does not outweigh the
potential value to the Commission of being able to review the
additional information about the applicant's ownership. Leaving the
threshold at 10% or greater will help us determine whether a particular
application raises issues of national security, foreign policy, or law
enforcement risks.'' VON and Microsoft, however, argue that a foreign
ownership reporting requirement ``will add unnecessary time and expense
to the review process without any obvious purpose or anticipated
reduction in illegal robocalls.'' While we recognize that an ownership
disclosure requirement constitutes an additional step in the direct
access application process for interconnected VoIP providers, we
conclude that the public interest in receiving this information
outweighs any incremental cost on applicants. Interconnected VoIP
providers that seek access to telephone numbers on a permanent basis
acquire both the rights and obligations associated with using that
access in the public interest, and we must ensure that access does not
result in illegal practices that harm consumers. As noted above, the
ownership disclosures we adopt are like those required in several other
Commission application processes, so requiring the same kind of
disclosure here is not unduly onerous. Twilio argues that applicants
for growth numbering resources should not have to disclose ownership
information in those applications because they would already have been
granted access to numbers. We are not revising the rules on
applications for growth numbering resources in 47 CFR 52.15(g)(4). We
do, however, address below the duty to update ownership disclosures
when the relevant information changes. Moreover, an applicant that is a
privately held entity should know its investors and maintain records of
their significant direct or indirect equity and/or voting interest
holders in the ordinary course of business. An applicant that is a
publicly held company is also required to identify its interest holders
in requisite filings with the U.S. Securities and Exchange Commission
(SEC). As in other contexts requiring the same kind of ownership
disclosure, the relatively minor burden of disclosing ownership
information in a direct access application is outweighed by the public
interest benefit of the Commission having the information when the
application is filed, in time to address potential issues raised by
foreign ownership before granting an applicant rights or privileges.
21. Non-streamlined pleading cycle for direct access applicants
with reportable foreign ownership. As proposed in the VoIP Direct
Access FNPRM, 86 FR 51081 (Sept. 14, 2021), we amend our rules to state
that the Bureau will remove applications from streamlined processing
whenever the applicant has reportable foreign ownership, meaning
ownership or control by a foreign entity that meets or exceeds the
threshold for disclosure under Sec. 63.18(h) of the Commission's
rules, as now incorporated in Sec. 52.15(g)(3). The rule formalizes
the current practice of taking applications with substantial foreign
ownership off the streamlined processing cycle.
22. Allowing sufficient time for review of applications with
reportable foreign ownership will help the Bureau identify and assess
potential national security and law enforcement risks raised by such
applications, and provide transparency to applicants regarding the
timeframe for processing their applications. Twilio supported this
proposal, and no commenter opposed it.
23. Referral of applications with reportable foreign ownership to
Executive Branch agencies. We decline to automatically refer to the
Executive Branch agencies interconnected VoIP providers' direct access
applications that have reportable foreign ownership or control. There
was a lack of strong record support for automatic referrals. Moreover,
given the limited number of referrals to date, it is more prudent and
efficient to continue the current practice under Sec. 1.40001(a) of
the rules, where the Commission, in its discretion, makes case-by-case
referrals of direct access applications if it finds that ``the specific
circumstances of an application require the input of the Executive
Branch as part of [the Commission's] public interest determination of
whether an application raises national security, law enforcement,
foreign policy, and/or trade policy concerns.''
24. Development of standard questions. We also decline to develop a
list of ``Standard Questions'' for interconnected VoIP applicants with
reportable foreign ownership or control. While the Commission has
adopted ``a standardized set of national security and law enforcement
questions (Standard Questions) that certain applicants and petitioners
. . . with reportable foreign ownership will be required to answer as
part of the Executive Branch review process,'' there was no strong
record support for developing such questions for all interconnected
VoIP direct access applicants with reportable foreign ownership. Given
the lack of a developed record and our decision not to automatically
refer applications to the Executive Branch agencies when an
interconnected VoIP provider has reportable foreign ownership, we find
it appropriate to rely on the current practice, under which Commission
staff and the Executive Branch agencies can request additional
information from applicants on a case-by-case basis.
25. Duty to update ownership information. To ensure ownership
information remains up to date, we revise Sec. 52.15(g)(3) to require
interconnected VoIP providers that obtain direct access authorization
under the revised rules to submit an update to the Commission and each
applicable state (i.e., each state where the provider has acquired or
applied to receive numbers from the state at the time of the ownership
change) within 30 days of any change to the reportable ownership
information disclosed in their direct access applications, or if a
provider that previously did not have reportable ownership information
comes to have reportable foreign ownership information. For example, if
a provider had no reportable ownership information at the time of its
application but a person or entity later came to possess more than 10%
of the equity in the provider, the provider would have to report the
change. If a provider had reportable ownership information at the time
of its application but the ownership changes (e.g., a holder of 10% of
the equity came to hold 50%), the provider would have to report than
change. But if there is a change in ownership that does not reach the
reportable level (e.g., a holder of two percent of the equity came to
hold six percent), no update would have to be filed. Alternatively, if
the provider that obtained direct access authorization under our
revised rules did not have reportable ownership percentages and
information (whether on domestic or foreign owners) at the time of its
original application, but subsequently has reportable information, we
require it to provide the information as an update to its authorization
within a 30-day timeframe. We also delegate authority to the Bureau to
direct the Numbering Administrator to suspend number requests if the
Bureau determines, based on updated information, that further review of
the direct access authorization is necessary.
26. This requirement builds upon the current rules, which require
each interconnected VoIP provider with direct access to numbering
resources to maintain the accuracy of all the contact information and
certifications submitted in its application, and to file a correction
with the Commission and

[[Page 80624]]

each applicable state within 30 days of any change to the contact
information or certifications. Going forward, obtaining such updates
regarding changes to ownership information will help us ensure that
direct access authorization holders' ownership does not change post-
authorization in a manner contrary to the public interest, such as
introducing a potential bad actor-owner that facilitates illegal
robocalling, poses a threat to the national security and law
enforcement interests of the United States, or otherwise engages in
conduct detrimental to the public interest. Under the current rules,
bad actors could surreptitiously strengthen their influence on
authorization holders by increasing their ownership after the
Commission grants the initial authorization, thereby evading Commission
oversight and undermining enforcement efforts if that change in
ownership levels did not have to be reported. By requiring all
ownership information to be updated within 30 days of a change,
potential bad actors can no longer remain hidden from view. In fact,
such information can be used to determine whether a change in
authorization is warranted (e.g., making the authorization be
conditioned on a mitigation agreement, or even revoking the
authorization).
27. The National Association of Attorneys General supports
requiring interconnected VoIP authorization grantees to update their
ownership information after a change. Some commenters oppose it,
however, arguing that such a requirement would be onerous and
unnecessary, especially with regard to information that has no bearing
on the Commission's objective to prevent foreign bad actors from
gaining direct access to U.S. numbers, and is not competitively neutral
because non-VoIP providers would not have to provide it. Twilio also
questions whether the 30-day deadline is truly necessary to advance the
Commission's objectives, rather than an annual or biennial update.
28. We reject these arguments because we believe the public
interest benefit of a requirement to keep all ownership data up to date
within 30 days of a change outweighs the minimal burden on grantees. As
stated in the VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021),
``obtaining such updates will help us to ensure that the ownership [of
grantees] does not change post-authorization in a manner that evades
the purpose of application review.'' No commenter proposed a
``materiality threshold'' to determine when ownership data updates must
be filed, and we therefore decline to adopt one. Absent an update
requirement, applicants could skirt the more extensive review that
applies to applications with reportable foreign ownership simply by
delaying the investment by a foreign entity. This could even occur
unintentionally as the result of an unexpected investment or buyout by
a foreign entity. In either case, the update requirement helps ensure
authorization holders with reportable foreign ownership receive an
appropriate level of scrutiny in light of their changed ownership, so
the Commission could consider, for example, whether the provider should
enter a robocall mitigation agreement. We also conclude that requiring
updates within 30 days, rather than annually or biennially, is a better
way to ensure the Commission has current information, and that
providing updated ownership information is relevant to our efforts to
eliminate illegal robocalls for all the reasons stated above regarding
providing foreign ownership data in applications. Finally, while non-
VoIP direct access applicants are not covered by this new rule, we do
not believe the burden on interconnected VoIP providers is so large as
to affect competition, and in any event do not foreclose imposing this
same duty on non-VoIP applicants in the future.
29. Filing procedure. We require all updated or corrected ownership
information to be filed in the Electronic Comment Filing System (ECFS)
through the Direct Access intake docket (Inbox 52.15) and via email to
<a href="/cdn-cgi/l/email-protection#b1f5f0f0f1d7d2d29fd6dec7">[email&#160;protected]</a>, unless the Bureau specifies another method. We note that
the Bureau may request additional documentation as necessary.
30. State submission requirement. Interconnected VoIP providers
obtaining direct access authorization under the revised rules we issue
in this document also are required to submit updated or corrected
ownership information to the states from which the authorization holder
has acquired or requested numbers at the time of the ownership change.
Such information should be submitted to states in the same manner the
providers would submit a correction or update to their original
applications.
31. Executive Branch agencies' review of corrected information. As
proposed in the VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021),
we also delegate authority to the Bureau to direct the Numbering
Administrator, pursuant to its applicable procedures, to suspend all
pending and future requests for numbers if the updated or corrected
ownership information submitted by an authorization holder indicates a
material change or discloses new information such that additional
investigation is necessary to confirm that the authorization still
serves the public interest. In the foreign ownership context, if
updated or corrected ownership information leads the Commission to
refer the authorization holder to the Executive Branch agencies, the
Bureau shall also direct the Numbering Administrator to suspend all
pending and future requests for numbers until such review is complete
and a determination is made by the Bureau.
32. Use of numbers after submission of updated or new information.
Finally, we note that authorization holders may continue to use numbers
they obtained prior to submitting updated or corrected ownership
information to the Bureau unless the Bureau determines that the
authorization must be revoked per the formal revocation procedure we
adopt below.

