Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Doc., 04-295, FCC 06-56 (71 FR 38091)

Federal Register / Vol. 71, No. 128 / Wednesday, July 5, 2006 / Rules and Regulations
Dated: June 22, 2006.
J.J. Plunkett,
Commander, U.S. Coast Guard, Captain of
the Port, Long Island Sound, Acting.
[FR Doc. E6–10472 Filed 7–3–06; 8:45 am]
BILLING CODE 4910–15–P

FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 1, 22, 24, and 64
[ET Docket No. 04–295; RM–10865; FCC 06–
56]

Communications Assistance for Law
Enforcement Act and Broadband
Access and Services
Federal Communications
Commission.
ACTION: Final rule.

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AGENCY:

SUMMARY: This document addresses the
assistance capabilities required,
pursuant to section 103 of the
Communications Assistance for Law
Enforcement Act (CALEA) for facilitiesbased broadband Internet access
providers and providers of
interconnected Voice over Internet
Protocol (VoIP). More generally, the
Second Report and Order and
Memorandum Opinion and Order
(Second R&O and MO&O) specifies
mechanisms to ensure that
telecommunications carriers comply
with CALEA. The MO&O denies in part
and grants in part a petition for
reconsideration and clarification filed
by the United States Telecom
Association (USTelecom) relating to the
compliance date for broadband Internet
access providers and providers of
interconnected VoIP.
DATES: Effective August 4, 2006, except
for §§ 1.20004 and 1.20005, which
contain information collection
requirements that have not been
approved by the Office of Management
and Budget. The Federal
Communications Commission will
publish a document in the Federal
Register announcing the effective date
of these sections.
FOR FURTHER INFORMATION CONTACT:
Rodney Small, Office of Engineering
and Technology, (202) 418–2452, email: [email protected].
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Second
Report and Order and Memorandum
Opinion and Order, ET Docket No. 04–
295, FCC 06–56, adopted May 3, 2006,
and released May 12, 2006. The full text
of this document is available for
inspection and copying during normal
business hours in the FCC Reference

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Center (Room CY–A257), 445 12th
Street, SW., Washington, DC 20554. The
full text of this document also may be
purchased from the Commission’s copy
contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street, SW., Room
CY–B402, Washington, DC 20554,
telephone (202) 488–5300; fax (202)
488–5563; e-mail at
[email protected].
Summary of the Second Report and
Order and Memorandum Opinion and
Order
Overview
1. Telecommunications industry
standard-setting bodies, working in
concert with law enforcement agencies
(LEAs) and other interested parties, are
developing technical requirements and
solutions for facilities-based broadband
Internet access providers and providers
of interconnected VoIP. We conclude
that, absent the filing of a deficiency
petition under CALEA section 107(b), it
would be premature for the FCC to
intervene in the standards development
process. Additionally, we permit all
carriers providing facilities-based
broadband Internet access and
interconnected VoIP services until May
14, 2007 to come into compliance with
CALEA. Further, we require that all
carriers providing facilities-based
broadband Internet access and
interconnected VoIP service to submit
interim reports to the Commission to
ensure that they will be CALEAcompliant by May 14, 2007. We also
require that all facilities-based
broadband Internet access and
interconnected VoIP providers to whom
CALEA obligations were extended in
the First Report and Order (First R&O)
in this proceeding come into
compliance with the system security
requirements in our rules within 90
days of the effective date of this Second
R&O.
2. More generally, we specify
mechanisms to ensure that
telecommunications carriers comply
with CALEA. Specifically, under the
express terms of the statute, all carriers
subject to CALEA are obliged to become
CALEA-compliant. We find that
sections 107(c) and 109(b) of CALEA
provide only limited and temporary
relief from compliance requirements,
and that they are complementary
provisions that serve different purposes,
which are, respectively: (1) Extension of
the CALEA section 103 compliance
deadline for equipment, facility, or
service deployed before October 25,
1998; and (2) recovery of CALEAimposed costs. We also conclude that,
in addition to the enforcement remedies

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through the courts available to LEAs
under CALEA section 108, we may take
separate enforcement action against
carriers that fail to comply with CALEA.
Moreover, we conclude that carriers are
generally responsible for CALEA
development and implementation costs
for post-January 1, 1995 equipment and
facilities.
Background
3. In March 2004, the Department of
Justice (DOJ), the Federal Bureau of
Investigation (FBI), and the Drug
Enforcement Administration (DEA)
(collectively, Law Enforcement) filed
with the Commission a petition for
expedited rulemaking, requesting that
we initiate a proceeding to resolve
various outstanding issues associated
with the implementation of CALEA. We
responded in August 2004 by issuing a
Notice of Proposed Rulemaking (NPRM)
(69 FR 56976, September 23, 2004) and
Declaratory Ruling in this proceeding.
The NPRM examined issues relating to
the scope of CALEA’s applicability to
packet-mode services, such as
broadband Internet access, and
implementation and enforcement issues.
4. In September 2005, the First R&O
(70 FR 59664, October 13, 2005)
concluded that CALEA applies to
facilities-based broadband Internet
access providers and providers of
interconnected VoIP service, and the
concurrent Further Notice of Proposed
Rulemaking (70 FR 59704, October 13,
2005) sought comment on whether
CALEA obligations should be extended
to providers of other types of VoIP
services and on whether something less
than full CALEA compliance should be
required of certain classes or categories
of facilities-based broadband Internet
access providers. The First R&O stated:
‘‘In the coming months, we will release
another order that will address separate
questions regarding the assistance
capabilities required of the providers
covered by today’s Order pursuant to
section 103 of CALEA. This subsequent
order will include other important
issues under CALEA, such as
compliance extensions and exemptions,
cost recovery, identification of future
services and entities subject to CALEA,
and enforcement.’’ The Second R&O
addresses these questions and issues
and specifies what telecommunications
providers must do to facilitate electronic
surveillance of their equipment,
facilities, and services by LEAs,
pursuant to court orders or other lawful
authorization.
5. In this Second R&O, we first
examine the obligations of facilitiesbased broadband Internet access and
interconnected VoIP providers to

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implement CALEA compliance
solutions under section 103 of the
statute, including solutions based on
either CALEA ‘‘safe harbor’’ standards
or the use of trusted third parties
(TTPs). We next examine the scope of
relief available to telecommunications
carriers pursuant to CALEA sections
107(c) and 109(b), issue new guidelines
to govern the filing and evaluation of
petitions associated with those rule
sections, and dispose of pending section
107(c) petitions. Third, we address
CALEA enforcement issues, both
generally and with specific regard to
facilities-based broadband Internet
access and interconnected VoIP
providers, including the filing of reports
by these providers to ensure their timely
compliance with the assistance
capability requirements of CALEA
section 103. Fourth, we examine CALEA
cost issues and specify cost recovery
mechanisms for wireline, wireless, and
other telecommunications carriers.
Fifth, we specify a date for facilitiesbased broadband Internet access and
interconnected VoIP providers to
comply with CALEA system security
requirements. Finally, we address the
CALEA compliance obligations of
providers of future telecommunications
services and technologies.
A. Requirements and Solutions
6. In this proceeding, we have
explored the complexity of the technical
issues regarding packet technologies to
ensure that broadband Internet access
and VoIP providers can comply with
CALEA and not compromise the ability
of LEAs to receive the information to
which they are entitled under the
statute. Specifically, as discussed in
detail, we probed the capabilities of
broadband Internet access and VoIP
providers to extract CII and provide it to
LEAs under CALEA, and inquired about
compliance solutions for these
providers based upon either CALEA
‘‘safe harbor’’ standards or the use of
TTPs. The record demonstrates that Law
Enforcement and industry have made
progress toward the goal of achieving
successful implementation of CALEA
with regard to the deployment of packet
technologies by broadband Internet
access and VoIP providers, but this is an
ongoing process. Although section
107(b) of CALEA allows the
Commission, upon petition, to establish
rules, technical requirements or
standards necessary for implementing
section 103 if any entity believes that
industry-created requirements or
standards are deficient, CALEA clearly
provides that LEAs and industry work
together in the first instance to
formulate CALEA compliance

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standards. Accordingly, we will
continue to monitor developments in
this area as Law Enforcement and
industry continue working together,
primarily through various standards
organizations, to develop long-term
solutions to these complex technical
issues. We also determine that all
carriers providing facilities-based
broadband Internet access and
interconnected VoIP services must be in
compliance with section 103 of CALEA
by May 14, 2007.
1. CALEA Obligations Under Section
103
7. Background. Section 103(a)(1) of
CALEA requires telecommunications
carriers to establish the capability of
providing to LEAs call content
information, pursuant to a court order or
other lawful authorization; and section
103(a)(2) of CALEA requires
telecommunications carriers to establish
the capability of providing to LEAs
reasonably available CII, pursuant to a
court order or other lawful
authorization. In the Second R&O, we
discuss a carrier’s obligations under
section 103 and compliance solutions as
they relate to broadband Internet access
and interconnected VoIP services.
8. CALEA defines CII as ‘‘dialing or
signaling information that identifies the
origin, direction, destination, or
termination of each communication
generated or received by a subscriber by
means of any equipment, facility, or
service of a telecommunications
carrier,’’ but CALEA does not define
‘‘origin,’’ ‘‘direction,’’ ‘‘destination,’’ or
‘‘termination.’’ The Commission has
adopted definitions of the component
terms (origin, direction, destination, and
termination) in the statutory definition
of CII in addressing petitions regarding
standards for circuit switched networks
in J–STD–025. However, as noted above,
packet technologies are substantially
different from the circuit switched
technologies that were the primary
focus of the Commission’s earlier
decisions on CALEA. Accordingly, in
the NPRM, we sought comment on
whether the Commission should clarify
the statutory term ‘‘call-identifying
information’’ for broadband Internet
access and VoIP services. We asked
commenters to provide specific
suggestions for these definitional issues.
9. We also invited comment as to how
the Commission should apply the term
‘‘reasonably available’’ to broadband
Internet access. We observed that the
Commission has previously determined
that information may not be
‘‘reasonably’’ available in circuit
switched networks if the information is
accessible only by significantly

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modifying a network, and further
observed that cost concerns are best
addressed as part of a section 107(c)
analysis. We tentatively concluded that
we should apply the same ‘‘reasonably’’
available criteria to broadband Internet
access and VoIP providers; i.e.,
information may not be reasonably
available to those providers if it is
accessible only by significantly
modifying their networks. However, we
recognized that, when looking at those
providers’ service architectures, it is not
always readily apparent where CII is
available. Accordingly we sought
comment on these related issues, such
as instances in which CII may be
reasonably available from either a
broadband Internet access provider or a
VoIP provider, but not from both. We
stated that, if the information is
reasonably available from both, we
would expect that both would have a
CALEA obligation with respect to that
information and would work
cooperatively with each other and with
the LEA to provide the LEA with all
required information.
10. Discussion. A number of parties
commented generally on the
Commission’s authority to intervene in
the development of CALEA technical
standards. Cingular notes that the U.S.
Court of Appeals for the District of
Columbia Circuit (D.C. Circuit) stated:
‘‘* * * Congress gave the
telecommunications industry the first
crack at developing standards,
authorizing the Commission to alter
those standards only if it found them
‘deficient.’ ’’ Cingular and many other
parties conclude that the Commission
must defer to the efforts of industry
standards bodies to formulate standards,
absent the filing of a petition under
section 107(b) with the Commission.
11. With regard to the availability of
CII in broadband access and VoIP
networks, commenters generally agree
that different information is available to
different service providers, and that
different parts of that information are
‘‘reasonably available’’ to different
service providers. However, several
parties identify situations in which,
they contend, a broadband Internet
access provider would not reasonably be
able to extract CII used by non-affiliated
VoIP providers. With regard to the
Commission’s tentative conclusion that
CII may be reasonably available to a
broadband access or VoIP provider as
long as that provider’s network does not
have to be significantly modified, some
parties argue that this standard is
inappropriate for Internet applications.
DOJ expresses particular concern about
the Commission using cost
considerations to decide what is

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‘‘reasonably available’’ because, DOJ
asserts, the Commission could
mistakenly excuse an entire class of
carriers from delivering a capability,
even though only one or two carriers
qualify for such relief based on nontechnical considerations. However,
industry commenters strongly disagree
with DOJ regarding the exclusion of cost
considerations from a ‘‘reasonably
available’’ inquiry.
12. We note the D.C. Circuit’s opinion
referenced by Cingular, as well as the
comments of both DOJ and the
telecommunications industry that
express concern about Commission
intervention in the continuing work by
Law Enforcement and industry to
develop CALEA technical standards for
broadband Internet access and VoIP
services. Addressing analogous
circumstances, the Court explained that
such intervention ‘‘would weaken the
major role Congress obviously expected
industry to play in formulating CALEA
standards.’’ In the course of developing
standards for CALEA compliance by
broadband Internet access and VoIP
providers, we expect that industry
standard-setting bodies, working in
concert with Law Enforcement and
other interested parties, will develop an
appropriate definition of ‘‘callidentifying information’’ in the context
of broadband Internet access and VoIP
networks as well as an appropriate
definition of what constitutes either
‘‘reasonable availability’’ of CII in such
networks or a ‘‘significant modification’’
of such networks. If this process proves
unsatisfactory, any interested party may
submit to the Commission a deficiency
petition under CALEA section 107(b).
We thus take no action on these issues
at this time.
13. The First R&O in this proceeding
established a CALEA compliance date of
May 14, 2007 for newly covered entities
and providers of newly covered
services. USTelecom asked that this
date be extended until 18 months from
the effective date of this Second R&O,
and also asked the Commission to
identify specifically all broadband
Internet access services subject to the
compliance date. To eliminate any
possible confusion, we conclude that
the public interest will be best served by
applying the May 14, 2007 compliance
date to all facilities-based broadband
Internet access and interconnected VoIP
services. We agree with USTelecom that
applying the compliance date uniformly
to these services is consistent with the
policy objectives identified in the First
R&O. We find that applying the same
compliance dates to all providers of
facilities-based broadband Internet
access and interconnected VoIP services

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will avoid any skewing effect on
competition and will prevent migration
of criminal activity onto networks with
delayed compliance dates.
14. One firm date establishes a clear
goal for all carriers, equipment
manufacturers, and law enforcement
that must cooperate in the process of
identifying, implementing and
deploying solutions. One firm date also
should encourage all interested parties
to move quickly to develop solutions
which, in turn, will benefit smaller
carriers who face greater challenges in
complying with CALEA in the absence
of standards and the availability of
compliant equipment in the
marketplace. Thus, we reject
suggestions for different compliance
deadlines for VoIP and broadband
Internet access services, or linking
compliance deadlines to certain events
or criteria, such as the development of
standards, a Commission decision that a
service provider is subject to CALEA, or
carrier size.
15. We also find that May 14, 2007 is
a reasonable time period for compliance
with the section 103 requirements. We
note, at the outset, that VoIP standards
for CALEA are nearing or are at
completion for various technologies.
Thus, manufacturers and carriers are in
a good position to implement and
deploy solutions for VoIP by that date,
even though we recognize that VoIP
providers who plan a nationwide
deployment will need to incorporate a
CALEA solution into numerous routers
or servers or negotiate arrangements
with numerous interconnecting carriers.
We similarly conclude that providers of
broadband Internet access services
should be able to comply with section
103 by May 14, 2007. Although
standards for newer broadband Internet
access technologies are yet to be
developed, especially regarding the
delivery of CII, we note that full content
surveillance has already been addressed
by standards groups for certain older
technologies and some carriers may be
able to rely on ‘‘passive’’ techniques
(e.g., using probes at certain points
throughout their network) to implement
surveillance. Other factors should
facilitate carrier compliance by that
date. For example, some solutions will
be software based, and thus carriers will
not necessarily have the burden of
deploying new equipment to come into
compliance. Further, facilities-based
broadband Internet access and VoIP
services interconnect with the public
Internet and public switched telephone
network (PSTN), respectively. Thus,
broadband access architectures and
protocols are compatible with standards
used for the Internet and VoIP

