[Federal Register: August 29, 2006 (Volume 71, Number 167)]
[Notices]
[Page 51240-51242]
[DOCID:fr29au06-91]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54340; File No. SR-ISE-2006-40]

Self-Regulatory Organizations; International Securities Exchange,
Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1
Thereto Relating to the Establishment of the Second Market

August 21, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 5, 2006, the International Securities Exchange, Inc.
(``ISE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the ISE.
On August 16, 2006, ISE filed Amendment No. 1 to the proposed rule
change.\3\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaces and supersedes the original filing
in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE is proposing to adopt Second Market rules for the listing
and trading of low-volume options classes. The text of the proposed
rule change, as amended, is available on the ISE's Web site (http://www.iseoptions.com
), at the principal office of the ISE, and at the

Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the ISE included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The ISE has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The ISE currently trades options on approximately 900 equity
securities that qualify for options trading pursuant to the listing
standards contained in ISE Rule 502. The listing standards for
underlying securities are uniform across all of the options exchanges,
and there are many additional underlying equity securities that qualify
for options trading under these standards which the ISE does not
currently list for trading, but are traded on one or more of the other
options exchanges. In general, the Exchange has chosen not to list and
trade these options classes based on the low average daily trading
volume (``ADV'') they have on the other options exchanges. The purpose
of this proposal is to adopt rules for the listing and trading of these
low-volume options classes that qualify for listing under ISE Rule 502
in a ``Second Market.'' Establishing the Second Market would allow the
Exchange to provide an opportunity for additional members to provide
liquidity as market makers, and to apply a modified fee structure to
this segment of the options market.
    Under the proposal, the Exchange would initially list eligible
equity options classes (excluding options on exchange traded funds)
that trade on another options exchange and that have an ADV below 500
contracts over a six-month period in the Second Market and those with
an ADV of over 1500 contracts in the existing market (the ``First
Market''). The proposed rules allow the Exchange to list such options
classes with an ADV between 500 and 1500 contracts initially in either
market, which is necessary to take into account other factors to ensure
that options classes are placed in the appropriate market (e.g.,
whether the volume trend over the six-month period is up or down, or
whether the underlying security is going to be or has been part of a
corporate action). Starting one year after the Second Market initiates
trading,\4\ the Exchange would review the market in which options
classes are listed every three months, and options classes would be
moved from the First to the Second Market when their ADV in the prior
six-month period falls below 300 contracts,\5\ and moved from the
Second to the First Market when their ADV in the prior six-month period
exceeds 750 contracts.
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    \4\ Initially, the Exchange intends to add options classes to
the Second Market over several months. The Exchange believes it is
important to provide participants in the Second Market a period of
continuity in Second Market products before moving options between
the First Market and Second Market. Therefore, if for example, the
Exchange were to initiate trading in September 2006, it would not
conduct the first review to move options classes from the First
Market to the Second Market, and vise versa, until September 2007.
The first review would look at the industry ADV of each options
class over the previous 6 months. Three months later, the Exchange
would again review the industry ADV of each options class over the
previous 6 months, and repeat this same review every three months
thereafter.
    \5\ Such options classes would remain in the Second Market for
at least twelve (12) months before being returned to the First
Market.
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    Under the proposal, all members approved to operate ISE market
maker memberships would be eligible to be Competitive Market Makers in
the Second Market. In addition, members that are only approved as
Electronic Access Members may also register as Competitive Market
Makers in the Second Market,\6\ but would pay a $0.10 transaction
surcharge over those market makers that own or lease ISE market maker
memberships. The Exchange believes that providing greater access to

make markets in the Second Market would help it attract additional
liquidity for these low-volume options classes from firms that do not
currently participate on the ISE as market makers, while assuring that
such market makers do not have an inappropriate cost advantage over
market makers that have purchased or leased ISE market maker
memberships. Only Primary Market Makers in the First Market may be
Primary Market Makers in the Second Market. All market makers would pay
the same $2,000 monthly access fee for the right to quote in the Second
Market.
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    \6\ Under proposed ISE Rule 902, members that are only
Electronic Access Members that want to become Competitive Market
Makers in the Second Market would be required to complete the same
market maker application and meet the same standards that are
applied to Competitive Market Makers under the Exchange's existing
rules. Members that are only Electronic Access Members are not
eligible to be Primary Market Makers in the Second Market.
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    Market making requirements in the Second Market would be mostly the
same as those currently applied in the First Market. As in the First
Market, a Primary Market Maker would be appointed for each class traded
in the Second Market (``SMPMMs''). SMPMMs would have all of the same
obligations in their appointed options as Primary Market Makers in the
First Market, including, among other things, entering continuous
quotations in all of the series of all of the options classes to which
they are appointed and satisfying requirements related to the Plan for
Creating and Operating an Intermarket Option Linkage. Competitive
Market Makers in the Second Market (``SMCMMs'') would be considered
``appointed'' to all of the options classes listed in the Second Market
and, among other things, must continuously quote all of the series of
any options class in which they choose to make markets.\7\ An SMCMM
would be able to choose whether to make markets in one or more Second
Market options classes on a daily basis. SMCMMs would be permitted to
quote in all of the options classes listed in the Second Market, but
would not be required to quote a minimum number of Second Market
options. Accordingly, SMCMMs would be able to choose to make markets in
as many or as few options classes as they wish. Finally, SMPMMs and
SMCMMs would be permitted to execute a limited percentage of their
volume in Second Market options in which they are not currently making
markets.\8\
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    \7\ In the First Market, Competitive Market Makers are appointed
to a group of options, but are only required to enter continuous
quotes in a minimum number of those appointed options pursuant to
ISE Rule 804(e)(2). Similarly in the Second Market, SMCMMs would be
considered appointed to all of the Second Market options, but would
not be required to enter continuous quotations in a minimum number
of Second Market options classes. Therefore, in both the First and
the Second Markets, there may be options classes to which a
Competitive Market Maker is appointed for which it is not making
markets. Other ISE rules regarding obligations and requirements
related to market maker quotations in appointed options, such as ISE
Rule 803(b), currently are (and would be) applicable only when a
Competitive Market Maker is quoting in an appointed option and do
not create an obligation for Competitive Market Makers to
continuously quote all appointed options classes. Other than the
minimum quotation requirement for Competitive Market Makers in the
First Market, the rules applicable to Competitive Market Makers in
the First Market and the Second Market for options classes in which
they are appointed would be the same. Because SMCMMs would be
appointed to all options classes in the Second Market, the rules
applicable to Competitive Market Makers in the First Market in
options classes to which they are not appointed would not apply to
SMCMMs (i.e., ISE Rule 805(b)).
    \8\ As explained in note 7 above, ISE Rule 805(b) regarding
options classes in which a Competitive Market Maker in the First
Market is not appointed would not apply to SMCMMs. The Rule permits
such Competitive Market Makers to enter orders in options classes to
which they are not appointed, limited to 25% of their total volume.
Since SMCMMs would be considered appointed to all of the options
classes in the Second Market, the Exchange proposes to adopt a
parallel rule to ISE Rule 805(b) for SMCMMs that allows them to
enter orders in options classes in which they are not currently
making markets (as opposed to in which they are not appointed),
limited to 25% of their total volume. The proposed rule specifies
that SMCMMs may only enter orders in options classes that they are
not quoting when the SMCMMs are making markets in at least one
options class. If a SMCMM chooses not to make markets in any Second
Market options classes on a particular day, it would not be
permitted to enter any orders in Second Market options.
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    The Exchange proposes several changes to its fee schedule for the
Second Market as follows: (1) Members would be charged an execution fee
of $.05 per contract for public customer orders; (2) a $.10 per
contract surcharge would be applied to transactions executed by market
makers that do not own or lease an ISE market maker membership (i.e.,
Electronic Access Members that make markets in the Second Market); (3)
Second Market options would be excluded from the payment for order flow
fee; (4) market makers would be charged a $2,000 per month access fee
(there would be no additional access fee for Electronic Access Members
to send orders to the Second Market); and (5) firms that are only
market makers in the Second Market (i.e., Electronic Access Members
that make markets in the Second Market) would be charged the same
$5,000 annual regulatory fee paid by Competitive Market Makers in the
First Market.
2. Statutory Basis
    The Exchange believes that the basis under the Act for this
proposed rule change is the requirement under Section 6(b)(4) \9\ that
an exchange have an equitable allocation of reasonable dues, fees and
other charges among its members and other persons using its facilities,
and the requirement under Section 6(b)(5) \10\ that an exchange have
rules that are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism for a free and open market and
a national market system, and, in general, to protect investors and the
public interest. In particular, the proposal is designed to attract
liquidity in low-volume options classes by providing for open access to
market makers.
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    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    (a) by order approve such proposed rule change, as amended, or
    (b) institute proceedings to determine whether the proposed rule
change, as amended, should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the amended
proposed rule change is consistent with the Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File No. SR-ISE-2006-40 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2006-40. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the ISE. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-ISE-2006-40 and should be submitted on or before
September 19, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-14273 Filed 8-28-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 77, Number 14 (Monday, January 23, 2012)]
[Notices]
[Pages 3313-3318]
[FR Doc No: 2012-1232]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66165; File No. SR-NASDAQ-2012-005]