Certifying Compliance With Other Commission Rules

33. Under our current rules, interconnected VoIP providers seeking
to obtain numbers must comply with various obligations that are
designed to enhance public safety, prevent access stimulation and
intercarrier compensation abuse, ensure that Commission broadband maps
are accurate, and ensure that providers actually provide the service
they describe. As we do in the robocall context above, we increase our
enforcement capabilities and strengthen those rules by requiring
interconnected VoIP providers to make certifications regarding their
compliance with those rules in their direct access applications.
34. Public safety certification. Consistent with our proposal in
the VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021), we revise
Sec. 52.15(g)(3) of the Commission's rules to require interconnected
VoIP applicants for direct access authorization to certify that they
comply with the Communications Assistance with Law Enforcement Act
(CALEA). We also require applicants to provide evidence in their
application that demonstrates their compliance with the Commission's
part 9 public safety rules and CALEA. To preserve flexibility and
minimize burdens, we decline to prescribe precisely what evidence
should be submitted to satisfy this requirement. We note that technical
specifications and call-flow diagrams ``have been helpful to Commission
staff in assessing direct access applicants' compliance with 911
service and CALEA requirements in some cases.'' Evidence of 911 service
agreements may

[[Page 80625]]

also be helpful to the Bureau's review. We additionally delegate to
Bureau or other Commission staff the right to request additional
documentation from the applicant to demonstrate compliance with these
public safety obligations, where necessary.
35. As with the other certifications we adopt in this document,
this new certification requirement will provide the Commission with
additional enforcement abilities should the Bureau find that an
authorization holder does not in fact comply with our public safety
rules or CALEA. Our requirement to provide evidence of compliance with
these obligations merely formalizes the preexisting Bureau practice of
requesting such evidence after an application's submission. By
requiring this evidentiary showing at the outset, we promote efficiency
by ensuring Bureau staff have the relevant documentation when they
begin their application review. Additionally, because the ability to
provide public safety answering points (PSAPs) with caller location and
call-back numbers necessitates two-way interconnection with the public
switched telephone network (PSTN), this requirement will help Bureau
staff assess whether an applicant actually provides interconnected VoIP
service.
36. Several parties support this measure. The Maine Public
Utilities Commission suggests that we should additionally require
providers to submit the 911-related documentation to state regulatory
and public safety agencies. Additionally, Lumen and USTelecom argue
that this documentation submission requirement would be unduly
burdensome if applied retroactively to existing authorization holders.
We understand these concerns and decline to make this requirement
retroactive at this time. We decline to take this approach because
state regulatory agencies vary widely in terms of their jurisdiction
over interconnected VoIP providers. While some states treat
interconnected VoIP providers like communications service providers for
specified purposes, others have statutes expressly limiting or removing
their jurisdiction over interconnected VoIP providers altogether. A
general requirement to send such documentation to state regulatory
agencies would not be tailored appropriately to ensure only those
agencies that have an interest in that information would receive it.
Tailoring such a requirement to apply only to those states with
jurisdiction over interconnected VoIP providers is also undesirable
because it would create regulatory asymmetry that is not competitively
neutral. We address additional state-related issues in Part III.A.4
below.
37. Access Stimulation certification. The VoIP Direct Access FNPRM,
86 FR 51081 (Sept. 14, 2021), sought comment on possible changes to our
direct access authorization rules to help combat Access Stimulation and
other forms of intercarrier compensation arbitrage. In April of this
year, we adopted a Second Report and Order, 88 FR 35743 (June 1, 2023)
(Access Arbitrage Second Report and Order), in the Access Arbitrage
docket which closed perceived loopholes in our Access Stimulation rules
that some entities, including interconnected VoIP providers, were
exploiting to the detriment of interexchange carriers (IXCs) and their
end-user customers. Given the revisions to our Access Stimulation rules
adding new requirements for internet Protocol Enabled Service (IPES)
Providers--which include interconnected VoIP providers--we adopt a new
certification that cross-references those new rules to help ensure
applicants for direct access to numbers are aware of, and comply with
them. We thus revise Sec. 52.15(g)(3) of the Commission's rules to
require interconnected VoIP providers applying for direct access to
numbers to certify that they comply with our Access Stimulation rules
found in 47 CFR 51.914.
38. We adopt this requirement to help alleviate concerns that
direct access authorization will be used to evade our Access
Stimulation rules when the applicant is directly or indirectly related
to an entity suspected of being an access stimulator. In our recent
Access Arbitrage Second Report and Order, 88 FR 35743 (June 1, 2023),
we noted that, ``[d]espite multiple orders and investigations making
clear the Commission will not tolerate access arbitrage, some providers
continue to manipulate their call traffic or call flows in attempts to
evade our rules. Recently, [local exchange carriers (LECs)] have
inserted [IPES] Providers into call paths as part of an ongoing effort
to evade our rules and to continue to engage in access stimulation.
After inserting an IPES Provider into the call flow, the LEC then
claims that it is not engaged in access stimulation as currently
defined in our rules.'' This requirement will provide an additional
enforcement mechanism if it is violated, including the potential for
revocation of the provider's direct access authorization. As with the
other certifications we adopt in this document, we expect the threat of
enforcement action related to a false certification to deter
applications by those that would violate our rules, including those
related to Access Stimulation.
39. Commenters in both the Direct Access and our Access Arbitrage
dockets have expressed support for this type of certification
requirement as a means to deter interconnected VoIP providers from
engaging in schemes to avoid the Access Stimulation rules. Verizon, for
example, stated that ``IPES providers with direct access should
acknowledge and affirmatively agree to observe the Commission's access
stimulation rules. Access stimulating IPES providers would face
consequences for making false certifications to the Commission.'' AT&T
agreed with Verizon, stating that ``[s]uch a requirement will give the
Commission an additional arrow in its quiver in the fight against
harmful arbitrage schemes and should not place an undue administrative
burden on IPES providers.'' We believe that these benefits Verizon and
AT&T raise outweigh the concerns from some commenters that
certifications that require interconnected VoIP providers to state
their compliance with existing rules are duplicative or unnecessary.
40. We decline to adopt additional requirements beyond the
certification at this time, as our newly adopted Access Stimulation
rules are designed to help address the issues that commenters have
noted in this docket. Should we find that more action is necessary to
restrict interconnected VoIP providers' engagement in Access
Stimulation schemes, we reserve the ability to revisit our conclusion
here. We also agree with CCA that many of the suggestions we received
in the record ``go well beyond the scope of the Further Notice, [and]
are not specifically related to interconnected VoIP providers directly
obtaining telephone numbers.''
41. FCC Form 477 and 499 filings. Under our rules, interconnected
VoIP providers that have qualifying subscribers must file FCC Forms 477
and 499. Interconnected VoIP providers that have one or more revenue-
generating end-user customers must file FCC Form 477, a semiannual
reporting obligation that, for interconnected VoIP providers, collects
data regarding (1) the number of service subscriptions sold to their
own end-user customers by census tract and, for each census tract,
shall provide the number of subscriptions provided under consumer
service plans; and (2) the service characteristics for its
subscriptions in each state. As proposed in the VoIP Direct Access
FNPRM, 86 FR 51081 (Sept. 14, 2021), we revise Sec. 52.15(g)(3) of the
Commission's rules to require interconnected VoIP providers that must
file FCC Forms 477

[[Page 80626]]

and 499 to provide evidence that they have complied with these
obligations, and any successor filing obligations, when filing a direct
access application. Should providers not have evidence of filing these
forms, their certification should explain the reasons why. The 2015
VoIP Direct Access Order, 80 FR 66454 (Oct. 29, 2015), noted that
during the procedural review of direct access applications, Bureau
staff routinely verify that both FCC Forms 477 and 499 have been filed,
if applicable. For providers that do not have eligible subscribers at
the time of filing their direct access applications, we expect but do
not require such providers to submit evidence of their submissions when
they become obligated to do so under our rules. Our new rule formalizes
this inquiry into an application requirement which, again, promotes
efficiency and adds another layer of enforcement capability. We note
that submission of FCC Forms 477 and 499 filing receipts would
constitute prima facie evidence of compliance with these rules. The FCC
Form 477 filing system will no longer be used to collect new FCC Form
477 submissions, and will remain open only for filers to make
corrections to existing FCC Form 477 filings for data as of June 30,
2022 and earlier. We also note that, beginning with data as of December
31, 2022, providers, including interconnected VoIP providers, are
required to submit the following data using the Broadband Data
Collection (BDC) filing system: fixed and mobile broadband and voice
FCC Form 477 subscription data, fixed and mobile BDC broadband
availability data, BDC mobile voice availability data.

Compliance With State Laws

42. The 2015 VoIP Direct Access Order, 80 FR 66454 (Oct. 29, 2015),
and current rules require an interconnected VoIP provider to
acknowledge a duty to comply with state guidelines and procedures
adopted under the numbering authority the Commission has delegated to
the states. In the VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14,
2021), the Commission asked whether to revise this rule to state that
interconnected VoIP providers holding a numbering authorization must
comply with state numbering requirements and other applicable
requirements for businesses operating in the state. Having considered
the record, we now revise Sec. 52.15(g)(3) to make clear that
interconnected VoIP applicants and authorization holders that request
numbering resources from the Numbering Administrator for a particular
state must acknowledge that their direct access authorization is
subject to compliance with both state numbering requirements and to the
laws, regulations, and registration requirements applicable to them as
businesses operating in that state, not merely state requirements
specifically issued under Commission delegated numbering authority.
Upon the effective date of these new rules, direct access applicants
must expressly acknowledge in their applications that they will comply
with such laws.
43. One of the original purposes of the requirement to comply with
state delegated numbering authority law was to promote competitive
neutrality by requiring interconnected VoIP providers with direct
access to numbering resources to be subject to the same numbering
requirements as carriers getting numbers for that state. Unfortunately,
it appears some interconnected VoIP providers have assumed they have no
duty to abide by other state requirements because Sec.
52.15(g)(3)(i)(B) focuses solely on delegated numbering authority. That
is not the Commission's intent and is inconsistent with the goal of
competitive neutrality. The revision we adopt in this document
addresses this unintended consequence and helps keep interconnected
VoIP providers on a more equal footing with local exchange carriers
(LECs) (which must comply with state general registration requirements
pursuant to their certificates of public convenience and necessity and
status as businesses operating in the states). It will directly help
avoid confusion over the duty to comply with applicable state laws
beyond delegated numbering matters. Equally important, it will
discourage interconnected VoIP direct access authorization holders from
requesting numbering resources for states where they do not serve end-
user customers, a practice that contributes to the exhaust of numbering
resources in that state. By clarifying that VoIP direct access
authorization holders must also comply with other applicable state
laws, such as registration requirements, the new requirement will make
it more difficult for interconnected VoIP providers to evade measures
that enable states to generally address other consumer-protection
issues, including unlawful robocalling. For example, state commissions
assert that requiring interconnected VoIP direct access authorization
holders to comply with state law through their registration
requirements will ensure that state authorities have the information
needed to identify providers involved in unlawful robocalling.
44. Several state commissions support this requirement. They
observe there has been confusion, or at least disagreement, about the
extent to which interconnected VoIP providers with direct access to
numbering resources must comply with general state-law duties
applicable to other businesses obtaining numbers in the states, such as
LECs. In Maine, for example, voice service providers must register with
the Maine Public Utilities Commission's (PUC) third-party administrator
for the Maine Universal Service Fund and the Maine Telecommunications
Education Access Fund. The Maine PUC staff, however, has found it does
not always have the information it needs to determine whether
interconnected VoIP providers doing business in Maine are contributing
to these funds, which it says is required by state law. Other state
commissions note similar issues.
45. In light of this record evidence, we disagree with commenters
who say there has been no confusion about the scope of the duty to
comply with state law or that this revised rule amounts to a new
delegation of numbering authority to the states. Our revised rule in
this document concerns state laws, regulations and registration
requirements applicable to them as businesses operating in a given
state, separate from any Commission delegation of numbering authority.
We are not delegating any new numbering authority to the states here.
Rather, the purpose is to make plain that direct access applicants must
acknowledge that their authorization is contingent on complying not
only with state requirements issued under delegated numbering
authority, but also with other independently applicable state
obligations, such as registration requirements, that would apply to
them as businesses operating in the state.
46. We also disagree with commenters who argue that requiring
interconnected VoIP providers to acknowledge that their direct access
authorization is subject to compliance with applicable state
requirements would undermine the Commission's 2004 Vonage Order and its
preemption of most state regulation of interconnected VoIP service. As
explained in the Vonage Order, that decision ``express[ed] no opinion''
on the applicability to an interconnected VoIP provider of a state's
``general laws governing entities conducting business within the state,
such as laws concerning taxation; fraud; general commercial dealings;
and marketing, advertising, and other business practices.'' The
Commission also stated in that order that ``as we move forward in
establishing policy and

