Assessment and Collection of Regulatory Fees For Fiscal Year 2011, 30605-30637 [2011-12685]
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Federal Register / Vol. 76, No. 102 / Thursday, May 26, 2011 / Proposed Rules
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and Standards.
[FR Doc. 2011–13102 Filed 5–25–11; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 1
[MD Docket No. 11–76; FCC 11–68]
Assessment and Collection of
Regulatory Fees For Fiscal Year 2011
Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Commission will revise
its Schedule of Regulatory Fees in order
to recover an amount of $335,794,000
that Congress has required the
Commission to collect for fiscal year
2011. The Communications Act of 1934,
as amended, provides for the annual
assessment and collection of regulatory
fees for annual ‘‘Mandatory
Adjustments’’ and ‘‘Permitted
Amendments’’ to the Schedule of
Regulatory Fees.
DATES: Submit comments on or before
June 2, 2011, and reply comments on or
before June 9, 2011.
ADDRESSES: You may submit comments,
identified by MD Docket No. 11–76, 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.
• People with Disabilities: Contact the
FCC to request reasonable
SUMMARY:
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accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by e-mail: FCC504@fcc.gov
or phone: 202–418–0530 or TTY: 202–
418–0432.
• E-mail: ecfs@fcc.gov. Include MD
Docket No. 11–76 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 detailed instructions for
submitting comments and additional
information on the rulemaking process,
see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT:
Roland Helvajian, Office of Managing
Director at (202) 418–0444.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking (NPRM), FCC 11–
68, MD Docket No. 11–76, adopted and
released May 3, 2011. The full text of
this document is available for
inspection and copying during normal
business hours in the FCC Reference
Center, 445 Twelfth Street, SW., Room
CY–A257, Portals II, Washington, DC
20554, and may also be purchased from
the Commission’s copy contractor,
BCPI, Inc., Portals II, 445 Twelfth Street,
SW., Room CY–B402, Washington, DC
20554. Customers may contact BCPI,
Inc. via their Web site, https://
www.bcpi.com, or call 1–800–378–3160.
This document is available in
alternative formats (computer diskette,
large print, audio record, and braille).
Persons with disabilities who need
documents in these formats may contact
the FCC by e-mail: FCC504@fcc.gov or
phone: 202–418–0530 or TTY: 202–418–
0432.
I. Procedural Matters
A. Ex Parte Rules-Permit-But Disclose
Proceeding
1. This is a ‘‘permit-but-disclose’’
proceeding subject to the requirements
under section 1.1206(b) of the
Commission’s rules.1 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
1 See 47 CFR 1.1206(b); see also 47 CFR 1.1202,
1.1203.
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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 twosentence description of the views and
arguments presented is generally
required.2 Additional rules pertaining to
oral and written presentations are set
forth in Section 1.1206(b).
B. Comment Filing Procedures
2. Pursuant to sections 1.415 and
1.419 of the Commission’s rules, 47 CFR
1.415, 1.419, interested parties may file
comments and reply 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. See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be
filed electronically using the Internet by
accessing the ECFS: https://
fjallfoss.fcc.gov/ecfs2/ or the Federal
eRulemaking Portal: https://
www.regulations.gov.
• 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. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St., SW., Room TW–A325,
Washington, DC 20554. The filing hours
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 must be
addressed to 445 12th Street, SW.,
Washington DC 20554.
People with Disabilities: To request
materials in accessible formats for
2 See
47 CFR 1.1206(b)(2).
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people with disabilities (braille, large
print, electronic files, audio format),
send an e-mail to fcc504@fcc.gov or call
the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
3. Documents in MD Docket No. 11–
76 will be available for public
inspection and copying during regular
business hours at the FCC Reference
Information Center, Portals II, 445 12th
Street, SW., CY–A257, Washington, DC
20554. These documents will also be
available free online, via ECFS.
Documents will be available
electronically in ASCII, Word, and/or
Adobe Acrobat.
4. 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 Commission’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.
II. Notice of Proposed Rulemaking
C. Paperwork Reduction Act
III. Discussion
5. This NPRM does not contain
proposed or modified information
collection burden (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).
A. FY 2011 Regulatory Fee Assessment
Methodology
9. In our FY 2011 regulatory fee
assessment, we will use the same
Section 9 regulatory fee assessment
methodology adopted in FY 2010 and in
prior years. Each fiscal year, the
Commission proportionally allocates the
total amount that must be collected via
Section 9 regulatory fees. The results of
our FY 2011 regulatory fee assessment
methodology (including a comparison to
the prior year’s results) are contained in
the table below. To collect the
$335,794,000 required by Congress, we
adjusted the FY 2010 amount upward
by 4.7 percent and allocated this
amount across the various fee
categories. Consistent with past
practice, we then divided the FY 2011
amount by the number of estimated
payment units in each fee category to
determine the unit fee.6 As in prior
D. Congressional Review Act Analysis
6. The Commission will send a copy
of this NPRM to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.3
E. Initial Regulatory Flexibility Analysis
7. An initial regulatory flexibility
analysis (‘‘IRFA’’) is contained herein.
Comments to the IRFA must be
identified as responses to the IRFA and
filed by the deadlines for comments on
the Notice. The Commission will send a
copy of the Notice, including the IRFA,
to the Chief Counsel for Advocacy of the
Small Business Administration.
3 See 5 U.S.C. 801(a)(1)(A). The Congressional
Review Act is contained in Title II, 251, of the
CWAAA; see Public Law 104–121, Title II, 251, 110
Stat. 868.
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Introduction
8. In this NPRM, we propose to collect
$335,794,000 in regulatory fees for
Fiscal Year (‘‘FY’’) 2011, pursuant to
Section 9 of the Communications Act of
1934, as amended (the ‘‘Act’’). Section 9
regulatory 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.4 The annual
regulatory fee amount to be collected is
established each year in the
Commission’s Annual Appropriations
Act which is adopted by Congress and
signed by the President and which
funds the Commission.5 In this annual
regulatory fee proceeding, we retain
many of the established methods,
policies, and procedures for collecting
Section 9 regulatory fees adopted by the
Commission in prior years. Consistent
with our established practice, we intend
to collect these regulatory fees during a
September 2011 filing window in order
to collect the required amount by the
end of our fiscal year.
4 47
U.S.C. 159(a).
Consolidated Appropriations Act, 2010,
Public Law 111–117 for the FY 2010 appropriations
act language for the Commission establishing the
amount of $335,794,000 of offsetting collections to
be assessed and collected by the Commission
pursuant to Section 9 of the Communications Act.
6 In many instances, the regulatory fee amount is
a flat fee per licensee or regulatee. In some
instances, the fee amount represents a per-unit fee
(such as for International Bearer Circuits), a per-unit
subscriber fee (such as for Cable, Commercial
Mobile Radio Service (‘‘CMRS’’) Cellular/Mobile
and CMRS Messaging), or a fee factor per revenue
dollar (Interstate Telecommunications Service
5 See
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Provider (‘‘ITSP’’) fee). The payment unit is the
measure upon which the fee is based, such as a
licensee, regulatee, or subscriber fee.