Self-Regulatory Organizations; the NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Establish an Enhanced Display Distributor Fee

January 17, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 5, 2012, the NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by Nasdaq.
The Commission is publishing this notice to solicit comments on the
proposed rule from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    Nasdaq proposes to establish an optional tiered distributor fee for
enhanced displays (the ``Enhanced Display Distributor Fee'').
    The text of the proposed rule change is below. Proposed new
language is italicized; proposed deletions are in brackets.\3\
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    \3\ Changes are marked to the rule text that appears in the
electronic Nasdaq Manual found at http://nasdaqomx.cchwallstreet.com.
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* * * * *

7026. Distribution Models

    (a) Display Solutions [Reserved]
    (1) Enhanced Displays (optional delivery method)
    (A) The charges to be paid by Distributors for offering subscribers
of Nasdaq Depth data controlled display products along with access to
an API or similar solution shall be:

------------------------------------------------------------------------
                                                 Number of downstream
                                                     subscribers
------------------------------------------------------------------------
Monthly Enhanced Display Solution Fee per    1-299 users = $2,000/month.
 Distributor for right to display products   300-399 users = $3,000/
 containing API or similar solution \*\.      month.
                                             400-499 users = $4,000/
                                              month.
                                             500-599 users = $5,000/
                                              month.
                                             600-699 users = $6,000/
                                              month.
                                             700-799 users = $7,000/
                                              month.
                                             800-899 users = $8,000/
                                              month.
                                             900-999 users = $9,000/
                                              month.
                                             1,000 users or more =
                                              $10,000/month.
------------------------------------------------------------------------
* Customers that are subscribing to certain enterprise depth capped fees
  as described in Nasdaq Rule 7023(a)(1)(c) are exempt from this fee.

    (B) The monthly fee per Professional or Non-Professional subscriber
for utilizing Nasdaq TotalView or Nasdaq OpenView data on a controlled
display product with access to an API or similar solution through that
display is the applicable Nasdaq TotalView or Nasdaq OpenView rates.
    The monthly fee per Professional or Non-Professional subscriber for
utilizing the Level 2 data for Nasdaq-listed securities on a controlled
display product with access to an API or similar solution through that
display is the applicable Nasdaq TotalView rates.
    The monthly fee per Professional or Non-Professional subscriber for
utilizing Nasdaq Level 2 data for NYSE, AMEX or regional listed
securities on a controlled display product with access to an API or
similar solution through that display is the applicable Nasdaq OpenView
rates.
    (2) The term ``non-professional'' shall have the same meaning as
set forth in Nasdaq Rule 7011(b).
    (3) The term ``Distributor'' shall have the same meaning as set
forth in Nasdaq Rule 7019(c).
    (b)-(c) No change.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq is proposing to amend Nasdaq Rule 7026 (Distribution Models)
to establish an optional Enhanced Display Solution Fee to further the
distribution of Nasdaq TotalView, Nasdaq OpenView and/or Nasdaq Level 2
Information (collectively, ``Nasdaq Depth Information''). The new data
distribution model (an ``Enhanced Display Solution'') offers a delivery
method available to firms seeking simplified market data administration
and may be offered by Distributors to external subscribers that are
using the Nasdaq Depth Information internally.
    The proposed optional Enhanced Display Solution Fee is intended to
provide a new pricing option for Distributors who provide a controlled
display product along with an Application Programming Interface

(``API'') or similar solution to subscribers. Non-display use is not
permitted under the Enhanced Display Solution Fee structure. To ensure
compliance with this new fee, Distributors must monitor for any non-
display or excessive use suggesting that the subscriber is not in
compliance. The Distributor is liable for any unauthorized use by the
Enhanced Data subscribers under the Enhanced Display Solution. This
proposed optional new fee only applies to external Distributors
offering any Nasdaq Depth Information and who opt for an Enhanced
Display option.
    This new pricing and administrative option is in response to
industry demand, as well as due to changes in the technology to
distribute market data. By providing this new fee option, Distributors
will have more administrative flexibility in their receipt and
distribution of Nasdaq Depth Information. Distributors opting for the
Enhanced Display Solution Fee would still be fee liable for the
applicable Professional or Non-Professional subscriber fees for Nasdaq
TotalView and Nasdaq OpenView, as described in Nasdaq Rule 7023.\4\
Nasdaq proposes to permit Distributors to select the Enhanced Display
Solution Fee at a minimum rate of $2,000 per month for up to 299
subscribers, and each tier of 100 users will be at an additional
incremental rate of $1,000 per month up to a maximum of $10,000 per
month for 1,000 or more subscribers per month. The Enhanced Display
Solution Fee is independent from the applicable subscriber fees as
described above. These new Enhanced Display Solution Fees will become
fee liable for the billing month of April 2012.
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    \4\ Subscribers redistributing Nasdaq Level 2 information under
the proposed fee change will pay underlying Nasdaq TotalView or
Nasdaq OpenView rates. A Subscriber redistributing Nasdaq Level 2
for Nasdaq-listed securities will pay the underlying Nasdaq
TotalView rates and a customer redistributing Nasdaq Level 2 for
NYSE, AMEX or regional listed securities will pay the underlying
Nasdaq OpenView rates.
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    This delivery option assesses a new fee schedule to Distributors of
Nasdaq Depth Information that provide an API or similar solution from a
controlled display. The Distributor must first agree to reformat,
redisplay and/or alter the Nasdaq Depth Information prior to
retransmission, but not to affect the integrity of the Nasdaq Depth
Information and not to render it inaccurate, unfair, uninformative,
fictitious, misleading or discriminatory. An Enhanced Display Solution
is any controlled display product containing Nasdaq Depth Information
where the Distributor controls a display of Nasdaq Depth Information,
but also allows the subscriber to access an API or similar solution
from that display product. The subscriber of an Enhanced Display may
use the Nasdaq Depth Information for the subscriber's own purposes and
may not redistribute the information outside of their organization. The
subscriber may not redistribute the data internally to other users in
the same organization.
    In the past, Nasdaq has considered this type of retransmission to
be an uncontrolled display since the Distributor does not control both
the entitlements and the display of the information. Over the last ten
years, Distributors have improved the technical delivery and monitoring
of data and the Enhanced Display offering responds to an industry need
to administer these new types of technical deliveries.
    Some Distributors believe that an API or other distribution from a
display is a better controlled product than a data feed and as such
should not be subject to the same rates as a data feed. The offering of
a new pricing option for an Enhanced Display would not only result in
Nasdaq offering lower fees for certain existing Distributors, but will
allow new Distributors to deliver Enhanced Displays to new clients,
thereby increasing transparency of the market. Nasdaq continues to
create new pricing policies aimed at increasing transparency in the
market and believes this is another step in that direction. This
includes the Enhanced Display Solution as well as the Managed Data
Solution.
    Accordingly, Nasdaq is establishing the Enhanced Display Solution
Fee for Distributors who are seeking simplified market data
administration and would like to offer Nasdaq Depth Information to
subscribers that are using the Nasdaq Depth Information internally. The
Nasdaq Enhanced Display Solution Fee is optional for firms providing a
controlled display product containing Nasdaq Depth Information where
the Distributor controls a display of Nasdaq Depth Information, but
allows the subscriber to access an API or similar solution from that
display product since these firms can choose to pay the data feed fees.
The new Nasdaq Enhanced Display Solution Fee is designed to allow
TotalView subscribers to redistribute data via a terminal without
paying a higher fee for an attached API. As a result, it does not
impact individual usage fees for TotalView or in any way increase the
costs of any user of the TotalView data product. For subscribers
wanting to use this same functionality for other products, they would
be able to do so by paying the applicable TotalView rates.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\5\ in general, and with Section
6(b)(4) of the Act,\6\ in particular, in that it provides an equitable
allocation of reasonable fees among users and recipients of Nasdaq
data. In adopting Regulation NMS, the Commission granted self-
regulatory organizations and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Commission concluded that Regulation NMS--by deregulating the
market in proprietary data--would itself further the Act's goals of
facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\7\
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    \7\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well.
    On July 21, 2010, President Barack Obama signed into law H.R. 4173,
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(``Dodd-Frank Act''), which amended Section 19 of the Act. Among other
things, Section 916 of the Dodd-Frank Act amended paragraph (A) of
Section 19(b)(3) of the Act by inserting the phrase ``on any person,
whether or not the person is a member of the self-regulatory
organization'' after ``due, fee or other charge imposed by the self-
regulatory organization.'' As a result, all SRO rule proposals
establishing or changing dues, fees, or other charges are immediately
effective upon filing regardless of whether such dues, fees, or

