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Nationwide Programmatic Agreement for Review

Under the National Historic Preservation Act

The Report and Order contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection requirements contained in this proceeding. Public and agency comments are due March 7, 2005. Comments should address the following: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. A copy of any comments on the information collections contained herein should be submitted to Judith B. Herman, Federal Communications Commission, 445 12th St., SW., Room 1-C804, Washington, DC 20554, or via the Internet to Judith-B.Herman@fcc.gov, and to Edward C. Springer, OMB Desk Officer, 10236 New Executive Office Building, 724 17th St., NW., Washington, DC 20503, or via the Internet to Edward.Springer@omb.eop.gov.

In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Pub. L. 107-198, see 44 U.S.C. 3506(c)(4), we previously sought comment on how the Commission might ``further reduce the information collection burden for small business concerns with fewer than 25 employees.'' In this Report and Order, we have assessed the effects of certain policy changes brought about by the Nationwide Agreement that might impose information collection burdens.1 More specifically, we believe that businesses with fewer than 25 employees will be affected by the Nationwide Agreement in a manner similar to other small entities. Burdens and benefits may be felt more acutely by small businesses due to their reduced ability to spread regulatory costs across a larger number of projects. The Nationwide Agreement does impose reporting, recordkeeping, and other compliance requirements.2 However, Part III of the Nationwide Agreement, which allows for the construction of certain telecommunications facilities without the need to submit section 106 materials to the SHPO/THPO, will probably provide the greatest regulatory relief for small businesses, including those with fewer than 25 employees. We believe that the Part III exclusions will be especially helpful for smaller entities including those with fewer than 25 employees who rely more heavily on the prompt, predictable completion of each project to maintain a satisfactory cash flow. Businesses that avail themselves of an exclusion will have some costs. For example, they will have to determine whether a specific project satisfies the criteria for that exclusion and maintain documentation of that determination in their files. ---------------------------------------------------------------------------

1 See Final Regulatory Flexibility Analysis, infra, at paragraphs 137-141.

2 Id. --------------------------------------------------------------------------- Summary of the Report and Order

1. In this Report and Order, we adopt revisions to the Federal Communications Commission's (``Commission'') rules to implement a Nationwide Programmatic Agreement (``Nationwide Agreement'') that will tailor and streamline procedures for review of certain Commission undertakings for communications facilities under section 106 (16 U.S.C. 470f) of the National Historic Preservation Act of 1966 (``NHPA'') (16 U.S.C. 470 et seq.). On June 9, 2003, we released a Notice of Proposed Rulemaking (``NPRM'') seeking comment on a draft Nationwide Agreement among the Commission, the Advisory Council on Historic Preservation (``Council'') and the National Conference of State Historic Preservation Officers (``Conference''). See 68 FR 40876 (July 9, 2003). As discussed below, upon consideration of the record, we have determined that, with certain revisions, the Nationwide Agreement will tailor the section 106 review in the communications context in order to improve compliance and streamline the review process for construction of towers and other Commission undertakings, while at the same time advancing and preserving the goal of the NHPA to protect historic properties, including historic properties to which federally recognized Indian tribes, including Alaska Native Villages, and Native Hawaiian Organizations (``NHOs'') attach religious and cultural significance. The Council and Conference have agreed with this determination, and the parties executed the Nationwide Agreement on October 4, 2004. Accordingly, upon the effective date of the rule changes adopted in this Report and Order, the provisions of the attached Nationwide Agreement will become binding on affected licensees and applicants of the Commission. [[Page 557]]

2. During the late 1990s, coincident with the explosion in tower constructions necessitated by the deployment of wireless mobile service across the country, delays in completing traditional section 106 reviews began to occur. The Commission's licensees and applicants (``Applicants''), State Historic Preservation Officers (``SHPOs'') and Commission staff began experiencing ever-growing caseloads and backlogs that, it soon became clear, were posing a threat to the timely deployment of wireless service to customers.

3. Faced with the prospect of even larger numbers of towers to be constructed, the Council formed a working group, consisting of representatives of the Council and Commission, SHPOs, Indian tribes, the communications industry, and historic preservation consultants. Members of the Working Group began meeting on a regular basis, seeking ways of tailoring the section 106 process to the unique situation posed by tower constructions (and the collocation of antennas on towers and other structures). While striving to preserve the goal of the NHPA to protect historic properties (including historic properties of cultural and religious importance to Indian tribes and NHOs), the group explored alternatives for streamlining the section 106 process, when feasible.

4. In November 2001, the Working Group began discussing a Nationwide Agreement, consistent with Sec. 800.14(b) (36 CFR 800.14(b)) of the Council's rules, to modify the historic preservation review process for communications towers and for antenna collocations that were not excluded from section 106 review under the Nationwide Programmatic Agreement for the Collocation of Wireless Antennas, executed March 16, 2001 (66 FR 17554, April 2, 2001) (``Collocation Agreement''). The Working Group sought to tailor the NHPA review process to the communications context in several ways that were reflected in the draft Nationwide Agreement. Commission staff also consulted on a government-to-government basis with representatives of federally recognized Indian tribes regarding the potential for provisions of the draft Agreement to significantly and uniquely affect their historic and cultural interests.

5. Although we agree, as discussed below, that certain changes to the document are appropriate, we conclude that signing the Nationwide Agreement advances the public interest. Section 800.14(b) of the Council's rules, promulgated pursuant to the Council's authority under section 214 of the NHPA, anticipates that, after due deliberation among affected parties, a federal agency, the Council and the Conference may enter into a nationwide programmatic agreement that streamlines the section 106 review process and tailors it to the particular context of the subject matter to which it is applied. Consistent with this provision, the Nationwide Agreement streamlines and tailors the NHPA review process for tower constructions in a variety of ways, including: identifying classes of undertakings that, due to the small likelihood that they will impact historic properties, are excluded from routine section 106 review; developing clear and concise principles governing the initiation of contact with Indian tribes and NHOs as part of the section 106 process; clarifying methods for involving the public in the process; providing definitional and procedural guidance for the identification and evaluation of historic properties, and the assessment of effects on those properties; establishing procedures, including timelines, for SHPO, Tribal Historic Preservation Officer (``THPO'') and Commission review; providing procedural guidance for situations where construction occurs prior to compliance with section 106; and prescribing uniform filing documentation.

6. We disagree with arguments that the Nationwide Agreement will obstruct deployment and impede public safety by adding regulatory complexity to the section 106 review process. To the contrary, we find, on balance, that the measures described herein will relieve unnecessary regulatory burdens, and therefore will promote public safety and consumer interests, consistent with our deregulatory initiatives. While the procedures prescribed in the Nationwide Agreement are not free of complexity, on the whole they are less burdensome than the current process under the Council's rules, and neither we nor any commenters have identified substantially simpler solutions that would be consistent with our responsibilities under section 106 of the NHPA.

7. At the same time, we conclude that the Nationwide Agreement will sufficiently protect historic properties. The NHPA and the Council's rules do not require that federal undertakings avoid all impacts on historic properties. Rather, section 106 requires that federal agencies ``take into account'' the effect of their undertakings on historic properties, which the Council's rules interpret to include, among other things, a ``reasonable and good faith effort'' to identify historic properties. Moreover, section 214 of the NHPA (16 U.S.C. 470v) directs the Council to ``tak[e] into consideration the magnitude of the exempted undertaking or program and the likelihood of impairment of historic properties.'' We interpret these provisions to mean that, in formulating exemptions and prescribing processes, the Council and the federal agency need not ensure that every possible effect on a historic property is individually considered in all circumstances, but that they should take into account the likelihood and potential magnitude of effects in categories of situations. Indeed, doing so should advance historic preservation in the long run by enabling all parties to focus their limited resources on the cases where significant damage to historic properties is most likely.

8. Within this framework, we find it significant that both the Council and the Conference, whose principal missions include administering section 106 and protecting historic properties, have agreed to sign the Nationwide Agreement. Like these expert agencies, we conclude, that the procedures and standards set forth in the Nationwide Agreement, while streamlining the process, are sufficient to minimize the likelihood that facilities construction will have unreviewed and unmitigated effects on historic properties, consistent with the NHPA.

9. As a preliminary matter, a number of commenters argue that construction of a communications tower is not a federal undertaking under section 106 of the NHPA. An ``undertaking'' under the NHPA means ``a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including * * * those requiring a Federal permit[,] license, or approval'' (16 U.S.C. 470w(7)(C)). The Commission's rules currently treat tower construction as an ``undertaking'' for purposes of the NHPA. Unless and until we revisit this public-interest question and determine that it is appropriate to amend our rules, we believe our existing policies reflect a permissible interpretation of the Commission's authority under the Communications Act.

10. Some commenters argue that we should not adopt the proposed Nationwide Agreement at this time because federally recognized Indian tribes were not sufficiently involved in its negotiation and drafting. Commission recognizes that as an independent agency of the federal government, we have a trust responsibility to and a government-to- government relationship with federally recognized Indian tribes. Accordingly, it [[Page 558]] is our stated policy to consult, to the extent practicable, with Tribal governments prior to implementing any regulatory action or policy that will significantly or uniquely affect Tribal governments, their land and resources. See In the Matter of Statement of Policy on Establishing a Government-to-Government Relationship with Indian Tribes, Policy Statement, 16 FCC Rcd 4078, 4080 (2000).

11. We conclude that the actions our staff has undertaken in developing the Nationwide Agreement fulfill the commitment made in the Tribal Policy Statement.

12. Our actions in this matter were not limited to inviting written comment from Indian tribes. The Commission invited representatives of Tribal governments to participate in deliberations of the Working Group, and in a series of communications to all federally recognized tribes, Commission staff scoped the issues and specifically invited meaningful consultative discussion. Commission staff also distributed materials and discussed the status of the Nationwide Agreement at several tribal conferences during the period of preparation and negotiation. These initial efforts led to direct substantive discussions between Commission staff and representatives of Tribes.

13. As a result of these consultations, we put out for public comment both the Navajo Nation's proposal for notifying Tribes of otherwise excluded undertakings and the United South and Eastern Tribes, Inc. (``USET'') proposal regarding tribal and NHO participation in considering proposed undertakings, and we are adopting aspects of the USET proposal in this Report and Order. Our consultation with USET has continued since we released the NPRM, and we have also kept other tribal organizations apprised of our work and have invited them and their members to participate. Finally, many Indian tribes and NHOs filed comments in this proceeding, and federally recognized tribes were encouraged to make ex parte presentations to members of the Commission staff regarding this rulemaking.

