Assessment and Collection of Regulatory Fees For Fiscal Year 2006, 17410-17433 [06-3201]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 71, Number 66 (Thursday, April 6, 2006)]
[Proposed Rules]
[Pages 17410-17433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3201]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 06-68; FCC 06-38]


Assessment and Collection of Regulatory Fees For Fiscal Year 2006

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission will revise its Schedule of Regulatory Fees in 
order to recover the amount of regulatory fees that Congress has 
required it to collect for fiscal year 2006. Section 9 of the 
Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees under sections 9(b)(2) and 
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and 
``Permitted Amendments'' to the Schedule of Regulatory Fees.

DATES: Comments are due April 14, 2006, and reply comments are due 
April 21, 2006.

ADDRESSES: You may submit comments, identified by MD Docket No. 06-68, 
by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: https://
www.fcc.gov/cgb/ecfs. Follow the instructions for submitting comments.
     E-mail: ecfs@fcc.gov. Include MD Docket No. 06-68 in the 
subject line of the message.
     Mail: Commercial overnight mail (other than U.S. Postal 
Service Express Mail, and Priority Mail, must be sent to 9300 East 
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th 
Street, SW., Washington DC 20554.

FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing 
Director at (202) 418-0444 or Rob Fream, Office of Managing Director at 
(202) 418-0408.

SUPPLEMENTARY INFORMATION:
    Adopted: March 22, 2006.
    Released: March 27, 2006.
    By the Commission.

Table of Contents

Heading
I. Introduction
II. Discussion
    A. FY 2006 Regulatory Fee Assessment Methodology
    1. Development of FY 2006 Regulatory Fees
    a. Calculation of Revenue and Fee Requirements
    b. Additional Adjustments to Payment Units
    2. Commercial Mobile Radio Service (CMRS) Messaging Service
    3. Regulatory Fees for Direct Broadcast Service (DBS) Providers 
and Cable Television Operators
    4. Broadband Radio Service (BRS)/Educational Broadband Service 
(EBS)
    B. Administrative and Operational Issues
    1. Mandatory Use of Fee Filer
    2. Proposals for Notification and Collection of Regulatory Fees
    a. Interstate Telecommunications Service Providers (ITSPs)--
Billed
    b. Satellite Space Station Licensees--Billed
    c. Additional Service Categories for Billing or Assessing
    d. Media Services Licensees--Assessed
    e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile 
Services--Assessed
    f. Cable Television Subscribers--Assessed
    3. Streamlined Regulatory Fee Payment Process for CMRS Providers
    4. Future Streamlining of the Regulatory Fee Assessment and 
Collection Process
III. Procedural Matters
    A. Payment of Regulatory Fees
    1. De Minimis Fee Payment Liability
    2. Standard Fee Calculations and Payment Dates
    B. Enforcement
    C. Initial Regulatory Flexibility Analysis
    D. Initial Paperwork Reduction Act of 1995 Analysis
    E. Ex Parte Rules
    F. Filing Requirements
IV. Ordering Clauses
Attachments
    Attachment A Initial Regulatory Flexibility Analysis
    Attachment B Sources of Payment Unit Estimates for FY 2006
    Attachment C Calculation of FY 2006 Revenue Requirements and 
Pro-Rata Fees
    Attachment D FY 2006 Schedule of Regulatory Fees
    Attachment E Factors, Measurements, and Calculations that 
Determine Station Contours and Population Coverages
    Attachment F FY 2005 Schedule of Regulatory Fees

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we propose to 
collect $288,771,000 in regulatory fees for Fiscal Year (FY) 2006, 
pursuant to section 9 of the Communications Act of 1934, as amended 
(the Act). These fees are mandated by Congress and are collected to 
recover the regulatory costs associated with the Commission's 
enforcement, policy and rulemaking, user information, and international 
activities.\1\
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    \1\ 47 U.S.C. 159(a).
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II. Discussion

    2. In this NPRM, we seek comment on the development of FY 2006 
regulatory fees collected pursuant to section 9 of the Act. For FY 
2006, we tentatively propose to retain the established method, 
policies, and priorities. In addition to the assessment methodology, 
the Commission typically seeks comment on various administrative and 
operational issues affecting the collection of regulatory fees. For the 
FY 2006 regulatory fee cycle, we propose to retain the same 
administrative measures used for notification and assessment of 
regulatory fees in previous years, such as generating pre-completed 
regulatory fee assessment forms for certain regulatees. Consistent with 
past practice, we invite comments and suggestions on ways to improve 
the Commission's administrative processes for notifying entities of 
their regulatory fee obligations and collecting their payments.
    3. The Commission is obligated to collect $288,771,000 in 
regulatory fees during FY 2006 to fund the Commission's operations. 
Consistent with our established practice, we plan to collect these 
regulatory fees in the August-September 2006 time frame in order to 
collect the required amount by the end of the fiscal year. In addition 
to the $288,771,000 amount above, pursuant to section 3013 of the 
Deficit Reduction Act (Public Law 109-171), the Commission is required 
to assess and collect an additional $10,000,000 in fiscal year 2006 as 
offsetting receipts.\2\

[[Page 17411]]

We seek comment on how the Commission should implement this provision. 
Specifically, we seek comment on whether the Commission should assess 
the additional $10,000,000 on application fees, on regulatory fees, or 
from some other form of assessment.
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    \2\ Section 3013 of Public Law 109-171 reads as follows, ``In 
addition to any fees assessed under the Communications Act of 1934 
(47 U.S.C. 151 et seq.), the Federal Communications Commission shall 
assess extraordinary fees for licenses in the aggregate amount of 
$10,000,000, which shall be deposited in the Treasury during fiscal 
year 2006 as offsetting receipts.''
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A. FY 2006 Regulatory Fee Assessment Methodology