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years, for cases involving small fees,
e.g., licenses that are renewed over a
multiyear term, we divided the resulting
unit fee by the term of the license and
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then rounded these unit fees consistent
with the requirements of Section 9(b)(2)
of the Act.
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10. In calculating the FY 2011
regulatory fees listed in (see Table—FY
2011 Schedule of Regulatory Fees
below), we adjusted the FY 2011 list of
payment units (see Table—Sources of
Payment Unit Estimates for FY 2011
below) based upon licensee databases,
industry and trade group projections, as
well as prior year payment information.
In some instances, Commission licensee
databases are used; in other instances,
actual prior year payment records and/
or industry and trade association
projections are used in determining the
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payment units.7 Where appropriate, we
adjusted and rounded our final
7 The databases we consulted are the following:
the Commission’s Universal Licensing System
(‘‘ULS’’), International Bureau Filing System
(‘‘IBFS’’), Consolidated Database System (‘‘CDBS’’)
and Cable Operations and Licensing System
(‘‘COALS’’). We also consulted 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, as well as
industry sources including, but not limited to,
Television & Cable Factbook by Warren Publishing,
Inc. and the Broadcasting and Cable Yearbook by
Reed Elsevier, Inc.
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estimates to take into consideration
events that may impact the number of
units for which regulatees submit
payment, such as waivers and
exemptions that may be filed in FY
2011, and fluctuations in the number of
licenses or station operators due to
economic, technical, or other reasons.
Our estimated FY 2011 payment units,
therefore, are based on several variable
factors that are relevant to each fee
category. The fee rate may also be
rounded or adjusted slightly to account
for these variables.
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BILLING CODE 6712–01–C
TABLE—FY 2011 Schedule of
Regulatory Fees (Continued)
FY 2011 RADIO STATION REGULATORY FEES
AM Class A
≤25,000 ................................................................
25,001–75,000 .....................................................
75,001–150,000 ...................................................
150,001–500,000 .................................................
500,001–1,200,000 ..............................................
1,200,001–3,000,00 .............................................
>3,000,000 ...........................................................
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AM Class B
$700
1,400
2,100
3,150
4,550
7,000
8,400
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AM Class C
AM Class D
$575
1,150
1,450
2,450
3,750
5,750
6,900
$525
800
1,050
1,575
2,625
3,950
5,000
$600
900
1,500
1,800
3,000
4,800
6,000
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FM Classes
A, B1 & C3
$675
1,350
1,850
2,875
4,550
7,425
9,450
FM Classes
B, C, C0, C1
& C2
$850
1,500
2,750
3,600
5,300
8,500
11,050
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Population
served
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FY 2011 Schedule of Regulatory Fees
(Continued)
INTERNATIONAL BEARER CIRCUITS—SUBMARINE CABLE
Submarine cable systems
(capacity as of December 31, 2010)
Fee amount
<2.5 Gbps ..........................................................................
2.5 Gbps or greater, but less than 5 Gbps .......................
5 Gbps or greater, but less than 10 Gbps ........................
10 Gbps or greater, but less than 20 Gbps ......................
20 Gbps or greater ............................................................
Table—Sources of Payment Unit
Estimates for FY 2011
In order to calculate individual
service fees for FY 2011, we adjusted FY
2010 payment units for each service to
more accurately reflect expected FY
2011 payment liabilities. We obtained
our updated estimates through a variety
of means. For example, we used
Commission licensee data bases, actual
prior year payment records and industry
and trade association projections when
available. The databases we consulted
include our Universal Licensing System
(‘‘ULS’’), International Bureau Filing
System (‘‘IBFS’’), Consolidated Database
System (‘‘CDBS’’) and Cable Operations
$12,825
25,650
51,275
102,575
205,125
Address
FCC,
FCC,
FCC,
FCC,
FCC,
International,
International,
International,
International,
International,
P.O.
P.O.
P.O.
P.O.
P.O.
and Licensing System (‘‘COALS’’), 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.
We sought verification for these
estimates from multiple sources and, in
all cases; we compared FY 2011
estimates with actual FY 2010 payment
units to ensure that our revised
estimates were reasonable. Where
appropriate, we adjusted and/or
rounded our final estimates to take into
consideration the fact that certain
variables that impact on the number of
Box
Box
Box
Box
Box
979084,
979084,
979084,
979084,
979084,
St.
St.
St.
St.
St.
Louis,
Louis,
Louis,
Louis,
Louis,
MO
MO
MO
MO
MO
63197–9000.
63197–9000.
63197–9000.
63197–9000.
63197–9000.
payment units cannot yet be estimated
with sufficient accuracy. These include
an unknown number of waivers and/or
exemptions that may occur in FY 2011
and the fact that, in many services, the
number of actual licensees or station
operators fluctuates from time to time
due to economic, technical, or other
reasons. When we note, for example,
that our estimated FY 2011 payment
units are based on FY 2010 actual
payment units, it does not necessarily
mean that our FY 2011 projection is
exactly the same number as in FY 2010.
We have either rounded the FY 2011
number or adjusted it slightly to account
for these variables.
TABLE—SOURCES OF PAYMENT UNIT ESTIMATES FOR FY 2011 (CONTINUED)
Fee Category
Sources of payment unit estimates
Land Mobile (All), Microwave, 218–219 MHz,
Marine (Ship & Coast), Aviation (Aircraft &
Ground), GMRS, Amateur Vanity Call Signs,
Domestic Public Fixed.
CMRS Cellular/Mobile Services ..........................
CMRS Messaging Services ................................
AM/FM Radio Stations ........................................
UHF/VHF Television Stations .............................
AM/FM/TV Construction Permits .........................
LPTV, Translators and Boosters, Class A Television.
Broadcast Auxiliaries ...........................................
BRS (formerly MDS/MMDS) ...............................
LMDS ..................................................................
Cable Television Relay Service (‘‘CARS’’) Stations.
Cable Television System Subscribers ................
Based on Wireless Telecommunications Bureau (‘‘WTB’’) projections of new applications and
renewals taking into consideration existing Commission licensee data bases. Aviation (Aircraft) and Marine (Ship) estimates have been adjusted to take into consideration the licensing of portions of these services on a voluntary basis.
Based on WTB projection reports, and FY 10 payment data.
Based on WTB reports, and FY 10 payment data.
Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.
Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.
Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.
Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.
Interstate Telecommunication Service Providers
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Earth Stations ......................................................
Space Stations (GSOs & NGSOs) ......................
International Bearer Circuits ................................
Submarine Cable Licenses .................................
11. When calculating the fee
methodology for AM and FM radio
stations, we consider many factors, such
as facility attributes and the population
served by each station. The calculation
of the population served is determined
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Based
Based
Based
Based
on
on
on
on
actual FY 2010 payment units.
WTB reports and actual FY 2010 payment units.
WTB reports and actual FY 2010 payment units.
data from Media Bureau’s COALS database and actual FY 2010 payment units.