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architectures and protocols are
compatible with standards used for the
PSTN, providing a foundation upon
which CALEA solutions for broadband
access and VoIP services can be
developed.
2. Compliance Solutions Based on
CALEA ‘‘Safe Harbor’’ Standards
16. Background. In the NPRM, the
Commission invited comment on a
variety of industry standards for packetmode technologies to determine
whether any of these standards are
deficient and thus preclude carriers,
manufacturers, and others from relying
on them as ‘‘safe harbors’’ in complying
with section 103 of CALEA. We noted
that, over the past several years, various
organizations have been developing
standards for various types of packet
technologies that support a variety of
applications used in both wireline and
wireless networks. We stated that these
standards could serve, pursuant to
section 107(a) of CALEA, as safe harbors
for section 103 compliance by
telecommunications carriers. Section
107(a) is titled ‘‘Safe Harbor’’ and
subsection 107(a)(2) provides: ‘‘A
telecommunications carrier shall be
found to be in compliance with the
assistance capability requirements
under section 103, and a manufacturer
of telecommunications transmission or
switching equipment or a provider of
telecommunications support services
shall be found to be in compliance with
section 106, if the carrier, manufacturer,
or support service provider is in
compliance with publicly available
technical requirements or standards
adopted by an industry association or
standard-setting organization, or by the
Commission under subsection (b), to
meet the requirements of section 103.’’
We noted that the standards process is
ongoing in several different venues,
with some standards already having
undergone modification and new ones
under development, and that
compliance with a safe harbor standard
is not required by CALEA.
17. In the NPRM, we also noted Law
Enforcement’s assessment that packetmode standards that have been
published are deficient. We stated our
belief that underlying this assessment
are Law Enforcement’s assumptions that
the definition of CII can be clearly
applied to packet networks, that
information so identified is ‘‘reasonably
available’’ to the carrier, and that the
provision of the information to LEAs by
the carrier is ‘‘reasonably achievable.’’
We further noted that the
Telecommunication Industry
Association disagrees with Law
Enforcement’s assessment. We asked

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parties to comment on industry
standards for packet-mode technologies
in an attempt to determine whether any
of these standards are deficient and thus
preclude carriers, manufacturers, and
others from relying on them as safe
harbors in complying with section 103.
We made clear, however, that we did
not intend to inhibit the ongoing work
by standards organizations, carriers, and
manufacturers to develop and deploy
CALEA-compliant facilities and
services. We recognized that CALEA
provides that carriers and others may
rely on publicly available technical
requirements or standards adopted by
an industry association or standardsetting organization to meet the
requirements of section 103, unless the
Commission takes specific action in
response to a petition.
18. In the NPRM, therefore, we invited
comment as to whether there is any
need to define what constitutes publicly
available technical requirements or
standards adopted by an industry
association or standard-setting
organization, and sought comment
regarding the appropriateness of
available standards and specifications to
be used as safe harbors for packet-mode
technologies for purposes of CALEA.
We observed that it appears that any
group or organization could publish a
set of technical requirements or
standards and claim it to be a safe
harbor, and we requested comment on
whether we should define what
constitutes publicly available technical
requirements or standards adopted by
an industry association or standard
setting organization. We also sought
comment on the appropriate format to
be used for the transmission of CII data
to LEAs. We noted that, when
broadband telephony (including VoIP)
CII is provided to LEAs, they may have
concerns with the format of the
electronic interface used to provide the
CII. We requested comment on whether
the CII should be converted into a
format preferred by LEAs.
19. Discussion. No specific
deficiencies in any packet-mode
standard were cited by any commenter.
Rather, there was a consensus to allow
the standards process to proceed and to
resolve issues with deficiency petitions.
In fact, both industry commenters and
DOJ note the appropriateness of this
process. Further, industry commenters
observe that Law Enforcement has not
filed a deficiency petition with respect
to any packet-mode standard. Similarly,
with regard to whether the Commission
should seek to determine the industry
bodies that are appropriate to generate
safe harbor standards, there is broad
consensus in the record that we should

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not. Finally, with regard to the issue of
the format of CII to be provided to LEAs,
there was a difference of opinion among
commenters as to whether a single
format is appropriate, but no one
recommended that the Commission
determine this issue in advance of
industry.
20. We found that it would be
premature for the Commission to preempt the ongoing industry process to
develop additional standards for packetmode technologies. We believe that
industry organizations, whose meetings
are generally open to all interested
parties—including LEAs—can best
develop those standards, just as they
previously developed circuit switched
standards. Further, given the diversity
of technologies supporting
communications services and the
breadth of organizations involved both
domestically and internationally in
developing packet-mode standards, we
find it both infeasible and inappropriate
to specify the organizations qualified to
develop standards that may be used as
‘‘safe harbors.’’ Finally, we find no
reason to become involved at this time
in the technically complex issue of
determining the appropriate format to
be used for the transmission of
broadband CII data to LEAs. Rather, for
all of these technical issues, we find that
the industry standards process remains
the preferred forum. We note again,
however, to the extent that any party
perceives a problem with an industry
developed packet-mode standard, it may
file with the Commission a deficiency
petition under section 107(b) of CALEA.
3. Compliance Solutions Based on a
Trusted Third Party
21. Background. In the NPRM, we
sought comment on the feasibility of
using a TTP approach to extract CII and
content from packets. Under this
approach, a TTP would operate a
service bureau with a system that has
access to a carrier’s network equipment
and remotely manage the intercept
process for the carrier. We noted that
the TTP could either rely on a
mediation device to collect separated
call content and CII from various points
in the carrier’s network and deliver the
appropriate information to a LEA, or
could rely on an external system to
collect combined call content and CII
and deliver appropriate information to
the LEA. In the NPRM, we focused on
the external system approach which, we
noted, could analyze the combined
information and provide the LEA only
that information to which it is entitled.
We sought comment on whether an
external system would be an efficient
method to extract information from

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packets. We stated that external systems
might provide economies of scale for
small carriers, and asked about the
approximate relative costs of internal
versus external systems for packet
extraction.
22. The record indicates that TTPs are
available to provide a variety of services
for CALEA compliance to carriers,
including processing requests for
intercepts, conducting electronic
surveillance, and delivering relevant
information to LEAs. Given the
effectively unanimous view of
commenters that the use of TTPs should
be permitted but not required, we
conclude that TTPs may provide a
reasonable means for carriers to comply
with CALEA, especially broadband
access and VoIP providers and smaller
carriers. We emphasize, however, that if
a carrier chooses to use a TTP, that
carrier remains responsible for ensuring
the timely delivery of CII and call
content information to a LEA and for
protecting subscriber privacy, as
required by CALEA. Thus, a carrier
must be satisfied that the TTP’s
processes allow the carrier to meet its
obligations without compromising the
integrity of the intercept. Carriers will
not be relieved of their CALEA
obligations by asserting that a TTP’s
processes prevented them from
complying with CALEA. We note DOJ’s
concern about carriers attempting to use
TTPs to shift costs to LEAs, but we
make no decision here that would allow
carriers who choose to use a TTP to shift
the financial responsibility for CALEA
compliance to the Attorney General
under section 109 (see discussion on
cost recovery, in the Second Report and
Order). We will evaluate whether the
availability of a TTP makes callidentifying information ‘‘reasonably’’
available to a carrier within the context
of section 103 in acting on a section 109
petition that a carrier may file (see
discussion on section 109 petitions, in
the Second Report and Order). As noted
by several commenters,
telecommunications carriers and
manufacturers have legally-mandated
privacy obligations, and we take no
action herein to modify those
obligations based on potential
broadband access and VoIP provider use
of TTPs. Finally, in accord with the
consensus of comments, we will defer to
standards organizations and industry
associations and allow them to
determine the degree to which the
ability of a TTP external system to
extract and isolate CII makes that
information reasonably available for
purposes of defining CALEA standards
and safe harbors.

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B. Sections 107(c) and 109(b) Petitions
23. In the Second Report and Order,
we address the scope of relief available
to telecommunications carriers pursuant
to CALEA sections 107(c)(2) and 109(b);
clarify guidelines to govern the filing
and evaluation of petitions filed under
these two sections; and dispose of
pending section 107(c)(2) petitions.
Under the express terms of the statute,
all telecommunications carriers subject
to CALEA must comply with its
mandate. Sections 107(c) and 109(b)
provide only limited and temporary
relief from CALEA compliance
requirements; they are ‘‘complementary
provisions that serve different
purposes.’’
24. Due to the time limitations set
forth in the CALEA statute,
telecommunications carriers may not
use section 107(c)(1) to obtain
extensions of the compliance deadline
in connection with most packet
services. We find that it would be
inconsistent with the express time
limitations of section 107(c) for the
Commission to grant 107(c) extension
relief to equipment, facilities or services
deployed after the effective date of
CALEA pursuant to other CALEA
provisions, section 229 of the
Communications Act, or section 706 of
the Telecommunications Act of 1996.
We also find that, to obtain section
109(b)(1) relief, in connection with a
given assistance capability requirement
under section 103, a
telecommunications carrier must
demonstrate that it undertook active and
sustained efforts to come into
compliance with that requirement, and
that compliance could not reasonably be
achieved without ‘‘significant difficulty
or expense.’’ As a result,
telecommunications carriers filing
section 109(b) petitions face a high
burden to obtain relief.
25. In the case of packet-mode
compliance requirements addressed in
this Second R&O, we expect that
telecommunications carriers will work
diligently until the end of the 18-month
compliance period, established in the
First R&O, to implement an appropriate
packet-mode CALEA solution. Once the
compliance period expires,
telecommunications carriers seeking
relief pursuant to section 109(b) will be
expected to document the efforts they
undertook throughout the 18-month
compliance period to achieve CALEA
compliance and to demonstrate how the
solution for which they wish to receive
cost recovery relief constitutes a
‘‘significant difficulty or expense.’’
Because section 109(b) is not a
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the filing of a section 109(b) petition
will not, by itself, toll the compliance
date.
26. Specifically, in this section, we
find that:
• Section 107(c)(1) may not be used
by telecommunications carriers seeking
extensions for equipment, facilities, and
services (hereinafter ‘‘facilities’’)
deployed on or after October 25, 1998
(the effective date of the CALEA section
103 and 105 requirements).
• Section 109(b)(1) does not itself
authorize the Commission to grant a
telecommunications carrier an
extension of the CALEA compliance
deadlines.
• Section 109(b)(1) imposes a high
burden of proof for telecommunications
carriers to demonstrate that they made
reasonable efforts to develop CALEA
solutions and that none of them are
reasonably achievable. In the absence of
CALEA compliance standards or
industry solutions, a petitioner must
demonstrate that it exercised a high
degree of due diligence in order to
develop its own solution, but was
unable to implement this solution
because of a ‘‘significant difficulty or
expense.’’
• Office of Management and Budget
(OMB) approval of the paperwork
collection requirements of this Second
Report and Order is required. Once
approval is received, we will issue a
public notice setting forth a deadline
that will require all telecommunications
carriers who have pending section
107(c)(1) petitions currently on file with
the Commission to inform the
Commission whether, pursuant to our
actions taken here, such petitions
concern ‘‘equipment, facilities, or
services’’ deployed prior to October 25,
1998.
• Once OMB approval is received, we
will issue a public notice setting forth
a deadline that will require all
telecommunications carriers providing
facilities-based broadband Internet
access or interconnected VoIP services
to file monitoring reports with the
Commission that briefly describe steps
that they are taking to come into
compliance with CALEA section 103.
We also will issue a public notice to
notify carriers of OMB approval of
paperwork collection requirements for
filing petitions under sections 107(c)
and 109(b).
1. Section 107(c)(1) Relief
a. Section 107(c)(1) Does Not Apply to
Any Equipment, Facility, or Service
Deployed On or After October 25, 1998
27. We adopt our tentative conclusion
that section 107(c)(1)’s unambiguous

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language expressly limits extensions to
cases where the petitioning
telecommunications carrier proposes to
install or deploy, or has installed or
deployed, its ‘‘ ‘equipment, facility, or
service prior to the effective date of
section 103 * * *,’ i.e., prior to October
25, 1998.’’ Given this limitation, a
section 107(c) extension is not available
to cover equipment, facilities, or
services installed or deployed on or
after October 25, 1998. Commenters
failed to present any other reasonable
way to read this section, and we reject
arguments by commenters that the
Commission should nonetheless ignore
Congress’s limited grant of authority to
entertain CALEA extension petitions
and look to other statutes for authority
to grant extensions for facilities
deployed after Congress’s cut-off date.
28. We reject commenters’ argument
that the Commission could entertain
extension petitions pursuant to statutes
other than section 107(c), including
CALEA section 109(b)(1) and section
706 of the Telecommunications Act of
1996. While we agree that section
107(c)(1) does not appear to prohibit the
Commission from exercising authority
under another statute, we find it
unlikely that Congress intended the
Commission to do so. The language of
section 107(c)(1) is very specific as to
what equipment, facilities, and services
are covered. Congress determined that,
effective October 25, 1998,
telecommunications carriers should
incorporate a CALEA compliance plan
into the design of any new facilities
deployments in so far as they are not
exempt from CALEA. To the extent that,
in hindsight, after exercising due
diligence, a specific CALEA compliance
plan was not reasonably achievable due
to a ‘‘significant expense’’ or
‘‘significant harm,’’ telecommunications
carriers could then seek relief pursuant
to section 109(b)(1). Therefore, in
designing sections 107(c)(1) and
109(b)(1), Congress appears to have
balanced carefully what it found to be
a reasonable compliance period against
a firm deadline for CALEA compliance.
If Congress had intended for the
Commission to continue granting
extension petitions after October 25,
1998, we find it unlikely that Congress
would have placed the time limitations
in section 107(c)(1).
29. To interpret other statutes to grant
the Commission CALEA extension
authority would undermine Congress’s
intent that, after a reasonable
compliance period, all
telecommunications carriers would
comply with their lawful CALEA
obligations. Thus, we reject
commenters’ arguments that CALEA

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section 109(b)(1), section 706 of the
Telecommunications Act of 1996, and
section 229(a) of the Communications
Act provide the Commission with
authority to grant extension petitions for
facilities deployed on or after October
25, 1998. First, although we believe that
the Commission has broad discretion
under CALEA section 109(b)(1)(K) to
impose conditions on relief granted by
that section, we disagree with Global
Crossing that the Commission should
use that section to grant extension relief
given the express limitation in section
107(c)(1). Second, we disagree with
OPASTCO that the Commission should
employ section 706 as overriding
statutory authority, because we find that
section 706’s directive that the
Commission encourage the deployment
of ‘‘advanced telecommunications
capability’’ is consistent with a criterion
that the Commission must examine in a
section 109(b)(1) petition. Because
section 109(b)(1) directs the
Commission to balance this one policy
objective against 10 other factors, we
decline to rely solely on one factor to
the exclusion of all others. Third, we
disagree with commenters who argue
that the Commission has broad
authority to entertain extension
petitions under section 229(a) of the
Communications Act, which is the
provision that grants the Commission
authority to implement CALEA. We
believe that, where Congress has
specifically limited Commission
extension authority in the CALEA
statute itself, it would be inappropriate
to employ section 229(a) to nevertheless
find this authority.
b. Contents of Section 107(c)(1) Petitions
30. We note that participation in the
FBI’s Flexible Deployment Program has
permitted even small and rural
telecommunications carriers to work
with LEAs to develop circuit-mode
CALEA compliance solutions. Packetmode telecommunications carriers,
however, are still in a much earlier stage
of CALEA deployment. Our finding
today that section 107(c)(1) is not
available for facilities deployed on or
after October 25, 1998 will compel most
of these telecommunications carriers to
implement CALEA compliant solutions.
To the extent that telecommunications
carriers deployed packet-mode facilities
prior to this date, we expect those
telecommunications carriers to follow
the guidelines set forth below for
section 107(c)(1) petitions.
31. Telecommunications carriers that
deployed circuit-mode facilities prior to
October 25, 1998. For this class of
telecommunications carriers, we adopt
the NPRM’s proposal that petitions