1. Development of FY 2006 Regulatory Fees
a. Calculation of Revenue and Fee Requirements
    4. We propose to use, for the purpose of our FY 2006 regulatory fee 
assessment, the same section 9 regulatory fee assessment methodology 
adopted for FY 2005. Each fiscal year, the Commission proportionally 
allocates the total amount that must be collected via section 9 
regulatory fees. The results of our proposed FY 2006 regulatory fee 
assessment methodology (including a comparison to the prior year's 
results) are contained in Appendix C. For FY 2006, we propose to use 
the receipts collected through the FY 2005 regulatory fees as a base 
for calculating the amount the Commission must collect in FY 2006. To 
collect the $288,771,000 required by law, we propose to adjust the FY 
2005 amount upward by 3.1 percent.\3\ Consistent with past practice, we 
propose to divide the FY 2006 amount by the number of payment units in 
each fee category to determine the unit fee.\4\ As in prior years, for 
cases involving small fees (e.g., licenses that are renewed over a 
multiyear term), we propose to divide the resulting unit fee by the 
term of the license. We propose to round these unit fees consistent 
with the requirements of section 9(b)(2).
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    \3\ Note that the required increase in regulatory fee payments 
of approximately 3.1 percent in FY 2006 is reflected in the revenue 
that is expected to be collected from each service category. Because 
this expected revenue is adjusted each year by the number of 
estimated payment units in a service category, the actual fee itself 
is sometimes increased by a number other than 3.1 percent. For 
example, in industries where the number of units is declining and 
the expected revenue is increasing, the impact of the fee increase 
may be greater.
    \4\ In many instances, the regulatory fee amount is a flat fee 
per licensee or regulatee. However, in some instances the fee amount 
represents a unit subscriber fee (such as for Cable, Commercial 
Mobile Radio Service (CMRS) Cellular/Mobile and CMRS Messaging), a 
per unit fee (such as for International Bearer Circuits), or a fee 
factor per revenue dollar (Interstate Telecommunications Service 
Provider fee). The payment unit is the measure upon which the fee is 
based, such as a licensee, regulatee, subscriber fee, etc.
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b. Additional Adjustments to Payment Units
    5. In calculating the FY 2006 regulatory fees proposed in 
Attachment D, we further adjusted the FY 2005 list of payment units 
(Attachment B) based upon licensee databases and industry and trade 
group projections. Whenever possible, we verified these estimates from 
multiple sources to ensure the accuracy of these estimates. In some 
instances, Commission licensee databases were used, while in other 
instances, actual prior year payment records and/or industry and trade 
association projections were used in determining the payment unit 
counts.\5\ Where appropriate, we adjusted and/or rounded our final 
estimates to take into consideration variables that may impact the 
number of payment units, such as waivers and/or exemptions that may be 
filed in FY 2005, and fluctuations in the number of licensees or 
station operators due to economic, technical, or other reasons. 
Therefore, when we state that our estimated FY 2006 payment units are 
based on FY 2005 actual payment units, the number may have been rounded 
or adjusted slightly to account for these variables.
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    \5\ The databases we consulted include, but are not limited to, 
the Commission's Universal Licensing System (ULS), International 
Bureau Filing System (IBFS), and Consolidated Database System 
(CDBS). We also consulted industry sources including, but not 
limited to, Television & Cable Factbook by Warren Publishing, Inc. 
and the Broadcasting and Cable Yearbook by Reed Elsevier, Inc., as 
well as reports generated within the Commission such as the Wireline 
Competition Bureau's Trends in Telephone Service and the Wireless 
Telecommunications Bureau's Numbering Resource Utilization Forecast 
and Annual CMRS Competition Report. For additional information on 
source material, see Attachment B.
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    6. Additional factors are considered in determining regulatory fees 
for AM and FM radio stations. These factors are facility attributes and 
the population served by the radio station. The calculation of the 
population served is determined by coupling current U.S. Census Bureau 
data with technical and engineering data, as detailed in Attachment E. 
Consequently, the population served, as well as the class and type of 
service (AM or FM), determines the regulatory fee amount to be paid.\6\
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    \6\ In addition, beginning in FY 2005, we established a 
procedure by which we set regulatory fees for AM and FM radio and 
VHF and UHF television Construction Permits each year at an amount 
no higher than the lowest regulatory fee in that respective service 
category. For example, the regulatory fee for a Construction Permit 
for an AM radio station will never be more than the regulatory fee 
for an AM Class C radio station serving a population of less than 
25,000.
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2. Commercial Mobile Radio Service (CMRS) Messaging Service
    7. Since FY 2003, the Commission has maintained the CMRS Messaging 
regulatory fee at the rate that was established in FY 2002 (i.e., $0.08 
per subscriber). We have maintained, rather than increased, this rate 
to account for the messaging industry's declining subscriber base.\7\ 
We note that between FY 1997 and FY 2005, for example, the CMRS 
Messaging subscriber base declined 75.3 percent from 40.8 million to 
10.1 million, respectively.\8\ We seek comment on whether we should 
continue the same approach for regulatory fees applicable to the 
messaging industry. Specifically, should we maintain the industry's 
regulatory fee at $0.08 per subscriber in FY 2006?
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    \7\ See, e.g., Assessment and Collection of Regulatory Fees for 
Fiscal Year 2003; Report and Order, 18 FCC Rcd 15985, 15992, at 
paragraph (2003).
    \8\ The 40.8 million number represents a unit estimate from the 
FY 1997 regulatory fee order, and the 10.1 million figure represents 
the number of paid units as of fiscal year end 2005.
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3. Regulatory Fees for Direct Broadcast Service (DBS) Providers and 
Cable Television Operators
    8. We seek comment on the appropriate regulatory fee structure for 
both cable operators and DBS providers. Since the inception of the 
Commission regulatory fee program, we have assessed section 9 
regulatory fees on cable operators using a per-subscriber approach, 
which is consistent with the statute. By contrast, section 9 regulatory 
fee assessments for DBS providers are based on a per-license approach. 
In the FY 2005 regulatory fee proceeding, the cable industry generally 
argued that the Commission should modify the regulatory fee assessment 
for DBS providers to a per-subscriber approach.\9\ In the FY 2005 
proceeding, we concluded that no changes were warranted at that time 
and therefore retained the regulatory fee assessment methodology used 
for DBS providers since FY 1995. We seek comment on whether we should 
retain the existing regulatory fee assessment methodology for cable 
operators and DBS providers for the purposes of our FY 2006 regulatory 
fee assessment. Commenters proposing a fee change should identify the 
Commission rulemaking proceeding(s) or change(s) in law that they 
believe warrant a modification of our fee assessment methodology for 
DBS operators. To the extent parties argue