Based on publicly available data sources for estimated subscriber counts and actual FY 2010
payment units.
Based on FCC Form 499–Q data for the four quarters of calendar year 2010, the Wireline
Competition Bureau projected the amount of calendar year 2009 revenue that will be reported on 2011 FCC Form 499–A worksheets in April, 2011.
Based on International Bureau (‘‘IB’’) licensing data and actual FY 2010 payment units.
Based on IB data reports and actual FY 2010 payment units.
Based on IB reports and submissions by licensees.
Based on IB license information.
by coupling current United States
Census Bureau data with technical and
engineering data, as detailed in the table
below. In FY 2011, we will begin to
incorporate new Census data that was
taken in 2010, and this could have an
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impact in altering the fees of some radio
stations. Hence, the population served,
as well as the class and type of service
(AM or FM), will continue to be the
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principal variables in determining the
amount of regulatory fees to be paid.8
Table—Factors, Measurements, and
Calculations That Go Into Determining
Station Signal Contours and Associated
Population Coverages
AM Stations
For stations with nondirectional
daytime antennas, the theoretical
radiation was used at all azimuths. For
stations with directional daytime
antennas, specific information on each
day tower, including field ratio,
phasing, spacing and orientation was
retrieved, as well as the theoretical
pattern root-mean-square of the
radiation in all directions in the
horizontal plane (‘‘RMS’’) figure
milliVolt per meter (mV/m) @ 1 km) for
the antenna system. The standard, or
modified standard if pertinent,
horizontal plane radiation pattern was
calculated using techniques and
methods specified in Sections 73.150
and 73.152 of the Commission’s rules
(see 47 CFR 73.150 and 73.152).
Radiation values were calculated for
each of 360 radials around the
transmitter site. Next, estimated soil
conductivity data was retrieved from a
database representing the information in
FCC Figure R3 (see Map of Estimated
Effective Ground Conductivity in the
United States, 47 CFR 73.190 Figure
R3). Using the calculated horizontal
radiation values, and the retrieved soil
conductivity data, the distance to the
principal community (5 mV/m) contour
was predicted for each of the 360
radials. The resulting distance to
principal community contours were
used to form a geographical polygon.
Population counting was accomplished
by determining which 2000 block
centroids were contained in the
polygon. (A block centroid is the center
point of a small area containing
population as computed by the U.S.
Census Bureau.) The sum of the
population figures for all enclosed
blocks represents the total population
for the predicted principal community
coverage area.
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FM Stations
The greater of the horizontal or
vertical effective radiated power (‘‘ERP’’)
(kW) and respective height above
8 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 for
a licensed station in that respective service
category. For example, in FY 2010 the regulatory fee
for an AM radio station Construction Permit was no
higher than the regulatory fee for an AM Class C
radio station serving a population of less than
25,000.
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average terrain (‘‘HAAT’’) (m)
combination was used. Where the
antenna height above mean sea level
(‘‘HAMSL’’) was available, it was used in
lieu of the average HAAT figure to
calculate specific HAAT figures for each
of 360 radials under study. Any
available directional pattern information
was applied as well, to produce a radialspecific ERP figure. The HAAT and ERP
figures were used in conjunction with
the Field Strength (50–50) propagation
curves specified in 47 CFR 73.313 of the
Commission’s rules to predict the
distance to the principal community (70
dBu (decibel above 1 microVolt per
meter) or 3.17 mV/m) contour for each
of the 360 radials (47 CFR 73.313). The
resulting distance to principal
community contours were used to form
a geographical polygon. Population
counting was accomplished by
determining which 2000 block centroids
were contained in the polygon. The sum
of the population figures for all enclosed
blocks represents the total population
for the predicted principal community
coverage area.
B. Regulatory Fee Obligations for Digital
Low Power, Class A, and TV
Translators/Boosters
12. The digital transition to fullservice television stations was
completed on June 12, 2009, but the
digital transition for Low Power, Class
A, and TV Translators/Boosters remains
voluntary, and there is presently no set
date for the completion of this
transition. Historically, the discussion
of digital transition conversion with
respect to regulatory fees has applied
only to full-service television stations.
As a result, the ‘‘digital only’’ exemption
does not impact this class of regulatees.
Because the digital transition in the Low
Power, Class A, and TV Translators/
Booster facilities is still voluntary and
the transition will occur over a period
time, some facilities may still be in the
process of converting from an analog to
a digital service. During this transition
period, licensees of Low Power, Class A,
and TV Translator/Booster facilities may
be operating in analog mode, in digital
mode, or in an analog and digital
simulcast mode. For regulatory fee
purposes, a fee will be assessed for each
facility operating either in an analog or
digital mode. In instances in which a
licensee is operating in both an analog
and digital mode as a simulcast, a single
regulatory fee will be assessed for this
analog facility that has a digital
companion channel. As greater numbers
of facilities convert to digital mode, the
Commission will provide revised
instructions on how regulatory fees will
be assessed.
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C. Commercial Mobile Radio Service
Messaging Service
13. Commercial Mobile Radio Service
(‘‘CMRS’’) Messaging Service, which
replaced the CMRS One-Way Paging fee
category in 1997, includes all
narrowband services.9 Since 1997, the
number of subscribers has declined
from 40.8 million to 4.9 million, and
there does not appear to be any sign of
recovery to the subscriber levels of
1997–1999.10 Maintaining the fee at the
existing level of $.08 per subscriber is
the minimum reasonable and
appropriate action to take under the
prevailing circumstances in the paging
industry. We propose in FY 2011 to
continue maintaining the regulatory fee
rate at $0.08 per subscriber due to the
declining subscriber base in this
industry. We seek comment on this
proposal.
D. Interstate Telecommunications
Service Provider (ITSP)
14. In our FY 2010 Regulatory Fee
Report and Order,11 we acknowledged
that the revenue base upon which the
ITSP fee is calculated has been
decreasing for several years.12 Because
of this continued decline, we limited
the increase in the FY 2010 ITSP fee rate
from $.00342 to $.00349, and assessed a
slightly higher fee across all other fee
categories. In FY 2011, the ITSP revenue
base has experienced an even more
significant decline. Over the past six
months, we note an additional decline
of nine percent (9%) in the ITSP base
revenue, which would increase the ITSP
9 See Assessment and Collection of Regulatory
Fees for Fiscal Year 1997, MD Docket No. 96–186,
Report and Order, 12 FCC Rcd 17161, 17184–85,
para. 60 (1997) (‘‘FY 1997 Report and Order’’).
10 Between FY 1997 and FY 2010, the subscriber
base in the paging industry declined 89 percent
from 40.8 million to 4.9 million subscribers,
according to FY 2010 collections data as of
September 30, 2010.
11 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2010, MD Docket No. 10–87,
Report and Order, 25 FCC Rcd 9278 at para. 31
(2010) (‘‘FY 2010 Report and Order’’).
