0989_ss_072611

3060-0989

July 2011

SUPPORTING STATEMENT

This collection is being submitted to the OMB for approval as a “delegated” extension to an existing collection (no change in the reporting requirements). The annual cost burden has been adjusted to reflect an increase in the filing fee amount.

A. Justification:

1. FCC 02-78, Report and Order, adopted and released in March 2002, (Order), sets forth the procedures for common carriers requiring authorization under section 214 of the Communications Act of 1934, as amended (Act), 47 U.S.C. Sec. 214, to acquire domestic interstate transmission lines through a transfer of control. Under section 214 of the Act, carriers must obtain Federal Communications Commission (FCC) approval before constructing, acquiring, or operating an interstate transmission line. Acquisitions involving interstate common carriers therefore require affirmative action by the FCC before the acquisition can occur.

In July 2001, the Commission issued a Public Notice (PN) in an attempt to provide some basic filing requirement guidelines. While the PN informed applicants what information to include in their applications, the PN did not: (1) allow combined filings of domestic and international 214s; (2) provide for pro forma treatment of transactions that do not result in a change in ultimate control of a carrier; (3) provide for notice of transfers in bankruptcy; (4) provide for treatment of asset acquisitions where customers are not losing service as transfers of control rather than discontinuances of service; and (5) provide for 30-day streamlined review of 80-90 percent of transactions. On June 7, 2002, the Commission released a PN announcing that all applications for transfer of control will follow the new procedures in the rules instead of the procedures listed in the July 2001 PN.

In addition to modifying the filing requirements in the July 2001 PN, the Order permits parties to file a single domestic section 214 application for all carriers involved in a transaction, rather than separate applications for each carrier. Additionally, this Order allows for the filing of joint international and domestic section 214 transfer of control authorizations, provides a streamlined process, clarifies that certain asset acquisitions are to be treated as transfers of control, and deletes obsolete rules. See 47 CFR Sections 63.01, 63.03 and 63.04.

a. Filing Procedures for Domestic Transfer of Control Applications - 47 CFR Sections 63.03-63.04:

According to the Order and 47 CFR sections 63.03 and 63.04, domestic section 214 applications involving domestic transfers of control, at a minimum, should specify: (1) the name, address and telephone number of each applicant; (2) the government, state, or territory under the laws of which each corporate or partnership applicant is organized; (3) the name, title, post office address, and telephone number of the officer or contact point, such as legal counsel, to whom correspondence concerning the application is to be addressed; (4) the name, address, citizenship and principal business of any person or entity that directly or indirectly owns at least ten percent of the equity of the applicant, and the percentage of equity owned by each of those entities (to the nearest one percent); (5) certification pursuant to 47 CFR sections 1.2001 through 1.2003 that no party to the application is subject to a denial of Federal benefits pursuant to section 5301 of the Anti-Drug Abuse Act of 1988; (6) a description of the transaction; (7) a description of the geographic areas in which the transferor and transferee (and their affiliates) offer domestic telecommunications services, and what services are provided in each area; (8) a statement as to how the application fits into one or more of the presumptive streamlined categories in section 63.03 or why it is otherwise appropriate for streamlined treatment; (9) identification of all other Commission applications related to the same transaction; (10) a statement of whether the applicants are requesting special consideration because either party to the transaction is facing imminent business failure; (11) identification of any separately filed waiver requests being sought in conjunction with the transaction; and (12) a statement showing how grant of the application will serve the public interest, convenience and necessity, including any additional information that may be necessary to show the effect of the proposed transaction on competition in domestic markets. Where an applicant wishes to file a joint international section 214 transfer of control application and domestic section 214 transfer of control application, the applicant must submit information that satisfies the requirements of 47 CFR section 63.18. In the attachment to the international application, the applicant must submit the information described in 47 CFR section 63.04(a)(6)-(a)(12). See 47 CFR Sections 63.03 and 63.04.

When the Commission, acting through the Wireline Competition Bureau, determines that applicants have submitted a complete application qualifying for streamlined treatment, it shall issue a public notice commencing a 30-day review period to consider whether the transaction serves the public interest, convenience and necessity. Parties will have 14 days to file any comments on the proposed transaction, and applicants will be given 7 days to respond.

b. Pro Forma Transactions - 47 CFR Section 63.03 (d):

Applicants are not required to file post-consummation notices of pro forma transactions, except that a post transaction notice must be filed with the Commission within 30 days of a pro forma transfer to a bankruptcy trustee or a debtor-in-possession. The notification can be in the form of a letter (in duplicate to the Secretary). The letter or other form of notification must also contain the information listed in sections (a)(1) through (a)(4) in section 63.04. A single letter may be filed for more than one such transfer of control. See 47 CFR section 63.04.

As noted on the OMB Form 83i, this information collection does not affect individuals or households; thus, there are no impacts under the Privacy Act.

The statutory authority for this collection is contained in 47 U.S.C. §§ 152, 154(i)-(j), 201, 214, and 303(r).

2. The information will be used to ensure that applicants comply with the requirements of 47 U.S.C. § 214. Improving access to electronic filing is an ongoing objective of the Commission. We note that the International Bureau has implemented an on-line filing process for international section 214 transfer applications. Applicants are now able to file international section 214 transfer applications on-line, but may not be able to file their domestic section 214 attachment on-line. Thus, until electronic filing for domestic section 214 transfer applications is implemented, applicants using electronic filing will be unable to file a combined domestic and international section 214 application. We will, however, permit applicants to file a separate domestic section 214 application that consists of a printed copy of the electronically filed international section 214 application and the requisite attachment containing the additional information required for the domestic application. The Commission continues to work towards an electronic filing solution that enables both the international and domestic applications to be handled electronically, and also allows the fees for both authorizations to be paid electronically.