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contain (1) an explanation for why an
extension is necessary, (2) a compliance
plan setting forth specific dates for
compliance no later than two years after
the petition’s filing date, (3) a
description of petitioner’s ‘‘due
diligence’’ attempts to become CALEA
compliant since June 30, 2002, and (4)
information satisfying the information
requests attached in Attachment F of the
Second Report and Order. Such
information will enable us to better
evaluate whether a telecommunications
carrier merits an extension. We decline
to adopt our tentative proposal that a
circuit-mode telecommunications
carrier that participates in the FBI’s
Flexible Deployment Program should be
deemed de jure to meet the section
107(c)(1) standard. Upon consideration
of its comments, we agree with DOJ that
section 107(c) requires more than
enrollment in Flex Deployment. We will
consider enrollment plus the other
items included in our instructions in
determining whether section 107(c)
relief is appropriate. As in the past,
upon the filing of a section 107(c)(1)
petition, we will continue to grant a
provisional extension for a period of
two years unless or until we issue an
order that states otherwise.
32. We reject assertions that our
section 107(c)(1) approach is overly
burdensome. We interpret section
107(c)(1) so that telecommunications
carriers may minimize the statutory
burden themselves if they proactively
seek CALEA solutions. Commenters
argue that telecommunications carriers,
especially small ones, face particular
challenges, including, for example, lack
of clout to negotiate with manufacturers
and lack of resources. We find that
section 107(c) allows us to take into
account the particular situation of a
telecommunications carrier, including
its bargaining power and financial
resources, when analyzing whether
CALEA compliance is ‘‘not reasonably
achievable through application of
technology available within the
compliance period.’’
33. Telecommunications carriers that
deployed packet-mode facilities prior to
October 25, 1998. We adopt the NPRM’s
proposal that, to obtain an extension of
time, a packet mode
telecommunications carrier must
provide documentation setting forth (1)
an explanation why an extension of
time is necessary, (2) a compliance plan
including specific dates for compliance
no later than two years after the
petition’s filing date, (3) a description of
petitioner’s ‘‘due diligence’’ attempts to
become CALEA compliant since
November 19, 2001, i.e., the date
mandated for packet-mode CALEA

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compliance by the Commission’s
September 28, 2001 Public Notice, and
(4) information satisfying the
information requests in Attachment F of
the Second Report and Order. Other
than arguments of burden, commenters
failed to provide convincing evidence or
arguments to show why the Commission
should depart from its proposal in the
NPRM.
2. Section 109(b)(1) Relief
34. We affirm the NPRM’s tentative
conclusions that ‘‘Congress anticipated
that section 109(b)(1) would be used in
extraordinary cases by
telecommunications carriers facing
particularly high CALEA-related costs
and difficulties.’’ We first describe the
scope of relief granted under section
109(b)(1) and its relationship to other
CALEA provisions. Second, we find that
a petitioner must meet a high burden of
proof to satisfy section 109(b)(1) and
may not use the absence of available
solutions as the sole basis for section
109(b)(1) relief. Third, we find that a
petitioner must exercise due diligence
to present a specific solution or a
pathway designed to reach a specific
solution. Finally, we explain how we
will weigh section 109(b)(1)’s eleven
factors in evaluating a petition.
a. Scope of Section 109(b)(1) Relief and
Its Relationship to Other CALEA
Sections
35. Section 109(b)(1) relief shifts the
burden of paying for a specific CALEA
solution to DOJ. Section 109(b)(1) is a
mechanism for a telecommunications
carrier to recover CALEA compliance
costs from DOJ if the
telecommunications carrier can
demonstrate that compliance with
CALEA capability requirements is not
‘‘reasonably achievable.’’ Section
109(b)(1) defines ‘‘reasonably
achievable’’ to mean that compliance
would impose a ‘‘significant difficulty
or expense’’ on the telecommunications
carrier. If the Commission grants a
section 109(b)(1) petition, the only relief
that a telecommunications carrier
receives is the following: the
telecommunications carrier may,
pursuant to section 109(b)(2)(A), request
DOJ to pay for the additional reasonable
costs for making CALEA compliance
reasonably achievable. DOJ may then
agree to pay for these costs. If DOJ
declines to pay for these costs, then the
telecommunications carrier ‘‘shall be
deemed to be in compliance’’ with the
capability requirements for the
equipment, facilities, and/or services
that were the subject of the section
109(b)(1) petition.

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36. Section 109(b)(1) neither compels
a telecommunications carrier to adopt a
specific CALEA solution nor requires
DOJ to pay for the telecommunications
carrier’s preferred solution. As
discussed above, under section 103, a
telecommunications carrier is entitled to
implement whatever solution it believes
best suits its network needs. However,
to recover costs from DOJ, a
telecommunications carrier must satisfy
the obligations set forth in section
109(b)(1). This means that the
telecommunications carrier must
demonstrate that compliance would
impose a significant difficulty or
expense. If there is a reasonable means
of compliance available, even if it is not
the telecommunications carrier’s
preferred solution, then the Commission
may find that a less expensive,
alternative solution would not impose a
significant difficulty or expense and
deny the petition. Section 109(b)(1)
makes no reference to the solution
preferences of a telecommunications
carrier—rather it focuses on whether
compliance with section 103 would
impose a ‘‘significant difficulty or
expense.’’ A telecommunications carrier
that fails to make this showing may not
request payment from DOJ. If, on the
other hand, the Commission finds that
compliance is not reasonably achievable
within the meaning of section 109(b),
DOJ has the option to pay the
appropriate costs of whatever
compliance solutions DOJ deems
appropriate.
37. Section 109(b)(1) relief terminates
when the equipment, facilities or
services undergo a substantial
replacement, modification or upgrade.
A section 109(b)(1) petition must
explain with specificity the equipment,
facility, or service for which the
petitioner seeks relief. The
Commission’s order granting section
109(b)(1) relief will specify what
equipment, facility, and/or service is
covered by the order. Once that
equipment, facility, or service is
replaced, significantly upgraded or
otherwise undergoes major
modification, the carrier is no longer
relieved of its CALEA obligations and
the replacement must comply with
section 103. To obtain section 109(b)(1)
relief for the modified equipment, the
telecommunications carrier would have
to file a new section 109(b)(1) petition.
38. Section 109(b)(1) relief does not
include extensions of time. Section
109(b)(1) is a cost recovery vehicle.
Section 107(c)(1) is the CALEA
provision that addresses extensions of
time. Congress determined that
telecommunications carriers cannot

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seek extension relief for facilities
deployed on or after October 25, 1998.
b. The Section 109(b)(1) Burden of Proof
39. We affirm the NPRM’s tentative
conclusion that a telecommunications
carrier faces a high burden of proof in
order to be relieved of its obligations to
pay for CALEA compliance.
Specifically, section 109(b)(1) requires a
petitioner to demonstrate, with respect
to each section 103 assistance capability
requirement for which it seeks relief,
that it has examined all possible
solutions and that all of these solutions
would impose a significant difficulty or
expense on the petitioner. This means
that if the Commission is aware of a
CALEA solution that the
telecommunications carrier has not
explored and covered in its petition, the
Commission will likely dismiss the
section 109(b)(1) petition as prima facie
insufficient. In its petition, the
telecommunications carrier must
explain with specificity the possible
CALEA solution and the significant
difficulty or expense that that solution
would impose on the
telecommunications carrier so that the
Commission and later DOJ may render
their respective determinations, under
sections 109(b)(1) and 109(b)(2)(A). We
adopt the tentative conclusion in the
NPRM that telecommunications carriers
may not rely solely on the absence of
industry standards and solutions under
section 109(b)(1)(K) as a basis for
section 109(b)(1) relief.
40. We further adopt our tentative
conclusion that a section 109(b)(1)
petition must seek relief for ‘‘precisely
identified ‘equipment facilities, or
services.’ ’’ In this regard, a petitioner
must describe with specificity how, in
its due diligence, the
telecommunications carrier made
reasonable efforts to identify a specific
solution or a pathway to a specific
solution. Without this showing, the
Commission will have no factual basis
to evaluate whether a
telecommunications carrier has satisfied
the requirements of section 109(b).
41. In addition, to the extent that
multiple solutions to a particular
CALEA capability requirement exist, the
petitioner must demonstrate that it
would suffer significant difficulty or
expense if it were to implement any of
them. We believe that the statute
requires this showing for at least two
reasons. First, the inquiry under section
109(b)(1) is whether CALEA compliance
imposes a specific harm, not whether a
telecommunications carrier is unable to
institute its solution of choice. If
alternative, less expensive solutions
exist that are reasonably achievable,

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then the telecommunications carrier is
not entitled to a section 109(b)(1)
determination that CALEA compliance
would impose a significant difficulty or
expense. Second, it would be
unreasonable to read the statute to
require DOJ to pay the costs for a more
expensive solution if a less expensive
solution exists. If multiple solutions
exist, DOJ should have the option to pay
for the least expensive one available.
c. Petitioner Due Diligence Requirement
42. In the NPRM, the Commission
tentatively concluded that section
109(b)(1) petitioners will be expected to
demonstrate active and sustained efforts
at developing and implementing CALEA
solutions for their operations, i.e.,
regardless of whether CALEA solutions
for packet-mode are generally available.
We explained this ‘‘due diligence’’
showing as requiring petitioners to
submit detailed information about
discussions and negotiations with
switch manufacturers, other equipment
manufacturers, and TTPs, both before
and after the FBI announced the
termination of the Flexible Deployment
Program in connection with packetmode technology. We tentatively
concluded that unless we are persuaded
that petitioners have engaged in
sustained and systematic negotiations
with manufacturers and third-party
providers to design, develop, and
implement CALEA solutions, we should
reject submitted petitions.
43. Many commenters disagreed with
our analysis and conclusions, but none
persuasively demonstrated that section
109(b)(1) excludes consideration of due
diligence and none persuaded us that
consideration of due diligence is
unnecessary for a proper interpretation
and application of section 109(b)(1).
Basically, the due diligence requirement
is necessary to ensure that
telecommunications carriers
demonstrate the showing required by
section 109(b)(1). Section 109(b)(1)
requires the Commission to determine,
upon petition, whether compliance with
section 103 is reasonably achievable for
‘‘any equipment, facility, or service
installed or deployed after January 1,
1995.’’ Unless the evidence
demonstrates that the petitioner has
comprehensively considered how to
become compliant with CALEA section
103, it would be difficult for the
Commission to conclude that section
103 compliance is not reasonably
achievable. Simply put, the evidence
must demonstrate that alternative
solutions were not reasonably
achievable.
44. To meet this requirement, the
petitioner may need to compare, for

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example, the cost of making annual
payments to a TTP for a CALEA service
for a number of years to the cost of
purchasing equipment and/or systems
up front that enable the petitioner to
meet CALEA capability requirements
themselves. Some solutions may
include both elements: leasing
capabilities and buying equipment. In
addition, the petitioner may also seek to
include recurring CALEA-specific
operations costs in the cost calculation.
Thus, it is necessary to capture the
impact of delayed vs. immediate
expenditures in calculating the total
cost of any solution, and to express the
cost of alternative solutions in
comparable dollars. A calculation of the
(net) present value or present worth of
expenditures of the solution is a
recognized way to accomplish this dual
purpose.
45. Our analysis and conclusions here
do not compel telecommunications
carriers to adopt any particular
‘‘equipment, facility, service, or feature’’
or ‘‘any specific design of equipment,
facilities, services, features, or system
configurations.’’ Service providers are
free to configure and build their systems
any way they choose. But a service
provider that seeks cost recovery relief
pursuant to section 109(b)(1) must
demonstrate that CALEA compliance
per se is not reasonably achievable. A
petition must include persuasive
evidence that the petitioner cannot
afford to achieve compliance through
network upgrades or equipment
retrofits. It must include a
demonstration that the petitioner’s
preferred CALEA solution is not
reasonably achievable and that no
alternative CALEA solution is
reasonably achievable, including
alternative manufacturer-provided
service packages, services provided by
TTPs, and sharing arrangements with
other service providers.
46. A due diligence showing is
particularly necessary to enable us to
consider whether section 109(b)(1) relief
is appropriate in cases where CALEA
standards have not been developed and/
or CALEA solutions are not generally
available. We reject the idea that we
may grant section 109(b)(1) relief merely
because standards have not been
developed or solutions are not generally
available. We therefore adopt our
tentative conclusion that the
requirements of section 109(b)(1) would
not be met by a petitioning
telecommunications carrier that merely
asserted that CALEA standards had not
been developed, or that solutions were
not readily available from
manufacturers.