14. We recognize that the execution of the Nationwide Agreement does not end our ongoing government-to-government relationship with federally recognized Tribes. Accordingly, we fully intend to continue regular consultation on a government-to-government basis, consistent with resource constraints, regarding the implementation of the Nationwide Agreement as well as other aspects of our relationship.

15. Section 214 of the NHPA permits the Council to exempt from section 106 review classes of federal undertakings that would be unlikely to impact historic properties. Pursuant to this authority, the draft Nationwide Agreement lists certain types of Commission undertakings that would be exempt from completing the section 106 process under the NHPA.

16. We conclude that categorically excluding from routine section 106 review categories of construction that are unlikely adversely to impact historic properties is appropriate and in the public interest. In addition to facilitating the timely deployment of service, properly drafted exclusions can promote historic preservation both by conserving the Commission's, SHPOs'/THPOs' and the Council's resources to review more important cases, and by providing incentives for applicants to locate facilities in a manner that will render effects on historic properties less likely. As discussed above, the NHPA does not require perfection in evaluating the potential effects of an undertaking in every instance. To the contrary, we believe section 214 contemplates a balancing of the likelihood of significant harm against the burden of reviewing individual undertakings. Moreover, the provisions in the Nationwide Agreement for ceasing construction and notifying the Commission and other interested parties upon discovery of previously unidentified historic properties provides a safeguard in the unusual instances where the availability of an exclusion might otherwise cause an adverse impact to be overlooked.

17. The proposed Nationwide Agreement excludes the ``Modification of a tower and any associated excavation that does not involve a collocation and does not substantially increase the size of the existing tower, as defined in the Collocation Agreement.'' A substantial increase in size, in turn, is defined in the Collocation Agreement by reference to the extent of any increase in the tower's height, the installation of new equipment cabinets or shelters, the extent of any new protrusion from the tower, and excavation outside the current tower site and any access or utility easements. Enhancements to towers that involve collocations and do not result in a substantial increase in size are excluded from review under the Collocation Agreement.

18. We conclude that it is appropriate and necessary to include in the Nationwide Agreement an exclusion for tower enhancements that constitute federal undertakings, do not involve collocations, and do not result in a substantial increase in size. Many changes to tower sites, such as building a fence around a tower, replacing an air conditioner or electric generator, or planting shrubs on the grounds, are in the nature of service or maintenance and are not federal undertakings. Thus, the Nationwide Agreement provides explicitly that Undertakings do not include maintenance and servicing of equipment. Other changes, however, are federal undertakings because they materially change the nature of the project that originally required section 106 review. Thus, a change is a federal undertaking if it alters an essential federal characteristic of the tower or its antennas. Any other interpretation would permit applicants to avoid section 106 review by initially constructing a non-intrusive tower and then modifying it substantially under the guise of a nonfederal alteration.

19. Because certain changes to towers that do not involve collocations are federal undertakings, we conclude that such enhancements should be excluded from review if they do not involve a substantial increase in size. Under the Collocation Agreement, a change to a tower occurring in conjunction with a collocation that does not result in a substantial increase in size is excluded from section 106 review. In some instances, a tower owner may find it beneficial to make a similar type of enhancement that is not associated with an immediate collocation. Such a change would have the same minimal likelihood of affecting historic properties as if it were accompanied by a collocation. Therefore, it should be excluded from section 106 review under the same standard.

20. Under the Collocation Agreement, collocations on towers constructed after March 16, 2001, are not excluded unless the tower has previously completed the section 106 review process. In drafting the Collocation Agreement, the parties recognized that permitting collocations on pre-existing towers without review, absent substantial evidence of an adverse effect from either the proposed collocation or the underlying tower, would minimize the potential for adverse effects from new construction by creating an incentive to collocate. For towers constructed after the effective date of the Collocation Agreement, by contrast, excluding collocations from review where the underlying tower had not been reviewed might create a perverse incentive for companies to build towers without review in the hope of later attracting collocations. The exclusion for enhancements will similarly apply to all towers constructed on or before March 16, 2001, and to [[Page 559]] towers constructed after that date that went through the section 106 process. Otherwise, a party might be able to avoid the limitation in the Collocation Agreement by first altering a tower and then adding an excluded collocation.

21. Similar to the exclusion for enhancements to towers, the draft Nationwide Agreement permits the construction of new towers without NHPA review when the new tower replaces an existing tower and does not involve a substantial increase in size, as defined in the Collocation Agreement. In addition, unlike the exclusion for enhancements, the replacement tower exclusion permits construction and excavation within 30 feet in any direction of the leased or owned property previously surrounding the tower.

22. We adopt the replacement tower exclusion. Similar to collocations, strengthened structures may reduce the need for more towers by housing up to two, four or more additional antennas. Given the limitation of the exclusion to replacements that do not effectuate a substantial increase in size, it is highly unlikely that a replacement tower within the exclusion could have any impact other than on archeological properties. Moreover, the limitation on construction and excavation to within 30 feet of the existing leased or owned property means that only a minimal amount of previously undisturbed ground, if any, would be turned, and that would be very close to the existing construction. Finally, for reasons similar to those discussed with respect to tower enhancements, the replacement tower exclusion will apply to towers constructed after March 16, 2001, only if the original tower completed section 106 review.

23. The draft Nationwide Agreement permits the erection of facilities without NHPA review for a temporary period not to exceed twenty-four months. We adopt the proposed temporary facilities exclusion with one revision. By their nature, temporary facilities usually involve little or no excavation. So long as no excavation will occur on previously undisturbed ground, the risk of damage to archeological or other historic properties from a temporary facility is small. Moreover, temporary facilities are often used in response to exigent circumstances where it is important that they be erected quickly. Taking these considerations together, we conclude that an exclusion for temporary facilities is appropriate where no excavation will occur on previously undisturbed ground. We revise the exclusion, however, so that a temporary facility that requires excavation other than on previously disturbed ground must complete section 106 review. We further conclude that a period of 24 months is sufficient to accommodate nearly all temporary facilities, and is necessary to ensure that the exclusion cannot be used to avoid section 106 review indefinitely.

24. The draft Nationwide Agreement permits specified construction on certain properties in active industrial, commercial, or government- office use without NHPA review. We adopt a revised version of this proposed exclusion. First, we limit the exclusion to industrial parks, commercial strip malls, or shopping centers that occupy a total land area of 100,000 square feet or more. As noted by several commenters, applying the exclusion to any commercial property as small as 10,000 square feet, as proposed in the NPRM, would create an unacceptable risk of inappropriate development on small commercial properties, such as neighborhood shops, that may be located in or near historic areas. By confining the exclusion to construction in industrial parks, commercial strip malls, or shopping centers that occupy a total land area of 100,000 square feet or more, we effectively ensure that construction subject to the exclusion will occur not only on plots that substantially exceed 10,000 square feet, but on highly developed properties and on ground that, in all likelihood, will have been thoroughly disturbed when the existing structures were constructed. At the same time, these types of properties are among those where wireless telecommunications service is most often needed. Thus, this exclusion combines a low likelihood of significant impact on historic properties with a high potential to satisfy service needs, thereby reducing pressure to site other facilities in potentially more sensitive locations.

25. Second, we limit the exclusion to facilities that are less than 200 feet in overall height. A tower of less than 200 feet is ordinarily unlikely to have significant incremental effects on historic properties within an area that is already highly developed. Furthermore, antenna structures 200 feet or less in height ordinarily do not require notification to the Federal Aviation Administration, and thus are not subject to federal lighting requirements. Thus, to the extent that lighting might have a visual adverse effect on historic properties, any such effect is unlikely from towers 200 feet or less.

26. Third, we require that before applying this exclusion, the applicant must undertake a search of relevant records, and must complete a full section 106 review under the Nationwide Agreement if it discovers that the property on which it proposes to construct is located within the boundaries of or within 500 feet of a historic property. The draft Nationwide Agreement proposed that the exclusion would not apply if a structure 45 years or older were located within 200 feet of the proposed facility. We conclude, however, that this proposed criterion would be burdensome to apply and is not well tailored to prevent potential effects on nearby historic properties. Thus, rather than turning on the age of nearby properties regardless of their eligibility, the exclusion's applicability should depend on whether the property or a property within 500 feet is, in fact, listed or eligible for listing in the National Register. We conclude that, for towers that otherwise meet the terms of the exclusion, a 500 foot buffer zone will adequately protect historic properties from adverse impacts.

27. Finally, for purposes of this exclusion, we require applicants to complete the process of tribal and NHO participation as specified in section IV of the Nationwide Agreement. We note that historic properties of traditional religious and cultural importance often are not listed in the National Register or other publicly available sources. Thus, in order to provide protection for these types of historic properties similar to that afforded to other historic properties by a search of records, it is necessary to seek information directly from Indian tribes and NHOs. If as a result of this process the applicant or the Commission identifies a historic property that may be affected, the applicant must complete the section 106 process pursuant to the Nationwide Agreement notwithstanding the exclusion.

28. The draft Nationwide Agreement excludes from review many towers proposed for construction in or near utility corridors, and along railways and highways. On review of the record, we conclude that the Nationwide Agreement should not create an exclusion for construction along highways and railroads. As numerous commenters observe, highways and railroads frequently follow pathways that track historic settlement and transportation patterns and, earlier, areas frequented by Indian tribes. We recognize that highways and passenger railways are among the areas where customer demand for wireless service is highest, and thus where the need for new facilities is greatest. Moreover, the existence of these modern intrusions reduces the risk that a new communications facility would impose [[Page 560]] an additional adverse effect on historic properties. Nonetheless, given the concentration of historic properties near many highways and railroads, we are persuaded that it is not feasible to draft an exclusion for highways and railroads that would both significantly ease the burdens of the section 106 process and sufficiently protect historic properties.

29. We do, however, adopt a limited exclusion for facilities located in or within 50 feet of a right-of-way designated for communications towers or above-ground utility transmission or distribution lines, where the facility would not constitute a substantial increase in size over existing structures in the right-of- way in the vicinity of the proposed construction. Due to the increasing usage of wireless services and advances in technology, providers of certain types of service are increasingly finding it feasible to utilize antennas mounted on short structures, often 50 feet or less in height, that resemble telephone or utility poles. Where such structures will be located near existing similar poles, we find that the likelihood of an incremental adverse impact on historic properties is minimal. Moreover, it promotes historic preservation to encourage construction of such minimally intrusive facilities rather than larger, potentially more damaging structures.

30. For reasons similar to those discussed above with respect to the industrial and commercial properties exclusion, this exclusion does not apply if the facility would be located within the boundaries of a historic property, and we require applicants to conduct a preliminary search of relevant records for such property. Due to the limited size of the structures permitted under this exclusion and their close similarity to nearby existing structures, however, we do not require research regarding historic properties within 500 feet. Finally, for the same reasons discussed above, application of this exclusion depends on successful completion of the tribal and NHO participation process.