[[Page 17412]]

the regulatory fee assessment process should be changed, they should 
identify the legal basis that would justify a change and explain how 
the benefits of the proposed change outweigh the costs of the 
established assessment methodology.
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    \9\ Assessment and Collection of Regulatory Fees for Fiscal Year 
2005, Report and Order and Order on Reconsideration, 20 FCC Rcd 
12259, 12264, at paragraph 10 (2005) (FY 2005 R&O and Order on 
Recon).
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4. Broadband Radio Service (BRS)/Educational Broadband Service (EBS)
    9. We are exploring regulatory fee issues for BRS/EBS in a 
separately pending BRS/EBS proceeding.\10\ To the extent that any 
changes to our regulatory fee rules are adopted in this separate BRS/
EBS proceeding, we propose not to implement such regulatory fee changes 
in the FY 2006 schedule of section 9 Regulatory Fees.
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    \10\ See Amendment of Parts 1, 21, 73, 74 and 101 of the 
Commission's Rules to Facilitate the Provision of Fixed and Mobile 
Broadband Access, Educational and Other Advanced Services in the 
2150-2162 and 2500-2690 MHz Bands et al., Report & Order and Further 
Notice of Proposed Rulemaking, 19 FCC Rcd 14165, 14293-97, at 
paragraphs 351-359 (2004) (R&O and FNPRM).
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B. Administrative and Operational Issues

    10. We invite comment on the administrative and operational 
processes used to collect the annual section 9 regulatory fees. 
Although these issues do not affect the amount of regulatory fees 
parties are obligated to submit, the administrative and operational 
issues affect the process of submitting payment. We generally invite 
comment on ways to improve these processes.
1. Mandatory Use of Fee Filer
    11. We continue to encourage regulatees to use the Commission's 
online electronic Fee Filer application. Since this application was 
introduced in 2000, entities who will be submitting more than twenty-
five (25) Form 159-Cs have been strongly encouraged to use Fee Filer 
when sending their regulatory fee payment. We seek comment on the 
impact to the public if the Commission was to institute the mandatory 
use of Fee Filer for large-volume section 9 regulatory fee payers. 
Mandatory use of Fee Filer by large-volume payers could ease both the 
Commission's administrative burden and those of high-volume payers, as 
well. We seek comment on whether any such mandatory usage requirement 
should be based on a pre-determined dollar amount, or on the number of 
transactions necessary to make payment. If mandatory usage were to be 
based on a dollar amount, what amount should be pre-determined? If 
based on the number of transactions conducted by a single entity, at 
what threshold should mandatory usage be established? Commenters should 
be aware that, for FY 2006, the Commission seeks solely to establish a 
record on this topic. In the event that, after receiving comments, the 
Commission deems this proposal to be an improvement, the use of Fee 
Filer would only become mandatory in FY 2007 or later.
2. Proposals for Notification and Collection of Regulatory Fees
    12. In this section, we seek comment on the administrative 
processes that the Commission uses to notify regulatees and collect 
regulatory fees. Each year, we generate public notices and fact sheets 
that notify regulatees of the fee payment due date and provide 
additional information regarding regulatory fee payment procedures. 
Consistent with our established practice, we propose to provide public 
notices, fact sheets and all other relevant material on our Web site at 
https://www.fcc.gov/fees/regfees.html for the FY 2006 regulatory fee 
cycle. As a general practice, we will not send such material via 
surface mail. However, in the event that regulatees do not have access 
to the Internet, we will mail public notices and other relevant 
material upon request. Regulatees and the general public may request 
such information by contacting the FCC Financial Operations HelpDesk at 
(877) 480-3201, Option 4.
    13. Although we will not send public notices and fact sheets to 
regulatees en masse, we will send specific regulatory fee bills or 
assessments via surface mail or e-mail to the select fee categories 
discussed below.\11\ We are pursuing our billing initiatives as part of 
our effort to modernize our financial practices. These initiatives also 
serve the purpose of providing licensees with notification of upcoming 
regulatory fees. Eventually, we intend to expand our billing 
initiatives to include all regulatory fee service categories.
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    \11\ An assessment is a proposed statement of the amount of 
regulatory fees owed by an entity to the Commission (or proposed 
subscriber count to be ascribed for purposes of setting the entity's 
regulatory fee) but it is not entered into the Commission's accounts 
receivable system as a current debt. By contrast, a bill is 
automatically recognized as a debt owed to the Commission. Bills 
reflect the amount owed and have a Fee Due Date of the last day of 
the regulatory fee payment window. Consequently, if a bill is not 
paid by the Fee Due Date, it becomes delinquent and is subject to 
our debt collection procedures. See also 47 CFR 1.1161(c), 
1.1164(f)(5), and 1.1910.
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a. Interstate Telecommunications Service Providers (ITSPs)--Billed
    14. In FY 2001, we began sending pre-completed FCC Form 159-W 
assessments to carriers in an effort to assist them in paying the 
Interstate Telecommunications Service Provider (ITSP) regulatory fee. 
The fee amount on FCC Form 159-W was calculated from the FCC Form 499-A 
report, which carriers are required to submit by April 1st of each 
year. Throughout FY 2002 and FY 2003, we refined the FCC Form 159-W to 
simplify the regulatory fee payment process.\12\ Beginning in FY 2004, 
the pre-completed FCC Form 159-W was sent to carriers as a bill, rather 
than as an assessment of amount due. Other than the manner in which 
Form 159-W payments were entered into our financial system, carriers 
experienced no procedural changes regarding the use of the FCC Form 
159-W when submitting payment of their ITSP regulatory fees. For FY 
2006, we propose to continue our Form 159-W billing initiative for 
ITSPs. We seek comment on this proposal and on ways that we could 
improve our billing initiative for ITSPs.
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    \12\ Beginning in FY 2002, Form 159-W included a payment section 
at the bottom of the form that allowed carriers the opportunity to 
send in Form 159-W in lieu of completing Form 159 Remittance Advice 
Form.
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b. Satellite Space Station Licensees--Billed
    15. Beginning in FY 2004, we mailed regulatory fee bills via 
surface mail to licensees in our two satellite space station service 
categories. Specifically, geostationary orbit space station (GSO) 
licensees receive bills requesting regulatory fee payment for 
satellites that (1) were licensed by the Commission and operational on 
or before October 1 of the respective fiscal year; and (2) were not co-
located with and technically identical to another operational satellite 
on that date (i.e., were not functioning as a spare satellite). Non-
geostationary orbit space station (NGSO) licensees received bills 
requesting regulatory fee payment for systems that were licensed by the 
Commission and operational on or before October 1 of the respective 
fiscal year.
    16. For FY 2006, we propose to continue our billing initiative for 
our GSO and NGSO satellite space station categories. We emphasize that 
the bills that we propose to generate for our GSO and NGSO licensees 
will only be for the satellite or system aspects of their respective 
operations. GSO and NGSO licensees typically have regulatory fee 
obligations in other service categories (such as earth stations, 
broadcast facilities, etc.), and we expect satellite operators to meet 
their full fee payment obligations for their entire portfolio of