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47. Nevertheless, we emphasize that
section 109(b)(1)’s due diligence
analysis is fact-specific and will take
into account, for example, the resources
of the petitioner. We recognize that
some telecommunications carriers,
particularly small telecommunications
carriers, may conclude that they cannot
afford the efforts required to develop
their own solutions. Thus, for example,
a small rural telecommunications carrier
might provide evidence that the lack of
industry standards and solutions,
coupled with its lack of financial
resources, would justify a finding that
the small telecommunications carrier
had met its due diligence requirements
by proffering only one solution, so long
as it is a bona fide solution.
48. We expect that significant
progress in developing CALEA
standards and solutions for broadband
Internet access and interconnected VoIP
services will be achieved during the 18month compliance period. We expect
that few if any petitioners could
successfully demonstrate the due
diligence necessary to support a section
109(b)(1) petition until the close of the
transition. We in fact expect broadband
Internet access and interconnected VoIP
providers to utilize that transition
period as an opportunity to promote the
development of CALEA standards and
solutions. Failure to utilize this
opportunity, or to document steps taken
to promote CALEA compliance
throughout the transition period, will
seriously damage a petitioner’s chances
of obtaining section 109(b)(1) relief.
d. Section 109(b)(1)’s Eleven Criteria
49. In determining whether a
telecommunications carrier has
successfully demonstrated that
compliance with a CALEA section 103
assistance capability requirement is not
reasonably achievable pursuant to
section 109(b)(1), the Commission must
examine the 11 statutory criteria set out
in section 109(b)(1). We affirm the
Commission’s tentative conclusion in
the NPRM that the Commission need
not weigh equally all 11 criteria, and its
tentative conclusion that we should
assign greater weight to national
security and public safety-related
concerns. We also conclude that we
should require petitioners to include in
their showing precisely identified
CALEA section 103 capability
requirements and ‘‘equipment, facilities,
or services’’ for which relief is sought.
We affirm our finding in the NPRM that
under the requirements of section
109(b)(1)(B) and 109(b)(1)(D),
petitioners must include a thorough
analysis of precisely identified costs to
satisfy CALEA obligations, as well as

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their effects on local service ratepayers,
where relevant; general allegations that
projected costs were ‘‘too high’’ or
unreasonably burdensome will not
suffice. We direct parties’ attention to
the cost discussion in the previous
CALEA Second Report and Order in CC
Docket No. 97–213 and we reaffirm our
determination there that costs not
directly related to CALEA compliance
may not be included in section 109(b)
petitions.
50. To provide further guidance as to
how the Commission will apply
consideration of the eleven section
109(b)(1) evaluative criteria in particular
cases, we provide the discussion set out
below. We nevertheless caution
interested persons that these guidelines
are intended to provide general
guidance only. The Commission will
examine each section 109(b) petition
based on the facts contained therein and
in the context of a specific analysis of
national security factors and other
factors that exist at that time. Section
109(b(1) directs the Commission to
examine the following criteria:
(A) ‘‘The effect on public safety and
national security.’’ Because the purpose
of the CALEA statute is to ensure public
safety and national security, this
criterion is critically important. In a
particular case, the Commission will
consider all relevant evidence submitted
by LEAs per this criterion, as well as
recommendations about how this
criterion should be applied to submitted
evidence and what weight should be
assigned to such evidence in our
particular deliberations. We will also
consider all relevant evidence submitted
by a petitioner, including evidence
about the number of electronic
surveillance requests it has received
from LEAs for the five (5) year period
prior to submission of its section 109(b)
petition. We will consider this latter
evidence in connection with evaluating
application of the instant criterion as
well as evaluating other, cost-related
criteria set out in section 109(b)(1)(A)
through (K).
(B) ‘‘The effect on rates for basic
residential telephone service.’’
Application of this factor affects only
evaluation of section 109(b) petitions
submitted by residential telephone
service providers subject to the
Commission’s Part 36 regulation. Its
relevance will be decisively affected by
how the Commission decides to
implement jurisdictional separations
policy pursuant to the directive set out
in 47 U.S.C. 229(e)(3).
(C) ‘‘The need to protect the privacy
and security of communications not
authorized to be intercepted.’’ A
petitioner must submit persuasive

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evidence why solution(s) described in
its petition could not protect the privacy
and security of customer
communications. In instances where the
petition presents evidence about TTP
services, the petitioner must present
persuasive evidence that the TTP(s)
cannot or will not provide privacy and
security protection.
(D) ‘‘The need to achieve the
capability assistance requirements of
section 103 by cost-effective methods.’’
A petitioner must submit persuasive
evidence showing that all identified
solutions, including those provided by
equipment vendors and other
manufacturers, TTPs, or solutions that
the petitioner proposes to develop for
itself, would impose a significant
‘‘difficulty or expense’’ within the
meaning of the statute. In the event that
there is no industry standard or
available market solution at the time
that a telecommunications carrier files
its petition, the telecommunications
carrier would need to demonstrate that
implementation of its own proposed
solution would impose a significant
expense.
(E) ‘‘The effect on the nature and cost
of the equipment, facility, or service at
issue.’’ In addition to the cost showing
described in paragraph (D), the
petitioner must submit persuasive
evidence demonstrating some adverse
effect on its facilities.
(F) ‘‘The effect on the operation of the
equipment, facility, or service at issue.’’
In addition to the cost showing in
paragraph (D), the petitioner would
need to demonstrate a specific adverse
effect on its operations.
(G) ‘‘The policy of the United States
to encourage the provision of new
technologies and services to the public.’’
The petitioner must submit persuasive
evidence demonstrating that CALEA
requirements were preventing it from
deploying a specifically identified new
technology or service, and/or persuasive
evidence that imposing CALEA
requirements would require it to take a
technology or service off the market.
(H) ‘‘The financial resources of the
telecommunications carrier.’’ A
showing under this factor would be
similar to the showing under factor (D).
The petitioner must present financial
resource documentation, including
current balance sheets and a complete
analysis of debt and equity financing
resources that are available. If the
particular petitioner is a small and rural
telecommunications carrier, this must
include a description and analysis of all
funding and loan guarantee sources
available from state and federal
assistance programs. Where relevant, all
telecommunications carriers must

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provide evidence showing how state
and local regulation affects the
availability or use of its financial
resources. For example,
telecommunications carriers regulated
by state Public Utility Commissions
should describe in detail how
Commission-approved depreciation
schedules can be modified to provide
for capital equipment acquisition on
terms more favorable than currently
negotiated and approved terms, or
provide evidence that such schedules
cannot be modified. Per this criterion,
the petitioner must submit persuasive
evidence that demonstrates that its
current financial resources and financial
resources generally available to it are
not or would not be sufficient to prevent
the imposition of ‘‘significant difficulty
or expense’’ as defined by CALEA
section 109(b)(1).
(I) ‘‘The effect on competition in the
provision of telecommunications
services.’’ Under this factor, the
petitioner would need to submit
persuasive evidence that demonstrate a
specific and quantifiable harm.
(J) ‘‘The extent to which the design
and development of the equipment,
facility, or service was initiated before
January 1, 1995.’’ This factor is selfexplanatory. In most if not all cases, it
will not apply to facilities-based
broadband Internet access and
interconnected VoIP.
(K) ‘‘Such other factors as the
Commission determines are
appropriate.’’ This provision enables
the Commission to evaluate factors that
may arise on a case by case basis, that
were difficult for Congress to predict
when enacting the statute, and are
difficult for the Commission to predict
during a rulemaking.
51. Attachment E of the Second
Report and Order sets forth filing
instructions explaining the specific
information telecommunications
carriers should include in their section
109(b) petitions. Attachment E of the
Second Report and Order reflects the
proposal in the NPRM, consideration of
the record in this proceeding, and our
further analysis herein of the statute’s
requirements.
52. Some small telecommunications
carriers have urged us to allow
telecommunications carriers filing
section 109(b)(1) petitions to pool their
applications under one general
application petition and, as a result,
more efficiently present common
arguments and save the costs of
submitting individual petitions, each of
which would be assessed the $5200
filing fee. We conclude that this is
inappropriate given the requirements
imposed by section 109(b)(1). Section

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38099

109(b)(1) requires a detailed
presentation of evidence that section
103 compliance is not reasonably
achievable. Petitioners are required to
submit evidence that demonstrates this
in connection with precisely identified
services, equipment, and facilities.
These will differ from carrier to carrier.
Additionally, petitioners are required to
identify cost and financial resources
information that is detailed and highly
telecommunications carrier-specific.
Even if we were to accept jointly pooled
section 109(b)(1) petitions, we would,
by operation of the statute, need to
separate each separate
telecommunications carrier petition for
individual assessment. This individual
assessment will impose predictable
costs.
3. Confidential Treatment of Section
107(c)(1) and Section 109(b)(1) Petitions
53. In addition to highly sensitive cost
and financial resources information,
section 107(c)(1) and section 109(b)(1)
petitions are likely to contain specific
information regarding the inability of
telecommunications equipment,
facilities, and services to comply with
CALEA standards. The facts underlying
discrete section 107(c) and section
109(b) adjudicatory proceedings could
also involve highly sensitive
information about LEA activities. We
therefore believe that section 107(c) and
section 109(b) filings would be entitled
to confidential treatment under the
Freedom of Information Act (FOIA) and
the Commission’s rules. Accordingly,
we direct petitioners to file their
petitions under a general claim of
confidential or proprietary protection,
subject only to scrutiny by the
Commission and the Attorney General
who is consulted in section 107(c)
adjudications and is a party to all
section 109(b) adjudications. Petitioning
telecommunications carriers are not
required to request separately
confidential treatment for the
information submitted in their petitions.
However, petitioners must mark the top
of each page of their petitions:
‘‘Confidential—Not for Public
Inspection.’’ We further conclude that,
pursuant to section 0.457(g) of the
Commission’s rules, the information
provided by telecommunications
carriers in these CALEA proceedings
will not be made routinely available for
public inspection. No commenter
disagrees with this approach.
4. Monitoring Reports
54. In its Petition, Law Enforcement
requested that the Commission impose
a new compliance regime consisting of
standardized CALEA compliance

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benchmarks for packet technologies.
Under this proposal, limited compliance
extensions generally would be granted
only if providers of services that use
packet technologies agreed to meet the
proposed benchmarks. Most LEAs
supported this proposal; nearly
everyone else opposed it as exceeding or
contravening the explicit terms of the
statute. We decline at this time to adopt
the Law Enforcement benchmark
proposal. As we stated in the NPRM, we
conclude that the interpretation of
CALEA that we adopt in this Second
R&O, particularly of CALEA sections
107(c) and 109(b), will better promote
law enforcement’s stated objective that
all telecommunications carriers should
become compliant with CALEA
requirements as soon as possible.
55. Nevertheless, we share Law
Enforcement’s general concern that
telecommunications carriers timely
comply with CALEA for packet
technologies. In the past,
telecommunications carriers’ progress in
complying with CALEA for packet
technologies was effectively monitored
in two ways: by the FBI when it
administered a Flexible Deployment
program for packet technology, and by
the Commission in administering
section 107(c) extension petitions. The
FBI’s Flexible Deployment program no
longer applies to packet technology and,
as a consequence of our decision here,
few telecommunications carriers will be
able to seek extensions under section
107(c). With information from these
programs no longer available, the
Commission will have difficulty
identifying, with sufficient forewarning,
impediments to timely compliance and
will have little opportunity to assist the
industry, as appropriate, in achieving
timely compliance. We thus conclude
that all telecommunications carriers
providing facilities-based broadband
Internet access or interconnected VoIP
services shall file a monitoring report
with the Commission which will help
the Commission ensure that providers of
services that use packet technologies
become CALEA compliant
expeditiously. Specifically, with respect
to facilities-based broadband Internet
access providers and interconnected
VoIP providers, we believe that a
monitoring report will better ensure that
they are able to meet the May 14, 2007
CALEA compliance deadline. A sample
monitoring report (Form XXX) is
provided in Attachment G of the Second
Report and Order. These monitoring
reports are separate and distinct from
any section 107(c) or section 109 filings
that a telecommunications carrier may
choose to make, and will not be

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considered substitutes for seeking relief
under those provisions.
56. Accordingly, we specify the
following procedure for these
monitoring reports. Once OMB approves
the new paperwork collection
requirements of this Second R&O, we
will issue a public notice setting forth
a deadline that will require that
providers of all such services to submit
to the Commission a completed Form
XXX, briefly describing the status of its
compliance for each service based on
packet technology, e.g., whether the
service already complies, whether the
telecommunications carrier will comply
with an identified industry standard or
develop an ad hoc solution, the steps
the telecommunications carrier is
undertaking to achieve CALEA
compliance, any problems with
manufacturer support or network
installation, and the date compliance is
anticipated. Completed Forms XXX will
not be made available to the public. We
will, however, share completed Forms
XXX with DOJ/FBI so that they may
evaluate the progress each provider of a
service that uses packet technology is
making to achieve CALEA compliance.
Where necessary, we may request
additional information from a provider
regarding its efforts to become CALEA
compliant by the May 14, 2007
deadline.
57. We find that the above procedure
will promote expeditious CALEA
compliance by providers of services that
use packet technologies, but whose
services are not yet CALEA compliant.
We recognize that this procedure will
impose an increased administrative
burden on such providers, but
anticipate that this burden will be
minimal. To minimize the burden, we
have developed a relatively short
reporting form.
5. Disposition of Pending Section
107(c)(1) Petitions
58. We conclude that section 107(c)
extension relief is not available for
applications that include equipment,
facilities and services installed or
deployed on or after October 25, 1998.
Accordingly, once OMB approves the
new paperwork collection requirements
of this Second R&O, we will issue a
public notice setting forth a deadline by
which any telecommunications carrier
that has a section 107(c) petition on file
with us shall file a letter that attests that
its pending petition exclusively
concerns equipment, facilities and
services installed or deployed before
October 25, 1998. The Commission will
thereafter dismiss all non-conforming
petitions and petitions for which
clarifying letters have not been received.

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C. Enforcement of CALEA
59. In the NPRM, we considered
whether, in addition to the enforcement
remedies through the courts available to
LEAs under section 108 of CALEA, we
may take separate enforcement action
against telecommunications carriers,
manufacturers and providers of
telecommunications support services
that fail to comply with CALEA. We
stated that we appear to have broad
authority under section 229(a) of the
Communications Act to promulgate and
enforce CALEA rules against both
common carriers and non-common
carriers, and sought comment on this
analysis. We also sought comment on
whether sections 108 and/or 201 of
CALEA impose any limitations on the
nature of the remedy that we may
impose (e.g. injunctive relief) and
whether section 106 of CALEA imposes
any limitations on our enforcement
authority over manufacturers and
support service providers.
60. Additionally, we sought comment
in the NPRM on how we would enforce
the assistance capability requirements
under section 103 of CALEA. To
facilitate enforcement, we tentatively
concluded that, at a minimum, we
should adopt the requirements of
section 103 as Commission rules. We
asked whether, given this tentative
conclusion, the lack of Commissionestablished technical requirements or
standards under CALEA section 107(b)
for a particular technology would affect
our authority to enforce section 103.
Further, we asked whether there are
other provisions of CALEA, such as
section 107(a)’s safe harbor provisions,
that the Commission should adopt as
rules in order to effectively enforce the
statute. Moreover, we stated in the
NPRM that we believed it to be in the
public interest for covered carriers to
become CALEA compliant as
expeditiously as possible and
recognized the importance of effective
enforcement of our rules affecting such
compliance. We sought comment on
whether our general enforcement
procedures are sufficient for purposes of
CALEA enforcement or whether we
should implement some special
procedures for purposes of CALEA
enforcement. We also sought comment
on any other measures we should take
into consideration in deciding how best
to enforce CALEA requirements.
61. Discussion. DOJ strongly supports
the Commission enforcing the CALEA
rules under section 229(a) of the
Communications Act. DOJ contends that
the telecommunications industry has in
many instances failed to cooperate with
LEAs and has delayed establishing

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CALEA standards and implementing
new wiretapping technologies.
However, industry commenters contend
that CALEA enforcement authority lies
exclusively with the courts under
CALEA section 108.
62. We find that we have the authority
under section 229(a) to enforce CALEA,
as that section gives us authority to
‘‘prescribe such rules as are necessary to
implement the requirements of the
Communications Assistance for Law
Enforcement Act.’’ As we observed in
the NPRM, section 229(a) provides
broad authority for the Commission to
adopt rules to implement CALEA and,
unlike section 229(b) does not limit our
rulemaking authority to common
carriers. While the ‘‘penalties’’
provision of section 229(d) refers to
CALEA violations ‘‘by the carrier,’’
section 229(d) does not limit the
Commission’s general enforcement
authority under the Communications
Act. We thus conclude that the
Commission has general authority under
the Communications Act to promulgate
and enforce CALEA rules against
carriers as well as non-common carriers.
We also conclude that section 106 of
CALEA does not limit our authority to
promulgate and enforce CALEA rules
against manufacturers and support
service providers. Accordingly, we find
that, contrary to commenters who
argued that authority to enforce CALEA
lies exclusively with the courts under
CALEA section 108, we have the
authority to prescribe CALEA rules and
investigate the compliance of those
carriers and providers subject to such
rules. Additionally, under the
Communications Act, the Commission
has broad authority to enforce its rules.
It can, for example, issue monetary
forfeitures and cease and desist orders
against common carriers and noncommon carriers alike for violations of
Commission rules.
63. We also conclude that sections
108 and 201 of CALEA do not limit the
nature of the remedy that the
Commission may impose. Whereas
court actions under sections 108 and
201 would typically follow a failed
attempt by a carrier to comply with an
electronic surveillance order, the
Commission may pursue enforcement
actions against any carrier for failure to
ensure that its equipment, facilities or
services are capable of providing the
assistance capability requirements prior
to receiving an electronic surveillance
request. Thus, the Commission’s
enforcement authority is
complementary to, not duplicative of,
the authority granted LEAs under
sections 108 and 201.