12 In FY 2010 ITSP, the fee factor in the FY 2010
NPRM of $.00351 was based on December 2009
ITSP revenue data. April 2010 ITSP revenue data,
however, reflected revenues 3.4 percent lower than
projections. This revenue decrease would have
resulted in an increase in the resulting fee factor
from the projected $.00351 to a fee factor of
$.00364. Thus, based on the proposed methodology
of the FY 2010 NPRM and the revised revenue
numbers, the ITSP fee factor would have increased
from $.00342 (FY 2009 ITSP fee rate) to $.00364.
The concerns of these providers, which collectively
represent 46.82 percent of all regulatory fees paid
in any given year, resulted in the adoption, as an
interim measure, an ITSP fee rate at $.00349, which
is a 2.1% increase from FY 2009. We find this to
be a reasonable interim measure pending our
review of whether part of that 46.82 percent of the
regulatory fee burden might be moved from ITSP in
the context of fundamental reform.
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Federal Register / Vol. 76, No. 102 / Thursday, May 26, 2011 / Proposed Rules
fee rate for FY 2011 to $.00402,13 an
increase of 15% from the fee rate
adopted in FY 2010.14 This increase in
the FY 2011 ITSP fee rate from $.00349
to $.00402 will be detrimental to the
operations of many small and medium
ITSP providers, and will further burden
a regulatory fee category already bearing
the majority of the agency’s overall
regulatory fee burden. Therefore, as we
did in FY 2010, we propose to limit the
increase of the FY 2011 ITSP fee rate to
$.00361 per revenue dollar, and assess
a slightly higher fee across all other
regulatory fee categories. We seek
comment on this proposal.
15. Each year, the Commission
downloads 499–A revenue data 15 onto
a FCC Form 159–W to establish an ITSP
regulatory fee bill. These bills are then
loaded into the Commission’s electronic
payment and filing system (‘‘Fee Filer’’)
so that providers can view and pay their
annual regulatory fee bill. Historically,
in creating ITSP regulatory fee bills, the
Commission separated 499–A filers into
two categories: (1) Those whose primary
revenue stream categorized them as
interstate telecommunications service
providers (ITSP), and (2) those whose
primary revenue stream was considered
to be non-ITSP, such as wireless,
satellite, and other service providers.
Simply stated, the logic here was to
categorize 499–A filers into two
regulatory fee paying categories—those
that pay ITSP regulatory fees on the
basis of a fee factor per revenue dollar,
and those whose primary revenue
stream would place them in a category
other than ITSP (‘‘non-ITSP providers’’),
such as wireless or satellite carriers, that
pay regulatory fees on some other basis
(e.g. wireless carriers pay regulatory fees
on a per subscriber basis). By separating
499–A filers into these two categories
(ITSP providers and non-ITSP
providers), the Commission was not
assessing the ITSP revenues of certain
particular entities (non-ITSP providers)
simply because these entities were
paying another form of regulatory fee
(e.g. wireless or satellite fees). After
more careful consideration, we realize
that this treatment resulted in
predominantly ITSP providers paying
fees on both ITSP revenues and, if they
also provided other services, a per unit
subscriber fee on other services (e.g.
wireless services), while non-ITSP paid
13 If the Commission did not provide any relief or
consider changes in the ITSP revenue stream, the
fee factor rate would be $0.00402 per revenue
dollar.
14 See FY 2010 Report and Order at Appendix C,
Page 28.
15 FCC Form 499–A is filed annually with USAC
on April 1st, but it can be revised many times for
up to a year of the April 1st filing.
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on a per unit basis only (e.g. for wireless
services), and were not assessed fees on
their ITSP revenues. There is no basis
for this disparate treatment; it is only
logical that these wireless providers and
other non-ITSP providers be subject to
ITSP fees based on their ITSP revenues,
similar to the fees that are currently
paid by wireline carriers. Therefore,
instead of separating 499–A filers into
these two categories of regulatory fee
payers, we propose to assess ITSP
regulatory fees on all ITSP revenues,
regardless of the predominant
classification of the payor. More
specifically, we find that a more
equitable way of assessing ITSP
regulatory fees is to assess an ITSP fee
on 499–A reported ITSP revenue items
regardless of whether the payor is
predominantly an ITSP or a non-ITSP
provider. If FCC Form 499–A has
revenues identified on lines 412(e),
420(d), and/or 420(e), the provider
would be subject to ITSP regulatory
fees.16
16. FCC Form 159–W was established
in FY 2001 to assist providers in
transposing revenue information from
their FCC Form 499–A to a worksheet
that would assist them in computing
their regulatory fee obligation. Initially,
the Form 159–W worksheet was left
blank for the provider to complete and
mail it in along with their check. In later
years, the Commission provided a precompleted Form 159–W based on
revenue information directly from FCC
Form 499–A. In this Notice of Proposed
Rulemaking, the Commission proposes
to assess a regulatory fee on all
providers that have subject revenues on
Line 14 of Form 159–W, which after the
fee factor is applied, results in a
regulatory fee obligation of $10 or
greater. By assessing regulatory fees on
all providers ($10 or greater), we believe
we can achieve a more equitable
assessment of ITSP regulatory fees
across all providers, and reduce the
subjective factor involved in identifying
some providers as non-ITSP because
their primary business is cellular or a
satellite provider. If ITSP revenues are
derived from the service and identified
on the appropriate lines of Form 499–
A (and subsequently transposed to Form
159–W), then a regulatory fee would be
16 See FCC Form 159–W on page 7 of the
Commission’s Interstate Telecommunications
Service Provider (ITSP) Fact Sheet, August 2010.
499–A Form Line 412(e) corresponds with Line 1
of FCC Form 159–W; 499–A Form Line 420(d)
corresponds with Line 2 of FCC Form 159–W; and
499–A Form Line 420(e) corresponds with Line 3
of FCC Form 159–W. However, from FCC Form
159–W revenue Lines 1 through 3, a provider can
also subtract Lines 5 through 12, resulting in a net
revenue amount upon which regulatory fees would
be due.
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assessed on those revenues. In FY 2011,
we believe our proposal will add $2.0
billion to the unit base estimate, which
will help to support maintaining the FY
2011 ITSP fee factor rate at $0.00361,
reducing the impact of this limitation on
all other regulatory fee categories. We
seek comment on this proposal of
assessing regulatory fees on ITSP
revenues from all providers.
E. Fee Waiver Policies
17. As our rules expressly provide,
petitions for waiver of a regulatory fee
must be accompanied by the required
fee ‘‘unless accompanied by a petition to
defer payment due to financial
hardship, supported by documentation
of the financial hardship.’’ 17 Similarly,
petitions for reduction of fees filed with
less than the full fee due must be
accompanied by a request for deferral
‘‘supported by documentation of
financial hardship.’’ 18 However, citing
section 1.1166(b) of the rules, which
states that ‘‘Deferrals of fees will be
granted for a period of six months
following the date that the fee is
initially due,’’ some have argued that,
even where supporting documentation
of financial hardship is not provided, a
regulatee can delay its payment of the
fees owed for up to six months simply
by requesting the deferral. That
argument is inconsistent with sections
1.1166(c) and (d) of our rules, which
provide that petitions for waivers or
reductions will be dismissed if they are
not accompanied by the full fee owed,
unless the regulatee requests a deferral
of payment supported by
documentation of financial hardship.19
A regulatee’s mere allegation of
financial hardship thus does not
automatically entitle it to a deferral of
its obligation to pay regulatory fees;
only a properly supported claim of
financial hardship will entitle the
regulatee to a deferral. Accordingly, if a
request for deferral is not supported by
documentation of financial hardship, it
will be denied, and an associated
petition for waiver or reduction will be
dismissed. A regulatee cannot delay
payment on the theory that its deferral
request triggered an automatic sixmonth extension of its obligation to pay.