other charges are imposed on members of the SRO, non-members, or both.
Section 916 further amended paragraph (C) of Section 19(b)(3) of the
Exchange Act to read, in pertinent part, ``At any time within the 60-
day period beginning on the date of filing of such a proposed rule
change in accordance with the provisions of paragraph (1) [of Section
19(b)], the Commission summarily may temporarily suspend the change in
the rules of the self-regulatory organization made thereby, if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of this title. If the Commission takes
such action, the Commission shall institute proceedings under paragraph
(2)(B) [of Section 19(b)] to determine whether the proposed rule should
be approved or disapproved.''
    Nasdaq believes that these amendments to Section 19 of the Act
reflect Congress's intent to allow the Commission to rely upon the
forces of competition to ensure that fees for market data are
reasonable and equitably allocated. Although Section 19(b) had formerly
authorized immediate effectiveness for a ``due, fee or other charge
imposed by the self-regulatory organization,'' the Commission adopted a
policy and subsequently a rule stipulating that fees for data and other
products available to persons that are not members of the self-
regulatory organization must be approved by the Commission after first
being published for comment. At the time, the Commission supported the
adoption of the policy and the rule by pointing out that unlike
members, whose representation in self-regulatory organization
governance was mandated by the Act, non-members should be given the
opportunity to comment on fees before being required to pay them, and
that the Commission should specifically approve all such fees. Nasdaq
believes that the amendment to Section 19 reflects Congress's
conclusion that the evolution of self-regulatory organization
governance and competitive market structure have rendered the
Commission's prior policy on non-member fees obsolete. Specifically,
many exchanges have evolved from member-owned not-for-profit
corporations into for-profit investor-owned corporations (or
subsidiaries of investor-owned corporations). Accordingly, exchanges no
longer have narrow incentives to manage their affairs for the exclusive
benefit of their members, but rather have incentives to maximize the
appeal of their products to all customers, whether members or non-
members, so as to broaden distribution and grow revenues. Moreover, we
believe that the change also reflects an endorsement of the
Commission's determinations that reliance on competitive markets is an
appropriate means to ensure equitable and reasonable prices. Simply
put, the change reflects a presumption that all fee changes should be
permitted to take effect immediately, since the level of all fees are
constrained by competitive forces.
    The recent decision of the United States Court of Appeals for the
District of Columbia Circuit in NetCoaliton v. SEC [sic], No. 09-1042
(D.C. Cir. 2010), although reviewing a Commission decision made prior
to the effective date of the Dodd-Frank Act, upheld the Commission's
reliance upon competitive markets to set reasonable and equitably
allocated fees for market data. ``In fact, the legislative history
indicates that the Congress intended that the market system `evolve
through the interplay of competitive forces as unnecessary regulatory
restrictions are removed' and that the SEC wield its regulatory power
`in those situations where competition may not be sufficient,' such as
in the creation of a `consolidated transactional reporting system.'
NetCoaltion [sic], at 15 (quoting H.R. Rep. No. 94-229, at 92 (1975),
as reprinted in 1975 U.S.C.C.A.N. 321, 323). The court's conclusions
about Congressional intent are therefore reinforced by the Dodd-Frank
Act amendments, which create a presumption that exchange fees,
including market data fees, may take effect immediately, without prior
Commission approval, and that the Commission should take action to
suspend a fee change and institute a proceeding to determine whether
the fee change should be approved or disapproved only where the
Commission has concerns that the change may not be consistent with the
Act.
    NASDAQ believes that this proposal is in keeping with those
principles by promoting increased transparency through the offering of
a new pricing option for an Enhanced Display, which would not only
result in Nasdaq offering lower fees for certain existing Distributors,
but will allow new Distributors to deliver Enhanced Displays to new
clients, thereby increasing transparency of the market. Additionally,
the proposal provides for simplified market data administration and may
be offered by Distributors to external subscribers that are using the
Nasdaq Depth Information internally. Nasdaq notes also that this filing
proposes to distribute no additional data elements and that the
Enhanced Display Solution Fee is optional. Accordingly, distributors
and users can discontinue use at any time and for any reason, including
due to an assessment of the reasonableness of fees charged. Nasdaq
continues to create new pricing policies aimed at increasing
transparency in the market and believes this is another step in that
direction.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Notwithstanding its
determination that the Commission may rely upon competition to
establish fair and equitably allocated fees for market data, the
NetCoaltion [sic] court found that the Commission had not, in that
case, compiled a record that adequately supported its conclusion that
the market for the data at issue in the case was competitive. For the
reasons discussed above, Nasdaq believes that the Dodd-Frank Act
amendments to Section 19 materially alter the scope of the Commission's
review of future market data filings, by creating a presumption that
all fees may take effect immediately, without prior analysis by the
Commission of the competitive environment. Even in the absence of this
important statutory change, however, Nasdaq believes that a record may
readily be established to demonstrate the competitive nature of the
market in question.
    There is intense competition between trading platforms that provide
transaction execution and routing services and proprietary data
products. Transaction execution and proprietary data products are
complementary in that market data is both an input and a byproduct of
the execution service. In fact, market data and trade execution are a
paradigmatic example of joint products with joint costs. The decision
whether and on which platform to post an order will depend on the
attributes of the platform where the order can be posted, including the
execution fees, data quality and price and distribution of its data
products. Without the prospect of a taking order seeing and reacting to
a posted order on a particular platform, the posting of the order would
accomplish little. Without trade executions, exchange data products
cannot exist. Data products are valuable to many end users only insofar
as they provide information that end users

expect will assist them or their customers in making trading decisions.
    The costs of producing market data include not only the costs of
the data distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's transaction execution
platform and the cost of regulating the exchange to ensure its fair
operation and maintain investor confidence. The total return that a
trading platform earns reflects the revenues it receives from both
products and the joint costs it incurs. Moreover, an exchange's
customers view the costs of transaction executions and of data as a
unified cost of doing business with the exchange. A broker-dealer will
direct orders to a particular exchange only if the expected revenues
from executing trades on the exchange exceed net transaction execution
costs and the cost of data that the broker-dealer chooses to buy to
support its trading decisions (or those of its customers). The choice
of data products is, in turn, a product of the value of the products in
making profitable trading decisions. If the cost of the product exceeds
its expected value, the broker-dealer will choose not to buy it.
Moreover, as a broker-dealer chooses to direct fewer orders to a
particular exchange, the value of the product to that broker-dealer
decreases, for two reasons. First, the product will contain less
information, because executions of the broker-dealer's orders will not
be reflected in it. Second, and perhaps more important, the product
will be less valuable to that broker-dealer because it does not provide
information about the venue to which it is directing its orders. Data
from the competing venue to which the broker-dealer is directing orders
will become correspondingly more valuable.
    Thus, a super-competitive increase in the fees charged for either
transactions or data has the potential to impair revenues from both
products. ``No one disputes that competition for order flow is
`fierce'.'' NetCoalition at 24. However, the existence of fierce
competition for order flow implies a high degree of price sensitivity
on the part of broker-dealers with order flow, since they may readily
reduce costs by directing orders toward the lowest-cost trading venues.
A broker-dealer that shifted its order flow from one platform to
another in response to order execution price differentials would both
reduce the value of that platform's market data and reduce its own need
to consume data from the disfavored platform. Similarly, if a platform
increases its market data fees, the change will affect the overall cost
of doing business with the platform, and affected broker-dealers will
assess whether they can lower their trading costs by directing orders
elsewhere and thereby lessening the need for the more expensive data.
    Analyzing the cost of market data distribution in isolation from
the cost of all of the inputs supporting the creation of market data
will inevitably underestimate the cost of the data. Thus, because it is
impossible to create data without a fast, technologically robust, and
well-regulated execution system, system costs and regulatory costs
affect the price of market data. It would be equally misleading,
however, to attribute all of the exchange's costs to the market data
portion of an exchange's joint product. Rather, all of the exchange's
costs are incurred for the unified purposes of attracting order flow,
executing and/or routing orders, and generating and selling data about
market activity. The total return that an exchange earns reflects the
revenues it receives from the joint products and the total costs of the
joint products.
    Competition among trading platforms can be expected to constrain
the aggregate return each platform earns from the sale of its joint
products, but different platforms may choose from a range of possible,
and equally reasonable, pricing strategies as the means of recovering
total costs. For example, some platform may choose to pay rebates to
attract orders, charge relatively low prices for market information (or
provide information free of charge) and charge relatively high prices
for accessing posted liquidity. Other platforms may choose a strategy
of paying lower rebates (or no rebates) to attract orders, setting
relatively high prices for market information, and setting relatively
low prices for accessing posted liquidity. In this environment, there
is no economic basis for regulating maximum prices for one of the joint
products in an industry in which suppliers face competitive constraints
with regard to the joint offering. This would be akin to strictly
regulating the price that an automobile manufacturer can charge for car
sound systems despite the existence of a highly competitive market for
cars and the availability of after-market alternatives to the
manufacturer-supplied system.
    The market for market data products is competitive and inherently
contestable because there is fierce competition for the inputs
necessary to the creation of proprietary data and strict pricing
discipline for the proprietary products themselves. Numerous exchanges
compete with each other for listings, trades, and market data itself,
providing virtually limitless opportunities for entrepreneurs who wish
to produce and distribute their own market data. This proprietary data
is produced by each individual exchange, as well as other entities, in
a vigorously competitive market.
    Broker-dealers currently have numerous alternative venues for their
order flow, including ten self-regulatory organization (``SRO'')
markets, as well as internalizing broker-dealers (``BDs'') and various
forms of alternative trading systems (``ATSs''), including dark pools
and electronic communication networks (``ECNs''). Each SRO market
competes to produce transaction reports via trade executions, and two
FINRA-regulated Trade Reporting Facilities (``TRFs'') compete to
attract internalized transaction reports. Competitive markets for order
flow, executions, and transaction reports provide pricing discipline
for the inputs of proprietary data products.
    The large number of SROs, TRFs, BDs, and ATSs that currently
produce proprietary data or are currently capable of producing it
provides further pricing discipline for proprietary data products. Each
SRO, TRF, ATS, and BD is currently permitted to produce proprietary
data products, and many currently do or have announced plans to do so,
including Nasdaq, NYSE, NYSE Amex, NYSEArca, and BATS.
    Any ATS or BD can combine with any other ATS, BD, or multiple ATSs
or BDs to produce joint proprietary data products. Additionally, order
routers and market data vendors can facilitate single or multiple
broker-dealers' production of proprietary data products. The potential
sources of proprietary products are virtually limitless.
    The fact that proprietary data from ATSs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS and Arca did before registering as exchanges by
publishing proprietary book data on the Internet. Second, because a
single order or transaction report can appear in an SRO proprietary
product, a non-SRO proprietary product, or both, the data available in
proprietary products is exponentially greater than the actual number of
orders and transaction reports that exist in the marketplace.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end users. Vendors impose price restraints based upon their
business models. For example, vendors such as Bloomberg and Thomson
Reuters that assess a surcharge on data they sell may refuse