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64. We observe that the Commission’s
rules already include various CALEA
requirements that we may enforce,
including system security and records
management requirements for all
carriers subject to CALEA and
assistance capability requirements for
wireline, cellular and PCS carriers. Our
existing rules for wireline, cellular and
PCS carriers already state that these
carriers are to comply with the
assistance capability requirements in
section 103; however, we have not
previously codified this requirement for
other carriers subject to CALEA. We
thus adopt our tentative conclusion to
codify this statutory requirement and
thereby clarify that all carriers subject to
CALEA are to comply, at a minimum,
with the assistance capability
requirements of section 103. This action
will facilitate the Commission’s
enforcement of CALEA. We recognize
that, in the absence of Commission
action to specify more precise
requirements in response to a section
107 (b) deficiency petition, as we did
previously regarding J–STD–025, our
rule sets forth a minimum requirement
that carriers, manufacturers and support
service providers may satisfy in various
ways (e.g., implementing an industry
standard, ad hoc or interim solution).
Nonetheless, this does not diminish our
resolve to consider carefully a bona fide
complaint that a carrier, manufacturers
or support service provider has not
provided the necessary assistance
capabilities and to take appropriate
enforcement action.
D. Cost Recovery Issues
65. In the NPRM, the Commission
sought comment on a number of issues
related to the recovery of CALEA
compliance costs, including the nature
of such costs and from which parties the
costs could be recovered. The
Commission also inquired into CALEA
cost recovery pursuant to intercept
statutes. The Commission further sought
comment on whether specific cost
recovery rules should be adopted to
help ensure that small and rural carriers
can become CALEA-compliant. Acting
pursuant to section 229(e)(3) of the
Communications Act, the Commission
also referred to the Federal-State Joint
Board on Jurisdictional Separations
(Joint Board) the following question:
whether CALEA compliance costs
should be separated between intrastate
and interstate jurisdictions, and, if so,
how the associated costs and revenues
should be allocated. Because of the
importance of the issues, the
Commission asked the Joint Board to
issue recommendations within a year of
the release of the NPRM, by August 9,

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38101

2005. The Joint Board, however, has not
yet issued its recommendation.
66. In the NPRM, the Commission
tentatively concluded that carriers bear
responsibility for CALEA development
and implementation costs for postJanuary 1, 1995 equipment and
facilities. We affirm this tentative
conclusion. Cost recovery from the
federal government under CALEA
section 109 turns on whether equipment
and facilities were deployed before or
after January 1, 1995. CALEA section
109 placed financial responsibility on
the federal government for CALEA
implementation costs related to
equipment deployed on or before
January 1, 1995. If the federal
government refused to pay for such
modifications, a carrier’s pre-1995
deployed equipment and facilities are
considered CALEA compliant until such
equipment or facility ‘‘is replaced or
significantly upgraded or otherwise
undergoes major modification’’ for
purposes of normal business operations.
On the other hand, for CALEA
implementation costs associated with
equipment deployed after January 1,
1995, CALEA section 109 places
financial responsibility on the
telecommunications carriers unless the
Commission determines compliance is
not ‘‘reasonably achievable.’’ Only in
that event may the Attorney General
agree to pay carriers the ‘‘additional
reasonable costs of making compliance
* * * reasonably achievable.’’ Based on
CALEA’s clear delineation of
responsibility for compliance costs, we
conclude that carriers bear
responsibility for CALEA development
and implementation costs for postJanuary 1, 1995 equipment and
facilities, absent a finding that
compliance is not reasonably achievable
pursuant to CALEA section 109(b).
67. In the NPRM, the Commission
acknowledged its prior statement
regarding the ability of carriers to
recover a portion of their CALEA capital
costs through electronic surveillance
order charges imposed on LEAs, and
that this statement was made without
the benefit of a complete and full record
on the issue. The Commission made this
observation as one of several aspects
that mitigated the cost burden on
carriers of implementing four CALEA
punch list items. However, because we
now conclude that CALEA section 109
provides the exclusive mechanism by
which carriers may recover from law
enforcement capital costs associated
with meeting the capability
requirements of CALEA section 103, the
Commission’s prior statement was
incorrect to the extent it suggested that
carriers may recover CALEA capital

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costs through intercept charges. As
discussed, CALEA specifically
addresses the allocation of
responsibility for compliance costs.
CALEA section 109 makes the federal
government responsible for compliance
costs for the period on or before January
1, 1995, and places the responsibility for
compliance costs after January 1, 1995
on carriers, absent a finding that
compliance is not reasonably achievable
pursuant to CALEA section 109(b).
Allowing carriers to recover CALEA
compliance costs from the government
through other means, such as through
intercept charges, would be inconsistent
with the cost recovery methodology set
forth in CALEA section 109 because it
would disrupt the cost burden balance
between law enforcement and carriers
carefully crafted by Congress in enacting
CALEA. In short, as DOJ notes, it
‘‘would essentially allow carriers to do
an ‘end-run’ around the provisions of
section 109(b) and Congressional
intent.’’ We therefore conclude that,
while carriers possess the authority to
recover through intercept charges the
costs associated with carrying out an
intercept that is accomplished using a
CALEA-based intercept solution, they
are prohibited by CALEA from
recovering through intercept charges the
costs of making modifications to
equipment, facilities, or services
pursuant to the assistance capability
requirements of CALEA section 103 and
the costs of developing, installing, and
deploying CALEA-based intercept
solutions that comply with the
assistance capability requirements of
CALEA section 103.
68. To the extent carriers do not meet
the necessary criteria for obtaining cost
recovery pursuant to section 109(b) of
CALEA, carriers may absorb the costs of
CALEA compliance as a necessary cost
of doing business, or, where
appropriate, recover some portion of
their CALEA section 103
implementation costs from their
subscribers. The specific provision
allowing carriers to recover some
portion of their CALEA capital costs
from their subscribers also reinforces
our conclusion that carriers may not
recover such costs from law
enforcement through intercept charges.
To the extent that carriers are not able
to recover their CALEA capital costs
from the federal government through
section 109, Congress provided only one
other avenue for carriers to recover such
costs, and that is from subscribers, not
law enforcement. Such recovery from
consumers, of course, will vary among
telecommunications carriers subject to
CALEA depending on certain factors.

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Rate-regulated carriers (e.g., incumbent
local exchange carriers) cannot raise
rates without first obtaining
authorization to do so. Other carriers
(e.g., Commercial Mobile Radio Services
(CMRS) providers) can recover their
costs from subscribers on a competitive
market basis. Given this backdrop, in
the NPRM, we invited comment on
whether a national surcharge scheme is
feasible for carriers in their efforts to
meet CALEA requirements. We also
sought comment on whether the
Commission would need to undertake a
specific forbearance analysis under
section 10 of the Communications Act,
and whether states may expressly
provide for or preclude the recovery of
CALEA compliance costs.
69. We decline to adopt a national
surcharge to recover CALEA costs. We
find that it would not serve the public
interest to use a national surcharge
scheme or to implement some form of
cost pooling system, as some
commenters suggest, because such a
scheme would increase the
administrative burden placed upon the
carriers and provide little incentive for
carriers to minimize their costs. We
therefore decline to mandate a surcharge
or other specific method of CALEA cost
recovery. We find that carriers that are
not subject to rate regulation may
choose to recover their CALEA-related
costs from their subscribers through any
lawful manner consistent with their
obligations under the Communications
Act. Section 229(e) of the
Communications Act allows rateregulated common carriers to seek to
recover their federally-allocated CALEA
section 103 costs from subscribers. As
noted, the Joint Board has not yet
provided its recommendation as to the
allocation of CALEA costs between the
federal and state jurisdictions. After the
Joint Board issues its recommendation,
and to the extent that CALEA costs
ultimately are allocated to the federal
jurisdiction, rate-regulated carriers
subject to the Commission’s price cap
rules have the ability to seek exogenous
treatment of the federally-allocated
CALEA costs. Carriers subject to the
Commission’s rate-of-return rules have
the ability to propose rate changes that
would seek recovery of any federallyallocated CALEA costs not already
recovered in rates.
70. Commenters to the NPRM also
argue that carriers with smaller
subscriber bases are less able to bear the
costs of CALEA implementation. To the
extent CALEA costs prohibit these
carriers from reasonably achieving
CALEA compliance, CALEA section
109(b) provides a remedy. The carriers
can seek a determination from the

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Commission that CALEA compliance is
not reasonably achievable, and, upon
such a determination, the Attorney
General may agree to pay the costs of
compliance for these carriers, or the
carriers will be deemed to be in
compliance.
E. System Security Requirements
71. In the First R&O, we concluded
that providers of facilities-based
broadband Internet access service and
interconnected VoIP service newly
identified as subject to CALEA under
the Substantial Replacement Provision
are to comply with the assistance
capability requirements in section 103
of CALEA within 18 months of the
effective date of the First R&O. In the
Second R&O, we determine that these
newly identified carriers must comply
with the system security requirements
in section 105 of CALEA and section
229(b) of the Communications Act, as
codified in the Commission’s rules,
within 90 days of the effective date of
this Second R&O.
72. We find that, based on the record,
90 days is a reasonable time period to
expect providers of facilities-based
broadband Internet access service and
interconnected VoIP service to comply
with sections 105 and 229(b) system
security requirements, as codified in the
Commission’s rules. Thus, we require
these carriers to file with the
Commission within 90 days of the
effective date of this Second R&O the
policies and procedures they use to
comply with the system security
requirements as codified in our rules.
Ninety days is the same amount of time
provided by the Commission when it
initially adopted these requirements.
Timely compliance with these
requirements will assist LEAs and the
Commission in identifying those entities
now subject to CALEA, provide
important contact information for
Commission follow-up on CALEA
compliance, and, more importantly for
LEAs, ensure that providers of facilitiesbased broadband Internet access service
and interconnected VoIP service are
adequately prepared for assisting LEAs
in conducting lawful electronic
surveillance.
F. Future Services and Technologies
73. In the NPRM, the Commission
tentatively concluded that it is
unnecessary to adopt Law
Enforcement’s proposal regarding the
Commission identifying future services
and entities subject to CALEA. We
recognized Law Enforcement’s need for
more certainty regarding the
applicability of CALEA to new services
and technologies, but expressed

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concerned that Law Enforcement’s
proposed approach could be
inconsistent with CALEA’s statutory
intent and could create an obstacle to
innovation. We noted that the
requirements of the statute and its
legislative history seem to support
opponents’ arguments that Congress did
not intend that manufacturers or service
providers would be required to obtain
advance clearance from the government
before deploying a technology or service
that is not subject to CALEA. We also
expressed concern that, as a practical
matter, providers will be reluctant to
develop and deploy innovative services
and technologies if they must build in
CALEA capabilities to equipment that
ultimately may not be subject to CALEA
or wait for a ruling on the statute’s
application to the new service or
technology.
74. Discussion. In its comments to the
NPRM, DOJ argues that the Commission
should adopt procedures to determine
whether future services and entities are
subject to CALEA. DOJ contends that it
would be helpful for industry and LEAs
to be able to seek rulings from the
Commission regarding CALEA’s
applicability to a new service in
advance of that service’s introduction
into the marketplace. DOJ concludes
that the Commission should require or
strongly encourage all providers of
interstate wire or electronic
communications services that have any
question about whether they are subject
to CALEA to seek Commission guidance
at the earliest possible date, well before
deployment of the service in question.
75. Other commenters support the
tentative conclusion set forth in the
NPRM, contending that the public
interest in innovation is not served by
government design mandates imposed
upon manufacturers and
telecommunications carriers. Verizon
states that, while it supports the
availability of an optional expedited
declaratory ruling procedure for carriers
that are unsure of their CALEA
obligations, DOJ’s proposed procedures
and related requirements would
effectively force carriers to obtain preauthorization of new services and
would contradict Congress’s intent
expressed in CALEA’s legislative
history, which makes clear that CALEA
should be implemented in a way that
does not impede the introduction of
new technologies, features, and services.
76. We agree with Verizon and other
commenters that it would be
inconsistent with the legislative history
of CALEA and inappropriate as a matter
of policy for the Commission to identify
future services and entities that may be
subject to CALEA. While we are

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sympathetic to DOJ’s goal of
establishing greater certainty regarding
the applicability of CALEA to new
services and technologies, we find that
implementing DOJ’s proposal would
have a chilling effect on innovation. We
believe that we can best determine the
future services and entities that are
subject to CALEA on a case-by-case
basis. However, we concur with Verizon
that an optional expedited declaratory
ruling procedure for entities that are
unsure of their CALEA obligations with
regard to new services would be useful.
Accordingly, telecommunications
carriers and manufacturers, as well as
LEAs, may petition the Commission for
a declaratory ruling as to CALEA
obligations with regard to new
equipment, facilities and services.
G. Consolidation of CALEA Rules
77. We are taking this opportunity to
consolidate our CALEA rules into part
1. Currently, those rules are contained
in three different Parts of the
Commission’s rules: part 22, titled
‘‘Public Mobile Services;’’ part 24, titled
‘‘Personal Communications Services;’’
and part 64, titled ‘‘Miscellaneous Rules
Related to Common Carriers.’’ CALEA
rules for parts 22 and 24 are each
contained in a subpart J, titled
‘‘Required New Capabilities Pursuant to
the Communications Assistance for Law
Enforcement Act (CALEA).’’ Each
respective subpart sets forth the CALEA
capabilities that must be provided by
cellular and Personal Communications
Services (PCS) telecommunications
carriers. CALEA rules for part 64 are
contained both in subpart V, titled
‘‘Telecommunication Carrier System
Security and Integrity Pursuant to the
Communications Assistance for Law
Enforcement Act (CALEA);’’ and in
subpart W, titled ‘‘Required New
Capabilities Pursuant to the
Communications Assistance for Law
Enforcement Act (CALEA).’’ subpart V
of part 64 sets forth the CALEA systems
security and integrity rules for all
telecommunications carriers, while
subpart W of part 64 sets forth the
CALEA capabilities that must be
provided by wireline
telecommunications carriers.
78. Our current CALEA rules
structure is somewhat confusing
because capability requirements are
contained in three different parts, while
systems security and integrity
requirements are contained in only one
part. Further, the capability
requirements for cellular, PCS, and
wireline telecommunications carriers
specified in different parts are identical,
with the only differences in language
being the specific references to the three

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different types of carriers. Moreover, as
discussed, we are herein codifying the
statutory requirement that all carriers
subject to CALEA must comply with the
assistance capability requirements of
section 103. While we could codify this
requirement in part 64, that part
pertains to ‘‘telecommunications
carriers’’ under the Communications
Act, rather than the broader application
of that term under CALEA. We therefore
find it more logical to codify this
requirement and consolidate our
existing CALEA rules in part 1, which
is titled ‘‘Practice and Procedure,’’ and
contains rules that apply more broadly
to various services within the
Commission’s jurisdiction. Accordingly,
we are establishing new subpart Z of
part 1, titling it ‘‘Communications
Assistance for Law Enforcement Act,’’
and are deleting part 22, subpart J; part
24, subpart J; part 64, subpart V; and
part 64, subpart W. Part 1, subpart Z
specifies that all carriers subject to
CALEA must comply with both the
assistance capability requirements of
CALEA section 103 and the systems
security and integrity requirements of
CALEA section 105, and also lists the
specific capability requirements
pertaining to cellular, PCS, and wireline
carriers that are currently set forth in
parts 22, 24, and 64. These rule changes
are specified in the rules section.
H. Miscellaneous
79. We recognize that certain
questions raised by the outstanding
Further Notice of Proposed Rulemaking
in this docket remain unresolved. We
intend to address these matters
expeditiously in a future order. In
addition, we recognize that parties may
also seek clarification of our rules and
regulations. Our rules and precedent
provide us with authority to issue such
clarifications, amendments,
suspensions, or waivers both in
response to petitions or on our own
motion.
Final Regulatory Flexibility Analysis
80. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), an Initial Regulatory Flexibility
Analysis (IRFA) was incorporated in the
NPRM in this proceeding. The
Commission sought written public
comment on the proposals in the NPRM,
including comment on the IRFA. The
comments received are discussed below,
except to the extent that they were
previously addressed in the Final
Regulatory Flexibility Analysis (FRFA)
attached to the First R&O in this
proceeding. The current FRFA, which
conforms to the RFA, pertains only to
the Second R&O in this proceeding. The

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companion MO&O does not adopt rules,
but rather, inter alia, denies a petition
to change a Commission rule.