We thus propose to amend section
1.1166(b) of the Rules 20 to read,
‘‘Deferrals of fees, if granted, will be for
17 47
CFR 1.1166(c).
CFR 1.1166(d).
19 47 CFR 1.1166(c) and (d) (requests for waivers
and reductions of fees ‘‘that do not include the
required fees or forms will be dismissed unless
accompanied by a petition to defer payment due to
financial hardship, supported by documentation of
the financial hardship.’’
20 47 CFR 1.1166(b).
18 47
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Federal Register / Vol. 76, No. 102 / Thursday, May 26, 2011 / Proposed Rules
a designated period of time not to
exceed six months.’’ We seek comment
on this rule clarification.
F. Administrative and Operational
Issues
18. In FY 2009, the Commission
implemented several changes in
procedures which simplified the
payment and reconciliation processes of
FY 2009 regulatory fees. These changes
proved to be very helpful to both
licensees and to the Commission, and
we propose in the following paragraphs
to expand upon these improvements. In
FY 2011, the Commission will promote
greater use of technology (and less use
of paper) to improve the regulatory fee
notification and collection process. In
addition to seeking comment on the
specific initiatives discussed in the
paragraphs below, we ask whether there
are other steps we could take to promote
greater use of technology in collecting
regulatory fees.
1. Mandatory Use of Fee Filer
19. In FY 2009, we instituted a
mandatory filing requirement using the
Commission’s electronic filing and
payment system (also known as ‘‘Fee
Filer’’).21 Licensees filing their annual
regulatory fee payments were required
to begin the process by entering the
Commission’s Fee Filer system with a
valid FRN and password.22 This change
was beneficial to both licensees and to
the Commission. For licensees, the
mandatory use of Fee Filer eliminates
the need to manually complete and
submit a hardcopy Form 159, and for
the Commission, the data in electronic
format made it much easier to process
payments more efficiently and
effectively. We propose to continue to
make the use of Fee Filer for filing
annual regulatory fees mandatory. We
seek comment on this proposal. We also
request comment on ways we might
improve the mandatory use of Fee Filer.
The mandatory use of Fee Filer does not
mean that licensees are expected to pay
only through Fee Filer—it is only
mandatory for licensees to begin the
process of filing their annual regulatory
fees using Fee Filer.
srobinson on DSK4SPTVN1PROD with PROPOSALS
2. Notification and Collection of
Regulatory Fees
a. Pre-Bills
20. In prior years, the Commission
mailed pre-bills via surface mail to
licensees in select regulatory fee
categories: Interstate
21 FY
2009 Report and Order at paras. 20 and 21.
it is very important for licensees to
have a current and valid FRN address on file in the
Commission’s Registration System (CORES).
22 Therefore,
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telecommunications service providers
(‘‘ITSPs’’), Geostationary (‘‘GSO’’) and
Non-Geostationary (‘‘NGSO’’) satellite
space station licensees,23 holders of
Cable Television Relay Service (‘‘CARS’’)
licenses, and Earth Station licensees.24
The remaining regulatees did not
receive pre-bills. In our FY 2009 Report
and Order, the Commission decided to
have the attributes of these pre-bills
viewed in Fee Filer, rather than mailing
pre-bills out to licensees via surface
mail.25 In FY 2011, the Commission will
continue to reduce its use of hardcopy
documents by not mailing out annual
regulatory fee pre-bills, and instead
place the pre-bill information on the
Commission’s Web site for licensees to
access through the Commission’s
electronic filing and payment system
(‘‘Fee Filer’’). Regulatees can also look to
the Commission’s Web site for
information on upcoming events and
deadlines relating to regulatory fees. We
ask whether further changes to our
system of electronic notification would
serve to more efficiently and effectively
inform regulatees of information and
procedures pertaining to regulatory fees.
IV. Procedural Matters
21. Included below are procedural
items as well as our current payment
and collection methods which we have
revised over the past several years to
expedite the processing of regulatory fee
payments. We do not propose changes
to these procedures. Rather, we include
them here as a useful way of reminding
regulatory fee payers and the public
about these aspects of the annual
regulatory fee collection process.
A. Public Notices and Fact Sheets
22. Each year we post public notices
and fact sheets pertaining to regulatory
fees on our Web site. These documents
contain information about the payment
due date and relevant regulatory fee
payment procedures. We will continue
to post this information on https://
23 Geostationary orbit space station (‘‘GSO’’)
licensees received regulatory fee pre-bills 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
regulatory fee pre-bills for systems that were
licensed by the Commission and operational on or
before October 1 of the respective fiscal year.
24 A pre-bill is considered an account receivable
in the Commission’s accounting system. Pre-bills
reflect the amount owed and have a payment due
date of the last day of the regulatory fee payment
window. Consequently, if a pre-bill is not paid by
the 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.
25 See FY 2009 Report and Order at paras. 24, 26.
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30617
www.fcc.gov/fees/regfees.html, but as in
previous years, we will not send out
public notices and fact sheets to
regulatees en masse.
B. Assessment Notifications
1. Media Services Licensees
23. Beginning in FY 2003, we sent fee
assessment notifications via surface
mail to media services entities on a perfacility basis.26 These notifications
provided the assessed fee amount for
the facility in question, as well as the
data attributes that determined the fee
amount. We have since refined this
initiative to be more electronic and
paperless.27 In our FY 2010 NPRM, we
proposed to discontinue mailing the
media notifications beginning in FY
2011, relying instead on information on
the Commission’s Web site and the use
of the Commission-authorized Web site
at https://www.fccfees.com.28 We kept
the comment and reply comment period
open until September 30, 2010 to be
receptive to the needs of media
licensees. We received no comments or
reply comments on this particular issue.
Therefore, beginning in FY 2011, we
will discontinue mailing hardcopy
notification assessment letters to media
licensees.
24. Every ten years, when the United
States Census data is released, this data
is incorporated into the population
counts of AM & FM radio stations on a
county basis. These population counts,
along with the station’s class and type
of service, are the basis for determining
regulatory fees. Although the 2010
Census data has been completed, the
data is still subject to revisions. In
addition, because FY 2011 regulatory
fees are determined on the basis of the
station’s attributes as of October 1, 2010,
it would be inappropriate to apply
incomplete 2010 Census data in
26 As stated previously in a footnote, a pre-bill is
considered an account receivable in the
Commission’s accounting system. Pre-bills include
an amount owed and have a payment due date of
the last day of the regulatory fee payment window.