31. Finally, the draft Nationwide Agreement excludes from NHPA review undertakings in geographic areas designated by the SHPO/THPO. We adopt this exclusion as drafted, with only minor clarifying edits. Such a provision, we believe, is consistent with the concept of an exclusion--i.e., to exempt from review undertakings where an impact upon historic properties is unlikely. SHPOs/THPOs are in an excellent position, given their local knowledge and experience, to identify such areas, when permissible under state or tribal law. While we encourage SHPOs and THPOs to designate areas pursuant to this provision to the extent warranted, we emphasize that doing so is at the SHPO/THPO's discretion.

32. In the NPRM, we requested comment on a proposal by the Conference to allow SHPOs/THPOs to ``opt out'' of the exclusion for construction along utility and transportation corridors in areas where historic properties are likely to be present. We reject the proposed opt-out provision. As drafted, the exclusions from the section 106 process are not dependent on local conditions, but identify circumstances under which construction is unlikely to significantly adversely affect historic properties in any state. At the same time, an opt-out provision would create a patchwork of varying agreements, state-by-state. Moreover, procedural changes, adopted by use of the opt-out provision, would likely occur over a period of time, creating additional burdens and confusion for all parties concerned.

33. We reject arguments that, as a matter of law, the Commission must provide notice to Indian tribes of all excluded undertakings. Section 214 of the NHPA allows for certain undertakings to be ``exempted from any or all of the requirements of this Act'' and expressly authorizes the Council to promulgate regulations to effectuate such exemption. We read section 214 as authorizing exemptions from the tribal consultation requirement of section 101(d)(6). There is nothing in the NHPA or in the Council's rules expressly requiring any type of notice to tribes for every individual undertaking that is excluded from review pursuant to a programmatic agreement that is signed and executed by the agency and the Council. Given that the Council is the agency authorized to promulgate rules to implement section 214 of the NHPA, the absence of notice provisions both in the Council's rules and in other programmatic agreements supports our conclusion that such provisions are not necessary under the NHPA, the Council's rules, or otherwise. Indeed, consistent with its rules, it is the Council, as evidenced by its signature to this agreement, who approves the proposed exemption ``based on the consistency of the exemption with the purposes of the act. * * *''

34. With respect to the specific exclusions in the Nationwide Agreement, we conclude, as discussed above, that tribal and NHO notice and participation are necessary for construction on commercial and industrial properties and in utility rights-of-way notwithstanding the exclusions. This is so because, without an opportunity for tribes and NHOs to participate, there is a substantial possibility that undertakings within these exclusions could affect properties of traditional cultural and religious importance. For the other exclusions, by contrast, any such possibility is insignificant. Therefore, a notice requirement would contravene the goals of section 214 of the NHPA and the Council's rule on exclusions by adding an unnecessary layer of review and regulation.

35. Finally, the Commission has met its government-to-government responsibility to consult with and its trust responsibility to federally recognized tribes with respect to the exclusions. As explained above, the Commission has engaged in government-to-government consultation with tribes regarding the Nationwide Agreement. Moreover, a proposal to require tribal notice was included in the draft Nationwide Agreement, and received the consideration of the various tribes and tribal organizations that participated in this proceeding. Indeed, after considering the comments of Indian tribes, we have included a tribal participation requirement for the industrial and commercial properties and utility corridor exclusions. We conclude that tribes were afforded an opportunity to consult with respect to this issue and accordingly did so.

36. The draft Nationwide Agreement provides that applicants should retain documentation of their determination that an exclusion applies to an undertaking. We decline to require any regular reporting of instances in which the exclusions are used in addition to such recordkeeping. We find that such mass undifferentiated reporting of constructed facilities would be excessively burdensome and, without more, would contribute little to an understanding of how the exclusions are being applied. We note that as records relevant to compliance with the Commission's rules, a company must produce documentation of its determination of an exclusion's applicability to the Commission upon request. SHPOs/THPOs may also require production of such records to the extent authorized under State or tribal law.

37. As a further safeguard to ensure that the exclusions are applied appropriately, we provide that a determination of exclusion should be made by an authorized individual within the applicant's organization. While the exclusions are drafted so that their application should not require historic preservation expertise, a responsible individual who understands the exclusions and their applicability [[Page 561]] needs to ensure that they are applied appropriately. Moreover, because the applicant is responsible for compliance with our rules, this responsible individual should be within the applicant's organization. We advise applicants to retain a record of the authorized individual's review as part of their record of the exclusion's applicability.

38. In the NPRM, we sought comment on two alternative sets of provisions governing participation of Indian tribes and NHOs in undertakings off tribal lands. Alternative A was developed by the Working Group. This proposed alternative directs applicants to use reasonable and good faith efforts to identify Indian tribes and NHOs that may attach cultural and religious importance to historic properties that may be affected by an undertaking, and provides guidance on how to perform such identification and on the subsequent process to be followed with Indian tribes and NHOs. Alternative B was proposed by USET during the course of meetings after the Working Group completed its deliberations. Alternative B requires the Commission to consult with potentially affected Indian tribes and NHOs on each proposed undertaking, in accordance with the Council's rules, unless either (1) the Indian tribe or NHO has given the applicant a letter of certification stating that such consultation is unnecessary; or (2) the applicant and the Indian tribe have reached a written agreement, filed with the Commission, regarding conditions under which such certification is unnecessary and the applicant has complied with that agreement. Alternative B encourages parties to use these alternative processes in lieu of government-to-government consultation. This alternative does not, however, provide guidance regarding how applicants should contact and relate to Indian tribes and NHOs, stating that such guidance would be provided in an appendix or by separate publication.

39. Since issuing the NPRM, the Commission has continued to work with Indian tribes outside the context of this proceeding to improve the means of tribal and NHO participation in the section 106 process. In particular, the Commission, after consultation with federally recognized tribes, has developed and implemented an electronic Tower Construction Notification System to facilitate identification of and appropriate initial contact with Indian tribes and NHOs that may attach religious and cultural significance to historic properties within the geographic area of a proposed undertaking. This system permits each Indian tribe and NHO voluntarily to identify in a secure electronic fashion the geographic areas in which historic properties of religious and cultural significance to that Indian tribe or NHO may be located. When an applicant then voluntarily enters into the system the location and other basic information about a proposed construction project, the Commission automatically forwards the information electronically or by mail to participating tribes and NHOs. Finally, Indian tribes and NHOs have the option of responding to applicants through the Tower Construction Notification System. By rationalizing the process of identification and initial contact through the Commission, we believe the Tower Construction Notification System will relieve burdens and provide certainty for tribes and NHOs, applicants, and the Commission alike.

40. Upon consideration of the record, and in light of the developments described above, we adopt procedures for participation of tribes and NHOs that incorporate aspects of both Alternatives A and B with certain modifications. First, we recognize that pursuant to the federal government's unique legal relationship with Indian tribal governments, as well as specific obligations under the NHPA and the Council's and Commission's rules, the Commission has a responsibility to carry out consultation with any federally recognized Indian tribe or any NHO that attaches religious and cultural significance to a historic property that may be affected by a Commission undertaking. As the Commission has previously recognized, the federal government has a historic trust relationship that requires it to adhere to fiduciary standards in dealing with federally recognized tribes. This fiduciary responsibility and duty of consultation rest with the Commission as an agency of the federal government, not with licensees, applicants, or other third parties.

41. At the same time, we cannot fulfill our duty of consultation in a vacuum. Because our applicants possess unique knowledge regarding the facilities that they propose to construct, the Nationwide Agreement that we adopt directs applicants to make reasonable and good faith efforts to identify the Indian tribes and NHOs that may have interests in a geographic area. The Nationwide Agreement further specifies that where an Indian tribe or NHO has voluntarily provided information to the Tower Construction Notification System, reference to that database constitutes a reasonable and good faith effort at identification. In addition, the Nationwide Agreement provides guidance regarding other means of fulfilling this obligation.

42. The Nationwide Agreement specifies that, after the applicant has identified potentially interested tribes and NHOs, contact should be made at an early stage in the planning process with each such tribe or NHO by either the Commission or the applicant, depending on the expressed wishes of the particular Indian tribe or NHO. The Commission will take steps to ascertain and publicize the contact preferences of all federally recognized Indian tribes and NHOs, both as to who must make the initial tribal contact and by what means, as well as any locations or types of construction projects for which the Indian tribe or NHO does not expect notification. To ensure that communications among parties are in accordance with the reasonable preferences of individual tribes and NHOs, the Commission will also use its best efforts to arrive at agreements regarding best practices with Indian tribes or NHOs, strive for uniformity in such best practices and encourage applicants to follow them. Through these best practices the Commission hopes to facilitate expeditious completion of section 106 review by minimizing misunderstandings among the parties to that process.

43. If there is no preexisting relationship between the applicant and an Indian tribe or NHO, and absent contrary indication from the Indian tribe or NHO, initial contact will be made by the Commission through its electronic Tower Construction Notification System. Where there is such a preexisting relationship the applicant may make the initial contact in the manner that is customary to that relationship or in any manner acceptable to the Indian tribe or NHO. In these circumstances, the applicant shall copy the Commission on any initial contact to the Indian tribe or NHO unless the Indian tribe or NHO has agreed such copying is unnecessary. The Nationwide Agreement specifies that any direct contact with the Indian tribe or NHO shall be made in a sensitive manner that is consistent with the reasonable wishes of the Indian tribe or NHO, including through the Tower Construction Notification System where such means is consistent with the tribe or NHO's preference. Where the tribe or NHO's wishes are not known, the Nationwide Agreement sets forth guidelines regarding respectful address and sufficient information. The text further directs that the applicant afford the tribe or NHO a reasonable [[Page 562]] opportunity to respond, ordinarily 30 days, allow additional time to respond as reasonable upon request, and make reasonable efforts to follow up in case the tribe or NHO does not respond to an initial communication.

44. The purpose of the initial contact, whether made by the Commission or the applicant, is to begin the process of ascertaining whether historic properties of religious and cultural significance to an Indian tribe or NHO may be affected by an undertaking, thereby triggering the duty of consultation. Unless the tribe or NHO affirmatively disclaims further interest or has agreed otherwise, this initial contact does not satisfy the applicant's obligation or constitute government-to-government consultation by the Commission. It is our hope and intent that, where direct contacts from an applicant are acceptable to the Indian tribe or NHO, amicable contacts will enable these consulting parties to complete the section 106 process so as to obviate the need for government-to-government consultation in a vast majority of cases. At the same time, because the duty to consult rests with the Commission as a federal government agency, the Nationwide Agreement directs applicants to promptly refer to the Commission any tribal request for government-to-government consultation, and to seek Commission guidance in cases of disagreement or failure to respond. Finally, the Nationwide Agreement substantially adopts provisions from Alternative A regarding inviting Indian tribes and NHOs to become consulting parties in the section 106 process, confidentiality, and the preservation of alternative arrangements.