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A. Need for, and Objectives of, the Rules
81. Advances in technology, most
notably the introduction of digital
transmission and processing techniques,
and the proliferation of Internet services
such as broadband access and VoIP,
have challenged the ability of LEAs to
conduct lawful electronic surveillance.
In light of these difficulties and other
outstanding issues associated with the
implementation of the CALEA, DOJ,
FBI, and DEA filed a joint petition for
expedited rulemaking in March 2004,
asking the Commission to address and
resolve these issues. The First R&O
concluded that CALEA applies to
facilities-based broadband Internet
access providers and providers of
interconnected VoIP service, and
established a compliance deadline of
May 14, 2007 for these providers.
82. In the Second R&O, we require
that facilities-based broadband Internet
access providers and providers of
interconnected VoIP submit monitoring
reports to ensure their CALEA
compliance by the May 14, 2007
deadline established by the First R&O.
More generally, we require that
telecommunications carriers comply
with CALEA by finding that sections
107(c) and 109(b) of CALEA provide
only limited and temporary relief from
compliance requirements, and by
finding that extension of the compliance
deadline for capabilities required by
CALEA section 103 is available only for
facilities and services deployed prior to
October 25, 1998 under the express
terms of the statute. We also conclude
that, in addition to the enforcement
remedies through the courts available to
LEAs under CALEA section 108, we
may take separate enforcement action
under section 229(a) of the
Communications Act against carriers
that fail to comply with CALEA.
Moreover, we conclude that carriers
must generally pay for CALEA
development and implementation costs
incurred after January 1, 1995 (unless
their costs are reimbursed in response to
a CALEA section 109(b) petition), but
we acknowledge that they may recover
costs from other sources, such as from
their subscribers.
B. Summary of Significant Issues Raised
by Public Comments in Response to the
IRFA
83. In this section, we respond to
commenters who filed directly in
response to the IRFA. To the extent we
received comments raising general small
business concerns during this

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proceeding, those comments are
discussed throughout the Second R&O.
84. The National Telecommunications
Cooperative Association (NTCA) and
the Office of Advocacy, U.S. Small
Business Administration (Advocacy)
filed comments directly in response to
the IRFA. NTCA and Advocacy both
generally contend that the RFA requires
that the Commission consider less
burdensome alternatives appropriate to
the size of the covered entities. These
comments were partially addressed in
our previous First R&O in this
proceeding; therefore, in this FRFA, we
respond only to those arguments that
are relevant to the Second R&O. In
particular, we respond to NTCA’s
argument that we failed to include the
availability of CALEA section 107(c)
extension petitions as part of the IRFA
and to Advocacy’s arguments that the
IRFA did not discuss all the alternatives
available to small entities, including
petitions for extensions under CALEA
sections 107(c) and 109(b) and use of
TTPs.
85. We reject NTCA’s and Advocacy’s
arguments that the Commission failed to
adequately consider these issues. While
we recognize that we did not
specifically list them in the IRFA, the
IRFA combined with the NPRM
appropriately identified the ways in
which the Commission could lessen the
regulatory burdens on small businesses
in compliance with our RFA
obligations. First, we generally
discussed in the NPRM the possibility of
an exemption from CALEA compliance
for small businesses that provide
wireless broadband Internet access to
rural areas. Second, with regard to
CALEA sections 107(c) and 109(b)
compliance extension petitions, we
devoted an entire section of the NPRM,
spanning 24 paragraphs, to these issues.
Although we proposed to restrict the
availability of compliance extensions
under section 107(c) and noted that
there is a significant burden on section
109(b) petitioners, we thoroughly
considered the potential impact of those
proposals on small businesses, but
concluded that it would be inconsistent
with the CALEA statute to make
exceptions for small businesses with
respect to section 107(c) and section
109(b) petitions. Third, with respect to
TTPs, we devoted a subsection of the
NPRM, spanning eight paragraphs, to
that issue. We noted therein that there
may be some tension between relying on
a TTP model and ‘‘safe harbor’’
standards, but that TTPs had the
potential to simplify or ease the burden
on carriers and manufacturers in
providing packet content and callidentifying information to LEAs.

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Further, we noted that external TTP
systems ‘‘might provide economies of
scale for small carriers.’’ Therefore, we
believe that a revised IRFA is not
necessary on any of these issues.
C. Description and Estimate of the
Number of Small Entities To Which
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 proposed rules. The RFA generally
defines the term ‘‘small entity’’ as
having the same meaning as the terms
‘‘small business,’’ ‘‘small organization,’’
and ‘‘small governmental jurisdiction.’’
In addition, the term ‘‘small business’’
has the same meaning as the term
‘‘small business concern’’ under the
Small Business Act. A small business
concern is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA).
1. Telecommunications Service Entities
a. Wireline Carriers and Service
Providers
87. Small Incumbent Local Exchange
Carriers (LECs). We have included small
incumbent LECs present RFA analysis.
As noted above, a ‘‘small business’’
under the RFA is one that, inter alia,
meets the pertinent small business size
standard (e.g., a telephone
communications business having 1,500
or fewer employees), and ‘‘is not
dominant in its field of operation.’’
Advocacy contends that, for RFA
purposes, small incumbent LECs are not
dominant in their field of operation
because any such dominance is not
‘‘national’’ in scope. We have therefore
included small incumbent LECs in this
RFA analysis, although we emphasize
that this RFA action has no effect on
Commission analyses and
determinations in other, non-RFA
contexts.
88. Incumbent Local Exchange
Carriers. Neither the Commission nor
the SBA has developed a small business
size standard specifically for incumbent
local exchange services. The appropriate
size standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 1,303 carriers have
reported that they are engaged in the
provision of incumbent local exchange
services. Of these 1,303 carriers, an
estimated 1,020 have 1,500 or fewer

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employees and 283 have more than
1,500 employees. Consequently, the
Commission estimates that most
providers of incumbent local exchange
service are small businesses that may be
affected by our action. In addition,
limited preliminary census data for
2002 indicate that the total number of
wired communications carriers
increased approximately 34 percent
from 1997 to 2002.
89. Competitive Local Exchange
Carriers, Competitive Access Providers
(CAPs), ‘‘Shared-Tenant Service
Providers,’’ and ‘‘Other Local Service
Providers.’’ Neither the Commission nor
the SBA has developed a small business
size standard specifically for these
service providers. The appropriate size
standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 769 carriers have
reported that they are engaged in the
provision of either competitive access
provider services or competitive local
exchange carrier services. Of these 769
carriers, an estimated 676 have 1,500 or
fewer employees and 93 have more than
1,500 employees. In addition, 12
carriers have reported that they are
‘‘Shared-Tenant Service Providers,’’ and
all 12 are estimated to have 1,500 or
fewer employees. In addition, 39
carriers have reported that they are
‘‘Other Local Service Providers.’’ Of the
39, an estimated 38 have 1,500 or fewer
employees and one has more than 1,500
employees. Consequently, the
Commission estimates that most
providers of competitive local exchange
service, competitive access providers,
‘‘Shared-Tenant Service Providers,’’ and
‘‘Other Local Service Providers’’ are
small entities that may be affected by
our action. In addition, limited
preliminary census data for 2002
indicate that the total number of wired
communications carriers increased
approximately 34 percent from 1997 to
2002.
90. Payphone Service Providers
(PSPs). Neither the Commission nor the
SBA has developed a small business
size standard specifically for payphone
services providers. The appropriate size
standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 654 carriers have
reported that they are engaged in the
provision of payphone services. Of
these, an estimated 652 have 1,500 or
fewer employees and two have more
than 1,500 employees. Consequently,

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the Commission estimates that the
majority of payphone service providers
are small entities that may be affected
by our action. In addition, limited
preliminary census data for 2002
indicate that the total number of wired
communications carriers increased
approximately 34 percent from 1997 to
2002.
91. Interexchange Carriers (IXCs).
Neither the Commission nor the SBA
has developed a small business size
standard specifically for providers of
interexchange services. The appropriate
size standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 316 carriers have
reported that they are engaged in the
provision of interexchange service. Of
these, an estimated 292 have 1,500 or
fewer employees and 24 have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of IXCs are small entities that may be
affected by our action. In addition,
limited preliminary census data for
2002 indicate that the total number of
wired communications carriers
increased approximately 34 percent
from 1997 to 2002.
92. Operator Service Providers (OSPs).
Neither the Commission nor the SBA
has developed a small business size
standard specifically for operator
service providers. The appropriate size
standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 23 carriers have
reported that they are engaged in the
provision of operator services. Of these,
an estimated 20 have 1,500 or fewer
employees and three have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of OSPs are small entities that may be
affected by our action. In addition,
limited preliminary census data for
2002 indicate that the total number of
wired communications carriers
increased approximately 34 percent
from 1997 to 2002.
93. Prepaid Calling Card Providers.
Neither the Commission nor the SBA
has developed a small business size
standard specifically for prepaid calling
card providers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees. According to Commission
data, 89 carriers have reported that they
are engaged in the provision of prepaid

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calling cards. Of these, 88 are estimated
to have 1,500 or fewer employees and
one has more than 1,500 employees.
Consequently, the Commission
estimates that all or the majority of
prepaid calling card providers are small
entities that may be affected by our
action.
b. Wireless Telecommunications Service
Providers
94. For those services subject to
auctions, we note that, as a general
matter, the number of winning bidders
that qualify as small businesses at the
close of an auction does not necessarily
represent the number of small
businesses currently in service. Also,
the Commission does not generally track
subsequent business size unless, in the
context of assignments or transfers,
unjust enrichment issues are implicated.
95. Wireless Service Providers. The
SBA has developed a small business
size standard for wireless firms within
the two broad economic census
categories of ‘‘Paging’’ and ‘‘Cellular and
Other Wireless Telecommunications.’’
Under both SBA categories, a wireless
business is small if it has 1,500 or fewer
employees. For the census category of
Paging, Census Bureau data for 1997
show that there were 1,320 firms in this
category, total, that operated for the
entire year. Of this total, 1,303 firms had
employment of 999 or fewer employees,
and an additional 17 firms had
employment of 1,000 employees or
more. Thus, under this category and
associated small business size standard,
the majority of firms can be considered
small. For the census category Cellular
and Other Wireless
Telecommunications, Census Bureau
data for 1997 show that there were 977
firms in this category, total, that
operated for the entire year. Of this
total, 965 firms had employment of 999
or fewer employees, and an additional
12 firms had employment of 1,000
employees or more. Thus, under this
second category and size standard, the
majority of firms can, again, be
considered small. In addition, limited
preliminary census data for 2002
indicate that the total number of paging
providers decreased approximately 51
percent from 1997 to 2002. In addition,
limited preliminary census data for
2002 indicate that the total number of
cellular and other wireless
telecommunications carriers increased
approximately 321 percent from 1997 to
2002.
96. Cellular Licensees. The SBA has
developed a small business size
standard for wireless firms within the
broad economic census category
‘‘Cellular and Other Wireless

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Telecommunications.’’ Under this SBA
category, a wireless business is small if
it has 1,500 or fewer employees. For the
census category Cellular and Other
Wireless Telecommunications firms,
Census Bureau data for 1997 show that
there were 977 firms in this category,
total, that operated for the entire year.
Of this total, 965 firms had employment
of 999 or fewer employees, and an
additional 12 firms had employment of
1,000 employees or more. Thus, under
this category and size standard, the great
majority of firms can be considered
small. Also, according to Commission
data, 437 carriers reported that they
were engaged in the provision of
cellular service, Personal
Communications Service (PCS), or
Specialized Mobile Radio (SMR)
Telephony services, which are placed
together in the data. We have estimated
that 260 of these are small, under the
SBA small business size standard.
97. Common Carrier Paging. The SBA
has developed a small business size
standard for wireless firms within the
broad economic census category,
‘‘Cellular and Other Wireless
Telecommunications.’’ Under this SBA
category, a wireless business is small if
it has 1,500 or fewer employees. For the
census category of Paging, Census
Bureau data for 1997 show that there
were 1,320 firms in this category, total,
that operated for the entire year. Of this
total, 1,303 firms had employment of
999 or fewer employees, and an
additional 17 firms had employment of
1,000 employees or more. Thus, under
this category and associated small
business size standard, the majority of
firms can be considered small.
98. In the Paging Third Report and
Order, we developed a small business
size standard for ‘‘small businesses’’ and
‘‘very small businesses’’ for purposes of
determining their eligibility for special
provisions such as bidding credits and
installment payments. A ‘‘small
business’’ is an entity that, together with
its affiliates and controlling principals,
has average gross revenues not
exceeding $15 million for the preceding
three years. Additionally, a ‘‘very small
business’’ is an entity that, together with
its affiliates and controlling principals,
has average gross revenues that are not
more than $3 million for the preceding
three years. The SBA has approved
these small business size standards. An
auction of Metropolitan Economic Area
licenses closed on March 2, 2000. Of the
985 licenses auctioned, 440 were sold.
Fifty-seven companies claiming small
business status won. Also, according to
Commission data, 375 carriers reported
that they were engaged in the provision
of paging and messaging services. Of

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those, we estimate that 370 are small,
under the SBA-approved small business
size standard.
99. Wireless Communications
Services. This service can be used for
fixed, mobile, radiolocation, and digital
audio broadcasting satellite uses. The
Commission established small business
size standards for the wireless
communications services (WCS)
auction. A ‘‘small business’’ is an entity
with average gross revenues of $40
million for each of the three preceding
years, and a ‘‘very small business’’ is an
entity with average gross revenues of
$15 million for each of the three
preceding years. The SBA has approved
these small business size standards. The
Commission auctioned geographic area
licenses in the WCS service. In the
auction, there were seven winning
bidders that qualified as ‘‘very small
business’’ entities, and one that
qualified as a ‘‘small business’’ entity.
100. Wireless Telephony. Wireless
telephony includes cellular, personal
communications services (PCS), and
specialized mobile radio (SMR)
telephony carriers. As noted earlier, the
SBA has developed a small business
size standard for ‘‘Cellular and Other
Wireless Telecommunications’’ services.
Under that SBA small business size
standard, a business is small if it has
1,500 or fewer employees. According to
Commission data, 437 carriers reported
that they were engaged in the provision
of wireless telephony. We have
estimated that 260 of these are small
under the SBA small business size
standard.
101. Broadband Personal
Communications Service. The
broadband Personal Communications
Service (PCS) spectrum is divided into
six frequency blocks designated A
through F, and the Commission has held
auctions for each block. The
Commission defined ‘‘small entity’’ for
Blocks C and F as an entity that has
average gross revenues of $40 million or
less in the three previous calendar
years. For Block F, an additional
classification for ‘‘very small business’’
was added and is defined as an entity
that, together with its affiliates, has
average gross revenues of not more than
$15 million for the preceding three
calendar years.’’ These standards
defining ‘‘small entity’’ in the context of
broadband PCS auctions have been
approved by the SBA. No small
businesses, within the SBA-approved
small business size standards bid
successfully for licenses in Blocks A
and B. There were 90 winning bidders
that qualified as small entities in the
Block C auctions. A total of 93 small
and very small business bidders won

