Think for a minute.
USDA/APHIS say that the reasons that they are making this rule are:
1.- Breeders that sell sight unseen though internet only do not get supervision from anybody. Residential/commercial breeders that receive the general public at their premises get "policed" by the general public, hence if there is something wrong somebody would make a complaint with the appropriate authority.
2.- USDA receive too many complaints about sick puppies that are shipped.
All this is a big load of BS and not the real reasons and this is why :
1.- The rule enforces inspections on kennels that do not receive general public at their premises. Then why the rule allows these breeders to meet at a different place than the actual kennel. Result: these sight unseen kennels can still sell their puppies from a different place than where the parents and puppies are kept and raised as soon as they don't ship...
2.- The buyer needs to be present to take possession of the puppy directly from the buyer to make sure that the puppy isn't sick. All animals must have a health certificate from a certified veterinarian to be shipped. Are they saying that a buyer can tell better than a veterinarian if a puppy is sick or not???
No, this doesn't make sense to me I'm not pro-conspiracy theories, but USDA, APHIS, AR, PETA, etc. are doing whatever they want and we are doing nothing to stop it.

My understanding is that they are using 1) # of breeding females, and 2) whether or not someone ships pups without the new owners ever being on the premises of the seller, as the 2 criteria to distinguish hobby breeders from commercial breeders.

1) I think the law says 5 females. Does the law consider age of the females? Does the law consider whether the female is spayed or not?

2) Whatever that # is, and however they define it... Does the law say # of breeding females AND shipping pups, or does it say # of breeding females OR shipping ups, or is it an AND/OR?

2) Is there other criteria that would be more effective to be used to distinguish hobby from commercial breeders?

Here's what I found on AKC. It says they want breeders to "self identify". Female # is UNDER 5.

http://www.akc.org/governmentrelations/usda_aphis_faqs.cfm#enforcement