[[Page 17413]]

FCC licenses. We seek comment on our proposal to generate regulatory 
fee bills for our two satellite space station service categories.
c. Additional Service Categories for Billing or Assessing
    17. We are currently exploring the feasibility of expanding our 
section 9 regulatory fee billing or assessing initiatives to three 
additional service categories in FY 2006. The service categories are 
Earth Stations, Cable Television Relay Service Stations (CARS) and the 
Local Multipoint Distribution Service (LMDS). We believe that billing 
or assessing can be accomplished for these categories because they are 
comprised of relatively few payment units (in comparison to many other 
categories in our Schedule of Regulatory Fees), and because the 
Commission maintains licensing databases for each of the three 
categories. Depending on progress made throughout this year, we may be 
in a position to generate bills or assessments for Earth Station, CARS 
and LMDS licensees in FY 2006. Any assessment initiative may occur 
solely online, whereby licensees would be instructed to visit a 
Commission-authorized Web site to view their regulatory fee 
obligations. Licensees would then be able to update or correct any 
information concerning their license, or to certify their fee-exempt 
status, if appropriate. The web site would be available to licensees 
throughout this summer. We seek comment on our intent to expand our 
billing/assessment initiatives to these service categories.
d. Media Services Licensees--Assessed
    18. Beginning in FY 2003, we sent fee assessment postcards via 
surface mail to media services entities on a per-facility basis. The 
postcards notified licensees of the date when fee payments were due; 
provided the assessed fee amount for the facility, as well as other 
data attributes that we used to determine the fee amount; and, 
beginning in FY 2004, provided licensees with a telephone number to 
call (Financial Operations Help Desk) in the event that they needed 
customer assistance. We propose to continue our assessment initiative 
for media services licensees this year in a similar fashion.\13\
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    \13\ Fee assessments are proposed to be issued for AM and FM 
Radio Stations, AM and FM Construction Permits, FM Translators/
Boosters, VHF and UHF Television Stations, VHF and UHF Television 
Construction Permits, Satellite Television Stations, Low Power 
Television (LPTV) Stations and LPTV Translators/Boosters, to the 
extent that applicants, permittees and licensees of such facilities 
do not qualify as government entities or non-profit entities. Fee 
assessments have not been issued for broadcast auxiliary stations in 
prior years, nor will they be issued in FY 2006.
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    19. Consistent with procedures used last year, we propose to mail a 
single round of postcards to licensees and their other known points of 
contact listed in CDBS (Consolidated Database System) and in CORES 
(Commission Registration System), the Commission's two official 
databases for media services. By doing so, licensees and their other 
points of contact will all be furnished with the same information for 
each facility in question so that they can designate among themselves 
the payer of this year's fee. Mailing postcards to all interested 
parties at different addresses on file for each facility also 
encourages all parties to visit a Commission-authorized Web site to 
update or correct any information concerning the facility, or to 
certify their fee-exempt status, if appropriate. The Web site will be 
available to licensees throughout this summer.\14\ We seek comment on 
our proposal to generate fee assessment postcards for media services 
entities.
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    \14\ The Commission-authorized Web site for media services 
licensees is https://www.fccfees.com.
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    20. In the past, some media services licensees have mistakenly 
mailed their postcards back to the Commission stapled to payment 
checks. We emphasize that under our proposal, licensees must still 
submit a completed FCC Form 159 Remittance Advice with their fee 
payments, despite having received an assessment postcard. The postcards 
may not be used as a substitute for a completed Form 159. We cannot 
guarantee that a licensee's regulatory fee payment will be posted 
accurately against the licensee's account if the licensee does not 
submit a completed Form 159 along with its fee payment.
    21. We also emphasize that the most important data element that 
media services licensees need to include on their Form 159 is their 
facility ID number. The facility ID number is a unique identifier that 
remains constant over the course of a facility's existence. Despite the 
fact that we prominently display a facility ID number on the facility's 
postcard, and our Form 159 filing instructions require payers to 
provide their facility ID number (and associated call sign) for the 
facility in question, we continue to receive many incomplete Form 159s 
that do not provide the facility ID number for the facility for which 
the fee is being paid.
e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile 
Services--Assessed
    22. As in FY 2005,\15\ we propose to send an assessment letter to 
Commercial Mobile Radio Service (CMRS) providers using data that is 
based on the Numbering Resource Utilization Forecast (NRUF) form, which 
includes a list of the carrier's Operating Company Numbers (OCNs) upon 
which the assessment is based. Consistent with existing practice, the 
letters will not include OCNs with their respective assigned number 
counts, but rather, an aggregate total of assigned numbers for each 
carrier. We also propose to continue our procedure of giving entities 
an opportunity to amend their subscriber counts by sending two rounds 
of assessment letters--an initial assessment and a final assessment 
letter.
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    \15\ See FY 2005 R&O and Order on Recon., 20 FCC Rcd 12259, 
12264, at paragraphs 38-44.
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    23. If the number of subscribers on the initial assessment letter 
differs from the subscriber count the service provider provided on its 
NRUF form, the carrier can correct its subscriber count by returning 
the assessment letter or by contacting (a telephone number will be 
provided) the Commission and stating a reason for the change, such as 
the purchase or the sale of a subsidiary, including the date of the 
transaction, and any other information that will help to justify a 
reason for the change.
    24. If we receive no response to our initial assessment letter, we 
will assume that the initial assessment is correct and will expect the 
fee payment to be based on the number of subscribers listed on the 
initial assessment. We will review all responses to initial assessment 
letters and determine whether a change in the number of subscribers is 
warranted. We will then generate a final assessment letter that informs 
carriers as to whether or not we accept the changed number of 
subscribers.
    25. As in previous years, operators will certify their subscriber 
counts in Block 30 of the FCC Form 159 Remittance Advice when making 
their regulatory fee payments. As an additional enhancement this year 
to this assessment process, we propose to include porting information 
(e.g., information on the number of ``ports in'' and ``ports out'') in 
our assessment letters so that licensees can account for any 
differences between the data submitted in their NRUF report and the 
Commission's assessment count.
    26. Although an initial and a final assessment letter will be 
mailed to carriers that have filed an NRUF form, it is conceivable that 
some carriers will