If a pre-bill is not paid by the due date, it becomes
delinquent and is subject to our debt collection
procedures. On the other hand, 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 accounting system as
a current debt.
27 Some of those refinements have been to
provide licensees with a Commission-authorized
Web site to update or correct any information
concerning their facilities, and to amend their feeexempt status, if need be. The notifications also
provide licensees with a telephone number to call
in the event that they need customer assistance.
28 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2010, Report and Order, 25 FCC
Rcd 9278 at para. 42 (2010) (‘‘FY 2010 Report and
Order’’).
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Federal Register / Vol. 76, No. 102 / Thursday, May 26, 2011 / Proposed Rules
determining FY 2011 regulatory fees for
radio stations. Therefore, we will apply
2010 Census data in determining the
population counts of radio stations as of
October 1, 2011, as part of our
calculations of FY 2012 regulatory fees.
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2. CMRS Cellular and Mobile Services
Assessments
25. As we have done in prior years,
our procedures for conveying CMRS
subscriber counts to providers are as
follows. We will mail an initial
assessment letter to Commercial Mobile
Radio Service (CMRS) providers using
data from the Numbering Resource
Utilization Forecast (‘‘NRUF’’) report
that is based on ‘‘assigned’’ number
counts that have been adjusted for
porting to net Type 0 ports (‘‘in’’ and
‘‘out’’).29 The letter will include a listing
of the carrier’s Operating Company
Numbers (‘‘OCNs’’) upon which the
assessment is based.30 The letters will
not include OCNs with their respective
assigned number counts, but rather, an
aggregate total of assigned numbers for
each carrier.
26. A carrier wishing to revise their
subscriber count can access Fee Filer
within a designated time frame to revise
their count. Providers should follow the
prompts in Fee Filer to record their
subscriber revisions, along with any
supporting documentation.31 The
Commission will then review the
revised count and supporting
documentation and either approve or
disapprove the submission in Fee Filer.
If the submission is disapproved, the
Commission will attempt to contact the
provider so that the provider will have
an opportunity to discuss its revised
subscriber count and/or provide
additional supporting documentation. If
we receive no response or correction to
the initial assessment letter, or we do
not reverse the disapproval of the
provider’s revised count submission, we
will expect the fee payment to be based
on the number of subscribers listed on
the initial assessment letter. Once the
timeframe for revision has passed, the
subscriber counts will be finalized.
These subscriber counts will then be the
basis upon which CMRS regulatory fees
will be expected. Providers will be able
to view their final subscriber counts
29 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2005 and Assessment and
Collection of Regulatory Fees for Fiscal Year 2004,
MD Docket Nos. 05–59 and 04–73, Report and
Order and Order on Reconsideration, 20 FCC Rcd
12259, 12264, paras. 38–44 (2005).
30 Id.
31 In the supporting documentation, the provider
will need to state a reason for the change, such as
a purchase or sale of a subsidiary, the date of the
transaction, and any other pertinent information
that will help to justify a reason for the change.
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online in Fee Filer. A final CMRS
assessment letter will not be mailed out.
27. Because some carriers do not file
the NRUF report, they may not receive
an initial letter of assessment. In these
instances, the carriers should compute
their fee payment using the standard
methodology 32 that is currently in place
for CMRS Wireless services (e.g.,
compute their subscriber counts as of
December 31, 2010), and submit their
fee payment accordingly. Whether a
carrier receives an assessment letter or
not, the Commission reserves the right
to audit the number of subscribers for
which regulatory fees are paid. In the
event that the Commission determines
that the number of subscribers paid is
inaccurate, the Commission will bill the
carrier for the difference between what
was paid and what should have been
paid.
3. Submarine Cable Allocation
28. The Commission collects a
revenue amount each year based on a
Congressional mandate. Because the
dollar amount differs each year, a
revenue apportionment is required each
year to determine the projected
regulatory fee revenue to be collected
from submarine cable providers and
from terrestrial/satellite facilities.33
Since FY 2009, the Commission has
used the 87.4/12.6 percent allocation
proposed in the Consensus Proposal as
the percentage upon which to determine
the regulatory fee revenue amounts for
submarine cable providers and
terrestrial/satellite facilities,
respectively.34 Each year, the
Commission reserves the right to revise
this 87.4/12.6 allocation. Although we
will continue to review this allocation
as part of our annual regulatory fee
proceeding, we do not at this time find
any basis to alter the 87.4/12.6 percent
revenue allocation for 2011 regulatory
fees.
4. Re-Assessment of Regulatory Fee
Issues in a Further Notice of Proposed
Rulemaking
29. Since 1994 when the first
regulatory fees were collected, the
communications industry has
undergone a rapid transformation. The
current basis of how regulatory fees are
32 See, e.g., Federal Communications
Commission, Regulatory Fees Fact Sheet: What You
Owe—Commercial Wireless Services for FY 2010 at
1 (released September 2010).
33 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2008, Second Report and Order,
24 FCC Rcd 4208 at n. 35 (2009) (‘‘Submarine Cable
Order’’).
34 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2009, Report and Order, 24 FCC
Rcd 10301 at para. 8 (2009) (‘‘FY 2009 Report and
Order’’).
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assessed, however, has changed only
slightly since its inception in 1994.35 In
FY 2008, the Commission released a
FNPRM which identified some of the
issues raised by commenters with regard
to the need for fundamental reform of
our regulatory fee assessment
methodology 36 From this rulemaking,
the Commission has already acted on
three of the issues: 1) a change in the
bearer circuit methodology for
calculating regulatory fees, 2) the
elimination of two regulatory fee
categories, the International Public
Fixed Radio and International High
Frequency Broadcast Stations, and 3)
the conversion of UHF and VHF
Television stations from analog to
digital television. In our FY 2010
Regulatory Fees Report & Order, we
stated that in a future proceeding, we
will ‘‘further examine the nature and
extent of all changes that need to be
made to our regulatory fee schedule and
calculations. In a separate and
forthcoming action, we will call for
comment on issues including, but not
limited to, how changes in the
telecommunications marketplace may
warrant rebalancing of regulatory fees
among existing service providers
* * *’’37 As our commitment to this
‘‘forthcoming action’’, the Commission
will by the end of 2011, initiate a further
rulemaking that will update the record
on regulatory fee rebalancing, as well as
expand this inquiry to include new
issues and services not covered by the
2008 FNPRM, such as whether and how
to re-assess the regulatory fee burden of
all fee categories, whether to incorporate
499–A wireless revenue in the
calculation of ITSP regulatory fees, and
whether to eliminate the regulatory fee
portion (but not the application fee
portion) of General Mobile Radio
Service (GMRS).
C. Streamlined Regulatory Fee Payment
Process
1. Cable Television Subscribers
30. We will continue to permit cable
television operators to base their
regulatory fee payment on their
company’s aggregate year-end
subscriber count, rather than requiring
them to report cable subscriber counts
on a per community unit identifier
(‘‘CUID’’) basis.