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approximately 40 percent of the 1,479
licenses for Blocks D, E, and F. On
March 23, 1999, the Commission reauctioned 347 C, D, E, and F Block
licenses. There were 48 small business
winning bidders. On January 26, 2001,
the Commission completed the auction
of 422 C and F Broadband PCS licenses
in Auction No. 35. Of the 35 winning
bidders in this auction, 29 qualified as
‘‘small’’ or ‘‘very small’’ businesses.
Subsequent events, concerning Auction
35, including judicial and agency
determinations, resulted in a total of 163
C and F Block licenses being available
for grant.
c. Satellite Telecommunications Service
Providers
102. Satellite telecommunications
service providers include satellite
operators and earth station operators.
The Commission has not developed a
definition of small entities applicable to
such operators. Therefore, the
applicable definition of small entity is
generally the definition under the SBA
rules applicable to Satellite
Telecommunications. This definition
provides that a small entity is expressed
as one with $13.5 million or less in
annual receipts. 1997 Census Bureau
data indicate that, for 1997, 273 satellite
communication firms had annual
receipts of under $10 million. In
addition, 24 firms had receipts for that
year of $10 million to $24,999,990.
2. Cable and OVS Operators
103. Cable and Other Program
Distribution. The Census Bureau defines
this category as follows: ‘‘This industry
comprises establishments primarily
engaged as third-party distribution
systems for broadcast programming. The
establishments of this industry deliver
visual, aural, or textual programming
received from cable networks, local
television stations, or radio networks to
consumers via cable or direct-to-home
satellite systems on a subscription or fee
basis. These establishments do not
generally originate programming
material.’’ The SBA has developed a
small business size standard for Cable
and Other Program Distribution, which
is: all such firms having $13.5 million
or less in annual receipts. According to
Census Bureau data for 2002, there were
a total of 1,191 firms in this category
that operated for the entire year. Of this
total, 1,087 firms had annual receipts of
under $10 million, and 43 firms had
receipts of $10 million or more but less
than $25 million. Thus, under this size
standard, the majority of firms can be
considered small.
104. Cable Companies and Systems.
The Commission has also developed its

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own small business size standards, for
the purpose of cable rate regulation.
Under the Commission’s rules, a ‘‘small
cable company’’ is one serving 400,000
or fewer subscribers, nationwide.
Industry data indicate that, of 1,076
cable operators nationwide, all but
eleven are small under this size
standard. In addition, under the
Commission’s rules, a ‘‘small system’’ is
a cable system serving 15,000 or fewer
subscribers. Industry data indicate that,
of 7,208 systems nationwide, 6,139
systems have under 10,000 subscribers,
and an additional 379 systems have
10,000–19,999 subscribers. Thus, under
this second size standard, most cable
systems are small.
105. Cable System Operators. The
Communications Act of 1934, as
amended, also contains a size standard
for small cable system operators, which
is ‘‘a cable operator that, directly or
through an affiliate, serves in the
aggregate fewer than 1 percent of all
subscribers in the United States and is
not affiliated with any entity or entities
whose gross annual revenues in the
aggregate exceed $250,000,000.’’ The
Commission has determined that an
operator serving fewer than 677,000
subscribers shall be deemed a small
operator, if its annual revenues, when
combined with the total annual
revenues of all its affiliates, do not
exceed $250 million in the aggregate.
Industry data indicate that, of 1,076
cable operators nationwide, all but ten
are small under this size standard. We
note that the Commission neither
requests nor collects information on
whether cable system operators are
affiliated with entities whose gross
annual revenues exceed $250 million,
and therefore we are unable to estimate
more accurately the number of cable
system operators that would qualify as
small under the size standard contained
in the Communications Act of 1934.
106. Open Video Services. Open
Video Service (OVS) systems provide
subscription services. The SBA has
created a small business size standard
for Cable and Other Program
Distribution. This standard provides
that a small entity is one with $12.5
million or less in annual receipts. The
Commission has certified a large
number of OVS operators, and some of
these are currently providing service.
Affiliates of Residential
Communications Network, Inc. (RCN)
received approval to operate OVS
systems in New York City, Boston,
Washington, D.C., and other areas. RCN
has sufficient revenues to assure that it
does not qualify as a small business
entity. Little financial information is
available for the other entities that are

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authorized to provide OVS. Given this
fact, the Commission concludes that
those entities might qualify as small
businesses, and therefore may be
affected by the rules and policies
adopted herein.
3. Internet and Other Information
Service Providers
107. Internet Service Providers. The
SBA has developed a small business
size standard for Internet Service
Providers (ISPs). ISPs ‘‘provide clients
access to the Internet and generally
provide related services such as web
hosting, web page designing, and
hardware or software consulting related
to Internet connectivity.’’ Under the
SBA size standard, such a business is
small if it has average annual receipts of
$23 million or less. According to Census
Bureau data for 2002, there were 2,529
firms in this category that operated for
the entire year. Of these, 2,437 firms had
annual receipts of under $10 million,
and 47 firms had receipts of $10 million
or more but less then $25 million.
Consequently, we estimate that the
majority of these firms are small entities
that may be affected by our action.
108. All Other Information Services.
‘‘This industry comprises
establishments primarily engaged in
providing other information services
(except new syndicates and libraries
and archives).’’ Our action pertains to
VoIP services, which could be provided
by entities that provide other services
such as e-mail, online gaming, web
browsing, video conferencing, instant
messaging, and other, similar IP-enabled
services. The SBA has developed a
small business size standard for this
category; that size standard is $6.5
million or less in average annual
receipts. According to Census Bureau
data for 1997, there were 195 firms in
this category that operated for the entire
year. Of these, 172 had annual receipts
of under $5 million, and an additional
nine firms had receipts of between $5
million and $9,999,999. Consequently,
we estimate that the majority of these
firms are small entities that may be
affected by our action.
D. Description of Projected Reporting,
Recordkeeping and Other Compliance
Requirements
109. The Second R&O requires that
facilities-based broadband Internet
access providers and providers of
interconnected VoIP submit monitoring
reports to the Commission to ensure
their CALEA compliance by the May 14,
2007 deadline established by the First
R&O. The Second R&O also requires
that, within 90 days of its effective date,
facilities-based broadband Internet

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38107

access providers and providers of
interconnected VoIP who were newlyidentified in the First R&O as subject to
CALEA submit system security
statements to the Commission.
Additionally, the Second R&O requires
that each carrier that has a CALEA
section 107(c) petition on file with the
Commission submit to us a letter
documenting that the carrier’s
equipment, facility, or service qualifies
for section 107(c) relief under the
October 25, 1998 cutoff for such relief.
The Second R&O contains new
information collection requirements
subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104–13. They
will be submitted to OMB for review
under Section 3507(d) of the PRA. OMB,
the general public, and other Federal
agencies are invited to comment on the
new or modified information collection
requirements contained in this
proceeding.
E. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
110. The RFA requires an agency to
describe any significant alternatives that
it has considered in reaching its
proposed approach, which may include
(among others) the following four
alternatives: (1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for small entities; (3) the
use of performance, rather than design,
standards; and (4) an exemption from
coverage of the rule, or any part thereof,
for small entities.
111. The need for the regulations
adopted herein is mandated by Federal
legislation. In the Second R&O, we find
that, under the express terms of the
CALEA statute, all carriers subject to
CALEA are obliged to become CALEAcompliant without exception. However,
in the previously-issued Further Notice
of Proposed Rulemaking in this
proceeding (a companion document to
the First R&O), we are considering two
alternatives: (1) Exempting from CALEA
certain classes or categories of facilitiesbased broadband Internet access
providers—notably small and rural
providers and providers of broadband
networks for educational and research
institutions, and (2) requiring something
less than full CALEA compliance for
certain classes or categories of
providers, including smaller providers.
112. In the Second R&O, we find that,
within 90 days of the effective date of
the Second R&O, facilities-based

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broadband Internet access providers and
providers of interconnected VoIP who
were newly-identified in the First R&O
as subject to CALEA must submit
system security statements to the
Commission. Ensuring that any
interception of a carrier’s
communications or access to callidentifying information can be activated
only in accordance with a court order or
other lawful authorization and with the
affirmative intervention of an employee
of the carrier acting in accordance with
regulations prescribed by the
Commission is required by section 105
of CALEA and section 229(b) of the
Communications Act. Further, system
security compliance within 90 days is
specified for telecommunications
carriers in section 64.2105 of the
Commission’s rules. While we
considered the alternative of modifying
this 90-day compliance period for
facilities-based broadband Internet
access providers and providers of
interconnected VoIP who were newlyidentified in the First R&O as subject to
CALEA, we concluded that would result
in disparate treatment of these newlyidentified providers.
113. In the Second R&O, we also find
that sections 107(c) and 109(b) of
CALEA provide only limited and
temporary relief from compliance
requirements, and that they are
complementary provisions that serve
different purposes, which are,
respectively: (1) Extension of the
CALEA section 103 compliance
deadline; and, (2) recovery of CALEAimposed costs. We considered the
alternative of a less stringent
interpretation of these two sections, but
concluded that, in designing them,
Congress carefully balanced a
reasonable compliance period against a
firm deadline. Accordingly, we
conclude that the statutory language
does not permit us to adopt a less
stringent interpretation. However, we
note that section 109(b) lists 11 criteria
for determining whether CALEA
compliance is ‘‘reasonably achievable’’
by a particular telecommunications
carrier, and one of these criteria is ‘‘[t]he
financial resources of the
telecommunications carrier.’’
Accordingly, small carriers may petition
for relief under this CALEA section,
thus possibly mitigating, in some cases,
the economic burden of compliance
with rules adopted herein.
114. In the Second R&O, we also find
that, in addition to the enforcement
remedies through the courts available to
LEAs under CALEA section 108, we
may take separate enforcement action
under section 229(a) of the
Communications Act against carriers

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that fail to comply with the CALEA
statute. We considered an alternative,
recommended by some commenters,
that authority to enforce CALEA lies
exclusively with the courts, but we
conclude that we have the authority to
prescribe CALEA rules and investigate
the compliance of those carriers and
providers subject to such rules. We also
conclude that there should be no
disparate treatment of small entities
with regard to CALEA enforcement
because this would be inconsistent with
the statute.
115. Finally, in the Second R&O, we
find that carriers must generally pay for
CALEA development and
implementation costs incurred after
January 1, 1995, but we acknowledge
that they may recover costs from other
sources, such as from their subscribers.
Some commenters argue that carriers
with small subscriber bases are less able
to bear the costs of CALEA
implementation; however, to the extent
CALEA costs prohibit these carriers
from reasonably achieving CALEA
compliance, we again note that CALEA
section 109(b) provides a remedy. The
carriers can seek a determination from
the Commission that CALEA
compliance is not reasonably
achievable, and, upon such a
determination, the Attorney General
may agree to pay the costs of
compliance for these carriers, or the
carriers will be deemed to be in
compliance. We believe our approach
represents a reasonable accommodation
for small carriers.
F. Report to Congress
116. The Commission will send a
copy of the Second R&O and MO&O,
including this FRFA, in a report to be
sent to Congress and the Government
Accountability Office pursuant to the
Congressional Review Act. In addition,
the Commission will send a copy of the
Second R&O and MO&O and FRFA to
the Chief Counsel for Advocacy of the
SBA.
Ordering Clauses
117. Pursuant to sections 1, 4(i), 7(a),
229, 301, 303, 332, and 410 of the
Communications Act of 1934, as
amended, and section 102 of the
Communications Assistance for Law
Enforcement Act, 18 U.S.C. 1001, the
Second Report and Order and
Memorandum Opinion and Order in ET
Docket No. 04–295 is adopted.
118. Parts 1, 22, 24, and 64 of the
Commission’s rules, 47 CFR parts 1, 22,
24, and 64, are amended as set forth
below. The requirements of the Second
Report and Order shall become effective
August 4, 2006. The Second Report and

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Order contains information collection
requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public
Law 104–13, that are not effective until
approved by the Office of Management
and Budget. The Federal
Communications Commission will
publish a document in the Federal
Register announcing the effective date
of those rules.
119. The ‘‘Petition for
Reconsideration and for Clarification of
the CALEA Applicability Order’’ filed by
the United States Telecom Association
is granted to the extent indicated herein
and is denied in all other respects.
120. The Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
the Second Report and Order and
Memorandum Opinion and Order,
including the Final Regulatory
Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small
Business Administration.
List of Subjects
47 CFR Part 1
Communications common carriers,
Reporting and recordkeeping
requirements, Telecommunications.
47 CFR Part 22
Communications common carriers.
47 CFR Part 24
Communications common carriers,
Personal communications services,
Telecommunications.
47 CFR Part 64
Communications common carriers,
Telecommunications, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR parts 1, 22,
24, and 64 as follows:

■

PART 1—PRACTICE AND
PROCEDURE
1. The authority citation for part 1
continues to read as follows:

■

Authority: 15 U.S.C. 79 et seq.; 47 U.S.C.
151, 154(i), 154(j), 155, 157, 225, and 303(r).

2. Subpart Z is added to read as
follows:

■

Subpart Z—Communications
Assistance for Law Enforcement Act
Sec.
1.20000

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Purpose.

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Federal Register / Vol. 71, No. 128 / Wednesday, July 5, 2006 / Rules and Regulations
1.20001 Scope.
1.20002 Definitions.
1.20003 Policies and procedures for
employee supervision and control.
1.20004 Maintaining secure and accurate
records.
1.20005 Submission of policies and
procedures and Commission review.
1.20006 Assistance capability requirements.
1.20007 Additional assistance capability
requirements for wireline, cellular, and
PCS telecommunications carriers.
1.20008 Penalties.

Subpart Z—Communications
Assistance for Law Enforcement Act
§ 1.20000

Purpose.

Pursuant to the Communications
Assistance for Law Enforcement Act
(CALEA), Public Law 103–414, 108 Stat.
4279 (1994) (codified as amended in
sections of 18 U.S.C. and 47 U.S.C.), this
subpart contains rules that require a
telecommunications carrier to:
(a) Ensure that any interception of
communications or access to callidentifying information effected within
its switching premises can be activated
only in accordance with appropriate
legal authorization, appropriate carrier
authorization, and with the affirmative
intervention of an individual officer or
employee of the carrier acting in
accordance with regulations prescribed
by the Commission; and
(b) Implement the assistance
capability requirements of CALEA
section 103, 47 U.S.C. 1002, to ensure
law enforcement access to authorized
wire and electronic communications or
call-identifying information.
§ 1.20001

Scope.

The definitions included in 47 CFR
1.20002 shall be used solely for the
purpose of implementing CALEA
requirements.

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§ 1.20002

Definitions.

For purposes of this subpart:
(a) Appropriate legal authorization.
The term appropriate legal
authorization means:
(1) A court order signed by a judge or
magistrate authorizing or approving
interception of wire or electronic
communications; or
(2) Other authorization, pursuant to
18 U.S.C. 2518(7), or any other relevant
federal or state statute.
(b) Appropriate carrier authorization.
The term appropriate carrier
authorization means the policies and
procedures adopted by
telecommunications carriers to
supervise and control officers and
employees authorized to assist law
enforcement in conducting any
interception of communications or
access to call-identifying information.