[[Page 80627]]

rules for . . . IP-enabled services, states will continue to play their
vital role in protecting consumers from fraud, enforcing fair business
practices, for example, in advertising and billing, and generally
responding to consumer inquiries and complaints.'' Accordingly, even
after the Vonage Order, WC Docket No. 03-211, Memorandum Opinion and
Order, 19 FCC Rcd 22404 (2004), the Commission has permitted states to
require interconnected VoIP providers to contribute to state universal
service funds and pay state fees related to 911/E911 service. VON and
Microsoft raised concerns that our revised rule could mistakenly be
interpreted by state commissions as expanding the permissible scope of
state regulation of interconnected VoIP services. To avoid any doubt,
we clarify that, as stated in the VoIP Direct Access FNPRM, 86 FR 51081
(Sept. 14, 2021), by adopting this revised rule we do not address the
statutory classification of interconnected VoIP services as
telecommunications or non-telecommunications services, nor do we
address, expand or alter, the scope of states' authority to regulate
interconnected VoIP service, as reflected in the Vonage Order and
established Commission policy. In a separate preemption argument in
this record, Terra Nova Telecom claims interconnected VoIP services
compete with the Commercial Mobile Radio Service (CMRS) and that
Congress has preempted state market entry or rate regulation of CMRS
under section 332(c)(3) of the Communications Act of 1934, as amended.
Terra Nova submits, therefore, that the Commission should not allow
states to impose requirements on interconnected VoIP services that they
could not impose on CMRS, such as the kinds of requirements the
Louisiana PSC seeks to impose on Terra Nova before issuing it telephone
numbers. But Terra Nova points to no authority stating that the scope
of preemption is identical for interconnected VoIP services and CMRS,
and section 332(c)(3) is specific to CMRS. Terra Nova also takes issue
with several requirements it alleges the Louisiana PSC seeks to impose
on it as a prerequisite to giving numbers to Terra Nova (which already
was granted direct access authority by this Commission). Terra Nova
contends that several of these requirements amount to market-entry or
public utility-style regulation of the kind preempted by the Vonage
Order. We lack adequate information to resolve this specific dispute in
the context of this general rulemaking.
47. We also disagree with arguments that the revised rule is too
vague because it does not specify the particular state requirements
that could apply to interconnected VoIP providers with direct access to
numbering resources. Any such list inevitably would risk being
incomplete or quickly outdated. The point of our rule revision is to
have applicants acknowledge their direct access authorization is
subject to compliance with applicable laws, regulations, and
registration requirements for businesses operating in the state(s)
where the authorization holder seeks to obtain numbers. We note,
moreover, that any interconnected VoIP provider obtaining numbering
resources from a state pursuant to Sec. 52.15(g)(3)(i)(C) presumably
would already be evaluating its potential duties under state law (e.g.,
registration with a secretary of state or tax authorities, possible
obligations under state universal service funds or regarding 911 fees)
to an extent that allows it to acknowledge whether it will comply with
state law. Our new application requirement therefore should not impose
any added burdens on interconnected VoIP applicants beyond their normal
preparation to begin dealing with a state and possibly providing
service there.
48. ``Minimal contacts.'' In order to help minimize numbering
exhaust, the Commission asked whether it should adopt a ``minimal
contacts'' requirement that interconnected VoIP providers would have to
meet in order to obtain numbering resources in a given state. Having
considered the record, we refer this issue to the NANC, as discussed
below in Part III.C. The Commission has not explicitly prohibited the
use of numbering resources requested for one state to serve customers
in other states, whether the entity obtaining the numbers is a LEC or
an interconnected VoIP provider holding a direct access authorization.
We recognize that a LEC is more likely to have contacts with the state
for which it has requested numbering resources, such as physical
facilities, a CPCN, and a state registration. At this time, however, we
do not have sufficient record evidence to fully assess this issue, and
attempting to define ``minimal contacts'' for interconnected VoIP
providers here would risk unintentionally imposing a new requirement
that numbering resources requested for a particular state be used to
serve at least some customers in that state. Absent such a new
requirement, which is outside the scope of this proceeding, a ``minimal
contacts'' requirement would put the Commission into the position of
having to evaluate the specific contacts of any direct access
authorized interconnected VoIP provider for each particular state in
which it seeks numbers, which inevitably would be a complex, provider-
specific inquiry, and one for which we lack helpful Commission
precedent. The California PUC commented that if ``minimal contacts''
means having customers in the state and operating authority by the
state, it would support a ``minimal contacts'' requirement. Other state
public utility commissions supported instituting a ``minimal contacts''
requirement but did not offer any further detail regarding the
standard.
49. Nomadic interconnected VoIP providers. The revised state-law
acknowledgment requirement we adopt applies to all interconnected VoIP
providers requesting numbering resources in a particular state, even if
their services are non-fixed or nomadic and not directly linked to the
state corresponding to the respective area code. The fact that some
interconnected VoIP providers provision non-fixed (or nomadic) services
does not alter the applicability of the state-law acknowledgment
requirement. RingCentral contends that state requirements other than
those issued under delegated numbering authority cannot apply to them
because nomadic VoIP services ``are impossible to segregate into
intrastate and interstate components'' and therefore are subject to
``exclusive federal jurisdiction.'' Non-fixed or nomadic interconnected
VoIP service providers request numbering resources from states and
therefore place burdens on each such state's numbering resources just
as their fixed-VoIP counterparts do. It would also burden state
commissions to determine the precise geographic locations of non-fixed
providers each time a numbering request was received. State commissions
strongly supported applying the state-law acknowledgment requirement to
non-fixed and nomadic interconnected VoIP providers, and we agree with
such a requirement.
50. Directing the Numbering Administrator to deny applications. We
delegate authority to the Bureau to direct the Numbering Administrator
to deny requests for numbering resources from an interconnected VoIP
provider when the Commission is notified (e.g., by a state commission)
that the provider is not complying with independently applicable state
legal requirements. It is important that there be some clear
consequence of not complying with applicable state laws when obtaining
numbering resources from a state based

[[Page 80628]]

on a Federal numbering authorization. Our actions here also are
consistent with current practice, under which, when a state reports
that a provider is not complying with state requirements, the Numbering
Administrator may deny that provider's numbering requests. Although we
believe that existing practices conform with Sec. 52.15 of the
Commission's rules, making the requirement explicit clarifies the
process so as to leave no doubt as to these requirements.

Ensuring the Accuracy of Application Contents

51. We revise Sec. 52.15(g)(3) of the Commission's rules to
require an officer or authorized representative of the applicant to
submit a declaration under penalty of perjury, pursuant to Sec. 1.16
of the rules, attesting that all statements in the application and any
appendices are true and accurate. We specify that false statements or
certifications made to the Commission may result in rejection of an
application or revocation of an authorization. Consistent with warnings
included in filings for other Commission authorizations and CPNI
certifications, we remind applicants that willful false statements are
also punishable by fine and/or imprisonment, and/or forfeiture.
Requiring a declaration under penalty of perjury will help ensure
applications are accurate and that applicants are taking the
application process seriously. The new declaration will also dissuade
bad actors from filing false information or filing altogether out of
fear of committing the crime of perjury and suffering increased
punishment.
52. Our rules prohibit any applicant for any Commission
authorization from making material false statements or omissions of
material information in its dealings with the Commission. Our addition
of a declaration under penalty of perjury is consistent with the
international section 214 application process, and the authorization
process for many other FCC authorizations, in which applicants include
a verification executed by an officer or other authorized
representative that the information included in the filing is true and
accurate. This requirement is also consistent with Robocall Mitigation
Database filings, which must include a declaration under penalty of
perjury pursuant to Sec. 1.16 of the Commission's rules. We further
note that many direct access applicants already provide this type of
declaration voluntarily.