3. There will be no duplication of information. The information sought is unique to each applicant.

4. The collections have been carefully designed to minimize the burden on all applicants. The Commission believes that the measures adopted in the Order will reduce regulatory burdens for small carriers including resellers and small incumbent local exchange carriers. The Commission eased filing burdens by adopting rules that enable carriers to file a single document with the Commission that combines both domestic and international section 214 applications, and aside from cases involving bankruptcy, where a simple notice will be required, the Commission eliminated filing requirements for pro forma transactions.

6. The required information will be used to determine compliance with section 214 of the Communications Act of 1934, as amended. Without this information, the Commission would be unable to perform its statutory responsibilities.

7. Filing frequency is not determined by the Commission. Applicants will file applications only when seeking authorization to transfer control of domestic interstate transmission lines. Carriers are subject to the requirements of 47 CFR Section 63.52(a). In addition to filing the original application and five copies with U.S. Bank in accordance with FCC Rules 1.1111 and 63.52(a), applicants are requested to forward a copy of the filed application, date-stamped by U.S. Bank, with a copy of the FCC Form 159, and a copy of the check for fee payment, to the Competition Policy Division, Wireline Competition Bureau, 445 12^th Street, SW, Washington, DC 20554. This requirement will allow expeditious processing of applications with voluminous documentation by eliminating the need to make extra copies for FCC staff who will be reviewing the applications. If the applicants want each Commissioner to receive a copy of their applications or other materials, they should file extra copies of each application.

8. Pursuant to 5 CFR 1320.8(d), the Commission published a 60 day notice in the Federal Register. See 76 FR 30714, dated May 26, 2011. No comments were received.

9. The FCC does not anticipate providing any payment or gift to respondents.

10. The FCC is not requiring that applicants submit confidential information to the FCC. If applicants submit information which applicants believe is confidential, applicants may request confidential treatment of such information under § 0.459 of the FCC's rules.

11. There are no questions of a sensitive nature with respect to the information collected.

12. The following represents the estimates of hour burden of the collections of information:

a. Filing Procedures for Domestic Transfer of Control Applications (47 CFR Sections 63.03-63.04)

1. Number of respondents: All telecommunications carriers seeking domestic section 214 approval concerning acquisitions of corporate control are required to comply with sections 63.03 and 63.04 described in paragraph one. The Commission anticipates receiving 85 applications per year.

2. Frequency of response: On occasion reporting requirement.

3. Annual hour burden per respondent: 12 hours per application. 85 respondents x 12 hours per response = 1,020 hours. Total annual burden is 1,020 hours.

4. Total estimate of annualized cost to respondents for the hour burdens of collection of information: $132,600. $1,560 per application ($130 per hour/12 hours per application) x 85 applications = $132,600.

5. Explanation of calculation: We estimate that preparation time will be approximately 12 hours per application. 12 (hours) x $130 (per hour) x 85 applications = $132,600.

2. Pro Forma Transactions ( 47 CFR Section 63.03).

1. Number of respondents: 7 respondents will file per year. The Commission anticipates receiving 7 filings per year.

2. Frequency of response: On occasion reporting requirement.

3. Annual hour burden per respondent: 1.5 hours per application. 7 respondents x 1.5 hours per response = 10.5 hours. Total annual burden is 10.5 hours (rounded to 11 hours).

4. Total estimate of annualized cost to respondents for the hour burdens of collection of information: $1,365. $195 per application ($130 per hour/1.5 hours per application) x 7 applications = $1,365.

5. Explanation of calculation: We estimate that preparation time will be approximately 1.5 hours per application. 1.5 (hours) x $130 (per hour) x 7 applications = $1,365.

Total number of respondents: 85 + 7 = 92.

Total annual burden: 1,020 + 11 = 1,031 hours.

13. The following represents the FCC's estimate of the annual cost burden to respondent or recordkeepers resulting from the collections of information:

(i) Total Capital and Start-up Cost: $0.

(ii) Total Operation and Maintenance and Purchase of Services Component. Respondents are subject to a filing fee of $1,015 per application. Thus, 85 applications x $1,015 = $86,275.

14. The following represents the FCC's estimates of the annual costs to the federal government as a result of the proposed requirements:

Review of Applications and Notices: 10 (staff members to process an application) x $27 (average grade and hourly salary of staff) x 20 (hours to process the applications) x 85 applications = $459,000.

15. There is an increase in the hourly burden of +72 hours because the number of respondents/responses increased to 92. The increase in respondent’s annual cost is due to an increase in the filing fee amount ($1,015 per application). Therefore, the Commission is reporting a +$10,040 increase adjustment to our cost estimates submitted and approved by OMB in 2008.

16. The Commission will post all filings submitted on the Internet.

17. The Commission does not seek approval not to display the expiration date for OMB approval of the information collections.

18. As explained in item 7 above, applicants will be required to submit more than an original and two copies of their application. The Commision also notes that when the 60 day notice was published, the delegated letterhead was not used; this collection will be submitted under delegated authority. There are no other exceptions.

B. Collections of Information Employing Statistical Methods

Not applicable. The requirements do not employ statistical methods.

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