35 47
U.S.C. 159(a) and 159(b).
and Collection of Regulatory Fees
for Fiscal Year 2008, MD Docket No. 08–65, RM–
11312, Report and Order and Further Notice of
Proposed Rulemaking, 73 FR 50201 (August 26,
2008) at paras. 38–41.
37 See Assessment and Collection of Regulatory
Fees for Fiscal Year 2010, MD Docket No. 10–87,
Report and Order, 25 FCC Rcd 9278 para. 31 (2010).
36 Assessment
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2. CMRS Cellular and Mobile Providers
31. In FY 2006, we streamlined the
CMRS payment process by eliminating
the requirement for CMRS providers to
identify their individual call signs when
making their regulatory fee payment,
instead allowing CMRS providers to pay
their regulatory fees only at the
aggregate subscriber level without
having to identify their various call
signs.38 We will continue this practice
in FY 2011. In FY 2007, we
consolidated the CMRS cellular and
CMRS mobile fee categories into one fee
category with a single fee code, thereby
eliminating the requirement for CMRS
providers to separate their subscriber
counts into CMRS cellular and CMRS
mobile fee categories during the
regulatory fee payment process. This
consolidation of fee categories enabled
the Commission to process payments
more quickly and accurately. For FY
2011, we will continue this practice of
combining the CMRS cellular and
CMRS mobile fee categories into one
regulatory fee category.
3. Interstate Telecommunications
Service Providers (‘‘ITSP’’)
32. In FY 2007, we adopted a proposal
to round lines 14 (total subject
revenues) and 16 (total regulatory fee
owed) on FCC Form 159–W to the
nearest dollar. This revision enabled the
Commission to process the ITSP
regulatory fee payments more quickly
because rounding was performed in a
consistent manner and eliminated
processing issues that occurred in prior
years. In FY 2011, we will continue
rounding lines 14 and 16 when
calculating the FY 2011 ITSP fee
obligation. In addition, we will continue
the practice of not mailing out Form
159–W via surface mail.
D. Payment of Regulatory Fees
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1. Lock Box Bank
33. All lock box payments to the
Commission for FY 2011 will be
processed by U.S. Bank, St. Louis,
Missouri, and payable to the FCC.
During the regulatory fee season, for
those licensees paying by check, money
order, or by credit card using Form 159–
E remittance advice, the fee payment
and Form 159–E remittance advice
should be mailed to the following
address: Federal Communications
Commission, Regulatory Fees, P.O. Box
979084, St. Louis, MO 63197–9000.
Additional payment options and
38 See
Assessment and Collection of Regulatory
Fees for Fiscal Year 2006, MD Docket No. 06–68,
Report and Order, 21 FCC Rcd 8092, 8105, para. 48
(2006).
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instructions are posted at https://
www.fcc.gov/fees/regfees.html.
2. Receiving Bank for Wire Payments
34. The receiving bank for all wire
payments is the Federal Reserve Bank,
New York, New York (TREAS NYC).
When making a wire transfer, regulatees
must fax a copy of their Fee Filer
generated Form 159–E to U.S. Bank, St.
Louis, Missouri at (314) 418–4232 at
least one hour before initiating the wire
transfer (but on the same business day),
so as not to delay crediting their
account. Regulatees should discuss
arrangements (including bank closing
schedules) with their bankers several
days before they plan to make the wire
transfer to allow sufficient time for the
transfer to be initiated and completed
before the deadline. Complete
instructions for making wire payments
are posted at https://www.fcc.gov/fees/
wiretran.html.
3. De Minimis Regulatory Fees
35. Regulatees whose total FY 2011
regulatory fee liability, including all
categories of fees for which payment is
due, is less than $10 are exempted from
payment of FY 2011 regulatory fees.
4. Standard Fee Calculations and
Payment Dates
36. The Commission will accept fee
payments made in advance of the
window for the payment of regulatory
fees. The responsibility for payment of
fees by service category is as follows:
• Media Services: Regulatory fees
must be paid for initial construction
permits that were granted on or before
October 1, 2010 for AM/FM radio
stations, VHF/UHF full service
television stations, and satellite
television stations. Regulatory fees must
be paid for all broadcast facility licenses
granted on or before October 1, 2010. In
instances where a permit or license is
transferred or assigned after October 1,
2010, responsibility for payment rests
with the holder of the permit or license
as of the fee due date.
• Wireline (Common Carrier)
Services: Regulatory fees must be paid
for authorizations that were granted on
or before October 1, 2010. In instances
where a permit or license is transferred
or assigned after October 1, 2010,
responsibility for payment rests with the
holder of the permit or license as of the
fee due date. We note that audio
bridging service providers are included
in this category.39
39 Audio bridging services are toll
teleconferencing services, and audio bridging
service providers are required to contribute directly
to the universal service fund based on revenues
from these services. On June 30, 2008, the
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• Wireless Services: CMRS cellular,
mobile, and messaging services (fees
based on number of subscribers or
telephone number count): Regulatory
fees must be paid for authorizations that
were granted on or before October 1,
2010. The number of subscribers, units,
or telephone numbers on December 31,
2010 will be used as the basis from
which to calculate the fee payment. In
instances where a permit or license is
transferred or assigned after October 1,
2010, responsibility for payment rests
with the holder of the permit or license
as of the fee due date.
• The first eleven regulatory fee
categories in our Schedule of Regulatory
Fees (see Table—Schedule of Regulatory
Fees) pay ‘‘small multi-year wireless
regulatory fees.’’ Entities pay these
regulatory fees in advance for the entire
amount of their five-year or ten-year
term of initial license, and only pay
regulatory fees again when the license is
renewed or a new license is obtained.
We include these fee categories in our
Schedule of Regulatory Fees to
publicize our estimates of the number of
‘‘small multi-year wireless’’ licenses that
will be renewed or newly obtained in
FY 2011.
• Multichannel Video Programming
Distributor Services (cable television
operators and CARS licensees):
Regulatory fees must be paid for the
number of basic cable television
subscribers as of December 31, 2010.40
Regulatory fees also must be paid for
CARS licenses that were granted on or
before October 1, 2010. In instances
where a permit or license is transferred
or assigned after October 1, 2010,
responsibility for payment rests with the
holder of the permit or license as of the
fee due date.
• International Services: Regulatory
fees must be paid for earth stations,
geostationary orbit space stations and
non-geostationary orbit satellite systems
that were licensed and operational on or
before October 1, 2010. In instances
Commission released the InterCall Order, in which
the Commission stated that InterCall, Inc. and all
similarly situated audio bridging service providers
are required to contribute directly to the universal
service fund. See Request for Review by InterCall,
Inc. of Decision of Universal Service Administrator,
CC Docket No. 96–45, Order, 23 FCC Rcd 10731
(2008) (‘‘InterCall Order’’).
40 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 2010,
rather than on a count as of December 31, 2010.
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where a permit or license is transferred
or assigned after October 1, 2010,
responsibility for payment rests with the
holder of the permit or license as of the
fee due date.