[[Page 17414]]

not be sent any letters of assessment because they did not file the 
NRUF form. We propose that these carriers compute their fee payment 
using the standard methodology \16\ that is currently in place for CMRS 
Wireless services (e.g., compute their subscriber counts as of December 
31, 2005), and submit their payment accordingly on FCC Form 159. 
However, regardless of whether a carrier receives an assessment letter 
or computes the subscriber count itself, the Commission reserves the 
right, under the Communications Act, to audit the number of subscribers 
for which regulatory fees are paid. In the event that the Commission 
determines that the number of subscribers is inaccurate or that an 
insufficient reason is given for making a correction on the initial 
assessment letter, we note that the Commission reserves the right to 
assess the carrier for the difference between what was paid and what 
should have been paid.
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    \16\ Federal Communications Commission, Regulatory Fees Fact 
Sheet: What You Owe--Commercial Wireless Services for FY 2005 at 1 
(rel. July 2005).
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    27. In summary, we propose to (1) Derive the subscriber count from 
NRUF data based on ``assigned'' number counts that have been adjusted 
for porting to net Type 0 ports (``in'' and ``out''), which should 
reflect a more accurate subscriber count; (2) provide carriers with the 
opportunity to revise their subscriber count in an initial assessment 
letter, and (3) require carriers to confirm their subscriber counts on 
an aggregate basis using data in the NRUF report.
f. Cable Television Subscribers--Assessed
    28. We propose to conduct a regulatory fee assessment initiative 
for the cable television industry consistent with the process the 
Commission used in FY 2005. Specifically, we propose to generate fee 
assessment letters for the cable operators who are on file as having 
paid regulatory fees the previous fiscal year for their basic cable 
subscribers. Also, as an additional means of notifying cable television 
regulatees of their section 9 regulatory fee payment obligations for FY 
2006, we propose to send an e-mail reminder to all of the operators' e-
mail addresses that are populated in the Media Bureau's Cable 
Operations and Licensing System (COALS). We seek comment on our 
proposed assessment initiative and on our intention to use company e-
mail addresses in COALS.
    29. Our assessment letter to each operator will (1) Announce the 
due date for payment of regulatory fees; (2) reflect the subscriber 
count for which the operator paid regulatory fees in FY 2005--and thus 
certified as having served as of December 31, 2004; and (3) request 
that the operator access a Commission-authorized Web site to provide 
its aggregate subscriber count as of December 31, 2005. If the number 
of subscribers as of December 31, 2005 differs from that as reported 
for last year, operators will be required to provide a brief 
explanation for the differing subscriber counts and indicate when the 
difference occurred. Cable operators who do not have access to the 
Internet will be able to contact the FCC Financial Operations Help Desk 
to provide their subscriber count as of December 31, 2005. We seek 
comment on this proposed assessment initiative.
    30. Some cable operators may not have made regulatory fee payments 
in FY 2005 and, as a result, will not receive an assessment letter for 
FY 2006 regulatory fees. For example, a new company may have become 
operational after the first day of the fiscal year and therefore did 
not have a regulatory fee obligation in FY 2005; or an existing company 
did not make a payment because it filed a petition for waiver of 
regulatory fees for FY 2005 based on financial hardship. Regardless of 
the circumstance, we emphasize that not receiving a regulatory fee 
assessment letter in FY 2006 does not excuse an operator from its 
obligation to pay FY 2006 regulatory fees. All non-exempt cable 
operators, not only those that made payments in FY 2005 and/or receive 
assessment letters for FY 2006 fees, are required to make payments.
    31. We also propose to retain the payment procedures for cable 
television operators that we have had in place for the past two fiscal 
years. That is, we will continue to permit cable television operators 
to base their payment on their company's aggregate subscriber count as 
of December 31, 2005, rather than requiring them to sub-report 
subscriber counts on a per community unit identifier (CUID) basis on 
the FCC Form 159 Remittance Advice. After providing their company's 
aggregate subscriber count in Block 25A of the FCC Form 159, operators 
will still be required to certify the accuracy of the subscriber count 
in Block 30.
    32. Finally, regarding the cable television industry's annual 
payment obligation for section 9 regulatory fees, we seek comment on 
ways in which we could reduce the gap between the number of estimated 
payment units that we establish for each fiscal year and the number of 
actual payment units that we receive for that fiscal year. The 
Commission does not have a universal reporting requirement by which all 
cable television operators would report the number of basic cable 
television subscribers that they serve throughout all of their cable 
television systems.\17\ Our estimates of the number of basic television 
subscribers are based on reviews of prior year regulatory fee payments 
made by cable operators and subscriber data published in publicly 
available data sources. As a result, the aggregate number of actual 
payment units made by the cable television industry may differ from the 
estimated number of units. We seek comments and/or proposals that 
address this situation.
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    \17\ The number of basic cable television subscribers served is 
the basis from which cable television operators are required to 
calculate their annual section 9 regulatory fee payment obligations.
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3. Streamlined Regulatory Fee Payment Process for CMRS Providers
    33. We propose to allow those CMRS Cellular, Mobile, and Messaging 
service providers that pay using an FCC Form 159 or the automated Fee 
Filer system to pay their subscriber totals at the aggregate level 
without having to identify and associate their subscriber counts with 
calls signs. We are requiring CMRS Cellular/Mobile providers to use the 
aggregate subscriber totals from their Numbering Resource Utilization 
Forecast report (NRUF),\18\ netted for porting; therefore, it is 
consistent for CMRS providers (Cellular, Mobile, and Messaging) to pay 
their subscriber totals at the aggregate level without having to 
associate these subscriber counts with their respective call signs. We 
believe that eliminating the requirement to identify subscribers at the 
call sign level will improve the Commission's efficiency in processing 
regulatory fee payments, as well as reduce the administrative burden on 
licensees during the payment process. We seek comment on whether 
eliminating the requirement for CMRS providers to identify their call 
signs when making their regulatory fee payment will in any manner 
disrupt the processes by which providers determine and calculate their 
subscriber totals.
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    \18\ For more information on our proposed regulatory fee 
assessment initiative for CMRS providers this fiscal year, see also 
Section II.B.2.E. of this NPRM.
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4. Future Streamlining of the Regulatory Fee Assessment and Collection 
Process
    34. We continue to welcome comments concerning our commitment to 
reviewing, streamlining and modernizing our statutorily required fee 
assessment and collection procedures.

[[Page 17415]]

Our areas of particular interest include: (1) The process for notifying 
licensees about changes in the annual Schedule of Regulatory Fees and 
how it can be improved; (2) the most effective way to disseminate 
regulatory fee assessments and bills, e.g., through surface mail, e-
mail, online Web site, or some other mechanism; (3) the fee payment 
process, including how the agency's online regulatory fee filing system 
(Fee Filer) can be enhanced; (4) the timing of fee payments, including 
whether we should alter the existing section 9 regulatory fee payment 
``window'' in any way; and (5) the timing of fee assessments and bills.