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(c) Appropriate authorization. The
term appropriate authorization means
both appropriate legal authorization and
appropriate carrier authorization.
(d) LEA. The term LEA means law
enforcement agency; e.g., the Federal
Bureau of Investigation or a local police
department.
(e) Telecommunications carrier. The
term telecommunications carrier
includes:
(1) A person or entity engaged in the
transmission or switching of wire or
electronic communications as a
common carrier for hire;
(2) A person or entity engaged in
providing commercial mobile service (as
defined in sec. 332(d) of the
Communications Act of 1934 (47 U.S.C.
332(d))); or
(3) A person or entity that the
Commission has found is engaged in
providing wire or electronic
communication switching or
transmission service such that the
service is a replacement for a substantial
portion of the local telephone exchange
service and that it is in the public
interest to deem such a person or entity
to be a telecommunications carrier for
purposes of CALEA.
§ 1.20003 Policies and procedures for
employee supervision and control.

A telecommunications carrier shall:
(a) Appoint a senior officer or
employee responsible for ensuring that
any interception of communications or
access to call-identifying information
effected within its switching premises
can be activated only in accordance
with a court order or other lawful
authorization and with the affirmative
intervention of an individual officer or
employee of the carrier.
(b) Establish policies and procedures
to implement paragraph (a) of this
section, to include:
(1) A statement that carrier personnel
must receive appropriate legal
authorization and appropriate carrier
authorization before enabling law
enforcement officials and carrier
personnel to implement the interception
of communications or access to callidentifying information;
(2) An interpretation of the phrase
‘‘appropriate authorization’’ that
encompasses the definitions of
appropriate legal authorization and
appropriate carrier authorization, as
used in paragraph (b)(1) of this section;
(3) A detailed description of how long
it will maintain its records of each
interception of communications or
access to call-identifying information
pursuant to § 1.20004;
(4) In a separate appendix to the
policies and procedures document:

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38109

(i) The name and a description of the
job function of the senior officer or
employee appointed pursuant to
paragraph (a) of this section; and
(ii) Information necessary for law
enforcement agencies to contact the
senior officer or employee appointed
pursuant to paragraph (a) of this section
or other CALEA points of contact on a
seven days a week, 24 hours a day basis.
(c) Report to the affected law
enforcement agencies, within a
reasonable time upon discovery:
(1) Any act of compromise of a lawful
interception of communications or
access to call-identifying information to
unauthorized persons or entities; and
(2) Any act of unlawful electronic
surveillance that occurred on its
premises.
§ 1.20004
records.

Maintaining secure and accurate

(a) A telecommunications carrier shall
maintain a secure and accurate record of
each interception of communications or
access to call-identifying information,
made with or without appropriate
authorization, in the form of single
certification.
(1) This certification must include, at
a minimum, the following information:
(i) The telephone number(s) and/or
circuit identification numbers involved;
(ii) The start date and time that the
carrier enables the interception of
communications or access to call
identifying information;
(iii) The identity of the law
enforcement officer presenting the
authorization;
(iv) The name of the person signing
the appropriate legal authorization;
(v) The type of interception of
communications or access to callidentifying information (e.g., pen
register, trap and trace, Title III, FISA);
and
(vi) The name of the
telecommunications carriers’ personnel
who is responsible for overseeing the
interception of communication or access
to call-identifying information and who
is acting in accordance with the carriers’
policies established under § 1.20003.
(2) This certification must be signed
by the individual who is responsible for
overseeing the interception of
communications or access to callidentifying information and who is
acting in accordance with the
telecommunications carrier’s policies
established under § 1.20003. This
individual will, by his/her signature,
certify that the record is complete and
accurate.
(3) This certification must be
compiled either contemporaneously
with, or within a reasonable period of

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time after the initiation of the
interception of the communications or
access to call-identifying information.
(4) A telecommunications carrier may
satisfy the obligations of paragraph (a) of
this section by requiring the individual
who is responsible for overseeing the
interception of communication or access
to call-identifying information and who
is acting in accordance with the carriers’
policies established under § 1.20003 to
sign the certification and append the
appropriate legal authorization and any
extensions that have been granted. This
form of certification must at a minimum
include all of the information listed in
paragraph (a) of this section.
(b) A telecommunications carrier shall
maintain the secure and accurate
records set forth in paragraph (a) of this
section for a reasonable period of time
as determined by the carrier.
(c) It is the telecommunications
carrier’s responsibility to ensure its
records are complete and accurate.
(d) Violation of this rule is subject to
the penalties of § 1.20008.

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§ 1.20005 Submission of policies and
procedures and Commission review.

(a) Each telecommunications carrier
shall file with the Commission the
policies and procedures it uses to
comply with the requirements of this
subchapter. These policies and
procedures shall be filed with the
Federal Communications Commission
within 90 days of the effective date of
these rules, and thereafter, within 90
days of a carrier’s merger or divestiture
or a carrier’s amendment of its existing
policies and procedures.
(b) The Commission shall review each
telecommunications carrier’s policies
and procedures to determine whether
they comply with the requirements of
§§ 1.20003 and 1.20004.
(1) If, upon review, the Commission
determines that a telecommunications
carrier’s policies and procedures do not
comply with the requirements
established under §§ 1.20003 and
1.20004, the telecommunications carrier
shall modify its policies and procedures
in accordance with an order released by
the Commission.
(2) The Commission shall review and
order modification of a
telecommunications carrier’s policies
and procedures as may be necessary to
insure compliance by
telecommunications carriers with the
requirements of the regulations
prescribed under §§ 1.20003 and
1.20004.
§ 1.20006 Assistance capability
requirements.

(a) Telecommunications carriers shall
provide to a Law Enforcement Agency

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the assistance capability requirements of
CALEA regarding wire and electronic
communications and call-identifying
information, see 47 U.S.C. 1002. A
carrier may satisfy these requirements
by complying with publicly available
technical requirements or standards
adopted by an industry association or
standard-setting organization, such as J–
STD–025 (current version), or by the
Commission.
(b) Telecommunications carriers shall
consult, as necessary, in a timely
fashion with manufacturers of its
telecommunications transmission and
switching equipment and its providers
of telecommunications support services
for the purpose of ensuring that current
and planned equipment, facilities, and
services comply with the assistance
capability requirements of 47 U.S.C.
1002.
(c) A manufacturer of
telecommunications transmission or
switching equipment and a provider of
telecommunications support service
shall, on a reasonably timely basis and
at a reasonable charge, make available to
the telecommunications carriers using
its equipment, facilities, or services
such features or modifications as are
necessary to permit such carriers to
comply with the assistance capability
requirements of 47 U.S.C. 1002.
§ 1.20007 Additional assistance capability
requirements for wireline, cellular, and PCS
telecommunications carriers.

(a) Definition—(1) Call-identifying
information. Call identifying
information means dialing or signaling
information that identifies the origin,
direction, destination, or termination of
each communication generated or
received by a subscriber by means of
any equipment, facility, or service of a
telecommunications carrier. Callidentifying information is ‘‘reasonably
available’’ to a carrier if it is present at
an intercept access point and can be
made available without the carrier being
unduly burdened with network
modifications.
(2) Collection function. The location
where lawfully authorized intercepted
communications and call-identifying
information is collected by a law
enforcement agency (LEA).
(3) Content of subject-initiated
conference calls. Capability that permits
a LEA to monitor the content of
conversations by all parties connected
via a conference call when the facilities
under surveillance maintain a circuit
connection to the call.
(4) Destination. A party or place to
which a call is being made (e.g., the
called party).

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(5) Dialed digit extraction. Capability
that permits a LEA to receive on the call
data channel a digits dialed by a subject
after a call is connected to another
carrier’s service for processing and
routing.
(6) Direction. A party or place to
which a call is re-directed or the party
or place from which it came, either
incoming or outgoing (e.g., a redirectedto party or redirected-from party).
(7) IAP. Intercept access point is a
point within a carrier’s system where
some of the communications or callidentifying information of an intercept
subject’s equipment, facilities, and
services are accessed.
(8) In-band and out-of-band signaling.
Capability that permits a LEA to be
informed when a network message that
provides call identifying information
(e.g., ringing, busy, call waiting signal,
message light) is generated or sent by
the IAP switch to a subject using the
facilities under surveillance. Excludes
signals generated by customer premises
equipment when no network signal is
generated.
(9) J–STD–025. The standard,
including the latest version, developed
by the Telecommunications Industry
Association (TIA) and the Alliance for
Telecommunications Industry Solutions
(ATIS) for wireline, cellular, and
broadband PCS carriers. This standard
defines services and features to support
lawfully authorized electronic
surveillance, and specifies interfaces
necessary to deliver intercepted
communications and call-identifying
information to a LEA. Subsequently,
TIA and ATIS published J–STD–025–A
and J–STD–025–B.
(10) Origin. A party initiating a call
(e.g., a calling party), or a place from
which a call is initiated.
(11) Party hold, join, drop on
conference calls. Capability that permits
a LEA to identify the parties to a
conference call conversation at all
times.
(12) Subject-initiated dialing and
signaling information. Capability that
permits a LEA to be informed when a
subject using the facilities under
surveillance uses services that provide
call identifying information, such as call
forwarding, call waiting, call hold, and
three-way calling. Excludes signals
generated by customer premises
equipment when no network signal is
generated.
(13) Termination. A party or place at
the end of a communication path (e.g.
the called or call-receiving party, or the
switch of a party that has placed another
party on hold).
(14) Timing information. Capability
that permits a LEA to associate call-

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Federal Register / Vol. 71, No. 128 / Wednesday, July 5, 2006 / Rules and Regulations
identifying information with the content
of a call. A call-identifying message
must be sent from the carrier’s IAP to
the LEA’s Collection Function within
eight seconds of receipt of that message
by the IAP at least 95% of the time, and
with the call event time-stamped to an
accuracy of at least 200 milliseconds.
(b) In addition to the requirements in
§ 1.20006, wireline, cellular, and PCS
telecommunications carriers shall
provide to a LEA the assistance
capability requirements regarding wire
and electronic communications and call
identifying information covered by J–
STD–025 (current version), and, subject
to the definitions in this section, may
satisfy these requirements by complying
with J–STD–025 (current version), or by
another means of their own choosing.
These carriers also shall provide to a
LEA the following capabilities:
(1) Content of subject-initiated
conference calls;
(2) Party hold, join, drop on
conference calls;
(3) Subject-initiated dialing and
signaling information;
(4) In-band and out-of-band signaling;
(5) Timing information;
(6) Dialed digit extraction, with a
toggle feature that can activate/
deactivate this capability.
§ 1.20008

Penalties.

In the event of a telecommunications
carrier’s violation of this subchapter, the
Commission shall enforce the penalties
articulated in 47 U.S.C. 503(b) of the
Communications Act of 1934 and 47
CFR 1.80.
PART 22—PUBLIC MOBILE SERVICES
3. The authority citation for part 22
continues to read as follows:

■

Authority: 47 U.S.C. 154, 222, 303, 309,
and 332.

Subpart J—[Removed]
4. Remove subpart J, consisting of
§§ 22.1100 through 22.1103.

■

PART 24—PERSONAL
COMMUNICATIONS SERVICES
5. The authority citation for part 24
continues to read as follows:

■

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Authority: 47 U.S.C. 154, 301, 302, 303,
309, and 332.

Subpart J—[Removed]
6. Remove subpart J, consisting of
§§ 24.900 through 24.903.

■

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PART 64—MISCELLANEOUS RULES
RELATING TO COMMON CARRIERS
7. The authority citation for part 64
continues to read as follows:

■

Authority: 47 U.S.C. 154, 254(k); secs.
403(b)(2)(B), (c), Pub. L. 104–104, 110 Stat.
56. Interpret or apply 47 U.S.C. 201, 218, 222,
225, 226, 228, and 254(k) unless otherwise
noted.

Subpart V—[Removed and Reserved]
8. Remove and reserve subpart V,
consisting of §§ 64.2100 through
64.2106.

■

Subpart W—[Removed and Reserved]
9. Remove and reserve subpart W,
consisting of §§ 64.2200 through
64.2203.

■

[FR Doc. 06–5954 Filed 7–3–06; 8:45 am]
BILLING CODE 6712–01–P

DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 660
[Docket No. 60109004–6164–02; I.D.
010406E]
RIN 0648-AT76

Fisheries Off West Coast States;
Coastal Pelagic Species Fisheries;
Annual Specifications
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Final rule.
AGENCY:

SUMMARY: NMFS issues a final rule to
implement the annual harvest guideline
for Pacific sardine in the U.S. exclusive
economic zone off the Pacific coast for
the fishing season of January 1, 2006,
through December 31, 2006. This
harvest guideline has been calculated
according to the regulations
implementing the Coastal Pelagic
Species (CPS) Fishery Management Plan
(FMP) and establishes allowable harvest
levels for Pacific sardine off the Pacific
coast.
DATES: Effective August 4, 2006.
ADDRESSES: Copies of the report
Assessment of Pacific Sardine Stock for
U.S. Management in 2006 and the
Environmental Assessment/Regulatory
Impact Review may be obtained from
Rodney R. McInnis, Regional
Administrator, Southwest Region,
NMFS, 501 West Ocean Blvd., Suite
4200, Long Beach, CA 90802–4213.

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FOR FURTHER INFORMATION CONTACT:
Joshua B. Lindsay, Southwest Region,
NMFS, 562–980–4034, e-mail:
[email protected].

The CPS
FMP, which was implemented by
publication of the final rule in the
Federal Register on December 15, 1999
(64 FR 69888), divides management unit
species into two categories: actively
managed and monitored. Harvest
guidelines for actively managed species
(Pacific sardine and Pacific mackerel)
are based on formulas applied to current
biomass estimates. Biomass estimates
are not calculated for species that are
only monitored (jack mackerel, northern
anchovy, and market squid).
At a public meeting each year, the
biomass for each actively managed
species is reviewed by the Pacific
Fishery Management Council’s
(Council) CPS Management Team
(Team). The biomass, harvest guideline,
and status of the fisheries are then
reviewed at a public meeting of the
Council’s CPS Advisory Subpanel
(Subpanel). This information is also
reviewed by the Council’s Scientific and
Statistical Committee (SSC). The
Council reviews the reports from the
Team, Subpanel, and SSC, provides
time for public comment, and then
makes its recommendation to NMFS.
The annual harvest guideline and
season structure are published by NMFS
in the Federal Register as soon as
practicable before the beginning of the
appropriate fishing season. The Pacific
sardine season begins on January 1 and
ends on December 31 of each year.
Public meetings of the Team and
Subpanel were held at NMFS Southwest
Fisheries Science Center in La Jolla, CA
on October 5 and 6, 2005 (70 FR 55335,
September 21, 2005). The Council
reviewed the report at its November
meeting in San Diego, CA, and listened
to comments from its advisory bodies
and the public. The Council then
adopted the 2006 harvest guideline for
Pacific sardine. Based on a biomass
estimate of 1,061,391 metric tons (mt),
the harvest guideline for Pacific sardine
for January 1, 2006, through December
31, 2006, is 118,937 mt.
The size of the sardine population
was estimated using an integrated stock
assessment model called Age-structured
Assessment Program (ASAP). ASAP is a
flexible forward-simulation that allows
for the efficient and reliable estimation
of a large number of parameters. ASAP
uses fishery dependent and fishery
independent data to obtain annual
estimates of sardine abundance, yearclass strength, and age-specific fishing
mortality. The ASAP model allows one

SUPPLEMENTARY INFORMATION:

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