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Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices
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services, background screening, restaurant breweries, rideshare services, and pharmacy benefit management. A
few comments responded about the continued usefulness of mode of delivery online versus in store/print as an industry delineation: Three addressed the current treatment of electronic shopping in NAICS with two in favor of some kind of change and one against. The balance of the comments identified long-term declines in the size of existing industries as justification for industry combinations in the Mining, Manufacturing, Wholesale Trade, Retail Trade, Finance and Insurance, and Other Services Except Public Administration sectors. No comments were received on the proposed update to Statistical Policy Directive No. 8 or the elimination of Statistical Policy Directive No. 9.
Each suggestion was carefully considered. Some suggestions were recommended for adoption but modified by the ECPC to better meet the objectives of NAICS. Based on public comments, the ECPC is recommending industry definition changes to explicitly classify certain activities and more clearly match accepted industry terminology. Some suggestions were recommended to be incorporated as products rather than industries. Other suggestions for change were not suited to the production-oriented basis of NAICS or could not be implemented in statistical programs, for various reasons, and thus were not accepted. When a proposal was not accepted, it was usually because: a The resulting industry would have been too small in the U.S., or b the proposal did not meet the production-oriented criterion for forming an industry in NAICS.
Detailed supporting documentation discussing the issues and rationale for reaching these recommendations is available at www.census.gov/naics, and Section II parts BD below describe the ECPC recommendations to address the specific focus areas from the February 26, 2020, Federal Register notice:
Continued usefulness of mode of delivery online versus in store/print as an industry delineation, proposed update to Statistical Policy Directive No.
8, and proposed elimination to Statistical Policy Directive No. 9.
B. Summary of ECPC Recommendations for Online Industries in the Wholesale Trade, Retail Trade, and Information Sectors The ECPC received only three comments in response to the February 26, 2020, Federal Register notice related to the continued usefulness of mode of delivery online versus in store/print as
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an industry delineation, with two generally in favor and one against. The ECPC notes that the internet has developed from a specialized activity to a generic method of delivery for goods and services. The use of the internet as a separate production function when defining industries in NAICS is problematic and requires reevaluation as internet usage has permeated the economy. With this in mind, after a technical review and consideration of the submitted comments, the ECPC
recommends related changes for NAICS
2022 that apply specifically to the Wholesale Trade, Retail Trade, and Information sectors. The relevant ECPC
recommendations follow by sector:
1 Wholesale Trade For the Wholesale Trade sector, the ECPC recommends eliminating NAICS
Industry 425110, Business to Business Electronic Markets. With this change, Subsector 425 and Industry Group 4251
would be renamed to Wholesale Trade Agents and Brokers. Given the minimal impact of combining NAICS Industries 425110 and 425120, Wholesale Trade Agents and Brokers, the ECPC does not recommend changes to codes or titles for NAICS Industries 42512 and 425120.
2 Retail Trade For the Retail Trade sector, given the increasing prevalence of omni-channel distribution and variations in reporting patterns, the ECPC recommends eliminating the store/nonstore distinction. Subsector 454, Nonstore Retailers, includes industries for electronic shopping and mail-order houses, vending machine operators, fuel dealers, and other direct selling establishments. In the proposed NAICS
2022 structure for the sector, electronic shopping, mail-order houses, and other direct selling establishments would be distributed throughout the new structure in the same way as retail stores, delineated by specialized broad product lines, such as groceries, apparel, hardware, etc. versus general merchandise. Vending machine operators would be retained as a 6-digit industry and combined with convenience retailers in a 5-digit industry for Convenience Retailers and Vending Machine Operators, included in the industry group for Grocery and Convenience Retailers, and in the subsector for Food and Beverage Retailers. Fuel dealers would be retained as 5- and 6-digit industries within the industry group for Fuel Dealers, grouped with gasoline stations at the subsector level.

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3 Information For the Information sector, given the increasing prevalence of internet as a generic method of delivery for publishing and broadcasting, the ECPC
recommends moving away from an internet-only distinction within this sector as well by eliminating NAICS
Industry 519130, Internet Publishing and Broadcasting and Web Search Portals, and a combining Subsector 511, Publishing Industries except internet with internet-only publishing to create Subsector 513, Publishing Industries, and retaining the structure of Subsector 511;
b combining Subsector 515, Broadcasting except internet with internet-only broadcasting and news syndicates, formerly in Subsector 519, to create Subsector 516, Broadcasting and Content Providers, with a 4-digit industry group for Radio and Television Broadcasting Stations, based on the production process of owning infrastructure and controlling the use of public spectrum, and a second 4-digit industry group for Media Streaming Distribution Services, Social Networks, and Other Media Networks and Content Providers; and c retaining web search portals in Subsector 519, Other Information Services, retitled to Web Search Portals, Libraries, Archives, and Other Information Services.
C. Update of Statistical Policy Directive No. 8, Standard Industrial Classification of Establishments The ECPC recommends updating the text of Statistical Policy Directive No. 8, Standard Industrial Classification of Establishments, using the language proposed in the February 26, 2020, Federal Register notice. No public comments submitted in response to the February 26, 2020, Federal Register notice offered views on this proposed update. OMB adopted NAICS as the replacement for the Standard Industrial Classification SIC for statistical purposes in 1997 62 FR 1728817337.
D. Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises The ECPC recommends eliminating Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises. OMB presented the Enterprise Standard Industrial Classification of Enterprises in 1974.
The classification is static and has not been updated or widely adopted over the past 45 years. NAICS United States does not include a similar variant for
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