III. Procedural Matters

A. Payment of Regulatory Fees

1. De Minimis Fee Payment Liability
    35. Consistent with past practice, regulatees whose total FY 2006 
regulatory fee liability, including all categories of fees for which 
payment is due, amounts to less than $10 will be exempted from payment 
of FY 2006 regulatory fees.
2. Standard Fee Calculations and Payment Dates
    36. The Commission will, for the convenience of payers, accept fee 
payments made in advance of the normal formal window for the payment of 
regulatory fees. Licensees are reminded that, under our current rules, 
the responsibility for payment of fees by service category is as 
follows:
    (a) Media Services: Regulatory fees must be paid for AM/FM radio 
station and VHF/UHF television station initial construction permits 
that were issued on or before October 1, 2005, and for all broadcast 
facility licenses granted on or before October 1, 2005. However, in 
instances where a permit or license is transferred or assigned after 
October 1, 2005, responsibility for payment rests with the holder of 
the permit or license as of the Fee Due Date.
    (b) Wireline (Common Carrier) Services: Fees must be paid for any 
authorization that was granted on or before October 1, 2005. However, 
in instances where a permit or license is transferred or assigned after 
October 1, 2005, responsibility for payment rests with the holder of 
the permit or license as of the Fee Due Date.
    (c) Wireless Services: Commercial Mobile Radio Service (CMRS) 
cellular, mobile, and messaging services (fees based upon a subscriber, 
unit or circuit count): Fees must be paid for any authorization that 
was issued on or before October 1, 2005. The number of subscribers, 
units or circuits on December 31, 2005 will be used as the basis from 
which to calculate the fee payment.
    The first eleven fee categories in our Attachment D, Schedule of 
Regulatory Fees, pay what the Commission refers to as ``small multi-
year wireless regulatory fees.'' Entities pay these regulatory fees in 
advance for the entire amount of the 5-year or 10-year term of initial 
license, and only pay fees again at the time of license renewal. As a 
result, the Commission does not collect regulatory fees for these 
eleven fee categories on an annual basis.
    (d) Multichannel Video Programming Distributor Services (cable 
television operators and CARS licensees): The number of basic cable 
television subscribers on December 31, 2005 will be used as the basis 
from which to calculate the fee payment.\19\ For CARS licensees, fees 
must be paid for any license that was granted on or before October 1, 
2005. In instances where a CARS license is transferred or assigned 
after October 1, 2005, responsibility for payment rests with the holder 
of the license as of the Fee Due Date.
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    \19\ Cable television system operators should compute their 
basic subscribers as follows: Number of single family dwellings + 
number of individual households in multiple dwelling unit 
(apartments, condominiums, mobile home parks, etc.) paying at the 
basic subscriber rate + bulk rate customers + courtesy and free 
service. Note: Bulk-Rate Customers = Total annual bulk-rate charge 
divided by basic annual subscription rate for individual households. 
Operators may base their count on ``a typical day in the last full 
week'' of December 2005, rather than on a count as of December 31, 
2005.
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    (e) International Services: For earth stations and geostationary 
orbit space stations, regulatory fees must be paid for stations that 
were licensed and operational on or before October 1, 2005. In 
instances where a license is transferred or assigned after October 1, 
2005, responsibility for payment rests with the holder of the license 
as of the Fee Due Date. For non-geostationary orbit satellite systems, 
fees must be paid for systems that were licensed and operational on or 
before October 1, 2005. In instances where a license is transferred or 
assigned after October 1, 2005, responsibility for payment rests with 
the holder of the license as of the Fee Due Date. For international 
bearer circuits, payment is calculated on a per-active circuit basis as 
of December 31, 2005.\20\