to offer proprietary products that end users will not purchase in
sufficient numbers. Internet portals, such as Google, impose a
discipline by providing only data that will enable them to attract
``eyeballs'' that contribute to their advertising revenue. Retail
broker-dealers, such as Schwab and Fidelity, offer their customers
proprietary data only if it promotes trading and generates sufficient
commission revenue. Although the business models may differ, these
vendors' pricing discipline is the same: They can simply refuse to
purchase any proprietary data product that fails to provide sufficient
value. NASDAQ and other producers of proprietary data products must
understand and respond to these varying business models and pricing
disciplines in order to market proprietary data products successfully.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples of entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, BATS Trading and Direct Edge. A
proliferation of dark pools and other ATSs operate profitably with
fragmentary shares of consolidated market volume.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, and Thomson Reuters.
    The court in NetCoalition concluded that the Commission had failed
to demonstrate that the market for market data was competitive based on
the reasoning of the Commission's NetCoalition order because, in the
court's view, the Commission had not adequately demonstrated that the
depth-of-book data at issue in the case is used to attract order flow.
Nasdaq believes, however, that evidence not before the court clearly
demonstrates that availability of data attracts order flow. For
example, as of July 2010, 92 of the top 100 broker-dealers by shares
executed on Nasdaq consumed Level 2/NQDS and 80 of the top 100 broker-
dealers consumed TotalView. During that month, the Level 2/NQDS-users
were responsible for 94.44% of the orders entered into Nasdaq and
TotalView users were responsible for 92.98%.
    Competition among platforms has driven Nasdaq continually to
improve its platform data offerings and to cater to customers' data
needs. For example, Nasdaq has developed and maintained multiple
delivery mechanisms (IP, multi-cast, and compression) that enable
customers to receive data in the form and manner they prefer and at the
lowest cost to them. Nasdaq offers front end applications such as its
``Bookviewer'' to help customers utilize data. Nasdaq has created new
products like TotalView Aggregate to complement TotalView ITCH and
Level 2/NQDS, because offering data in multiple formatting allows
Nasdaq to better fit customer needs. Nasdaq offers data via multiple
extranet providers, thereby helping to reduce network and total cost
for its data products. Nasdaq has developed an online administrative
system to provide customers transparency into their data feed requests
and streamline data usage reporting. Nasdaq has also expanded its
Enterprise License options that reduce the administrative burden and
costs to firms that purchase market data.
    Despite these enhancements and a dramatic increase in message
traffic, Nasdaq's fees for market data have remained flat. In fact, as
a percent of total customer costs, Nasdaq data fees have fallen
relative to other data usage costs--including bandwidth, programming,
and infrastructure--that have risen. The same holds true for execution
services; despite numerous enhancements to Nasdaq's trading platform,
absolute and relative trading costs have declined. Platform competition
has intensified as new entrants have emerged, constraining prices for
both executions and for data.
    The vigor of competition for depth information is significant and
the Exchange believes that this proposal clearly evidences such
competition. Nasdaq is offering a new pricing model in order to keep
pace with changes in the industry and evolving customer needs. It is
entirely optional and is geared towards attracting new customers, as
well as retaining existing customers.
    The Exchange has witnessed competitors creating new products and
innovative pricing in this space over the course of the past year.
Nasdaq continues to see firms challenge its pricing on the basis of the
Exchange's explicit fees being higher than the zero-priced fees from
other competitors such as BATS. In all cases, firms make decisions on
how much and what types of data to consume on the basis of the total
cost of interacting with Nasdaq or other exchanges. Of course, the
explicit data fees are but one factor in a total platform analysis.
Some competitors have lower transactions fees and higher data fees, and
others are vice versa. The market for this depth information is highly
competitive and continually evolves as products develop and change.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\. At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(a)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2012-005. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also
will be available for inspection and copying at the principal offices
of the Exchange. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASDAQ-2012-005, and should be submitted on or before February 13,
2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1232 Filed 1-20-12; 8:45 am]
BILLING CODE 8011-01-P


$538,271	3.16%	*	$16,989	$64,386	$11.35	0.002%	0.067%

6111	Elementary and Secondary Schools	$3,030,260	8,367	$362,168	7.67%	**
$27,771	$18,651	$2.23	0.001%	0.008%

6112	Junior Colleges	$202,450	248	$816,332	7.67%	**	$62,597	$778	$3.14
0.000%	0.005%

6113	Colleges, Universities, and Professional Schools	$516,584	954
$541,493	7.67%	**	$41,522	$2,749	$2.88	0.001%	0.007%

6114	Business Schools and Computer and Management Training	$2,494,829
6,377	$391,223	7.67%	**	$29,999	$10,608	$1.66	0.000%	0.006%

6115	Technical and Trade Schools	$2,200,654	5,401	$407,453	7.67%	**
$31,244	$14,585	$2.70	0.001%	0.009%

6116	Other Schools and Instruction	$5,746,928	26,349	$218,108	7.67%	**
$16,725	$52,302	$1.98	0.001%	0.012%

6117	Educational Support Services	$1,727,713	4,498	$384,107	7.67%	**
$29,453	$8,881	$1.97	0.001%	0.007%

6211	Offices of Physicians	$109,075,812	166,372	$655,614	4.39%	*	$28,784
$498,314	$3.00	0.000%	0.010%

6212	Offices of Dentists	$63,055,882	111,183	$567,136	6.73%	*	$38,168
$247,229	$2.22	0.000%	0.006%

6213	Offices of Other Health Practitioners	$28,457,609	96,344	$295,375
8.92%	*	$26,333	$261,999	$2.72	0.001%	0.010%

6214	Outpatient Care Centers	$5,017,087	8,298	$604,614	5.58%	*	$33,730
$48,821	$5.88	0.001%	0.017%

6215	Medical and Diagnostic Laboratories	$5,030,676	5,662	$888,498	5.45%
*	$48,465	$30,328	$5.36	0.001%	0.011%

6216	Home Health Care Services	$2,508,304	8,000	$313,538	5.45%	*	$17,102
$28,708	$3.59	0.001%	0.021%

6219	Other Ambulatory Health Care Services	$1,891,509	3,933	$480,933
5.45%	*	$26,233	$21,124	$5.37	0.001%	0.020%

6221	General Medical and Surgical Hospitals	$435,561	151	$2,884,513
5.08%	**	$146,458	$956	$6.33	0.000%	0.004%

6222	Psychiatric and Substance Abuse Hospitals	$103,678	48	$2,159,950
5.08%	**	$109,669	$210	$4.37	0.000%	0.004%

6223	Specialty (except Psychiatric and Substance Abuse) Hospitals
$140,371	130	$1,079,779	5.08%	**	$54,825	$826	$6.35	0.001%	0.012%