45. We conclude that the provisions we adopt are consistent with the Commission's fulfillment of its tribal consultation responsibilities under the NHPA and other sources of federal law. The NHPA does not provide for delegation of the tribal consultation responsibility to private entities. The provisions that we adopt, however, do not delegate the Commission's consultation responsibilities but provide for direct contacts with an Indian tribe or NHO by an applicant only in accordance with the expressed wishes of the Indian tribe or NHO. Moreover, the Nationwide Agreement further provides that, where the applicant is unknown to the tribe or NHO, the initial contact will generally be made by the Commission and does not in any circumstance allow applicants and licensees to embark upon and conclude the section 106 process without Commission participation and without tribal or NHO consent.

46. The Nationwide Agreement expressly states that the initial contact between applicants or the Commission and Indian tribes and NHOs is required at ``an early stage of the planning process * * * in order to begin the process of ascertaining whether * * * Historic Properties [of religious and cultural significance to them] may be affected.'' The Nationwide Agreement expresses the ambition that this initial contact will lead to voluntary direct discussions through which applicants and tribes or NHOs will resolve any matters to the tribe or NHO's satisfaction without Commission involvement. However, the Nationwide Agreement makes clear that in the absence of such an agreement, decision-making authority and the duty to consult rest with the Commission. Thus, federally recognized Indian tribes are free, at any point, to request government-to-government consultation with the Commission, and the Commission is accessible and able to engage in government-to-government consultation with any tribe on any undertaking at any time. Moreover, if an applicant and an Indian tribe or NHO disagree regarding whether an undertaking will have an adverse effect on a historic property of religious and cultural significance, or if the tribe or NHO does not respond to the applicant's inquiries, the Nationwide Agreement directs the applicant to seek guidance from the Commission, following which appropriate consultation will occur and only then will the Commission make a decision regarding the proposed undertaking. The Commission only puts the exploratory phase of the process into the hands of those parties with the most intimate knowledge of the proposed undertaking and, subject to the expressed wishes of an Indian tribe or NHO, authorizes them to provide information to, solicit information from, and engage in voluntary discussions with the tribes and NHOs. This is consistent with Sec. 800.2(c)(4) of the Council's rules (36 CFR 800.2(c)(4)), which permits agencies to authorize applicants to initiate section 106 discussions or contacts with consulting parties such as tribes, and is in keeping with applicable federal consultation responsibilities.

47. We reject the argument that the role of applicants in initiating the section 106 process constitutes an illegal delegation. Except where there is a preexisting relationship between a particular tribe or NHO and the applicant or a particular tribe has advised the Commission of its willingness to be contacted initially by applicants, the first contact concerning a proposed undertaking will generally come from the Commission. In any event, cases relating to Congressional delegations of power to other branches of the federal government are inapposite. Moreover, federal agencies may permit private sector entities to perform delineated governmental functions when clear standards are set forth, guidelines for policymaking are offered, and specific findings are required. This is especially true when the private entity's participation is subject to the government agency's ultimate reviewing authority, which, as described above, is the case here. Similarly, OMB Circular A-76, which addresses functions of government that are non-delegable to the private sector, is not applicable because the Commission is not delegating a governmental function or any decision-making authority, but simply seeking assistance from our licensees and applicants in beginning a process over which the Commission ultimately retains control.

48. For these reasons, we conclude that the Nationwide Agreement, as we adopt it today, does not unlawfully delegate or derogate the Commission's duties of consultation. At the same time, in combination with the other developments described above, the Nationwide Agreement provides substantial assistance and guidance to applicants in carrying out their assigned role. We disagree, however, with commenters who urge us to prescribe more definitive time periods or provide greater finality. Ultimately, the Commission has a government-to-government relationship with and fiduciary responsibility to Indian tribes, as manifested in the duties of consultation under general principles of law and under the specific provisions of the NHPA. Thus, absent the Indian tribe or NHO's agreement, only the Commission can confer finality with respect to tribes or NHOs for an undertaking that is not excluded from section 106 review. Moreover, while ultimately no further consultation is required if an undertaking will not affect a historic property of cultural and religious significance to a tribe or NHO, applicants must work with tribes and NHOs in their efforts to determine whether such eligible properties exist, and must refer to the Commission for finality absent tribal or NHO agreement with their identification efforts. It is our hope, through the guidance in the Nationwide Agreement and through the separate negotiation of voluntary best [[Page 563]] practices with Indian tribes and NHOs, to facilitate consensual resolutions that satisfy the needs of all parties swiftly and with a minimum expenditure of resources.

49. Section V of the draft Nationwide Agreement establishes procedures to streamline and tailor the public participation provisions of the Council's rules to fit the communications context. Specifically, this section provides for notice of a proposed undertaking to the relevant local government and the public on or before the date the project is submitted to the SHPO/THPO, recommends means of providing public notice, and specifies the content of these notices. The provision also states that the SHPO/THPO may make available lists of additional interested organizations that should be contacted, and it requires the applicant to consider public comments and provide those comments to the SHPO/THPO. In addition, it sets out procedures for identifying consulting parties and the rights of consulting parties.

50. We adopt the public participation provisions substantially as drafted. The Nationwide Agreement simplifies, by tailoring to the communications context, the process in the Council's existing rules for providing notice, involving the public, identifying consulting parties, and addressing comments received. We conclude that the provisions as drafted achieve the important public participation goals of the Council's rules in a manner that will reduce misunderstandings and relieve burdens on applicants, SHPOs/THPOs and the Commission alike.

51. We reject most of the changes that commenters have proposed to this section. Specifically, we find that there should not be a firm time limit on public comments on a proposed undertaking, but that all comments received prior to completion of the review process should be considered. We further conclude, consistent with common practice, that use of the local zoning process, local newspaper publication, or an equivalent process constitutes sufficient notice of a proposed undertaking in the nature of a communications facility to the general public. Moreover, it is appropriate to permit the SHPO/THPO, as the consulting party most familiar with the local community of interest, to provide by generally available list the names of additional parties that should be contacted in order to further ensure a full opportunity for public participation under the circumstances of each case. In order to preserve applicants' flexibility to pursue the process in the most efficient sequence under the circumstances of each case, we only require that notice to the local government and the public occur on or before the date materials are submitted to the SHPO/THPO. We also find that adoption of a national confidentiality standard would be infeasible given the SHPOs'/THPOs' need for information and the diversity of laws on this subject in the various states.

52. We do conclude that it is appropriate for the applicant to inform the SHPO/THPO, as part of the Submission Packet, of the identity of designated consulting parties. Accordingly, we add this provision to the Nationwide Agreement and we include a request for the relevant information on the attached forms. We find, however, that it is unnecessary and burdensome for applicants to notify the Commission of each undertaking as part of the public participation process. Finally, we conclude that the criterion encouraging applicants to grant consulting party status to one who has ``a demonstrated legal or economic interest in the undertaking, or demonstrated expertise or standing as a representative of local or public interest in historic or cultural resources preservation,'' is consistent with, and required by, the Council's rules (36 CFR 800.2(c)(5)).

53. Section VI of the draft Nationwide Agreement establishes procedures and standards for identifying historic properties, evaluating their historic significance, and assessing any effect the proposed undertaking may have upon those historic properties. Commenters address five principal subjects in this area, including: (1) The definition of area of potential effects (APE); (2) the means of identifying and evaluating historic properties within the APE for visual effects; (3) the need for archeological surveys; (4) the definition of an adverse effect; and (5) the use of qualified experts.

54. The APE is the area within which an applicant must look for historic properties that may be affected by an undertaking. The draft Nationwide Agreement provides that each undertaking has one APE for direct (physical) effects, consisting of the area of potential ground disturbance and the portion of any historic property that will be destroyed or physically altered by the undertaking, and a second APE for indirect visual effects. The draft further establishes a rebuttable presumption that the latter APE is the area from which the tower will be visible within 1/2 mile of the proposed tower for a tower that is 200 feet or less in height, 3/4 mile for a tower more than 200 feet but no more than 400 feet in height, and 1.5 miles for a taller tower. The applicant and the SHPO/THPO may mutually agree on an alternative to the presumed distance in any case, and disputes regarding whether to use an alternative APE may be submitted to the Commission for resolution.

55. We adopt the APE provisions substantially as drafted, with only technical and clarifying revisions. In doing so, we emphasize that the scaled distances for visual APEs in the Nationwide Agreement are not inflexible mandates but presumptions, subject to variation in specific instances either by mutual agreement or, in cases of dispute, by Commission decision. Thus, while providing a structure to facilitate the determination of the APE in most cases, the Nationwide Agreement ultimately affords case-by-case flexibility. Although some commenters argue that the presumed distances are too small or too large, we are not persuaded that the presumed distances are inappropriate for the typical case, subject to departure where conditions require. We do add a general definition of the APE for visual effects in order to clarify, consistent with the definition of adverse effect, that it refers only to the geographic area in which the undertaking has the potential to introduce visual elements that diminish the setting, including the landscape, of a historic property where setting is a character-defining feature of eligibility.

56. With respect to identification and evaluation of Historic Properties, the Council's rules define a Historic Property, in relevant part, as ``any prehistoric or historic district, site, building, structure, or object included in, or eligible for inclusion in, the National Register. * * *'' (36 CFR 800.16 (l)(1)). The Council's rules further provide that properties eligible for inclusion in the National Register include ``both properties formally determined as such in accordance with regulations of the Secretary of the Interior and all other properties that meet the National Register criteria'' (36 CFR 800.16(l)(2)). This definition implements section 106 of the NHPA, which provides that a federal agency shall take into account the effect of any federal undertaking on any property ``included or eligible for inclusion in the National Register.''