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    \20\ Regulatory fees for International Bearer Circuits are to be 
paid by facilities-based common carriers that have active 
international bearer circuits in any transmission facility for the 
provision of service to an end user or resale carrier, which 
includes active circuits to themselves or to their affiliates. In 
addition, non-common carrier satellite operators must pay a fee for 
each circuit sold or leased to any customer, including themselves or 
their affiliates, other than an international common carrier 
authorized by the Commission to provide U.S. international common 
carrier services. Non-common carrier submarine cable operators are 
also to pay fees for any and all international bearer circuits sold 
on an indefeasible right of use (IRU) basis or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. See Assessment and 
Collection of Regulatory Fees for Fiscal Year 2001, MD Docket No. 
01-76, Report and Order, 16 FCC Rcd 13525, 13593 (2001); Regulatory 
Fees Fact Sheet: What You Owe--International and Satellite Services 
Licensees for FY 2004 at 3 (rel. July 2004) (the fact sheet is 
available on the FCC Web site at: https://hraunfoss.fcc.gov/edocs_
public/attachmatch/DOC-249904A4.pdf). On February 6, 2006, VSNL 
Telecommunications (US) Inc. filed a Petition for Rulemaking urging 
the Commission to reform the current International Bearer Circuit 
Fee rules and policies as applied to non-common carrier submarine 
cable operators. See Petition for Rulemaking of VSNL 
Telecommunications (US) Inc., RM-11312 (filed February 6, 2006). 
This Petition remains pending before the Commission, which has 
issued a Public Notice requesting comment on the petition. See 
Consumer and Governmental Affairs Bureau, Reference Information 
Center, Public Notice, Report No. 2759 (released February 15, 2006). 
The Commission intends to resolve the complex issues presented by 
this Petition separately, and any comments on these issues filed in 
the instant proceeding will be incorporated into, and addressed, 
with those filed on the Petition for Rulemaking.
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B. Enforcement

    37. As a reminder to all licensees, section 159(c) of the 
Communications Act requires us to impose an additional charge as a 
penalty for late payment of any regulatory fee. As in years past, a 
late payment penalty of 25 percent of the amount of the required 
regulatory fee will be assessed on the first day following the deadline 
date for filing of these fees. Regulatory fee payment must be received 
and stamped at the lockbox bank by the last day of the regulatory fee 
filing window, and not merely postmarked by the last day of the window. 
Failure to pay regulatory fees and/or any late penalty will subject 
regulatees to sanctions, including the Commission's Red Light Rule (see 
47 CFR 1.1910) and the provisions set forth in the Debt Collection 
Improvement Act of 1996 (DCIA). We also assess administrative 
processing charges on delinquent debts to recover additional costs 
incurred in processing and handling the related debt pursuant to the 
DCIA and Sec.  1.1940(d) of the Commission's Rules. These 
administrative processing charges will be assessed on any delinquent 
regulatory fee, in addition to the 25 percent late charge penalty. 
Partial underpayments of regulatory fees are treated in the following 
manner. The licensee will be given credit for the amount paid, but if 
it is later determined that the fee paid is incorrect or not timely 
paid, the 25 percent late charge penalty will be assessed on the

[[Page 17416]]

portion that is not paid in a timely manner.
    38. Furthermore, our regulatory fee rules provide that we will 
withhold action on any applications or other requests for benefits 
filed by anyone who is delinquent in any non-tax debts owed to the 
Commission (including regulatory fees) and will ultimately dismiss 
those applications or other requests if payment of the delinquent debt 
or other satisfactory arrangement for payment is not made. See 47 CFR 
1.1161(c), 1.1164(f)(5), and 1.1910. Failure to pay regulatory fees can 
also result in the initiation of a proceeding to revoke any and all 
authorizations held by the entity responsible for paying the delinquent 
fee(s).