6231	Nursing Care Facilities	$1,718,618	2,217	$775,200	5.08%	**	$39,360
$11,513	$5.19	0.001%	0.013%

6232	Residential Mental Retardation, Mental Health and Substance Abuse
Facilities	$1,155,914	4,046	$285,693	5.08%	**	$14,506	$40,459	$10.00
0.004%	0.069%

6233	Community Care Facilities for the Elderly	$2,284,461	9,203	$248,230
5.08%	**	$12,604	$29,961	$3.26	0.001%	0.026%

6239	Other Residential Care Facilities	$558,961	1,877	$297,795	5.08%	**
$15,120	$9,728	$5.18	0.002%	0.034%

6241	Individual and Family Services	$8,057,734	27,310	$295,047	5.08%	**
$14,981	$86,180	$3.16	0.001%	0.021%

6242	Community Food and Housing, and Emergency and Other Relief Services
$3,126,011	6,774	$461,472	5.08%	**	$23,431	$19,728	$2.91	0.001%	0.012%

6243	Vocational Rehabilitation Services	$1,022,676	2,623	$389,888	5.08%
**	$19,796	$9,873	$3.76	0.001%	0.019%

6244	Child Day Care Services	$7,254,249	47,892	$151,471	5.08%	**	$7,691
$129,007	$2.69	0.002%	0.035%

7111	Performing Arts Companies	$3,739,335	7,819	$478,237	9.26%	*	$44,293
$16,945	$2.17	0.000%	0.005%

7112	Spectator Sports	$1,921,724	3,500	$549,064	9.26%	*	$50,853	$11,233
$3.21	0.001%	0.006%

7113	Promoters of Performing Arts, Sports, and Similar Events	$2,931,291
4,565	$642,123	9.26%	*	$59,471	$34,067	$7.46	0.001%	0.013%

7114	Agents and Managers for Artists, Athletes, Entertainers, and Other
Public Figures	$2,147,875	3,204	$670,373	9.26%	*	$62,088	$5,423	$1.69
0.000%	0.003%

7115	Independent Artists, Writers, and Performers	$9,177,876	16,611
$552,518	9.26%	*	$51,172	$39,055	$2.35	0.000%	0.005%

7121	Museums, Historical Sites, and Similar Institutions	$1,758,005
5,261	$334,158	6.95%	**	$23,211	$12,437	$2.36	0.001%	0.010%

7131	Amusement Parks and Arcades	$721,704	1,897	$380,445	5.36%	*	$20,377
$5,986	$3.16	0.001%	0.015%

7132	Gambling Industries	$802,524	1,208	$664,341	5.36%	*	$35,583	$2,617
$2.17	0.000%	0.006%

7139	Other Amusement and Recreation Industries	$14,878,601	46,981
$316,694	5.36%	*	$16,962	$116,258	$2.47	0.001%	0.015%

7211	Traveler Accommodation	$12,170,235	31,843	$382,195	2.95%	*	$11,278
$138,188	$4.34	0.001%	0.038%

7212	RV (Recreational Vehicle) Parks and Recreational Camps	$2,338,386
6,085	$384,287	2.95%	*	$11,340	$20,899	$3.43	0.001%	0.030%

7213	Rooming and Boarding Houses	$549,947	2,405	$228,668	2.95%	*	$6,748
$7,086	$2.95	0.001%	0.044%

7221	Full-Service Restaurants	$36,898,445	130,156	$283,494	4.15%	*
$11,762	$362,767	$2.79	0.001%	0.024%

7222	Limited-Service Eating Places	$30,495,707	124,944	$244,075	4.15%	*
$10,127	$426,817	$3.42	0.001%	0.034%

7223	Special Food Services	$3,096,456	11,376	$272,192	4.15%	*	$11,293
$97,678	$8.59	0.003%	0.076%

7224	Drinking Places (Alcoholic Beverages)	$9,494,057	43,640	$217,554
4.15%	*	$9,026	$84,325	$1.93	0.001%	0.021%

8111	Automotive Repair and Maintenance	$54,579,544	145,857	$374,199
3.67%	*	$13,719	$1,821,691	$12.49	0.003%	0.091%

8112	Electronic and Precision Equipment Repair and Maintenance
$4,213,288	11,323	$372,100	5.14%	*	$19,122	$142,769	$12.61	0.003%	0.066%

8113	Commercial and Industrial Machinery and Equipment (except
Automotive and Electronic) Repair and Maintenance	$9,400,474	21,243
$442,521	4.15%	*	$18,386	$262,961	$12.38	0.003%	0.067%

8114	Personal and Household Goods Repair and Maintenance	$5,447,836
23,522	$231,606	4.15%	*	$9,623	$191,337	$8.13	0.004%	0.085%

8121	Personal Care Services	$12,170,150	84,303	$144,362	5.71%	*	$8,241
$211,426	$2.51	0.002%	0.030%

8122	Death Care Services	$7,536,235	14,986	$502,885	5.71%	*	$28,708
$94,512	$6.31	0.001%	0.022%

8123	Drycleaning and Laundry Services	$6,711,399	32,496	$206,530	5.71%	*
$11,790	$155,917	$4.80	0.002%	0.041%

8129	Other Personal Services	$6,535,483	26,943	$242,567	5.71%	*	$13,847
$140,742	$5.22	0.002%	0.038%

8131	Religious Organizations	$34,213,454	156,574	$218,513	2.22%	*	$4,855
$607,873	$3.88	0.002%	0.080%

8132	Grantmaking and Giving Services	$18,515,506	11,353	$1,630,891	2.22%
*	$36,239	$44,498	$3.92	0.000%	0.011%

8133	Social Advocacy Organizations	$3,993,173	9,003	$443,538	2.22%	*
$9,856	$34,510	$3.83	0.001%	0.039%

8134	Civic and Social Organizations	$7,378,615	26,658	$276,788	2.22%	*
$6,150	$96,234	$3.61	0.001%	0.059%

8139	Business, Professional, Labor, Political, and Similar Organizations
$25,082,876	58,608	$427,977	2.22%	*	$9,510	$235,083	$4.01	0.001%	0.042%

[a] Estimated based on 2002 receipts and payroll data from US Census
Bureau, Statistics of U.S. Businesses, 2002 and payroll data from US
Census Bureau, Statistics of [a] U.S. Businesses, 2003. Receipts are not
reported for 2003, but were estimated assuming the ratio of receipts to
payroll remained unchanged between 2002 and 2003.

[b] US Census Bureau, Statistics of U.S. Businesses, 2003.

[c] Estimated from ratios of net income to total receipts as reported
for 2003 by the US Internal Revenue Service, Corporation Source Book,
2003. <<http://www.irs.gov/
taxstats/bustaxstats/article/0,,id=149687,00.html>> Data not available
at disaggregated levels for all industries, and profit rates at more
highly aggregated levels are used for such industries.

NA: Data not available

* Profit rate imputed from corresponding 3-digit NAICS industry.

** Profit rate imputed from corresponding 2-digit NAICS
industry.APPENDIX A

ESTIMATED NATIONAL NUMBER OF FIXED LADDERS

GREATER THAN 20 FEET IN HEIGHT

A.1	Introduction

This appendix summarizes the estimated number of structures with fixed
ladders in the United States and the number of fixed ladders above 20
feet in height.  To estimate the number of fixed ladders above 20 feet
in height, ERG contacted industry consultants, associations, government
agencies, trade journals, and manufacturers. First, ERG identified the
structures in various industries at which fixed ladders are likely to
exist. Second, the number of fixed ladders in each industry was
estimated. Numerous industry sources, primarily trade association and
manufacturers, were contacted to develop and revise the fixed ladder
estimates.

Fixed ladders are defined in this report as ladders such as: 1) vertical
steel ladders affixed to a structure; or 2) individual rung ladders
ladder crosspieces which are individually attached to a structure, such
as the rungs found embedded in the concrete in manholes. By definition,
a fixed ladder is permanently attached to a structure, building, or
equipment; this type of walking-working surface does not include ship
stairs or manhole steps (OSHA, 2003). The fixed ladder estimate does not
include structures with step bolts such as those found on monopole
communication towers.

The following structures were identified as having fixed ladders:

Ski lift towers

Communications towers (radio, television, cellular, and microwave)

Smokestacks and chimneys

Cooling towers

Manholes

Elevator pits

Power transmission towers

Silos (grain, plastic, cement, and steel)

Billboards

Bridges

Commercial and apartment buildings:

Water tanks and towers

Permanent and mobile amusement rides

Wind turbines

Astronomical observatories

Manufacturing and industrial buildings

ERG identified other possible structures that might have fixed ladders,
such as dams, tunnels, and stormwater drainage systems.  However, ERG
did not identify data for the number of structures or whether they had
fixed ladders for these categories.