57. We have in the record a letter from the Chairmen of the U.S. House of Representatives Committee on Resources and Subcommittee on National Parks, Recreation and Public Lands to the Chairman of the Council, noting that the Council originally defined properties eligible for inclusion in the National Register under section [[Page 564]] 106 to include only properties that the Keeper had previously determined to be eligible, and suggesting that the Council consider addressing this definitional issue either in the Nationwide Agreement or in a then-pending Council rulemaking. We determine not to alter the definition of Historic Property used in the draft Nationwide Agreement and the Council's rules. In this regard, we defer to the Council's clearly stated interpretation of its own governing statute, which was recently upheld by the federal court reviewing amendments to the Council's rules. See National Mining Association v. Slater, 167 F.Supp.2d 265, 290-292 (D.D.C. 2001), rev'd in part, 324 F.3d 752 (2003). We also note that Sec. 800.14 (36 CFR 800.14) of the Council's rules, which authorizes programmatic agreements, discusses alternative procedures to Subpart B of the Council's rules, but the definition of Historic Property is in Subpart C. For all these reasons, we conclude that questions regarding the definition of historic properties are outside the scope of this proceeding and should be addressed, if at all, by the Council.

58. At the same time, we conclude, based on our review of the record, that it is appropriate to narrow and define applicants' obligations with respect to the identification and evaluation of historic properties within the APE for visual effects. Section 106 is silent on the methodology necessary to identify properties ``included in or eligible for inclusion in the National Register.'' Indeed, a federal court has held that the Council's requirement that federal agencies conduct surveys to identify historic properties is not mandated by the plain meaning of section 106. Under the Council's regulations, the agency must make ``a reasonable and good faith effort'' that takes into account the burdens of evaluation, the nature and extent of potential effects, the magnitude of the undertaking and the degree of federal involvement in the proposed undertaking. Council regulations provide further that this obligation may be met through procedures specified in subpart B of the rules or as modified in a Programmatic Agreement tailored to the agency's specific needs. Here, the record demonstrates that requiring applicants to undertake field surveys for thousands of new communications facilities annually causes considerable delay in the deployment of communications services and imposes a hefty burden on the resources of applicants and SHPO/THPOs alike. Moreover, only those historic properties within the APE for which visual setting or visual elements are character-defining features of eligibility are potentially subject to visual adverse effects. Of these properties, many will not incur adverse effects from a communications facility, depending on the extent to which the facility is visible from the property and other factors. Taking these considerations together, we conclude that the burdens of conducting field surveys and taking other active measures beyond reviewing defined sets of records to identify historic properties in the APE for visual effects, in the context of the facilities covered by this Nationwide Agreement, are not merited by the small potential benefit to historic preservation.

59. Specifically, the Nationwide Agreement requires that, for most types of historic properties within the APE for visual effects, identification and evaluation efforts are limited to the applicant's review of five sets of records available within the SHPO/THPO's office or in a publicly available source identified by the SHPO/THPO. First, the applicant must identify properties that are actually listed in the National Register. Second, it must identify properties that the Keeper of the National Register has formally determined to be eligible. Third, identification efforts must include properties that the SHPO/THPO is in the process of nominating for the National Register, as certified by the SHPO/THPO. Fourth, identification includes properties that the SHPO/THPO's records identify as having previously been determined eligible by a consensus of the SHPO/THPO and another federal agency or local government representing the Department of Housing and Urban Development. Fifth, identification efforts shall include properties shown in the SHPO/THPO's inventory as having previously been evaluated by the SHPO/THPO and found by it to meet the National Register criteria. Except as described below, an applicant need not identify historic properties within the APE for visual effects that are not in one of these categories, nor need it evaluate the historic significance of such properties.

60. We find, however, that review of records maintained by the SHPO/THPO is insufficient for identification of historic properties of traditional religious and cultural significance to Indian tribes and NHOs. As the Council's rules recognize, Indian tribes and NHOs possess special expertise in assessing the eligibility of historic properties that may possess religious and cultural significance to them. Moreover, Indian tribes and NHOs frequently have confidentiality and privacy concerns about including sites of religious and cultural significance to them in publicly available records. Therefore, we conclude that identification and evaluation of historic properties without the involvement of potentially affected Indian tribes and NHOs would create an unacceptable risk that historic properties of traditional cultural and religious significance to them may be overlooked. Accordingly, as part of the process of Indian tribe and NHO participation pursuant to section IV of the Nationwide Agreement, an applicant or the Commission shall gather information from Indian tribes or NHOs to assist in identifying and evaluating historic properties of traditional cultural and religious significance to them.

61. As part of the Submission Packet to be provided to the SHPO/ THPO and consulting parties, the Nationwide Agreement requires the applicant to list the historic properties that it has identified pursuant to the Nationwide Agreement. Upon reviewing this list, the SHPO/THPO may identify other properties already included in its inventory within the APE that it considers eligible for inclusion in the National Register. In this event, the SHPO/THPO may notify the applicant of these additional properties pursuant to section VII.A.4 of the Nationwide Agreement in order for the applicant to assess the potential effects on such properties. We conclude that this process, without imposing additional burdens of identification and evaluation on applicants, provides a safeguard for the SHPO/THPO to identify specific historic properties that may be affected in rare instances where the process provided in the Nationwide Agreement might otherwise cause significantly affected properties to be overlooked.

62. Finally, these limitations on the identification and evaluation process do not apply within the APE for direct effects. The APE for direct effects, because it is limited to the area where the tower will cause ground or physical disturbances, is much smaller than for visual effects. As a result, searches of those areas do not present the potential for delay likely to arise in assessing visual effects. At the same time, the potential magnitude of effects to properties within the APE for direct effects is much greater, in some instances including destruction of the property, and these effects are not readily discoverable other than through careful examination of the site. Therefore, additional identification efforts, potentially including an archeological field survey, may be [[Page 565]] required within the APE for direct effects.

63. Upon review of the record, we conclude that an archeological field survey should not be required where archeological resources are unlikely to be affected. Many facilities are placed in locations where the likelihood of affecting archeological resources is remote; for example, on paved ground in a highly developed downtown area. Requiring onsite archeological work in these instances would add substantial delay and cost to facilities deployment to no appreciable benefit.

64. At the same time, we conclude, that the Nationwide Agreement must define with specificity the circumstances under which a field survey is not required. First, no archeological field survey is necessary when the ground on which construction will occur has been previously disturbed. Where the ground has been previously disturbed in the locations and at the depths that are proposed to be excavated in connection with future construction, the likelihood of direct effects to archeological resources ordinarily is remote, whether or not archeological resources may be located at greater depths or in other portions of the project area. Due to differences in the compaction characteristics of soils in different parts of the Nation, however, we require a previous disturbance to at least two feet below the proposed construction depth (excluding footings and other anchoring mechanisms). We find that a two-foot margin is necessary to provide reasonable assurance that archeological resources are unlikely to be affected under any soil conditions. The second circumstance under which no archeological field survey is required is when geomorphological evidence indicates that cultural-resource bearing soils do not occur within the project area, or may occur but at more than two feet below the proposed construction depth. Where a qualified expert has found that such conditions exist, direct effects on archeological resources are inherently unlikely, and accordingly it is ordinarily not reasonable to require further identification efforts.

65. With respect to both of these criteria, the depth of proposed construction to be considered excludes footings and other anchoring mechanisms that may require excavation substantially deeper than the general level at a site. These footings cover very small areas within a project site, usually no more than two to three feet (and often less) in diameter, and may extend 20 to 30 feet deep or more. Under the circumstances, we find that a field survey in such narrow deep areas is infeasible, and indeed may typically cause more harm than the minimal amount of damage to archeological resources that could occur during construction. Therefore, performing a field survey at the depths reached by footings and other anchoring mechanisms is ordinarily not part of a reasonable and good faith effort to identify historic properties.

66. Finally, similar to the procedure for identifying historic properties that may incur visual effects, we include provisions to ensure the ability of Indian tribes and NHOs to provide information regarding the potential presence of archeological historic properties of religious and cultural significance to them, and we provide a safeguard opportunity for the SHPO/THPO to identify the need for a field survey. Specifically, as part of the tribal and NHO participation process pursuant to section IV of the Nationwide Agreement, the applicant or the Commission must gather information from identified Indian tribes and NHOs to assist in identifying archeological historic properties, including the need for a field survey. In addition, the applicant must substantiate its determination that no archeological field survey is necessary as part of its Submission Packet, and the SHPO/THPO may identify a need for a field survey, notwithstanding the applicability of either of the criteria discussed above, during its review pursuant to section VII.A. We emphasize that an Indian tribe or NHO, or a SHPO/THPO, must provide evidence supporting a high probability of the presence of intact archeological historic properties within the APE for direct effects in order for a field survey to be necessary under these circumstances.

67. Once historic properties have been identified and their historic significance evaluated, the next step in the section 106 process is assessment of whether the proposed undertaking would have an adverse effect on those historic properties. The draft Nationwide Agreement provides that effects shall be evaluated using the Criteria of Adverse Effect set forth in the Council's rules. The draft further provides guidance, consistent with the Council's rules, that a facility will have a visual adverse effect if its visual effect will noticeably diminish the integrity of one or more characteristics qualifying a property for the National Register, and that a facility will not cause a visual adverse effect unless visual setting or elements are character-defining features of eligibility. The provision then provides examples of historic properties on which visual adverse effects might occur.

68. We adopt with some revisions the provision of the Nationwide Agreement describing visual adverse effects. Although the Council's rule is not entirely clear, it is plain that setting is among the characteristics of a historic property that, when altered and diminished in integrity, may produce an adverse effect. It seems reasonable to us that, under some circumstances, the introduction of a large visual intrusion outside the boundaries of a historic property within the APE may diminish the integrity of setting, including the landscape, on that property in such a way as to alter a characteristic of visual setting or visual elements that qualifies the property for inclusion in the National Register. By contrast, where the features that qualify a property for listing on the National Register are unrelated to its visual setting (for example, its interior design), then a visual intrusion outside the property boundaries will not constitute an adverse effect. Indeed, any other view arguably would be inconsistent with section 106, which directs federal agencies, without limitation, to consider the ``effect'' of their undertakings on historic properties. More important, the Council has consistently interpreted section 106 and its rules in this manner. We therefore disagree with commenters who suggest that a facility must be located within the boundary of a historic property in order to have a visual adverse effect on that property.

69. We do revise the draft Nationwide Agreement to clarify that a facility may have a visual adverse effect on a historic property only if the historic property is within the APE. In addition, the presence within the APE of a historic property for which visual setting or visual elements are character-defining features of eligibility does not in itself mean that the undertaking will necessarily have an adverse effect on that property, but rather the undertaking must noticeably diminish the integrity of a qualifying characteristic of eligibility. Finally, we delete the examples of types of properties to which visual adverse effects may occur. We conclude that in the context of the clarified definition of visual adverse effect, the addition of examples of representative types of situations where there may be but is not necessarily a visual adverse effect would create an unnecessary risk of confusion.