Other Issues

53. Declining to expand direct access to numbers. Under our
existing rules, VoIP direct access applicants must provide
interconnected VoIP services rather than one-way VoIP or other types of
services that make use of numbers. The Commission sought comment on
whether to allow one-way VoIP or other types of service providers to
have direct access to numbers. We elect not to do so at this time. The
record does not support this expansion of direct access and, indeed,
contains some opposition to doing so until the guardrails proposed in
the VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021), are adopted
and effectively implemented. By avoiding unnecessary or premature
expansion of direct access to such providers, we better protect
valuable and limited numbering resources from potential bad actors,
both because fewer entities will have direct access to numbers and
because interconnected VoIP providers engage in commercial agreements
with carriers and have obligations and checks that one-way providers
may not. One-way VoIP providers have fewer regulatory obligations than
traditional carriers or interconnected VoIP providers. Our action is
also consistent with the rationale in the 2015 VoIP Direct Access
Order, 80 FR 66454 (Oct. 29, 2015), for limiting direct access
authorizations to interconnected VoIP providers. That order found that
interconnected VoIP providers are more likely than other VoIP providers
to need direct access to numbers because they are more likely to
provide service used by consumers to replace ``plain old telephone
service'' (POTS), and because outbound-only VoIP service does not
require telephone numbers.
54. Facilities readiness certification. The VoIP Direct Access
Order, 80 FR 66454 (Oct. 29, 2015), provided examples of what an
applicant could submit to show ``facilities readiness'' as required by
47 CFR 52.15(g)(3)(i)(D). We sought comment on whether to revise Sec.
52.15(g)(3) of the direct access rules to explicitly specify the
documents that will be allowed to satisfy the ``facilities readiness''
requirement. Comments on the issue were divided, and, having considered
the issue further, we decline to revise our rule. Rather, we conclude
that the examples of technical documentation and information that
applicants may submit to demonstrate facilities readiness in the VoIP
Direct Access Order, 80 FR 66454 (Oct. 29, 2015), will continue to
suffice. This approach preserves the flexibility of interconnected VoIP
providers to submit information that is relevant to the unique
characteristics of their networks. We also reaffirm our delegation of
authority to the Bureau to request additional documentation on a case-
by-case basis as necessary.
55. Know-your-customer certification. Section 64.1200(n)(3)
requires voice service providers to ``[t]ake affirmative, effective
measures to prevent new and renewing customers from using its network
to originate illegal calls, including knowing its customers and
exercising due diligence in ensuring that its services are not used to
originate illegal traffic.'' The VoIP Direct Access FNPRM, 86 FR 51081
(Sept. 14, 2021), sought comment on whether to require direct access
applicants to certify that they `` `know their customer' through
customer identity verification.'' Comments on this topic were mixed.
After considering the record, we decline to adopt a specific know-your-
customer certification at this time. As discussed below in the section
addressing our referrals to the NANC, interconnected VoIP providers
often resell numbers that they have obtained through the direct access
process to third-party providers. Additionally, our decision to study
the issue of number resale further, our adoption of new certifications
as part of interconnected VoIP providers' applications for direct
access authorization, and potential future action regarding number
resale and indirect access recipient certifications, may accomplish the
same objectives as would adopting a know-your-customer certification.
We therefore reserve for future determination whether to adopt such a
certification in the direct access application context.

Application Review and Authorization Oversight

56. In this section, we adopt measures to facilitate greater
transparency regarding the review of direct access applications, make
explicit our procedures for rejecting applications, and expand the
bases on which direct access authorizations may be revoked and adopt a
process for such revocations.

Codifying the Process for Reviewing Direct Access Applications

57. As proposed, we revise Sec. 52.15(g)(3) of the Commission's
rules to formalize the process for reviewing direct access
applications. We direct Bureau staff to conduct a due-diligence review
of an applicant's direct access application prior to seeking comment on
it. This due-diligence review shall include, but is not limited to,
determining whether the applicant is the subject of a past or pending
Enforcement Bureau inquiry or whether the applicant has reportable
foreign

[[Page 80629]]

ownership. This initial review process is critical to ensure illegal
robocallers and other bad actors do not gain access to finite numbering
resources. As noted above, we direct the Bureau to withhold placing any
application submitted by an applicant with reportable foreign ownership
on streamlined processing (that is, withhold issuing an ``Accepted-for-
Filing Public Notice''). Additionally, the Bureau retains the authority
to determine, at its discretion, whether to accept an application for
non-streamlined filing so that it may further analyze whether a grant
is in the public interest during and after the prescribed comment
period. Furthermore, if the Bureau finds that an application raises
public interest concerns, it may withhold placing it on streamlined
processing until those concerns are addressed through applicant
supplements or otherwise, even if the application otherwise meets
procedural requirements. One commenter generally supported this
approach, and no commenter opposed it.
58. The action we take in this document formalizes this preexisting
practice and makes explicit the Bureau's authority in the rules.
Specifically, the rules shall state that the Bureau will review direct
access applications to ensure that they are complete and appropriate
for streamlined treatment before the Bureau issues a public notice
accepting the application for filing. By taking this step, we draw on
our similar procedure governing review of international section 214
applications, and promote greater transparency and predictability for
applicants regarding the process and timing applicable to a potential
authorization. We note that applicants must provide additional
information as requested by the Bureau during and after its initial
review of a direct access application. Such responses must be submitted
to the Bureau using the same method for submitting original application
materials, unless otherwise directed. The majority of commenters
supported Commission efforts to fight illegal robocalling and fraud,
and staff diligence in reviewing applications and coordination with the
Enforcement Bureau is part of ensuring potential robocallers do not
gain access to numbering resources.

Codifying the Processes for Rejecting Direct Access Applications

59. We next revise Sec. 52.15(g)(3) of the Commission's rules to
authorize the Bureau to reject an application when it determines the
applicant cannot satisfy the qualifications for a direct access
authorization or that granting the application would not be in the
public interest. We also adopt the proposal to authorize the Bureau, in
its discretion, to reject applications submitted by an applicant which
it has a reasonable basis to believe has engaged in behavior contrary
to the public interest. As described above, we also authorize the
Bureau to reject an application if it determines that the applicant
made a false or misleading statement. We further conclude that the
Bureau may reject applications if, for example, the Commission
determines that an applicant with reportable foreign ownership presents
national security, law enforcement, foreign policy, and/or trade policy
risks. Next, to improve transparency, we also direct the Bureau to
announce rejection decisions, the reasons for the rejection, and
whether they are with or without prejudice via public notice. The
record supports this action with no opposition. Similar to our action
described above regarding codifying the Bureau's review process, this
action codifying the Bureau's authority to reject applications makes
explicit a practice that already occurs under our current rules. We
believe this delegation of authority formalizing these practices leads
to greater transparency and predictability.

Revocation of Authorization

60. We next adopt procedures concerning the grounds for revocation
and/or termination of direct access to numbers authorizations.
Specifically, we find that the Commission may revoke and/or terminate
direct access to numbers authorizations of interconnected VoIP
providers for failure to comply with the Communications Act of 1934, as
amended (Act) and its implementing rules, other applicable laws and
regulations, and/or where retention of those authorizations no longer
serves the public interest. The Commission's Bureaus and Offices have
revoked and/or terminated licenses and authorizations where warranted
and within the scope of their authority. We revise Sec. 52.15(g)(3) of
the Commission's rules to specify the grounds on which we can revoke
and/or terminate direct access authorizations, namely if: the
authorization holder has failed to comply with the Commission's
numbering rules; the authorization holder no longer meets the
qualifications for a direct access authorization (e.g., the
authorization holder no longer meets the application certification
requirements or the conditions applicable to authorization holders
under the Commission's rules); the Commission uses the term
``termination'' where an authorization is terminated based on the
authorization holder's failure to comply with a condition of the
authorization, and has determined that the procedures applicable to
termination need not mirror the procedures used for revocation of
authorizations; the authorization holder, or officer or authorized
representative of the authorization holder, has made a false statement
or certification to the Commission; or revoking and/or terminating the
authorization is in the public interest (e.g., the Commission's
assessment of the record evidence, including any filing by the
Executive Branch agencies stating that retention of the authorization
presents national security, law enforcement, foreign policy, and/or
trade policy concerns and/or violates the terms of a mitigation
agreement reached with the Executive Branch agencies).
61. We delegate authority to the Bureau and the Enforcement Bureau
to determine appropriate procedures and initiate revocation and/or
termination proceedings and to revoke and/or terminate an
authorization, as required by due process and applicable law and in
light of the relevant facts and circumstances, including providing the
authorization holder with notice and opportunity to respond. In recent
revocation proceedings, the Commission exercised its discretion to
``resolve disputes of fact in an informal hearing proceeding on a
written record,'' and reasonably determined that the issues raised in
those cases could be properly resolved through the presentation and
exchange of full written submissions before the Commission itself.
62. We also delegate authority to the Bureau and the Enforcement
Bureau to direct the Numbering Administrator to suspend the
authorization holder's access to new numbering resources after either
bureau determines that the authorization holder acted willfully; or
public health, interest, or safety requires an immediate suspension; or
after giving the authorization holder notice and an opportunity to
demonstrate or achieve compliance with our rules. Once either bureau
revokes and/or terminates the authorization, the interconnected VoIP
provider may no longer obtain additional numbers from the Numbering
Administrator. While we do not at this time require an interconnected
VoIP provider to return its numbers once the Bureau has revoked its
direct access authorization, we refer to the NANC how such a
requirement would impact consumers, end-users, and providers, and
whether such a requirement would be feasible. Relatedly, we also do not
at

[[Page 80630]]

this time restrict such providers from accessing numbering databases
that may be necessary for providing service, such as routing and
porting, for numbers it already has. Interconnected VoIP providers that
have had their authorizations revoked may reapply for a new
authorization if they can demonstrate that they have cured the grounds
for the revocation and have taken measures to ensure they will not
arise again. At this time, we decline to adopt number reclamation as a
consequence of a revocation of direct access authorization. We refer
the issue of the impact of number reclamation on consumers and end-
users to the NANC. We therefore note that a revocation of direct access
authorization does not obviate an interconnected VoIP provider's
obligations under our rules with respect to the numbering resources it
still maintains. These obligations include, e.g., filing NRUF reports,
making NANP cost-support contributions, and updating the Reassigned
Numbers Database.
63. As affirmed recently in our Caller ID Authentication Sixth
Report and Order, 88 FR 29035 (May 5, 2023), where the Commission
grants a right or privilege, it unquestionably has the right to revoke
or deny that right or privilege in appropriate circumstances. In
addition, holders of these and all Commission authorizations have a
clear and demonstrable duty to operate in the public interest. The
action we take in this document promotes transparency into our direct
access authorization enforcement mechanisms by formalizing in our rules
the procedure by which we will revoke such authorizations. This step
will put bad actors on notice regarding the consequences they will face
if they flout the rules. Our delegation of authority to the Bureaus
will permit efficient processing of revocations, allowing the
Commission to respond to bad actors in a timely manner.
64. The record overwhelmingly supports these proposals. One
commenter, for example, states that ``[i]t is important for the
Commission to affirm its commitment to invoking this enforcement
authority, because complaints under section 208 cannot be brought
against VoIP providers, given their lack of common carrier status. Use
of this enforcement authority with respect to VoIP entities will help
`combat access stimulation and other intercarrier compensation abuses.
. . .' '' Similarly, another commenter states ``if a Direct Access
grantee is clearly found to be engaged in [intercarrier compensation]
arbitrage abuse, the FCC must impose real consequences for such abuses
because VoIP providers and other noncommon carrier Direct Access
grantees are not subject to section 208 of the Communications Act.''