A.2	Summary

Table A-1 summarizes the estimated count of structures and fixed ladders
by type of structure.  There are about:

3.1 million fixed ladders in excess of 20 feet.

9.9 million manholes, of which 1.485 million are estimated to have fixed
ladders in excess of 20 feet.

20,490 billboards with ladders in excess of 20 feet.

Details supporting Table A-1 are in Sections A.3 through A.20 below.

A.3	Ski Lift Towers

ERG contacted the National Ski Areas Association (NSAA) to determine the
number of ski lift towers in the U.S. The four major types of ski lifts
include detachable chair lifts, gondolas, fixed grip chair lifts, and
surface lifts. All towers that support these lifts have fixed ladders.
Based on an annual survey of participating resorts around the United
States, the number of ski lift towers were tallied at 24,088 (NSAA,
2004a). NSAA reported that this information is likely to be 80 to 85
percent complete due to survey nonresponse. Thus, ERG inflated the
totals by 20 percent to 28,906 lift towers with fixed ladders.

Ski towers are climbed on average 2 or 3 times a year for annual
inspection and annual maintenance (NSAA, 2004b). They are also painted
roughly every three years. There is some variation in how often lift
towers are maintained. Some newer lifts no longer need annual
lubrication maintenance, while older lifts might require more upkeep.
None of the lifts have cages on the fixed ladders given the possibility
lift riders could get their skis caught in the cages.Table A.1
Estimated Number of Fixed Ladders

Structures With Fixed Ladders	Number Of Structures In U.S.	Number With
Fixed Ladders

(> 20 Feet)	Sources

Ski lift towers 	28,906	28,906	NSAA, 2004a

NSAA, 2004b

Communications towers 	190,000	190,000	FCC, 2007

Carlise, 2007

 Smokestacks/chimneys 	99,984	57,929	EPA, 2007

Cooling towers at chemical plants 	76,997	73	Ellis, 2004

EPA, 2004

Census, 2007a.

Manholes	9,900,000	1,485,000	Albee, 2004

Elevator pits 	675,000	0	Clothier, 2004

Beyer, 2004

Power transmission towers 	800,000	16,000	EIA, 2004

Weisbrich and Weisbrich, 2004

Putnam, 2004

Silos 	1,000,000	850,000	Ellis, 2004

Miller, 2004

Billboards	500,000	20,490	OAAA, 2004 and 2005

Bridges 	592,246	872	FHWA, 2004a and b.

Commercial buildings (1)	4,700,000	0	DOE/EIA, 2002

Apartment buildings (1)	136,000	0	DOE/EIA, 2001

Water tanks/towers 	53,410	53,410	EPA, 2000

Permanent amusement rides	NA	350	King, 2004

Mobile amusement rides 	NA	150	OABA, 2004

Wind turbines 	5,000	5,000	AWEA, 2004

Historic windmills 	35	Unknown	Windmill, 2005

Astronomical observatories	12	60	Encyclopedia, 2005

Manufacturing and industrial bldgs.	350,866	350,866	Census, 2007b

Total	19,108,456	3,059,106

	(1) Discussions with Outdoor Amusement Business Association (OABA)
staff indicate that very few office and multi-family residential
buildings use fixed ladders greater than 20 feet in height.

Based on this data, ERG estimated that all 28,906 estimated fixed
ladders on lift towers are infrequently climbed.

A.4	Communications Towers (Radio, Television, Cellular, and Microwave)

Virtually all communication towers have fixed ladders. The Federal
Communications Commission (FCC) Antenna Structure Registration Database
lists 93,000 registered communication towers that have been constructed
(FCC, 2007). The database only includes towers greater than 199 feet.
ERG contacted Tower Source, a company that compiles information on tower
locations and leasing information.  Their databases contains
approximately 210,000 structures overall.  About 160,000 are guyed and
freestanding towers, all of which have fixed ladders.  The remaining
50,000 structures are located on rooftops but they do not record whether
the antennae are located on the roof itself or on a climbable structure
on the roof.  (Carlise, 2007).  For the purposes of estimating the
number of fixed ladders, we assume that 60 percent of the 50,000 rooftop
antennae are on climbable fixed ladders.  This results in an estimated
190,000 communications towers.

A.5	Smokestacks and Chimneys

EPA collects information on point sources, such as industrial
smokestacks and chimneys to track air emissions in the United States.
This database—the National Emissions Inventory (NEI) database—is
populated with information collected from the states.  EPA posted
Version 3 of the 2002 NEI database point source files in April 2007
(EPA, 2007).  ERG analyzed the file to identify individual stacks by
combination of unique pairs of facility identification numbers and stack
height.  The database contained nearly 100,000 stacks (99,984 stacks) of
which nearly 60,000 (57,929) are 20 feet or greater in height.

A.6	Cooling Towers

Cooling towers are used in different industries for purposes such as air
conditioning, power generation, manufacturing, and at chemical plants.
Put simply, the purpose of a tower is to remove excess heat from
industrial processes by circulating water.  There are two types of
cooling towers, natural draft towers and forced draft towers. Natural
draft towers are generally much larger than forced draft towers, which
must use fans in the cooling process. Examples of a natural draft tower
include the large chimney structures that are constructed at nuclear
power plants. Contacts with a safety expert indicate that cooling towers
generally have fixed ladders (Ellis, 2004).

The cooling tower estimate was revised to include electric power
generation plants that use cooling towers. Towers at power generation
plants are used to condense steam that turns the generators. The 1997
Economic Census reports 13,513 chemical manufacturing plants, whereas
EPA’s Risk Management Program counts 15,000 facilities (Census, 1997;
EPA, 2004). Each of these plants has approximately five sections, each
with one tower that has two 12-foot sections of ladder (Ellis, 2004).
ERG counted these two sections as one ladder for the purposes of this
analysis for a total of 75,000 ladders.

The 2002 Economic Census identifies 1,997 (Census, 2002a) power
generation plants in operation. While no substantial data was available
about the frequency with which these ladders are climbed, consultants
indicated that they were climbed more often than twice a year and thus
ERG assumed that none of these ladders are infrequently climbed (Ellis,
2004).

Based on discussions with industry sources, the majority of cooling
towers are forced draft towers which are not over twenty feet high, and
do not have fixed ladders over twenty feet high. A small number of the
largest power plants in operation do have natural draft cooling towers
that are several stories high. Nuclear power plants generally employ
natural draft towers in a plant design. There were 73 nuclear power
plants in operation in the United States according to the 2002 United
States Economic Census (Census, 2002a).

A.6	Manholes

Manholes serve as access points for sewer system maintenance and may
have fixed ladders installed. ERG found no estimates of the number of
manholes or underground chambers. In 1999, however, the American Society
of Civil Engineers estimated that there are 750,000 miles of public
sewer in the U.S. (Albee, 2004). Based on an analysis of websites that
specify standards for spacing manholes of 300 to 600 feet apart, ERG
estimated that 750,000 miles of public sewer might 6.6 to 13.2 million
manholes, for an average of 9.9 million manholes. While some manholes
have fixed ladders in the form of rungs that are embedded in concrete,
many are climbed into using temporary ladders. One contact at a
municipal sewer department noted that the individual rungs are
considered unsafe by the industry due to corrosion and other degradation
problems (Kido, 2004). Another noted that individual rungs are usually
not found in older sewer systems, but that he had used them to climb
into shallow manholes (Dailey, 2004).

Most manholes are not deeper than 20 feet based conversations with
officials at municipal sewer departments (Meehan, 2004 and Kido, 2004).
One official noted that the manholes greater than 20 feet are generally
climbed every 5 years for inspections and that they compose a minority
of the manholes, likely around 10 percent (Kido, 2004). In order not to
underestimate the number of fixed ladders for which costs might be
incurred, ERG rounds up the estimate to 15 percent.  Thus, 15 percent of
the estimated 9.9 million manholes, or 1.485 million manholes might be
deeper than 20 feet and might have fixed ladders.

A.7	Elevator Pits

According to the industry’s trade journal, Elevator World, the number
of elevators in the U.S. is roughly estimated at 675,000 as of the year
2000 (Clothier, 2004). Other consultants have indicated this might be a
low, but could not provide any better estimates (Beyer, 2004). One
consultant indicated that roughly 95% of elevators have fixed ladders
(Beyer, 2004).  National Inspection Services notes that the depth of the
elevator pit varies with elevator speed.  A car traveling at 100 feet
per minute requires a 4-foot pit while a car traveling at 600 feet per
minute requires a 7-foot pit (NIS, 2007).  Thus, with the exception of
extremely high-speed elevators in the tallest buildings, elevator pits
are unlikely to have fixed ladders in excess of 20 feet.

A.8	Transmission Towers

In 2004, the United States had approximately 160,000 miles of high
voltage transmission line (EIA, 2004).  Weisbrich and Weisbrich (2004)
indicate a transmission tower spacing of about 5 towers per mile.  ERG
combined the information to estimate about 800,000 high voltage
transmission towers nationwide.