70. We revise the Nationwide Agreement to require that aspects of identification, evaluation, and assessment be performed by experts who meet the Secretary of the Interior's [[Page 566]] qualifications. The NHPA (16 U.S.C. 470h-4(a)) expressly recognizes the importance of using qualified experts in historic preservation reviews. It states that ``[a]gency personnel or contractors responsible for historic resources shall meet qualification standards established by the Office of Personnel Management in consultation with the Secretary and appropriate professional societies of the disciplines involved.'' We find it consistent with the objectives embodied in the NHPA that where a licensee or applicant, like a contractor, performs portions of the section 106 process that implicate professional expertise in the agency's stead, it also should use Secretary-qualified experts.

71. The Secretary's standards generally establish minimum levels of education and/or experience for qualified experts in history, architectural history, archeology, and related fields. The record before us details the errors in the section 106 process, leading to delays, that often occur where qualified experts are not used. This persuades us that the mandatory use of Secretary-qualified experts for identification and evaluation of properties within the APE for direct effects, and for assessment of effects on all historic properties, is critical to provide the level of reliability and trust necessary to support the streamlined procedures and standards established in the Nationwide Agreement. The standards in the Nationwide Agreement for these aspects of historic preservation review are not and by their nature cannot be so objective as to render the use of qualified experts unnecessary. Thus, requiring the use of Secretary-qualified experts for these purposes advances the objectives of section 214 of the NHPA.

72. With respect to the identification of properties within the APE for visual effects, by contrast, the Nationwide Agreement largely reduces the applicant's obligations to reviewing defined sets of records in the SHPO's/THPO's files. We find that specialized training is not necessary to glean from these records whether the properties contained therein have been previously determined or considered eligible for inclusion in the National Register as specified in the Nationwide Agreement. Therefore, while we encourage applicants to use Secretary-qualified experts to identify historic properties within the APE for visual effects, we do not require the use of Secretary- qualified experts for this purpose.

73. Although we encourage and expect that applicants will use experts with relevant experience in the section 106 process and the specific geographic area, we do not include such a requirement in the Nationwide Agreement. Unlike the Secretary's standards for general professional qualifications, there are no widely accepted or legally mandated standards for section 106 experience or geographic expertise. Therefore, any requirement along these lines would be either potentially arbitrary or too general to enforce.

74. Section VII of the Nationwide Agreement establishes procedures for SHPO/THPO review of applicants' determinations and for submission of certain matters to the Commission. Generally, the draft Nationwide Agreement provides that applicants shall submit their determinations to the SHPO/THPO using the prescribed Submission Packet, and that the SHPO/THPO has 30 days to review the submission. If the SHPO/THPO agrees with the applicant's determination that no historic properties would be affected or does not respond to such a determination within 30 days, the section 106 process is complete and no Commission processing is necessary. If the SHPO/THPO does not respond within 30 days to an applicant's determination of no adverse effect, the draft establishes a presumption that the SHPO/THPO concurs with the applicant's determination, requires the applicant to forward the Submission Packet to the Commission, and permits the Commission to establish a time period within which the process will be considered complete unless the Commission notifies the applicant otherwise. Section VII also specifies procedures for resolution in cases of adverse effect, similar to those set forth in the Council's rules. In addition, the section provides that instances in which the applicant and SHPO/THPO do not agree on an assessment may be submitted to the Commission.

75. We adopt section VII of the Nationwide Agreement substantially as written. With respect to Applicant determinations of no adverse effect, while we expect that SHPOs/THPOs will endeavor in good faith to review such determinations within the time frame specified in the Nationwide Agreement, we conclude that it is appropriate to require a submission to the Commission where the SHPO/THPO fails to do so. By their nature, determinations of no adverse effect ordinarily involve closer and more subjective judgments of whether an adverse effect may occur than do cases where no historic properties are affected. Indeed, this difference is reflected in the generally applicable procedures set forth in the Council's rules. Therefore, consistent with the positions taken by the Council and the Conference in negotiating the Nationwide Agreement, it is sound historic preservation policy that where a SHPO/ THPO has not reviewed an applicant's determination of no adverse effect, the federal agency should have the opportunity to do so. In order to avoid undue delay, we conclude that an applicant's determination of no adverse effect will be final 15 days after electronic submission to the Commission, or 25 days after submission to the Commission by other means, unless the relevant Bureau notifies the applicant otherwise. We find that an additional 10 days is appropriate for hard copy submissions both because non-electronic submissions may take longer to reach the relevant personnel and in order to encourage electronic filing, which saves resources and reduces uncertainty for all parties.

76. We decline to adopt other time limits. While we will endeavor to resolve disputes between SHPOs/THPOs and applicants as quickly as possible, and to facilitate the timely resolution of adverse effects, we conclude that the variety of factual circumstances under which these situations may arise makes it inadvisable to adopt binding time frames. We also find that up to five additional days for SHPOs/THPOs to review comments that are filed toward the end of their review period is reasonable, given that such filings will necessitate additional review only of the new material. In addition, given the variety of factual situations that may arise, we find it appropriate to leave the parties flexibility to determine in each matter whether and when to consider means to achieve conditional findings of no adverse effect. We find no legal support or rationale for the suggestion that the Council must be given an opportunity to review determinations of no historic properties affected and no adverse effect under a programmatic agreement.

77. We do, however, revise and clarify the draft provision for the return and amendment of inadequate submissions. The intent of the requirement that resubmissions occur within 60 days is to permit SHPOs/ THPOs to manage their dockets effectively by dismissing stale proceedings. We did not intend to suggest any limitation on the resubmission of a project as a new matter, and we amend the Nationwide Agreement to clarify this point. Additionally, we specify that the resubmission commences a new 30-day review period. While we are aware of [[Page 567]] the potential for SHPOs/THPOs to evade the time limit in the Nationwide Agreement through unnecessary returns, we believe the requirement to describe deficiencies will limit this potential, and we conclude that it is unreasonable to permit applicants to benefit from a potentially shorter ultimate review period due to their own initial shortcomings. We intend to monitor any complaints about the application of this provision, and we will not hesitate to request an amendment or other appropriate measures from the other signatories if experience proves it necessary.

78. The draft Nationwide Agreement proposes forms (or templates) that Applicants would be required to use when submitting materials to SHPOs/THPOs. The forms are designed to simplify the submission of section 106 material, clarify for applicants and SHPOs/THPOs what is required, and provide uniformity in submissions nationwide. The draft Nationwide Agreement includes two forms: Form NT for proposed new towers, and Form CO for proposed collocations that are not excluded from section 106 review by either the Collocation Agreement or the Nationwide Agreement.

79. We revise and adopt Form NT and Form CO for submissions to SHPOs and THPOs. In an effort to simplify the forms and make them more user-friendly, we make a number of formal changes in response to the comments. Finally, in order to achieve the benefits of uniformity and simplicity for SHPOs/THPOs as well as applicants, we make use of the forms mandatory for all undertakings that are not excluded from section 106 review. We conclude that the negotiating process as well as the notice and comment in this rulemaking proceeding have provided interested parties with ample opportunities to influence their content and form.

80. We agree with most commenters that the Nationwide Agreement should apply prospectively. The Nationwide Agreement includes not only timelines and procedures, but also standards and forms that help ensure that the timelines and procedures will be reasonable for SHPOs/THPOs and will not compromise historic preservation. Because pending applications may not meet the Nationwide Agreement's standards, and in all likelihood will not use the prescribed forms, to apply it automatically to all pending cases would cause confusion and potentially impose unreasonable burdens on SHPOs/THPOs. We note, however, that should a party wish to take advantage of the provisions in the Nationwide Agreement, it may withdraw its filing and resubmit under the Nationwide Agreement.

81. In the NPRM, we proposed amending Sec. 1.1307(a)(4) of the Commission's rules, which directs that proposed undertakings be evaluated for their effects on historic properties, expressly to require that applicants follow the procedures set forth in the Council's rules, as modified and supplemented by the Nationwide Agreement and the Collocation Agreement. We adopt the change to Sec. 1.1307(a)(4) as proposed. The rule will bring administrative certainty by making it clear that the provisions of the Nationwide Agreement are mandatory and binding upon applicants, and that non-compliance with its procedures will subject a party to potential enforcement action. Final Regulatory Flexibility Analysis

82. As required by the Regulatory Flexibility Act of 1980, as amended (``RFA'') 3 an Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in the Notice of Proposed Rulemaking (``NPRM'') for the Nationwide Programmatic Agreement Regarding the section 106 National Historic Preservation Act Review Process (``Nationwide Agreement'').4 The Federal Communications Commission (``Commission'' or ``FCC'') sought written public comment on the proposals in the NPRM, including comment on the IRFA. This present Final Regulatory Flexibility Analysis (``FRFA'') conforms to the RFA.5 ---------------------------------------------------------------------------

3 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).

4 See Nationwide Programmatic Agreement Regarding the Section 106 National Historic Preservation Act Review Process, WT Docket No. 03-128, Notice of Proposed Rulemaking, 18 FCC Rcd 11,664 (2003) (``Notice''); Errata, 18 FCC Rcd 12,854 (2003).

5 See 5 U.S.C. 604. --------------------------------------------------------------------------- A. Need for, and Objectives of, Adopted Rules

83. Under Commission rules implementing the National Environmental Policy Act of 1969, as amended (``NEPA''),6 licensees and other entities that build towers and other communications facilities (``Applicants'') are required to assess such proposed facilities to determine whether they may significantly affect the environment under Sec. 1.1307 of the Commission's rules.7 For example, under Sec. 1.1307(a)(4) of the Commission's rules, those Applicants currently are obliged to use the detailed procedures specified in the rules of the Advisory Council on Historic Preservation (``Council'') (36 CFR 800.1 et seq.) to determine whether their proposed facilities may affect districts, sites, buildings, structures, or objects significant in American history, architecture, archeology, engineering or culture that are listed or eligible for listing in the National Register of Historic Places (``historic properties''). ---------------------------------------------------------------------------

6 42 U.S.C. 4321-4335.