C. Initial Regulatory Flexibility Analysis

    39. With respect to this NPRM, an Initial Regulatory Flexibility 
Analysis (IRFA), is contained in Attachment A of the Appendix.\21\ 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM specified infra. The 
Commission will send a copy of the NPRM, including the IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration.
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    \21\ See 5 U.S.C. 603. In addition, the NPRM and the IRFA (or 
summaries thereof) will be published in the Federal Register.
---------------------------------------------------------------------------

D. Initial Paperwork Reduction Act of 1995 Analysis

    40. This document does not contain proposed or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4). Completion of the 159 family of forms required by the 
Commission's regulatory fee payment process is already approved by the 
Office of Management and Budget under information collections 3060-0589 
and 3060-0949.

E. Ex Parte Rules

    41. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's 
rules.\22\ Ex parte presentations are permissible if disclosed in 
accordance with Commission rules, except during the Sunshine Agenda 
period when presentations, ex parte or otherwise, are generally 
prohibited. Persons making oral ex parte presentations are reminded 
that a memorandum summarizing a presentation must contain a summary of 
the substance of the presentation and not merely a listing of the 
subjects discussed. More than a one- or two-sentence description of the 
views and arguments presented is generally required.\23\ Additional 
rules pertaining to oral and written presentations are set forth in 
section 1.1206(b).
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    \22\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202 and 1.1203.
    \23\ See 47 CFR 1.1206(b)(2).
---------------------------------------------------------------------------

F. Filing Requirements

    42. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules,\24\ interested parties may file comments on or 
before the dates indicated on the first page of this document. Comments 
may be filed using: (1) The Commission's Electronic Comment Filing 
System (``ECFS''), (2) the Federal Government's eRulemaking Portal, or 
(3) by filing paper copies.\25\
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    \24\ See id. Sec. Sec.  1.415, 1.419.
    \25\ See Electronic Filing of Documents in Rulemaking 
Proceedings, 13 FCC Rcd 11322 (1998).
---------------------------------------------------------------------------

    43. Electronic Filers: Comments may be filed electronically using 
the Internet by accessing the ECFS: https://www.fcc.gov/cgb/ecfs or the 
Federal eRulemaking Portal: https://www.regulations.gov. Filers should 
follow the instructions provided on the website for submitting 
comments. For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to ecfs@fcc.gov, and include the following 
words in the body of the message, ``get form.'' A sample form and 
directions will be sent in response.
    44. Paper Filers: Parties who choose to file by paper must file an 
original and four copies of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although we continue to experience delays in 
receiving U.S. Postal Service mail). All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington DC 20554.
    45. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. These documents will also be available via ECFS. Documents 
will be available electronically in ASCII, Word 97, and/or Adobe 
Acrobat.
    46. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an e-mail to fcc504@fcc.gov or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: https://www.fcc.gov.

IV. Ordering Clauses

    47. Accordingly, it is ordered that, pursuant to sections 4(i) and 
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed 
Rulemaking is hereby adopted.
    It is further ordered that the Commission's Consumer Information 
Bureau, Reference Information Center, shall send a copy of this NPRM, 
including the Initial Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.


[[Page 17417]]


Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Attachment A: Initial Regulatory Flexibility Analysis

    48. As required by the Regulatory Flexibility Act (RFA),\26\ the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules in the present NPRM. Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed on or before the dates indicated on the first 
page of this document. The Commission will send a copy of the NPRM, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.\27\ In addition, the NPRM and IRFA (or 
summaries thereof) will be published in the Federal Register.\28\
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    \26\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by 
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
    \27\ 5 U.S.C. 603(a).
    \28\ Id.
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I. Need for, and Objectives of, the Proposed Rules

    49. This rulemaking proceeding is initiated to obtain comments 
concerning the Commission's proposed amendment of its Schedule of 
Regulatory Fees in the amount of $288,771,000, the amount that Congress 
has required the Commission to recover. The Commission seeks to collect 
the necessary amount through its proposed Schedule of Regulatory Fees 
in the most efficient manner possible and without undue public burden.

II. Legal Basis

    50. This action, including publication of proposed rules, is 
authorized under sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\29\
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    \29\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
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III. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    51. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted.\30\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \31\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\32\ A ``small business concern'' is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\33\
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    \30\ 5 U.S.C. 603(b)(3).
    \31\ 5 U.S.C. 601(6).
    \32\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \33\ 15 U.S.C. 632.
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    52. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.\34\
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    \34\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028, 
at page 40 (July 2002).
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    53. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.\35\
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    \35\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
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    54. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' \36\ As of 1997, there were approximately 
87,453 governmental jurisdictions in the United States.\37\ This number 
includes 39,044 county governments, municipalities, and townships, of 
which 37,546 (approximately 96.2%) have populations of fewer than 
50,000, and of which 1,498 have populations of 50,000 or more. Thus, we 
estimate the number of small governmental jurisdictions overall to be 
84,098 or fewer.
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    \36\ 5 U.S.C. 601(5).
    \37\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2000, Section 9, pages 299-300, Tables 490 and 492.
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    55. We have included small incumbent local exchange carriers in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
\38\ The SBA's Office of Advocacy contends that, for RFA purposes, 
small incumbent local exchange carriers are not dominant in their field 
of operation because any such dominance is not ``national'' in 
scope.\39\ We have therefore included small incumbent local exchange 
carriers in this RFA analysis, although we emphasize that this RFA 
action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
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    \38\ 15 U.S.C. 632.
    \39\ Letter from Jere W. Glover, Chief Counsel for Advocacy, 
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small 
Business Act contains a definition of ``small-business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 
601(3) (RFA). SBA regulations interpret ``small business concern'' 
to include the concept of dominance on a national basis. See 13 CFR 
121.102(b).
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    56. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees.\40\ According to 
Commission data,\41\ 1,303 carriers have reported that they are engaged 
in the provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by our proposed action.
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    \40\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517110 (changed from 513310 in October 2002).
    \41\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
Page 5-5 (June 2005) (hereinafter ``Trends in Telephone Service''). 
This source uses data that are current as of October 1, 2004.
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    57. Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), ``Shared-Tenant Service