ERG also spoke to a large electricity provider (Putnam, 2004). He noted
that of most transmission towers accessed via aerial lifts, less than 2
percent of towers are likely to be climbed .  Taking two percent of
800,000 transmission towers results in an estimated 16,000 towers that
are likely to be climbed.

A.9	Silos

Industries that use silos include plastics plants, chemical plants,
foundries, coal plants, cement plants, grain mills, beef and dairy
farms, and aluminum processors, among others. Given the wide variation
of the number of silos at each facility and by industry, ERG was  not
able to obtain accurate estimates on the number of silos in the U.S.
broken down by industry. Based on his knowledge of the average number of
silos in some industries, one consultant estimated 1,000,000 silos exist
across all industries (Ellis, 2004). Another contact at the
International Silos Association (ISA) estimated that there might be
roughly 70,000 working forage silos at livestock and dairy farms in the
U.S., all of which have fixed ladders, on the interior and the exterior
(ISA, 2004).

A large silo manufacturer estimated that 80 to 90 percent of silos have
fixed ladders outfitted with cages (Miller, 2004). Based on this data,
ERG assumed that 85 percent of silos have fixed ladders higher than 20
feet.

A.10	Billboards

Based on discussions with the Outdoor Advertising Association of America
(OAAA, 2005) the number of billboards with fixed ladders over 20 feet in
length is now estimated at 20,490. The OAAA provided this estimate from
member comments and a survey completed in 2003.

A.11	Bridges

According to statistics maintained by the U.S. Department of
Transportation Federal Highway Administration, there were 592,246
bridges constructed as of 2004 (FHWA, 2004a). Most bridges do not have
fixed ladders. The bridges that are most likely to have fixed ladders
are movable bridges, which require the ladders for maintenance work on
the mechanical and electrical equipment (FHWA, 2004b). Moveable bridges
make up a small number, 0.15 percent, of all bridges in the United
States according to the FHWA data. Bucket trucks and inspection
platforms are generally used to do work on bridges.  Thus, there are an
estimated 872 fixed ladders on bridges.

A.12	Commercial and Apartment Buildings

The Department of Energy reports that there are 4.7 million commercial
buildings in the U.S. in 1999, most of which are office, retail,
warehouse, and storage buildings.  Seventy-nine percent of these
buildings are one story tall  (DOE, 2002). Buildings only one story tall
can access roofs from the exterior with a temporary ladder, negating the
need for a fixed ladder.  Taller buildings usually provide access to a
roof by stairwell.  Based on these observations, ERG concluded that very
few residential and commercial buildings have fixed ladders. These
estimates do not include fire escapes, which ERG assumed were not
covered by the standard.

A.13	Water Tanks and Towers

The EPA defines a community water system as a public water system that
serves at least 15 service connections used by year-round residents or
regularly serves at least 25 year-round residents. These range from
small, privately owned systems to huge public systems serving millions.

The 2000 Community Water System Survey shows there are 53,410 such
systems. Water tanks and/or towers provide storage for these systems
(EPA, 2002). Whether a water tank or tower is used for water storage
depends largely on the geography of the area and varies widely across
the U.S. One manufacturer of water towers suggested that areas with
mountainous terrain can sustain water pressure in a drinking system by
constructing tanks on high ground. While ERG was not able to collect any
data on the number of water tanks or towers per system (a system could
have more than one tank and/or tower), ERG assumed one tank or tower per
system as a lower bound on the actual number of water tanks and towers
in the U.S.

Based on discussions with the safety director of a large manufacturer of
water towers and tanks, all water tanks and towers have fixed ladders.
They are climbed about 2 to 3 times a year to get birds nests off the
top, for maintenance, to put cellular antennas up, and to replace light
bulbs (Rudy, 2004). ERG assumed that the fixed ladders on water towers
and tanks are all infrequently climbed, although a small percentage
might be climbed more frequently if more frequent repairs are needed,
especially to the cellular antennae.

A.14	Permanent and Mobile Amusement Rides

While there are 320 permanent amusement parks in the U.S., very few have
rides that require fixed ladders. Some of the rides inside buildings
have fixed ladders, but the vast majority is climbed using a catwalk.
There are very few permanent rides that have fixed ladders higher than
20 feet; an estimate of such rides ranges from 300 to 400 rides. These
are climbed every day for maintenance access and to check rides before
they start (King, 2004). For estimating the number of fixed ladders
nationwide, ERG took the mid-point of the estimate (350 ladders).

With respect to mobile amusement parks, there are likely about 100 to
200 rides that might have fixed ladders higher than 20 feet (OABA,
2004). Again, none of these rides are infrequently climbed as they are
set up and dismantled once a week during the summer months. Furthermore,
these ladders are also used for maintenance access. Some mobile parks
also operate year round.  For estimating the number of fixed ladders
nationwide, ERG took the mid-point of the estimate (150 ladders).

A.17	Wind Turbines

The American Wind Energy Association (AWEA) reports that there currently
are 6,500 wind turbines in the U.S. Some are lattice structures and do
not have fixed ladders. AWEA estimates that roughly 5,000 wind turbines
have fixed ladders (AWEA, 2004).

Wind turbines are generally only climbed when there is a problem with
the operation of the turbine. A large operator and manager of wind
energy projects throughout the U.S. noted that turbines are generally
climbed 2 to 3 times a year for scheduled maintenance and 2 to 3 times a
year to make unscheduled repairs. Overall, the turbines are climbed 4 to
6 times a year. Thus, fixed ladders on wind turbines are not
infrequently climbed.

A.18	Windmills

Preliminary research into water pumping windmills indicate that they are
historic structures and are fairly small in number in the United States
(30-40 in the US). Windmills can be found in California; Cape Cod,
Massachusetts; and on Long Island, New York (Windmill, 2005).

A.19	Astronomical Observatories

The number of observatories in the United States overall is very small
overall, 12 facilities (Encyclopedia, 2005). Observatories are usually
comprised of several structures housing telescopes and other observation
equipment that contain fixed ladders. A discussion was held with the
staff from the Kech Observatory located at Mauna Kea, Hawaii (Dill,
2005). The dome at the Kech Observatory structure is 100 feet high and
has multiple ladders. ERG assumed that on average there were 5 fixed
ladders for each facility based on initial photographic observations
(e.g.,   HYPERLINK "http://www.ifa.hawaii.edu/mko/"
http://www.ifa.hawaii.edu/mko/ ).

A.20	Manufacturing and Industrial Buildings

ERG searched the 2002 Economic Census database for the number of
manufacturing establishments.  The number, as of June 2007, is 350,866
establishments (Census, 2002b).  For the purpose of estimating the
number of fixed ladders in the United States, ERG assumed one fixed
ladder per establishment.

A.21	References

Albee. 2004. Telephone conversations between Steve Albee, Project
Director of the GAP Analysis, Environmental Protection Agency (EPA) and
Ayesha Berlind, ERG. August 19, 2004.

American Wind Energy Association (AWEA). 2004. Telephone conversations
between Kathy Belyeu, Strategic Communications and Ayesha Berlind, ERG.
August 19, 2004.

Beyer. 2004. Telephone conversations between Bob Beyer, President,
Elevator Advisors, Inc. and Ayesha Berlind, ERG. August 19, 2004.

Carlise.  2007.  Telephone conversations between Mary Carlise,
TowerSource, and Maureen Kaplan, ERG.  June 28, 2007.

Census.  2002a.  U.S. Census Bureau. 2002. 2002 Economic Census:
Manufacturing. As downloaded from   HYPERLINK
"http://www.census.gov/econ/census02/data/industry/E22111.HTM"
http://www.census.gov/econ/census02/data/industry/E22111.HTM  on June
28, 2007.

Census.  2002b.  U.S. Census Bureau. 2002. 2002 Economic Census:
Manufacturing. As downloaded from   HYPERLINK
"http://factfinder.census.gov/servlet/IQRTable?_bm=y&-ds_name=EC0200A1&-
NAICS2002=31-33&-_lang=en"
http://factfinder.census.gov/servlet/IQRTable?_bm=y&-ds_name=EC0200A1&-N
AICS2002=31-33&-_lang=en  on June 28, 2007.

Census. 1997. U.S. Census Bureau. 1997 Economic Census: Manufacturing.
As downloaded from   HYPERLINK
"http://www.census.gov/epcd/ec97/us/US000_31.HTM#N325"
http://www.census.gov/epcd/ec97/us/US000_31.HTM#N325  on August 23,
2004.

Clothier. 2004. Telephone conversations between David Clothier, Copying
Editor, Elevator World and Ayesha Berlind, ERG. August 18, 2004.

Dailey. 2004. Telephone conversations between Tom Dailey, Maintenance
Foreman, Newburyport Sewer Department and Ayesha Berlind, ERG. August
26, 2004.