7 47 CFR 1.1307. ---------------------------------------------------------------------------

84. These Council procedures, when combined with the procedures employed by the various State Historic Preservation Officers (``SHPOs'') and Tribal Historic Preservation Officers (``THPOs''), and when multiplied by the number of facilities being constructed, created an unnecessarily inefficient review process for Applicants. For example, in the late 1990's, coincident with the vast increase in tower constructions necessitated by the expanded deployment of wireless mobile services, unacceptable delays in completing traditional section 106 reviews under the Council's rules began to occur and continue to be experienced. The Commission therefore, began to explore alleviating such procedural inefficiencies by using the provision in the rules of the Council that allows for the creation of programmatic agreements between the Council and other agencies.8 Generally speaking, such programmatic agreements are intended to craft specific procedures that more closely reflect the needs and practices of specific federal agencies and the industries they regulate. ---------------------------------------------------------------------------

8 36 CFR 800.14(b). ---------------------------------------------------------------------------

85. Under Sec. 800.14(b) of its rules, the Council, Federal agencies, such as the Commission, and the appropriate SHPO or National Conference of State Historic Preservation Officers (``NCSHPO'') may negotiate a programmatic agreement to govern the implementation of a particular program when, for example, the effects on historic properties are multi-state or when nonfederal parties are delegated major responsibilities. Accordingly, to streamline and tailor the pre- construction review of towers and other communications facilities under section 106 of the National Historic Preservation Act (``NHPA'')9 and the related Commission and Council rules, the Council, the Commission, and NCSHPO negotiated a programmatic agreement under Sec. 800.14(b) of the Council's rules. Some objectives of the Nationwide Agreement and the related rule revisions are to increase Applicants' awareness of applicable [[Page 568]] laws and rules; to tailor and streamline the current procedures under the rules of the Council and the Commission; and to ensure compliance by Applicants with the Nationwide Agreement and related Commission and Council rules. ---------------------------------------------------------------------------

9 16 U.S.C. 470f. ---------------------------------------------------------------------------

86. In this Report and Order, the Commission incorporates into its rules the recently agreed upon Nationwide Agreement, which, as discussed below, will streamline and tailor existing procedures under the Commission and Council rules for the review of certain Undertakings for communications facilities under section 106 of the National Historic Preservation Act of 1966 (``NHPA'').10 ---------------------------------------------------------------------------

10 See 16 U.S.C. 470 et seq. ---------------------------------------------------------------------------

87. The Nationwide Agreement clarifies and tailors the obligations 11 of the Applicants to assist the Commission in meeting its responsibilities under NEPA and the NHPA. First, to reduce regulatory burdens (e.g., identifying historic properties, preparing submission packets) on both large and small Applicants, the Nationwide Agreement, in Part III, excludes from routine review under section 106 of the NHPA certain Undertakings that are unlikely to affect historic properties. ---------------------------------------------------------------------------

11 See 47 CFR 1.1307(a)(4) (directing that proposed undertakings be evaluated for their effects on historic properties). ---------------------------------------------------------------------------

88. Second, for those Undertakings that are not addressed by the Part III exclusions and that, therefore, remain subject to review, the draft Agreement specifies standards and procedures that Applicants must follow when completing the section 106 review. For example, for undertakings that remain subject to review, the Agreement sets forth guidelines for tribal participation; 12 procedures for ensuring compliance with the NHPA's public participation requirements;13 methods for establishing the area of potential effects, identifying and evaluating historic sites, and assessing effects;14 and procedures for submitting projects to, and for review by, the SHPO or THPO and the Commission.15 The Nationwide Agreement also includes procedures to be followed when historic properties (e.g., archeological artifacts) are discovered during construction; 16 processes to be followed when facilities are constructed prior to completion of the section 106 process; 17 and provisions for the submission of public comments and objections.18 ---------------------------------------------------------------------------

12 Nationwide Agreement, Part IV.

13 Nationwide Agreement, Part V.

14 Nationwide Agreement, Part VI.

15 Nationwide Agreement, Part VII.

16 Nationwide Agreement, Part IX.

17 Nationwide Agreement, Part X.

18 Nationwide Agreement, Part XI. ---------------------------------------------------------------------------

89. In addition, the Nationwide Agreement includes forms which Applicants must use for section 106 submissions to SHPOs, as well as to THPOs that have agreed to accept such forms for projects on tribal lands that are not subject to review by a SHPO.

90. The Commission also amends its rules in order to make clear that the procedures in the Nationwide Agreement will be binding on regulatees, who are subject to its terms, and that non-compliance with these procedures would subject a party to potential Commission enforcement action such as admonishment, forfeiture, or revocation of a license to operate, where appropriate. Specifically, the Commission amends Sec. 1.1307(a)(4) to specify that, in order to ascertain whether a proposed action may affect properties that are listed or eligible for listing in the National Register,19 an Applicant must follow the procedures set forth in the rules of the Council, as modified and supplemented by the Nationwide Programmatic Agreement for the Collocation of Wireless Antennas and the Nationwide Agreement. Both agreements will be included as appendices in the Code of Federal Regulations. ---------------------------------------------------------------------------

19 ``Listed'' properties are those properties for which an application for inclusion in the National Register of Historic Places (``National Register'') has been approved. Under Section 800.16(l)(2) of the regulations of the Advisory Council on Historic Preservation, 36 CFR 800.16(l)(2), the term ``eligible for inclusion in the National Register'' includes both properties formally determined as such by the Keeper of the National Register in accordance with applicable regulations of the Secretary of the Interior and all other properties that meet the National Register criteria. Information on the characteristics of properties that meet these criteria is available at the National Register Web site: http://www.cr.nps.gov/nr. --------------------------------------------------------------------------- B. Summary of Significant Issues Raised by Public Comments in Response to the IRFA

91. The Commission considered the potential impact of its actions on smaller entities throughout the process of negotiating and drafting the Nationwide Agreement. One of its goals has been to make the environmental review process more efficient and standardized so that smaller entities can learn and complete the process more quickly.

92. We received one comment in response to the IRFA. The Eastern Band of Cherokee Indians (``EBCI'') opposes any streamlining efforts, whether for large or small businesses, that could have the effect of reducing or eliminating government-to-government consultation between federal agencies and tribes. EBCI also believes that some language in the IRFA should have been stronger to make clear that an Applicant's obligations under the Nationwide Agreement (e.g., notice, timely submission of necessary documents, and consultation) are mandatory.

93. With respect to the impact of the Nationwide Agreement on government-to-government consultation, we address the concerns of EBCI most specifically in section IV of the Nationwide Agreement. In particular, as explained in section III.C.2. of the Report and Order 20 we have taken considerable care in the Nationwide Agreement to fulfill the Commission's duty of government-to-government consultation in all cases that cannot be consensually resolved without such consultation. With regard to the obligations of Applicants to comply with the terms of the Nationwide Agreement, we have revised Sec. 1.1307(a)(4) of our rules to ensure that regulatees understand that compliance with the Nationwide Agreement is mandated. However, the Commission notes that, wherever appropriate, any differential burdens favoring small entities have been preserved by the Nationwide Agreement. Furthermore, the Commission has made a concerted effort to reduce burdens on small entities. That being said, the Commission believes that all entities--large and small--will benefit from compliance with the Nationwide Agreement. ---------------------------------------------------------------------------

20 Nationwide Agreement Report and Order at section III.C.2. --------------------------------------------------------------------------- C. Description and Estimate of the Number of Small Entities to Which the Adopted Rules Will Apply

94. 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 proposed rules.21 The RFA generally defines the term ``small entity'' as having the same meaning as the terms ``small business,'' ``small organization,'' and ``small governmental jurisdiction.''22 In addition, the term ``small business'' has the same meaning as the term ``small business concern'' under the Small Business Act.23 A ``small business concern'' is one which: [[Page 569]] (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (``SBA'').24 ---------------------------------------------------------------------------

21 5 U.S.C. 604(a)(3).

22 5 U.S.C. 604(6).

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

24 15 U.S.C. 632. ---------------------------------------------------------------------------

95. The Report and Order and, accordingly, the Nationwide Agreement, will produce a rule change that will impose requirements on a large number of entities in determining whether facilities that they propose to construct may affect historic properties listed or eligible for listing on the National Register of Historic Places.25 Due to the number and diversity of Applicants, including small entities that are Commission licensees as well as non-licensee tower companies, we now classify and quantify them in the remainder of this section. ---------------------------------------------------------------------------

25 47 CFR 1.1307(a)(4). --------------------------------------------------------------------------- Wireless Telecommunications

96. Cellular Licensees. The SBA has developed a small business size standard for small businesses in the category ``Cellular and Other Wireless Telecommunications.''26 Under that SBA category, a business is small if it has 1,500 or fewer employees.27 According to the Bureau of the Census, only twelve firms from a total of 1238 cellular and other wireless telecommunications firms operating during 1997 had 1,000 or more employees.28 Therefore, even if all twelve of these firms were cellular telephone companies with more than 1,500 employees, nearly all cellular carriers were small businesses under the SBA's definition. ---------------------------------------------------------------------------

26 13 CFR 121.201, North American Industry Classification System (NAICS code 517212 (Changed from 513322 in October 2002).

27 Id.

28 U.S. Department of Commerce, U.S. Census Bureau, 1997 Economic Census, Information--Subject Series, Establishment and Firm Size, Table 5--Employment Size of Firms Subject to Federal Income Tax at 64, NAICS code 517212 (October 2000). ---------------------------------------------------------------------------

97. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non- nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the definition under the SBA rules applicable to ``Cellular and Other Wireless Telecommunication'' companies. This category provides that a small business is a wireless company employing no more than 1,500 persons.29 According to Census Bureau data for 1997, there were 977 firms in this category, total, that operated for the entire year.30 Of this total, 965 firms had 999 or fewer employees, and an additional 12 firms had 1,000 employees or more.31 If this general ratio continues in 2004 in the context of Phase I 220 MHz licensees, the Commission estimates that nearly all such licensees are small businesses under the SBA's small business size standard. ---------------------------------------------------------------------------

29 13 CFR 121.201.

30 U.S. Census Bureau, 1997 Economic Census, Subject Series: Information, ``Employment Size of Firms Subject to Federal Income Tax: 1997,'' Table 5, NAICS code 513322 (issued Oct. 2000).

31 Id. The census data do not provide a more precise estimate of the number of firms that have 1,500 or fewer employees; the largest category provided is ``Firms with 1,000 employees or more.'' ---------------------------------------------------------------------------

98. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz service is subject to spectrum auctions. In the 220 MHz Third Report and Order, we adopted a small business size standard for defining ``small'' and ``very small'' businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.32 This small business standard indicates that 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.33 A ``very small business'' is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years.34 The SBA has approved these small size standards.35 Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998.36 In the first auction, 908 licenses were auctioned in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (``EAG'') Licenses, and 875 Economic Area (``EA'') Licenses. Of the 908 licenses auctioned, 683 were sold.37 Thirty-nine small businesses won licenses in the first 220 MHz auction. The second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.38 ---------------------------------------------------------------------------

32 Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service, PR Docket No. 89-552, Third Report and Order, 12 FCC Red 10943, 11068-70, paragraphs 291-295 (1997) (220 MHz Third Report and Order).