North American Numbering Council Referrals

65. Number use and resale generally. The VoIP Direct Access FNPRM,
86 FR 51081 (Sept. 14, 2021), sought comment on whether direct access
applicants should certify that the numbers they are applying for will
only be used to provide interconnected VoIP services. The record we
received regarding this issue was insufficient for us to determine
precisely how interconnected VoIP providers are using the numbers they
obtain, whether any such uses result in violations of our rules, and
whether any further restrictions would have anticompetitive effects or
impair neutrality with respect to technology. While the revised
certifications and accompanying obligations we adopt herein should
substantially aid our efforts to curtail unlawful uses of numbering
resources, questions remain as to how numbers obtained by
interconnected VoIP providers may continue to facilitate illegal
robocalling or access stimulation, as well as how our policies affect
number exhaustion in particular area codes. The NANC is entrusted with
advising the Commission on numbering policy and technical issues
associated with numbering ``in the changing world of communications''
and must ensure that the NANP administration does not unduly favor or
disfavor one technology over another. In light of the limited record on
this important issue of number use by interconnected VoIP providers,
including number use by direct and indirect customers of such providers
and further consideration of additional measures to combat illegal
robocalls such as know-your-customer obligations, we therefore direct
the Bureau to request that the NANC examine and report on: (1) how
interconnected VoIP providers that obtain direct access to numbers are
using those numbering resources today, including, for example, the
extent to which they use numbers obtained in a state to serve the
customers of that state, the extent to which they use numbers obtained
via direct access to provide non-interconnected VoIP service, and the
extent to which numbers obtained via direct access are resold to other
providers; (2) those uses in terms of compliance with the Commission's
robocalling, Access Stimulation and other rules, area code exhaustion,
and other public interest concerns, including potential consumer
benefits or competitive harms of increasing the availability of direct
access to numbers or placing more limits on the use of numbers obtained
via direct access; and (3) possible options for mitigating any
identified adverse impacts on consumers of number disuse, misuse, and
resale, and how any Commission-imposed requirements for, or limits on,
number use or resale would impact consumers, providers, and
competition. We additionally require that the NANC examine, in
considering how to minimize the adverse impacts on consumers and/or
area code exhaustion arising from interconnected VoIP providers
obtaining numbers in a state where they serve few or no customers, the
efficacy of Commission adoption of a ``minimum contacts'' requirement
to obtain numbering resources in a particular state; and possible
options for defining such a standard.
66. Foreign-originated calls and use of numbers obtained
indirectly. Questions also remain regarding the use of U.S. NANP
numbers for calls that originate abroad and terminate in the U.S.
market. In the Fifth Caller ID Authentication FNPRM, 87 FR 42670 (July
18, 2022), we sought comment on whether we should restrict the use of
domestic numbering resources for such calls in order to prevent illegal
robocalls, and whether other countries' regulations provide a useful
roadmap for our own. We also sought comment on whether we should
restrict indirect access to numbers (e.g., numbers obtained on the
secondary market) by both interconnected VoIP providers and carriers
generally, or only for numbers that would be used in foreign-originated
calls.
67. Commenters in that proceeding agreed that some entities are
increasingly using numbers obtained, particularly through indirect
access, to originate illegal robocalls. TNS recently noted that
``numbers may be purchased separately with one provider and linked with
outbound calling minutes from a second,'' which it argued ``is a major
source of bad actor traffic.'' Indeed, the success of STIR/SHAKEN ``may
already be responsible for some bad actors shifting to acquiring
batches of real numbers instead of spoofing.'' Commenters disagreed,
however, on whether and what steps should be taken to prevent such
abuse, including the appropriate liability standard, and whether
restrictions should apply to all providers or solely to interconnected
VoIP providers. Commenters urged the Commission to proceed cautiously
when considering restrictions. Notably, no party in that proceeding
addressed the merits of specific foreign restrictions

[[Page 80631]]

on numbering usage raised in the Caller ID Authentication Fifth FNPRM,
87 FR 42670 (July 18, 2022), and their applicability to the U.S.
marketplace.
68. In light of the complexity of numbering arrangements, the mixed
record in this and related proceedings where this issue has arisen, and
limited comment on the specific number usage restrictions in place in
other countries, we agree with commenters in the Call Authentication
Trust Anchor docket who argue that we should proceed cautiously. We
therefore direct the Bureau to request that the NANC examine and report
on: the use of numbers obtained on the secondary market; numbers
obtained on the secondary market would include, e.g., numbers obtained
from a reseller or a carrier partner. As part of its referral, the
Bureau may choose to include direction to investigate issues or
proposals related to number misuse it concludes may benefit from
focused NANC examination, including proposals raised by commenters in
the record of this and other related proceedings.
69. Supplying numbers to customers on a trial basis. In the VoIP
Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021), we asked whether we
should require direct access applicants to certify that they will not
supply numbers on a trial basis to new customers (i.e., use of numbers
for free for the first 30 days, etc.), a practice that commonly leads
to bad actors gaining temporary control over numbers for the purposes
of including misleading caller ID information. While some commenters
agreed that supplying numbering resources for trial use can facilitate
illegal robocalls, they provided no data to support their assertions.
Accordingly, we refer this issue to the NANC for further study. We
expect that this, and our other referrals to the NANC concerning number
use, will give us a fuller picture regarding the customers' use of
numbering resources, and thereby aid our future consideration of
whether to impose a know-your-customer certification requirement.
Specifically, we direct the Bureau to request that the NANC examine and
report on: the practice of direct access authorization holders
supplying telephone numbers to customers on a trial basis; the use of
such ``trial basis'' numbers to engage in illegal robocalling,
spoofing, or fraud; the effect on authorization holders in the event of
a Commission prohibition on providing numbers on a trial basis; and the
effect of supplying telephone numbers to customers on a trial basis on
numbering resource exhaust.
70. Number reclamation. In the VoIP Direct Access FNPRM, 86 FR
51081 (Sept. 14, 2021), we sought comment on whether we should require
an interconnected VoIP provider that has had its direct access
authorization revoked to return the numbers that it has already
obtained directly. Some commenters expressed concern that reclaiming
numbers when direct access authority is revoked could have potential
negative impacts on consumers, and that we should have proper
procedures in place to mitigate these impacts. In light of the paucity
of data submitted in the record, and in order to ensure that number
reclamation as a consequence of a revocation of direct access
authorization will not have a negative impact on consumers, we direct
the NANC to study the benefits, risks, and solutions regarding
reclamation of numbers when a direct access authorization is revoked,
and the impact to consumers and end-users. Specifically, we direct the
Bureau to request that the NANC examine and report on: the potential
impact on consumers, end-users, and providers of number reclamation as
a consequence of direct access authorization revocation; how providers
or the Commission could mitigate any identifiable negative impacts for
consumers and end-users; and how to accomplish returning reclaimed
numbers to providers with reinstated direct access authorization. In
its analysis, the NANC should additionally describe how interconnected
VoIP providers use numbering databases in providing service, and how a
restriction on accessing such databases would impact consumers, end-
users, and providers.

Cost-Benefit Analysis

71. The rule clarifications and formalizations adopted in the
Second Report and Order generally reflect a mandate from the TRACED
Act. We conclude that the expected benefits will exceed the costs,
which are minimal. The Commission found in the Caller ID Authentication
First Report and Order, 85 FR 22029 (April 21, 2020), that widespread
deployment of the STIR/SHAKEN framework will increase its effectiveness
for both voice service providers and their subscribers, producing a
potential annual benefit floor of $13.5 billion due to the reduction in
nuisance calls and fraud. In addition, the Commission identified many
non-quantifiable benefits, such as restoring confidence in incoming
calls and ensuring reliable access to emergency and healthcare
communications. The rules we adopt in the Second Report and Order are
intended, consistent with the TRACED Act, to help unlock those
benefits. As the Commission has noted, an overall reduction in illegal
robocalls will greatly lower network costs by eliminating both the
unwanted traffic and the labor costs of handling numerous customer
complaints. The certifications and disclosures we adopt place minimal
burdens on interconnected VoIP providers, and our formalization of the
direct access application review process will ensure efficient use of
staff time, imposing appropriately small costs on Commission staff. We
therefore conclude that the rules we adopt in the Second Report and
Order will impose only a minimal cost on direct access applicants while
having the overall effect of materially lowering network costs and
raising consumer benefits.

Legal Authority

72. The VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021),
proposed concluding that our authority for adopting the new or revised
direct access to numbers application requirements for interconnected
VoIP providers arises from section 251(e) of the Act and section 6(a)
of the TRACED Act. No commenter opposed these proposals regarding the
basis for our legal authority to adopt the requirements described in
the Second Report and Order. We conclude that section 251(e) of the Act
provides sufficient authority for the requirements adopted in this
Report and Order and that section 6(a) of the TRACED Act provides both
supplemental and independent authority for those requirements
specifically related to fighting illegal robocalls.
73. Section 251(e)(1) of the Act grants the Commission ``exclusive
jurisdiction over those portions of the North American Numbering Plan
that pertain to the United States.'' Based on this grant, in the VoIP
Direct Access Order, 80 FR 66454 (Oct. 29, 2015), the Commission
concluded that section 251(e)(1) provided it with authority ``to extend
to interconnected VoIP providers both the rights and obligations
associated with using telephone numbers.'' The Commission also has
relied on section 251(e)(1) to require interconnected and one-way VoIP
providers to implement the STIR/SHAKEN caller ID authentication
framework and allow customers to reach the National Suicide Prevention
Lifeline by dialing 988. Consistent with the Commission's well-
established reliance on section 251(e) numbering authority with respect
to interconnected VoIP providers, we conclude that section 251(e)(1)
allows us to further refine our processes and requirements governing

[[Page 80632]]

direct access to numbers by interconnected VoIP providers.
74. We further conclude that section 6(a) of the TRACED Act
provides us with separate, additional authority to adopt our proposals
related to fighting illegal robocalls. Section 6(a)(1) gives the
Commission authority ``to determine how Commission policies regarding
access to number resources, including number resources for toll free
and non-toll free telephone numbers, could be modified, including by
establishing registration and compliance obligations,'' and to ``take
sufficient steps to know the identity of the customers of such
providers [of voice services], to help reduce access to numbers by
potential perpetrators of violations of section 227(b) of the
Communications Act of 1934 (47 U.S.C. 227(b)).''
75. The Commission commenced the required proceeding pursuant to
the TRACED Act in March 2020, and expanded on those inquiries in the
VoIP Direct Access FNPRM, 86 FR 51081 (Sept. 14, 2021). Section 6(a)(2)
of the TRACED Act states that ``[i]f the Commission determines under
paragraph (1) that modifying the policies described in that paragraph
could help achieve the goal described in that paragraph, the Commission
shall prescribe regulations to implement those policy modifications.''
We conclude that section 6(a) of the TRACED Act, in directing us to
prescribe regulations implementing policy changes to reduce access to
numbers by potential perpetrators of illegal robocalls, provides an
independent basis to adopt certain of the rule changes we are making to
the direct access process with respect to fighting unlawful robocalls.