Department of Energy (DOE)/EIA. 2002. 1999 Building activities: Compare
activities by number of buildings. As downloaded from   HYPERLINK
"http://www.eia.doe.gov/emeu/cbecs/pba99/comparenumber.html"
http://www.eia.doe.gov/emeu/cbecs/pba99/comparenumber.html  and
HYPERLINK
"http://www.eia.doe.gov/emeu/cbecs/pba99/other/otherbasictables.html"
http://www.eia.doe.gov/emeu/cbecs/pba99/other/otherbasictables.html  on
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Department of Energy (DOE)/EIA. 2001 Residential Energy Consumption
Survey (Table HC1-4a). As downloaded from   HYPERLINK
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ftp://ftp.eia.doe.gov/pub/consumption/residential/2001hc_tables/housingu
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Ellis. 2004. Telephone conversations between Nigel Ellis, Ph.D., CSP,
P.E., CPE and Ayesha Berlind, ERG. August 16, 2004, and August 23, 2004.

Encyclopedia.  2007.  Search for astronomical observatories.
HYPERLINK "http://www.infoplease.com/encyclopedia/1obs.html"
http://www.infoplease.com/encyclopedia/1obs.html

Energy Information Administration (EIA).  2004.  Department of Energy.
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  HYPERLINK
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http://www.eia.doe.gov/cneaf/electricity/page/fact_sheets/transmission.h
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Environmental Protection Agency (EPA). 2007.  United States
Environmental Protection Agency.  2002 National Emission Inventory
homepage at   HYPERLINK
"http://www.epa.gov/ttn/chief/net/2002inventory.html"
http://www.epa.gov/ttn/chief/net/2002inventory.html . and Version 3
(April 2007)database at   HYPERLINK
"ftp://ftp.epa.gov/EmisInventory/2002finalnei/point_sector_data/national
/"
ftp://ftp.epa.gov/EmisInventory/2002finalnei/point_sector_data/national/

Downloaded June 2007.

Environmental Protection Agency (EPA). 2004. Changes to the Chemical
Accident Prevention Rule (Risk Management Program) in 2004. RMP Series
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4_factsheet.pdf/$File/RMP2004_factsheet.pdf"
http://yosemite.epa.gov/oswer/ceppoweb.nsf/vwResourcesByFilename/RMP2004
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Environmental Protection Agency (EPA). 2002. Community Water System
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FCC.  2007.  Federal Communications Commission (FCC).  Antenna Structure
Registration database.    HYPERLINK
"http://wireless2.fcc.gov/UlsApp/AsrSearch/asrAdvancedSearch.jsp"
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searched on May 2, 2007.

Federal Highway Administration (FHWA). 2004a. Deficient Bridges by State
and Highway System. As downloaded from   HYPERLINK
"http://www.fhwa.dot.gov/bridge/defbr04.htm"
http://www.fhwa.dot.gov/bridge/defbr04.htm  on March 30, 2005.

Federal Highway Administration (FHWA). 2004b. Telephone conversation
between Tom Everett, Director of the Office of Bridge Technology and
Ayesha Berlind, ERG. August 19, 2004.

ISA. 2004. Telephone conversation between Joe Shefchik and Ayesha
Berlind, ERG. August 26, 2004.

Kido. 2004. Telephone conversation between Wendell, Kido, Chief, Policy
and Planning Division, Sacramento County Regional Sanitation District
and Ayesha Berlind, ERG. August 26, 2004.

King. 2004. Telephone conversation between Brian King, Chairman, ASTM
and Ayesha Berlind, ERG. August 18, 2004.

Meehan. 2004. Telephone conversation between Dennis Meehan, Sewer
Superintendent, Lexington Public Works and Ayesha Berlind, ERG. August
25, 2004.

Miller. 2004. Telephone conversation between Gerald Miller, Construction
Superintendent, Marietta Structures, Inc. and Ayesha Berlind, ERG.
August 24, 2004.

National Inspection Services (NIS).  2007.  Ups & Downs:  Checking for
Elevator Safety.    HYPERLINK
"http://www.nationalinspection.net/inspector/articles/elevator.html"
www.nationalinspection.net/inspector/articles/elevator.html  downloaded
July 3.

National Ski Areas Association (NSAA). 2004a. Telephone conversation
between Sid Roslund, Director of Technical Services, National Ski Areas
Association and Ayesha Berlind, ERG. August 17, 2004.

National Ski Areas Association (NSAA). 2004b. Telephone conversation
between Michael Berry, President, National Ski Areas Association, and
Ayesha Berlind, ERG. August 17.

Outdoor Advertising Association of America (OAAA), 2005. Interview with
Myron Liable, President, and J.R. Watson, Director Legislation and
Research, Outdoor Advertising Association of America. April 5, 2005.

Outdoor Advertising Association of America (OAAA). 2004. Telephone
conversation between Myron Liable, President, Outdoor Advertising
Association of America and Ayesha Berlind, ERG. August 17, 2004.

OABA. 2004. Telephone conversation between Bob Johnson, President,
Outdoor Amusement Business Association and Ayesha Berlind, ERG. August
18, 2004.

OSHA. 2003. Walking and Working Surfaces; Personal Protective Equipment
(Fall Protection Systems). Federal Register 68:23527-23568. May 2.

Putnam. 2004. Telephone conversation between Dee Putnam, Safety
Professional, Duke Power, and Ayesha Berlind, ERG. August 19, 2004.

Rudy. 2004. Telephone conversation between Jim Rudy, Safety Director,
CBI and Ayesha Berlind, ERG. August 23, 2004.

Weisbrich and Weisbrich.  2004.  Weisbrich, Alfred L. and Gunther J.
Weisbrich.  Dual Use Tower:  Transmission and Generation.  Utility
Automation & Engineering T&D Online.    HYPERLINK
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"
http://uaelp.pennnet.com/articles/article_display.cfm?article_id=199789
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Windmills.  2007. List of windmills in the United States.   HYPERLINK
"http://www.windmillworld.com/world/usa.htm"
http://www.windmillworld.com/world/usa.htm

 Production workers include those in building and grounds; construction;
installation, maintenance, and repair; production; and material moving
occupations. It is conceivable that workers in construction and related
occupations, even though not employed by establishments in construction
industries, might on occasion perform work that would be regulated by
OSHA under its construction standards in §1926. To the extent this is
true, their employers might also be required to meet the requirements
for fall protection and walking and working surfaces as specified in the
construction standards.

 See U.S. Small Business Administration, Table of Small Business Size
Standards Matched to North American Industry Classification System
Codes, July 31, 2006.  < http://www.sba.gov/size/indextableofsize.html>.
Accessed August 8, 2006.

 For a description of the survey, see Eastern Research Group, PPE Cost
Survey: Final Report. Task Order 3, Base Year, DOL Contract No.
J-9-F-9-0010. June 23, 1999 (Exhibit 14, OSHA Docket S-042: Costs of
Personal Protective Equipment).  Back support belts and similar
ergonomic devices were explicitly excluded from the types of personal
protective equipment investigated by the survey.

 BLS, Employee Costs for Employee Compensation – March, 2006. June 21,
2006

 ASTM C478-06b 16.5.3 specifies that the rung or cleat shall project a
uniform clear distance of 4 inches minimum from the wall, to the
embedment side of the rung.  The OSHA distance is measured from the
centerline of the manhole step.  Thus, if a step is at least an inch
wide, a step that meets the ASTM 4-inch requirement would also meet the
OSHA 4.5 inch requirement.

 Type 2 bolts were withdrawn in 2005.

 The 22-inch clearance requirement for new structures matches ANSI
A1264, Section 6.11.

 i.e. a violation of minimum importance. For example, if ship stairs
existed when they were supposedly banned, as long as they met the draft
regulation, it would be an infraction but one so minor as to be below
regulatory concern.

 The draft text does not provide a definition of “routinely.”

 A “qualified climber” as described here combines the terms
“qualified engineer” and “qualified person” in ANSI standard
A10.14 on fall protection. That standard, however, has been withdrawn.

 The new alternatives are assumed to be at least as effective in
employee protection as that provided by the current requirements.

 Production workers include those in building and grounds; construction;
installation, maintenance, and repair; production; and material moving
occupations. It is conceivable that workers in construction and related
occupations, even though not employed by establishments in construction
industries, might on occasion perform work that would be regulated by
OSHA under its construction standards in §1926. For the purpose of
estimating costs, however, ERG assumed that these employees are covered
by the General Industry standard.

 In an unscientific sample, a 25-year resident of a 28-story apartment
building in New York City reported that the outside of the windows were
never cleaned (Smith, 2007).

 See production worker supervisor’s hourly wage plus benefits for
NAICS 5617 in Table 2-5.

 This assumes that a qualified climber could not bring his or her
accreditation if he or she changes companies.

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