33 Id. at paragraph 291.

34 Id.

35 See Letter to Daniel Phythyon, Chief, Wireless Telecommunications Bureau, Federal Communications Commission, from Aida Alvarez, Administrator, Small Business Administration, dated January 6, 1998.

36 See generally ``220 MHz Service Auction Closes,'' Public Notice, 14 FCC Red 605 (WTB 1998).

37 ``FCC Announces It is Prepared to Grant 654 Phase II 220 MHz Licenses after Final Payment is Made,'' Public Notice, 14 FCC Red 1085 (WTB 1999).

38 ``Phase II 220 MHz Service Spectrum Auction Closes,'' Public Notice, 14 FCC Red 11218 (WTB 1999). ---------------------------------------------------------------------------

99. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, we adopted size standards for ``small businesses'' and ``very small businesses'' for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.39 A small business is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years.40 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 $15 million for the preceding three years.41 An auction of 52 Major Economic Area (``MEA'') licenses commenced on September 6, 2000, and closed on September 21, 2000.42 Of the 104 licenses auctioned, 96 licenses were sold to 9 bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001 and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.43 ---------------------------------------------------------------------------

39 See Service Rules for the 746-764 MHz Bands, and Revisions to Part 27 of the Commission's Rules, WT Docket No. 99-168, Second Report and Order, 15 FCC Red 5299-5344, paragraph 108 (2000).

40 Id. at paragraphs 106-108.

41 Id. at paragraphs 106-108.

42 See generally, ``220 MHz Service Auction Closes: Winning Bidders in the Auction of 908 Phase II 220 MHz Service Licenses,'' Public Notice, DA 98-2143 (rel. October 23, 1998).

43 ``700 MHz Guard Bands Auction Closes: Winning Bidders Announced,'' Public Notice, 16 FCC 4590 (WTB 2001). ---------------------------------------------------------------------------

100. Lower 700 MHz Band Licenses. We adopted criteria for defining three groups of small businesses for purposes of determining their eligibility for special provisions such as bidding credits.44 We have defined a small business as an entity that, together with its affiliates and controlling principals, has average gross revenues not [[Page 570]] exceeding $40 million for the preceding three years.45 A very small business is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years.46 Additionally, the lower 700 MHz Service has a third category of small business status that may be claimed for Metropolitan/Rural Service Area (``MSA/RSA'') licenses. The third category is entrepreneur, which is defined as 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. An auction of 740 licenses (one license in each of the 734 MSAs/RSAs and one license in each of the six Economic Area Groupings) commenced on August 27, 2002, and closed on September 18, 2002.47 Of the 740 licenses available for auction, 484 licenses were sold to 102 winning bidders. Seventy-two of the winning bidders claimed small business, very small business or entrepreneur status and won a total of 329 licenses. ---------------------------------------------------------------------------

44 See Reallocation and Service Rules for the 698-746 MHz Spectrum Band (Television Channels 52-59), GN Docket No. 01-74, Report and Order, 17 FCC Red 1022 (2002).

45 Id. at paragraph 172.

46 Id. at paragraph 172.

47 See ``Lower 700 MHz Band Auction Closes,'' 17 FCC Red 17272 (2002). ---------------------------------------------------------------------------

101. Upper 700 MHz Band Licenses. The Commission released a Report and Order, authorizing service in the upper 700 MHz band.48 No auction has been held yet. ---------------------------------------------------------------------------

48 Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission's Rules, WT Docket No. 99- 168, Second Memorandum Opinion and Order, 16 FCC Red 1239 (2001). ---------------------------------------------------------------------------

102. Private and Common Carrier Paging. 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.49 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 size standards.50 An auction of MEA licenses commenced on February 24, 2000, and closed on March 2, 2000.51 Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies claiming small business status won licenses. At present, there are approximately 24,000 Private Paging site-specific licenses and 74,000 Common Carrier Paging site-specific licenses. According to the most recent Trends in Telephone Service, 471 carriers reported that they were engaged in the provision of either paging and messaging services or other mobile services.52 Of those, the Commission estimates that 450 are small, under the SBA business size standard specifying that firms are small if they have 1,500 or fewer employees.53 ---------------------------------------------------------------------------

49 220 MHz Third Report and Order, 12 FCC Red at 11068-70, paragraphs 291-295, 62 FR 16004 at paragraphs 291-295 (1997).

50 See Letter from Aida Alvarez, Administrator, Small Business Administration to Thomas Sugrue, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission (June 4, 1999).

51 Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging Systems, WT Docket No. 96-18, PR Docket No. 93-253, Memorandum Opinion and Order on Reconsideration and Third Report and Order, 14 FCC Red 10030, 10085, paragraph 98 (1999).

52Trends in Telephone Service at Table 5.3 (rel. Aug. 2001).

53 Id. The SBA size standard is that of Paging, 13 CFR 121.201, NAICS code 517211. ---------------------------------------------------------------------------

103. 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 has created a small business size standard for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years.54 For Block F, an additional small business size standard 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.55 These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA.56 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 approximately 40% of the 1,479 licenses for Blocks D, E, and F.57 On March 23, 1999, the Commission reauctioned 155 C, D, E, and F Block licenses; there were 113 small business winning bidders. Based on this information, we conclude that the number of small broadband PCS licensees includes the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F blocks plus the 113 winning bidders in the re-auction, for a total of 296 small entity broadband PCS providers as defined by the SBA small business standards and the Commission's auction rules. ---------------------------------------------------------------------------

54 See Amendment of parts 20 and 24 of the Commission's Rules--Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 96-59, Report and Order, 11 FCC Red 7824, paragraph 57-60 (1996); see also 47 CFR 24.720(b).

55 See Amendment of parts 20 and 24 of the Commission's Rules--Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, Report and Order, 11 FCC Red 7824, paragraph 60 (1996).

56 See Letter to Amy Zoslov, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, from A. Alvarez, Small Business Administration, dated December 2, 1998.

57 FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (rel. January 14, 1997). ---------------------------------------------------------------------------

104. Narrowband PCS. To date, two auctions of narrowband personal communications services licenses have been conducted. For purposes of the two auctions that have already been held, ``small businesses'' were entities with average gross revenues for the prior three calendar years of $40 million or less.58 Through these auctions, the Commission has awarded a total of 41 licenses, out of which 11 were obtained by small businesses. To ensure meaningful participation of small business entities in future auctions, the Commission has adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order. A ``small business'' is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million.59 A ``very small business'' is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million.60 The SBA has approved these small business size standards.61 There is also one megahertz of narrowband PCS spectrum that has been held in reserve and that the Commission has not yet decided to release for licensing. The Commission cannot predict accurately the number of licenses that will be awarded to small entities in future actions. However, four of the 16 winning bidders in the two [[Page 571]] previous narrowband PCS auctions were small businesses, as that term was defined under the Commission's Rules. The Commission assumes, for purposes of this analysis, that a large portion of the remaining narrowband PCS licenses will be awarded to small entities. The Commission also assumes that at least some small businesses will acquire narrowband PCS licenses by means of the Commission's partitioning and disaggregation rules. ---------------------------------------------------------------------------

58 See Amendment of the Commission's Rules to Establish New Personal Communications Services, Narrowband PCS, Second Report and Order and Second Further Notice of Proposed Rulemaking, 15 FCC Red 10456, 10476, paragraph 40 (May 18, 2000).

59 Id. at 15 FCC Red 10476, paragraph 40.

60 Id. at 15 FCC Red 10476, paragraph 40.

61 See Letter to Amy Zoslov, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, from A. Alvarez, Administrator, Small Business Administration (Dec. 2, 1998). ---------------------------------------------------------------------------

105. 900 MHz Specialized Mobile Radio (``SMR''). In September of 1995, in a rulemaking adopting competitive bidding rules specifically for the 900 MHz SMR service, the Commission established a two-tiered bidding credit scheme for the 900 MHz SMR auction in which we defined two categories of small businesses: (1) An entity that, together with affiliates, has average gross revenues for the three preceding years of $3 million or less; and (2) an entity that, together with affiliates, has average gross revenues for the three preceding years of $15 million or less.62 The SBA has approved these size standards.63 In Auction Seven, which closed on April 15, 1996, sixty winning bidders for geographic area licenses in the 900 MHz SMR band qualified as small businesses under the $15 million size standard. ---------------------------------------------------------------------------

62 Amendment of parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the Specialized Mobile Radio Pool, PR Docket No. 89-553, Second Order on Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639, 2645- 46 (1995) (900 MHz SMR Rulemaking); see also 47 CFR 90.814(b).

63 See Letter to Michele C. Farquhar, Acting Chief, Wireless Telecommunications Bureau, Federal Communications Commission, from Philip Lader, Administrator, Small Business Administration (July 24, 1996). ---------------------------------------------------------------------------

106. 800 MHz SMR. In the 800 MHz Second Report and Order, we adopted a small business size standard for defining ``small'' and ``very small'' businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.64 This small business standard indicates that 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.65 A ``very small business'' is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years.66 The SBA has approved these small size standards.67 ---------------------------------------------------------------------------

64 See Amendment of part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, Second Report and Order, FCC 97-223, PR Docket No. 93-144, 12 FCC Rcd 19079, paragraph 141 (1997) (800 MHz Second Report and Order); see also 47 CFR 90.912(b).

65 Id.

66 Id.

67 See Letter from Aida Alvarez, Administration, Small Business Administration to Daniel B. Phythyon, Chief, Wireless Telecommunications Bureau, Federal Communications Commission (Oct. 27, 1997) (Upper 200 channels). See Letter from Aida Alvarez, Administrator, Small Business Administration to Thomas Sugrue, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission (Aug. 10, 1999) (applying the size standards approved in SBA's Oct. 27, 1997 letter to the 800 MHz MSR, Lower 80 and 150 General channels). ---------------------------------------------------------------------------

107. The auction of the 525 800 MHz SMR geographic area licenses for the upper 200 channels began on October 28, 1997, and was completed on December 8, 1997. Three (3) winning bidders for geographic area licenses for the upper 200 channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard, and seven (7) qualified as very small businesses. Next, the auction of the 1,050 800 MHz SMR geographic area licenses for the General Category channels began on August 16, 2000, and was completed on September 1, 2000. Eleven (11) out of a total of 14 winning bidders for geographic area licenses for the General Category channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard. Finally, a total of 2,800 Economic Area licenses in the lower 80 channels of the 800 MHz SMR service were sold in an auction completed on December 5, 2000. Of the 22 winning bidders, 19 claimed ``small business'' status. Thus, 40 winning bidders for geographic licenses in the 800 MHz SMR band qualified as small businesses.

108. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations on the 800 MHz bands. We do not kn