Procedural Matters

76. Regulatory Flexibility Act. The Regulatory Flexibility Act of
1980, as amended (RFA), requires that an agency prepare a regulatory
flexibility analysis for notice and comment rulemakings, unless the
agency certifies that ``the rule will not, if promulgated, have a
significant economic impact on a substantial number of small
entities.'' Accordingly, we have prepared a Final Regulatory
Flexibility Analysis (FRFA) concerning the possible impact of the rule
changes contained in the Second Report and Order on small entities.
77. Paperwork Reduction Act. This document may contain new or
modified information collection requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. Specifically, the rules
adopted in 47 CFR 52.15(g)(3)(ii)(B) through (F), (I), (K), (L), and
(N) and (g)(3)(x)(A) may require new or modified information
collections. All such new or modified information collection
requirements will be 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 will be invited to comment on the
new or 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. In this document, we
describe several steps we have taken to minimize the information
collection burdens on small entities.
78. Contact Person. For further information about this proceeding,
please contact Mason Shefa, FCC Wireline Competition Bureau,
Competition Policy Division, at (202) 418-2494, or <a href="/cdn-cgi/l/email-protection#4f222e3c2021613c272a292e0f292c2c61282039">[email&#160;protected]</a>.

Ordering Clauses

79. Accordingly, it is ordered that pursuant to sections 1, 3, 4,
201 through 205, 227b-1, 251, and 303(r) of the Communications Act of
1934, as amended, 47 U.S.C. 151, 153, 154, 201 through 205, 227b-1,
251, 303(r), and section 6(a) of the TRACED Act, Public Law 116-105,
6(a)(1) through (2), 133 Stat. 3274, 3277 (2019), the Second Report and
Order hereby is adopted and part 52 of the Commission's Rules, 47 CFR
part 52, is amended. The Second Report and Order shall become effective
30 days after publication in the Federal Register, except for 47 CFR
52.15(g)(3)(ii)(B) through (F), (I), (K), (L), and (N) and
(g)(3)(x)(A), which shall become effective upon an announcement in the
Federal Register of OMB review and an effective date of those rules.
80. It is further ordered that the Commission's Office of the
Secretary, Reference Information Center, shall send a copy of the
Second Report and Order, including the Final Regulatory Flexibility
Analysis and Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
81. it is further ordered that the Office of the Managing Director,
Performance Evaluation and Records Management, shall send a copy of the
Second Report and Order 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).

Final Regulatory Flexibility Analysis

Need for, and Objectives of, the Second Report and Order

82. The Second Report and Order takes important steps aimed at
stemming the tide of illegal robocalls perpetrated by interconnected
VoIP providers and protecting the Nation's numbering resources from
abuse by foreign bad actors by strategically updating the Commission's
rules regarding how such providers obtain nationwide authorization for
direct access to our Nation's limited numbering resources.
83. First, the Second Report and Order requires applicants to make
robocall-related certifications to ensure compliance with the
Commission's rules targeting illegal robocalls. Second, to mitigate the
risk of providing bad actors abroad with access to our numbering
resources, it requires applicants to disclose and keep current
information about their ownership. Third, it requires applicants to
certify to their compliance with other Commission rules applicable to
interconnected VoIP providers. Fourth, it requires providers requesting
numbers from a state's numbering administrator to comply with the
state's laws and registration requirements that are applicable to
businesses requesting numbers in that state. Fifth, it requires
applicants to include a signed declaration that their applications are
true and accurate. Sixth, and finally, it formalizes the Bureau's
application review, application rejection, and authorization revocation
processes.

Summary of Significant Issues Raised by Public Comments in Response to
the Initial Regulatory Flexibility Analysis (IRFA)

84. There were no comments raised that specifically addressed the
proposed rules and policies presented in the IRFA. Nonetheless, the
Commission considered the potential impact of the rules proposed in the
IRFA on small entities and took steps where appropriate and feasible to
reduce the compliance burden for small entities in order to reduce the
economic impact of the rules enacted herein on such entities.

Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration

85. Pursuant to the Small Business Jobs Act of 2010, which amended
the RFA, the Commission is required to

[[Page 80633]]

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.

Description and Estimate of the Number of Small Entities to Which the
Rules Will Apply

86. 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 rules adopted herein. 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.
87. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. Our actions, over time, may affect small entities that
are not easily categorized at present. We therefore describe, at the
outset, three broad groups of small entities that could be directly
affected herein. First, while there are industry specific size
standards for small businesses that are used in the regulatory
flexibility analysis, according to data from the SBA's Office of
Advocacy, in general a small business is an independent business having
fewer than 500 employees. These types of small businesses represent
99.9% of all businesses in the United States, which translates to 32.5
million businesses.
88. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. Nationwide, for tax year 2020, there were
approximately 447,689 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
89. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2017 Census of Governments indicate there were
90,075 local governmental jurisdictions consisting of general purpose
governments and special purpose governments in the United States. Of
this number there were 36,931 general purpose governments (county,
municipal and town or township) with populations of less than 50,000
and 12,040 special purpose governments--independent school district
with enrollment populations of less than 50,000. Accordingly, based on
the 2017 U.S. Census of Governments data, we estimate that at least
48,971 entities fall into the category of ``small governmental
jurisdictions.''
90. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired communications networks. Transmission
facilities may be based on a single technology or a combination of
technologies. Establishments in this industry use the wired
telecommunications network facilities that they operate to provide a
variety of services, such as wired telephony services, including VoIP
services, wired (cable) audio and video programming distribution, and
wired broadband internet services. By exception, establishments
providing satellite television distribution services using facilities
and infrastructure that they operate are included in this industry.
Wired Telecommunications Carriers are also referred to as wireline
carriers or fixed local service providers. Fixed Local Service
Providers include the following types of providers: Incumbent Local
Exchange Carriers (ILECs), Competitive Access Providers (CAPs) and
Competitive Local Exchange Carriers (CLECs), Cable/Coax CLECs,
Interconnected VoIP Providers, Non-Interconnected VoIP Providers,
Shared-Tenant Service Providers, Audio Bridge Service Providers, and
Other Local Service Providers. Local Resellers fall into another U.S.
Census Bureau industry group and therefore data for these providers is
not included in this industry.
91. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 4,590 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,146
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
92. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. Providers of these services
include both incumbent and competitive local exchange service
providers. Wired Telecommunications Carriers is the closest industry
with an SBA small business size standard. Wired Telecommunications
Carriers are also referred to as wireline carriers or fixed local
service providers. Fixed Local Exchange Service Providers include the
following types of providers: ILECs, CAPs and CLECs, Cable/Coax CLECs,
Interconnected VoIP Providers, Non-Interconnected VoIP Providers,
Shared-Tenant Service Providers, Audio Bridge Service Providers, Local
Resellers, and Other Local Service Providers. The SBA small business
size standard for Wired Telecommunications Carriers classifies firms
having 1,500 or fewer employees as small. U.S. Census Bureau data for
2017 show that there were 3,054 firms that operated in this industry
for the entire year. Of this number, 2,964 firms operated with fewer
than 250 employees. Additionally, based on Commission data in the 2022
Universal Service Monitoring Report, as of December 31, 2021, there
were 4,590 providers that reported they were fixed local exchange
service providers. Of these providers, the Commission estimates that
4,146 providers have 1,500 or fewer employees. Consequently, using the
SBA's small business size standard, most of these providers can be
considered small entities.
93. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA have developed a small business size standard
specifically for incumbent local exchange carriers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small

[[Page 80634]]

business size standard for Wired Telecommunications Carriers classifies
firms having 1,500 or fewer employees as small. U.S. Census Bureau data
for 2017 show that there were 3,054 firms in this industry that
operated for the entire year. Of this number, 2,964 firms operated with
fewer than 250 employees. Additionally, based on Commission data in the
2022 Universal Service Monitoring Report, as of December 31, 2021,
there were 1,212 providers that reported they were incumbent local
exchange service providers. Of these providers, the Commission
estimates that 916 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, the
Commission estimates that the majority of incumbent local exchange
carriers can be considered small entities.
94. Competitive Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to local exchange services.
Providers of these services include several types of competitive local
exchange service providers. Competitive Local Exchange Service
Providers include the following types of providers: CAPs and CLECs,
Cable/Coax CLECs, Interconnected VoIP Providers, Non-Interconnected
VoIP Providers, Shared-Tenant Service Providers, Audio Bridge Service
Providers, Local Resellers, and Other Local Service Providers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 3,378 providers
that reported they were competitive local exchange service providers.
Of these providers, the Commission estimates that 3,230 providers have
1,500 or fewer employees. Consequently, using the SBA's small business
size standard, most of these providers can be considered small
entities.
95. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically for
Interexchange Carriers. Wired Telecommunications Carriers is the
closest industry with an SBA small business size standard. The SBA
small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees. Additionally, based on Commission data
in the 2022 Universal Service Monitoring Report, as of December 31,
2021, there were 127 providers that reported they were engaged in the
provision of interexchange services. Of these providers, the Commission
estimates that 109 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, the
Commission estimates that the majority of providers in this industry
can be considered small entities.
96. Wireless Telecommunications Carriers (except Satellite). This
industry comprises establishments engaged in operating and maintaining
switching and transmission facilities to provide communications via the
airwaves. Establishments in this industry have spectrum licenses and
provide services using that spectrum, such as cellular services, paging
services, wireless internet access, and wireless video services. The
SBA size standard for this industry classifies a business as small if
it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show
that there were 2,893 firms in this industry that operated for the
entire year. Of that number, 2,837 firms employed fewer than 250
employees. Additionally, based on Commission data in the 2022 Universal
Service Monitoring Report, as of December 31, 2021, there were 594
providers that reported they were engaged in the provision of wireless
services. Of these providers, the Commission estimates that 511
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
97. Local Resellers. Neither the Commission nor the SBA have
developed a small business size standard specifically for Local
Resellers. Telecommunications Resellers is the closest industry with a
SBA small business size standard. The Telecommunications Resellers
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. Mobile virtual network operators (MVNOs)
are included in this industry. The SBA small business size standard for
Telecommunications Resellers classifies a business as small if it has
1,500 or fewer employees. U.S. Census Bureau data for 2017 show that
1,386 firms in this industry provided resale services for the entire
year. Of that number, 1,375 firms operated with fewer than 250
employees. Additionally, based on Commission data in the 2022 Universal
Service Monitoring Report, as of December 31, 2021, there were 207
providers that reported they were engaged in the provision of local
resale services. Of these providers, the Commission estimates that 202
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
98. Toll Resellers. Neither the Commission nor the SBA have
developed a small business size standard specifically for Toll
Resellers. Telecommunications Resellers is the closest industry with an
SBA small business size standard. The Telecommunications Resellers
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. MVNOs are included in this industry. The
SBA small business size standard for Telecommunications Resellers
classifies a business as small if it has 1,500 or fewer employees. U.S.
Census Bureau data for 2017 show that 1,386 firms in this industry
provided resale services for the entire year. Of that number, 1,375
firms operated with fewer than 250 employees. Additionally, based on
Commission data in the 2022 Universal Service Monitoring Report, as of
December 31, 2021, there were 457 providers that reported they were
engaged in the provision of toll services. Of these providers, the
Commission estimates that 438 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
99. All Other Telecommunications. This industry is comprised of
establishments primarily engaged in providing specialized

[[Page 80635]]

telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems. Providers of
internet services (e.g., dial-up ISPs) or voice over internet protocol
(VoIP) services, via client-supplied telecommunications connections are
also included in this industry. The SBA small business size standard
for this industry classifies firms with annual receipts of $35 million
or less as small. U.S. Census Bureau data for 2017 show that there were
1,079 firms in this industry that operated for the entire year. Of
those firms, 1,039 had revenue of less than $25 million. Based on this
data, the Commission estimates that the majority of ``All Other
Telecommunications'' firms can be considered small.

Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements for Small Entities

100. In the Second Report and Order, we adopt new certifications
and disclosures in our direct access application process for all
interconnected VoIP provider applicants. Upon the effective date of
these rules, we require explicit acknowledgment of compliance with all
robocall regulations; implement disclosure and update requirements
regarding ownership and control; require certification of compliance
with other applicable Commission regulations and certain state law; and
add a declaration requirement to hold applicants accountable for the
truthfulness and accuracy of their direct access applications.
101. Specifically, we require a direct access applicant to certify
that it will use numbering resources lawfully and will not knowingly
encourage, assist, or facilitate illegal robocalls, illegal spoofing,
or fraud. If the applicant has a foreign owner whose interest exceeds
the reporting threshold set forth in Sec. 63.18(h) of our rules, those
applications will be placed on a ``non-streamlined'' processing track.
We require applicants for a Commission direct access authorization to
disclose information, including the name, address, country of
citizenship, and principal business of every person or entity that
directly or indirectly owns at least ten percent of the equity and/or
voting interest, or a controlling interest, of the applicant, and the
percentage of equity and/or voting interest owned by each of those
entities to the nearest one percent, consistent with the requirements
of international section 214 applicants. Also consistent with section
214, we require an applicant to certify whether it is, or is affiliated
with, a foreign carrier, and cross-reference with Sec. 63.18(i) for
consistency. A chart or narrative describing the applicant's corporate
structure is also required for interconnected VoIP applicants.
102. To ensure ownership information remains up to date, the Second
Report and Order revises Sec. 52.15(g)(3) to require interconnected
VoIP providers that obtain direct access authorization under the
revised rules to submit an update to the Commission and each applicable
state within 30 days of any change to the ownership information
disclosed in their direct access applications. Authorization holders
are also required to submit updated or corrected ownership information
to the states for which they have acquired or requested numbers at the
time of the ownership change and in the same manner the providers would
submit a correction or update to their original applications. We also
revise Sec. 52.15(g)(3) to require applicants to certify their
compliance with the Communications Assistance with Law Enforcement Act
(CALEA), and provide evidence in their applications that demonstrates
their compliance with both CALEA and the Commission's part 9 public
safety rules. A new certification cross-references new access arbitrage
rules, thus revising Sec. 52.15(g)(3) to require interconnected VoIP
providers applying for direct access to numbers to certify that they
will not use numbering resources to evade our access stimulation rules.
Interconnected VoIP providers that must file FCC Forms 477 and 499 will
now provide evidence that they have complied with these obligations,
and any successor filing obligations, when filing a direct access
application.
103. The Second Report and Order further revises Sec. 52.15(g)(3)
of our rules to require an officer or authorized employee
representative of the applicant to submit a declaration under penalty
of perjury, pursuant to Sec. 1.16 of the rules, attesting that all
statements in the application and any appendices are true and accurate.
All updated or corrected ownership information shall be filed though
existing methods such as the Electronic Comment Filing System (ECFS)
through the Direct Access intake docket (Inbox 52.15) and via email to
<a href="/cdn-cgi/l/email-protection#b9fdf8f8f9dfdada97ded6cf">[email&#160;protected]</a>, unless the Bureau specifies another method. The Bureau may
request additional documentation as necessary, during and after its
initial review of a direct access application.
104. After reviewing the record, we received no concerns about
unique burdens from small businesses that would be impacted by the new
certifications adopted in the Second Report and Order. As such, the
Commission does not have sufficient information on the record to
determine whether small entities will be required to hire professionals
to comply with its decisions or to quantify the cost of compliance for
small entities. The Commission, however, anticipates the approaches it
has taken to implement the requirements will have minimal or de minimis
cost implications because many of these obligations are required to
comply with existing Commission regulations.

Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered

105. The RFA requires an agency to provide ``a description of the
steps the agency has taken to minimize the significant economic impact
on small entities . . . including a statement of the factual, policy,
and legal reasons for selecting the alternative adopted in the final
rule and why each one of the other significant alternatives to the rule
considered by the agency which affect the impact on small entities was
rejected.''
106. The Second Report and Order considered alternatives that may
reduce the impact of these rule changes on small entities. Some
proposals were not adopted because the requirements already exist under
other parts of the Commission's rules. New obligations regarding STIR/
SHAKEN caller ID authentication or robocall mitigation specifically for
interconnected VoIP providers were not adopted; instead applicants are
required to certify compliance with preexisting rule sections. This
reduces confusion and maintains accuracy should the Commission decide
to revise the robocall-related dockets. We declined to adopt our
proposal to require direct access authorization holders to certify on
their applications, or inform the Commission if the authorization
holder is subject to a Commission or other regulator or law enforcement
investigation due to its robocall mitigation plan being deemed
insufficient, or due to suspected unlawful robocalling or spoofing,
because authorization holders are already required to do so under the
Commission's rules.

[[Page 80636]]

107. There was not strong record support for certain proposals that
require action of the Office of International Affairs (OIA) or the
Bureau, so we declined to adopt those finding that it is more efficient
to rely on current practices to address these concerns. These include
automatic referral of interconnected VoIP providers' direct access
applications to the Executive Branch agencies when an applicant has
reportable foreign ownership, and developing a list of ``Standard
Questions'' for interconnected VoIP applicants with reportable foreign
ownership. We also declined to adopt rules to specify the documents
that will be allowed to satisfy the ``facilities readiness''
requirement in the Commission's current rules. Comments on the issue
were divided and we conclude that existing examples of technical
documentation are sufficient. Further, after considering the record, we
declined to adopt a know-your-customer certification proposal at this
time.
108. As discussed above, the new certification requirements in the
Second Report and Order are minimally burdensome, as they merely
require providers to certify that they are compliant with preexisting
Commission rules. Our public safety and CALEA documentation submission
requirement merely formalizes existing Bureau practice of requesting
such information from direct access applicants. Our new ownership
disclosure requirement tracks requirements already imposed on providers
in the section 214 context. For these reasons, we believe that small
and other interconnected VoIP providers will not have an issue
including these new certifications and disclosures in their direct
access authorization applications.

Report to Congress

109. The Commission will send a copy of the Second Report and
Order, including the 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 Second Report and Order, including the FRFA, to the Chief
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 52

Communications common carriers, Telecommunications, Telephone.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 52 as follows:

PART 52--NUMBERING

0
1. The authority citation for part 52 continues to read as follows:

Authority: 47 U.S.C. 151, 152, 153, 154, 155, 201-205, 207-209,
218, 225-227, 251-252, 271, 303, 332, unless otherwise noted.

0
2. Amend Sec. 52.15 by revising and republishing paragraph (g)(3) to
read as follows:

Sec. 52.15 Central office code administration.

* * * * *
(g) * * *
(3) Commission authorization process. A provider of interconnected
VoIP service may show a Commission authorization obtained pursuant to
this paragraph (g)(3) as evidence that it is authorized to provide
service under paragraph (g)(2) of this section.
(i) Definition. The term foreign carrier found in this section is
given the same meaning as in Sec. 63.09(d) of this chapter.
(ii) Contents of the application for interconnected VoIP provider
numbering authorization. An application for authorization must
reference this section and must contain the following:
(A) The applicant's name, address, and telephone number and contact
information for personnel qualified to address issues relating to
regulatory requirements, compliance with Commission's rules in this
chapter, 911, and law enforcement;
(B) An acknowledgment that the authorization granted under this
paragraph (g)(3) is subject to compliance with applicable Commission
numbering rules in this part; numbering authority delegated to the
states; and industry guidelines and practices regarding numbering as
applicable to telecommunications carriers;
(C)-(F) [Reserved]
(G) An acknowledgment that the applicant must file requests for
numbers with the relevant state commission(s) at least 30 days before
requesting numbers from the Numbering Administrators;
(H) Proof that the applicant is or will be capable of providing
service within sixty (60) days of the numbering resources activation
date in accordance with paragraph (g)(2) of this section;
(I) [Reserved]
(J) A certification that the applicant complies with its applicable
Universal Service Fund contribution obligations under part 54, subpart
H, of this chapter, its Telecommunications Relay Service contribution
obligations under Sec. 64.604(c)(5)(iii) of this chapter, its NANP and
local number portability (LNP) administration contribution obligations
under Sec. Sec. 52.17 and 52.32 of this chapter, and its obligations
to pay regulatory fees under Sec. 1.1154 of this chapter;
(K) A certification that the applicant possesses the financial,
managerial, and technical expertise to provide reliable service. This
certification must include the name of applicant's key management and
technical personnel, such as the Chief Operating Officer and the Chief
Technology Officer, or equivalent, and state that none of the
identified personnel are being or have been investigated by the
Commission or any law enforcement or regulatory agency for failure to
comply with any law, rule, or order; and
(L) [Reserved]
(M) A certification pursuant to Sec. Sec. 1.2001 and 1.2002 of
this chapter that no party to the application is subject to a denial of
Federal benefits pursuant to section 5301 of the Anti-Drug Abuse Act of
1988, see 21 U.S.C. 862.
(N) [Reserved]
(iii) Filing procedure. An applicant for Commission authorization
under this section must file its application electronically through the
``Submit a Non-Docketed Filing'' module of the Commission's Electronic
Comment Filing System (ECFS). Each application shall be accompanied by
the fee prescribed in part 1, subpart G, of this chapter.
(iv) Public notice and review period for streamlined pleading
cycle. Upon determination by the Wireline Competition Bureau (Bureau)
that the applicant has filed a complete application that is appropriate
for streamlined treatment, the Bureau will assign a docket number to
the application and issue a public notice stating that the application
has been accepted for filing as a streamlined application. The
applicant must make all subsequent filings relating to its application
in this docket. Parties may file comments addressing an application for
authorization no later than 15 days after the Bureau releases a public
notice stating that the application has been accepted for filing,
unless the public notice specifies a different filing date. An
application under this section is deemed granted by the Commission on
the 31st day after the Commission releases a public notice stating that
the application has been accepted for filing, unless the Bureau
notifies the applicant

[[Page 80637]]

that the grant will not be automatically effective.
(v) Non-streamlined processing of applications. If an application
discloses that the applicant has reportable ownership by a foreign
person or entity, the Bureau shall remove the application from
streamlined processing. The Bureau may also remove an application from
streamlined processing at its discretion for other reasons. The Bureau
shall notify the applicant by public notice that it is removing the
application from streamlined processing, and shall state the reason for
the removal. An application may also receive non-streamlined processing
if:
(A) An applicant fails to respond promptly to Commission inquiries;
(B) An application is associated with a non-routine request for
waiver of the Commission's rules in this chapter;
(C) An application would, on its face, violate a Commission rule in
this chapter or the Communications Act;
(D) Timely filed comments on the application raise public interest
concerns that require further Commission review; or
(E) The Bureau determines that the application requires further
analysis to determine whether granting the application serves the
public interest.
(vi) Additional information. Applicants must provide additional
information requested by the Bureau during and after its initial review
of a direct access application. Failure to respond to such a request or
other official correspondence may result in the rejection of the
application without prejudice. Any additional information that the
Bureau may require must be submitted in the same manner as the original
application filing, unless the Bureau specifies another method.
(vii) Rejection of applications. The Bureau may reject an
application by announcing the rejection, the reasons for the rejection,
and whether the rejection is with or without prejudice via public
notice if it determines or has a reasonable basis to believe that:
(A) The applicant cannot satisfy the qualification requirements for
a Commission authorization under this paragraph (g)(3);
(B) The applicant has made a false statement or certification to
the Commission;
(C) The applicant has engaged in behavior contrary to the public
interest; or
(D) Granting the application would not serve the public interest.
(viii) Authorization suspension. The Wireline Competition Bureau or
Enforcement Bureau may suspend a direct access authorization holder's
access to new numbering resources under 5 U.S.C. 558(c):
(A) After either Bureau determines that the authorization holder
acted willfully; or public health, interest, or safety requires an
immediate suspension; or
(B) After giving the authorization holder notice and an opportunity
to demonstrate compliance with the Commission's rules in this chapter.
(ix) Authorization revocation. The Wireline Competition Bureau or
Enforcement Bureau shall determine appropriate procedures and initiate
revocation and/or termination proceedings and revoke and/or terminate
an authorization, as required by due process and applicable law and in
light of the relevant facts and circumstances, including providing the
authorization holder with notice and opportunity to respond. Either
Bureau may commence such revocation and/or termination proceedings if:
(A) The authorization holder has failed to comply with the
Commission's numbering rules in this part.
(B) The authorization holder no longer meets the requirements for a
Commission authorization under this paragraph (g)(3);
(C) The authorization holder, or officer or authorized
representative of the authorization holder, has made a false statement
or certification to the Commission; or
(D) Revoking and/or terminating the authorization is in the public
interest.
(x) Conditions applicable to all interconnected VoIP provider
numbering authorizations. An interconnected VoIP provider authorized to
request numbering resources directly from the Numbering Administrators
under this section shall:
(A) Maintain the accuracy of all contact information and
certifications in its application. If any contact information or
certification is no longer accurate, the provider must file a
correction with the Commission and each applicable state within thirty
(30) days of the change of contact information or certification. The
Commission may use the updated information or certification to
determine whether a change in authorization status is warranted;
(B) Comply with the applicable Commission numbering rules in this
part; numbering authority delegated to the states; and industry
guidelines and practices regarding numbering as applicable to
telecommunications carriers;
(C) File requests for numbers with the relevant state commission(s)
at least thirty (30) days before requesting numbers from the Numbering
Administrators; and
(D) Provide accurate regulatory and numbering contact information
to each state commission when requesting numbers in that state.
* * * * *

0
3. Delayed indefinitely, further amend Sec. 52.15 by:
0
a. Revising paragraph (g)(3)(ii)(B);
0
b. Adding paragraphs (g)(3)(ii)(C) through (F) and (I);
0
c. Revising paragraph (g)(3)(ii)(K);
0
d. Adding paragraph (g)(3)(ii)(L);
0
e. Removing the period at the end of paragraph (g)(3)(ii)(M) and adding
``; and'' in its place;
0
f. Adding paragraph (g)(3)(ii)(N); and
0
g. Revising paragraphs (g)(3)(iv) and (g)(3)(x)(A).
The additions and revisions read as follows:

Sec. 52.15 Central office code administration.

* * * * *
(g) * * *
(3) * * *
(ii) * * *
(B) An acknowledgment that the authorization granted under this
paragraph (g)(3) is subject to compliance with applicable Commission
numbering rules in this part; numbering authority delegated to the
states, and the state laws, regulations, and registration requirements
applicable to businesses operating in each state where the applicant
seeks numbering resources; and industry guidelines and practices
regarding numbering as applicable to telecommunications carriers;
(C) A certification that the applicant will not use the numbers
obtained pursuant to an authorization under this paragraph (g)(3) to
knowingly transmit, encourage, assist, or facilitate illegal robocalls,
illegal spoofing, or fraud, in violation of robocall, spoofing, and
deceptive telemarketing obligations under Sec. Sec. 64.1200, 64.1604,
and 64.6300 through 64.6308 of this chapter and 16 CFR 310.3(b);
(D) A certification that the applicant has fully complied with all
applicable STIR/SHAKEN caller ID authentication and robocall mitigation
program requirements and filed a certification in the Robocall
Mitigation Database as required by Sec. Sec. 64.6301 through 64.6305
of this chapter;
(E) A certification with accompanying evidence that the applicant
complies with its 911 obligations under part 9 of this chapter, and
that it complies with the provisions of the Communications Assistance
with Law Enforcement Act, 47 U.S.C. 1001 et seq. Wireline Competition
Bureau (Bureau) or other

[[Page 80638]]

Commission staff may request additional documentation from the
applicant to demonstrate compliance with these public safety
obligations, where necessary;
(F) A certification that the applicant complies with the Access
Stimulation rules under Sec. 51.914 of this chapter;
* * * * *
(I) Proof that the applicant has filed FCC Forms 477 and 499, or a
statement explaining why each such form is not yet applicable;
* * * * *
(K) A certification that the applicant possesses the financial,
managerial, and technical expertise to provide reliable service. This
certification must include the name of applicant's key management and
technical personnel, such as the Chief Operating Officer and the Chief
Technology Officer, or equivalent, and state that neither the applicant
nor any of the identified personnel are being or have been investigated
by the Commission, law enforcement, or any regulatory agency for
failure to comply with any law, rule, or order, including the
Commission's rules in this chapter applicable to unlawful robocalls or
unlawful spoofing;
(L) The same information, disclosures, and certifications required
by Sec. 63.18(h) and (i) of this chapter;
* * * * *
(N) A declaration under penalty of perjury pursuant to Sec. 1.16
of this chapter that all statements in the application and any
appendices are true and accurate. This declaration shall be executed by
an officer or other authorized representative of the applicant.
* * * * *
(iv) Public notice and review period for streamlined pleading
cycle. Upon determination by the Bureau that the applicant has filed a
complete application that is appropriate for streamlined treatment, the
Bureau will assign a docket number to the application and issue a
public notice stating that the application has been accepted for filing
as a streamlined application. The applicant must make all subsequent
filings relating to its application in this docket. Parties may file
comments addressing an application for authorization no later than 15
days after the Bureau releases a public notice stating that the
application has been accepted for filing, unless the public notice
specifies a different filing date. An application under this section is
deemed granted by the Commission on the 31st day after the Commission
releases a public notice stating that the application has been accepted
for filing, unless the Bureau notifies the applicant that the grant
will not be automatically effective.
* * * * *
(x) * * *
(A) Maintain the accuracy of all contact information,
certifications, and ownership or affiliation information in its
application. If any contact information, certification, or affiliation
information submitted in an application pursuant to this section, is no
longer accurate, the provider must file a correction with the
Commission and each applicable state within thirty (30) days of the
change of contact information, certification, or affiliation
information. Regarding ownership information, if the holders of equity
and/or voting interests in the provider change such that a provider
that previously did not have reportable ownership or control
information under paragraph (g)(3)(ii)(L) of this section now has
reportable ownership or control information, or there is a change to
the reportable ownership or control information the provider previously
reported under paragraph (g)(3)(ii)(L), the provider must file a
correction with the Commission and each applicable state within thirty
(30) days of the change to its ownership or control information. The
Commission may use the updated contact information, certifications, or
ownership or affiliation information to determine whether a change in
authorization status is warranted;
* * * * *
[FR Doc. 2023-24679 Filed 11-17-23; 8:45 am]
BILLING CODE 6712-01-P

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