• International Services: Submarine
Cable Systems: Regulatory fees for
submarine cable systems are to be paid
on a per cable landing license basis
based on circuit capacity as of December
31, 2010. In instances where a license is
transferred or assigned after October 1,
2010, responsibility for payment rests
with the holder of the license as of the
fee due date. For regulatory fee
purposes, the allocation in FY 2011 will
remain at 87.6 percent for submarine
cable and 12.4 percent for satellite/
terrestrial facilities.
• International Services: Terestrial
and Satellite Services: Finally,
regulatory fees for International Bearer
Circuits are to be paid by facilities-based
common carriers that have active (used
or leased) international bearer circuits
as of December 31, 2010 in any
terrestrial or satellite 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, noncommon 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. ‘‘Active circuits’’ for
these purposes include backup and
redundant circuits as of December 31,
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2010. Whether circuits are used
specifically for voice or data is not
relevant for these purposes in
determining that they are active circuits.
In instances where a permit or license
is transferred or assigned after October
1, 2010, responsibility for payment rests
with the holder of the permit or license
as of the fee due date. For regulatory fee
purposes, the allocation in FY 2011 will
remain at 87.6 percent for submarine
cable and 12.4 percent for satellite/
terrestrial facilities.
E. Enforcement
37. To be considered timely,
regulatory fee payments must be
received and stamped at the lockbox
bank by the last day of the regulatory fee
filing window. Section 9(c) of the Act
requires us to impose a late payment
penalty of 25 percent of the unpaid
amount to be assessed on the first day
following the deadline date for filing of
these fees.41 Failure to pay regulatory
fees and/or any late penalty will subject
regulatees to sanctions, including those
set forth in section 1.1910 of the
Commission’s rules 42 and in the Debt
Collection Improvement Act of 1996
(‘‘DCIA’’).43 We also assess
41 47
U.S.C. 159(c).
47 CFR 1.1910.
43 Delinquent debt owed to the Commission
triggers application of the ‘‘red light rule’’ which
requires offsets or holds on pending disbursements.
47 CFR 1.1910. In 2004, the Commission adopted
rules implementing the requirements of the DCIA.
See Amendment of Parts 0 and 1 of the
Commission’s Rules, MD Docket No. 02–339, Report
and Order, 19 FCC Rcd 6540 (2004); 47 CFR Part
42 See
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administrative processing charges on
delinquent debts to recover additional
costs incurred in processing and
handling the related debt pursuant to
the DCIA and section 1.1940(d) of the
Commission’s rules.44 These
administrative processing charges will
be assessed on any delinquent
regulatory fee, in addition to the 25
percent late charge penalty. In case of
partial payments (underpayments) of
regulatory fees, 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, then the
25 percent late charge penalty (and
other charges and/or sanctions, as
appropriate) will be assessed on the
portion that is not paid in a timely
manner.
38. 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.45 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).
BILLING CODE 6712–01–P
1, Subpart O, Collection of Claims Owed the United
States.
44 47 CFR 1.1940(d).
45 See
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47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.
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BILLING CODE 6712–01–C
TABLE—REFERENCE TO FY 2010 SCHEDULE OF REGULATORY FEES
FY 2010 radio station regulatory fees
AM Class A
≤25,000 ....................................................
25,001–75,000 .........................................
75,001–150,000 .......................................
150,001–500,000 .....................................
500,001–1,200,000 ..................................
1,200,001–3,000,000 ...............................
>3,000,000 ...............................................
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AM Class B
$675
1,350
2,025
3,050
4,400
6,750
8,100
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AM Class C
$550
1,075
1,350
2,300
3,500
5,400
6,475
Fmt 4702
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AM Class D
$500
750
1,000
1,500
2,500
3,750
4,750
E:\FR\FM\26MYP1.SGM
FM Classes A,
B1 & C3
FM Classes B,
C, C0, C1 &
C2
$650
1,325
1,825
2,800
4,450
7,250
9,250
$825
1,450
2,725
3,550
5,225
8,350
10,850
$575
875
1,450
1,725
2,875
4,600
5,750
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Federal Register / Vol. 76, No. 102 / Thursday, May 26, 2011 / Proposed Rules
30623
TABLE—REFERENCE TO FY 2010 SCHEDULE OF REGULATORY FEES
[International Bearer Circuits—Submarine Cable]
Submarine cable systems (capacity as of December
31, 2009)
Fee amount
< 2.5 Gbps .....................................................................
2.5 Gbps or greater, but less than 5 Gbps ...................
5 Gbps or greater, but less than 10 Gbps ....................
10 Gbps or greater, but less than 20 Gbps ..................
20 Gbps or greater ........................................................
Initial Regulatory Flexibility Analysis
39. As required by the Regulatory
Flexibility Act (‘‘RFA’’),46 the
Commission prepared this Initial
Regulatory Flexibility Analysis (‘‘IRFA’’)
of the possible significant economic
impact on small entities by the policies
and rules proposed in this 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 NPRM.
The Commission will send a copy of the
Notice, including the IRFA, to the Chief
Counsel for Advocacy of the Small
Business Administration.47 In addition,
the Notice and IRFA (or summaries
thereof) will be published in the Federal
Register.48
A. Need for, and Objectives of, the
Notice
40. This rulemaking proceeding was
initiated for the Commission to obtain
comments regarding its proposed
amendment to its Schedule of
Regulatory Fees in the amount of
$335,794,000, which is the amount that
Congress has required the Commission
to recover. The Commission seeks to
collect the necessary amount through its
revised Schedule of Regulatory Fees in
the most efficient manner possible and
without undue public burden.
$14,625
29,250
58,500
116,975
233,950
Address
FCC,
FCC,
FCC,
FCC,
FCC,
International,
International,
International,
International,
International,
P.O.
P.O.
P.O.
P.O.
P.O.
C. Description and Estimate of the
Number of Small Entities To Which the
Rules Will Apply
42. 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.50 The RFA generally defines
the term ‘‘small entity’’ as having the
same meaning as the terms ‘‘small
business,’’ ‘‘small organization,’’ and
‘‘small governmental jurisdiction.’’ 51 In
addition, the term ‘‘small business’’ has
the same meaning as the term ‘‘small
business concern’’ under the Small
Business Act.52 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.53
43. Small Businesses. Nationwide,
there are a total of approximately 29.6
million small businesses, according to
the SBA.54
44. Small Organizations. Nationwide,
as of 2002, there are approximately 1.6
million small organizations.55 A ‘‘small
organization’’ is generally ‘‘any not-forprofit enterprise which is independently
owned and operated and is not
dominant in its field.’’ 56
45. Small Governmental Jurisdictions.
The term ‘‘small governmental
jurisdiction’’ is defined generally as
‘‘governments of cities, towns,
townships, villages, school districts, or
B. Legal Basis
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41. 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.49
46 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’’).
47 5 U.S.C. 603(a).
48 Id.
49 47 U.S.C. 154(i) and (j), 159, and 303(r).
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50 5
U.S.C. 603(b)(3).
U.S.C. 601(6).
52 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.’’
53 15 U.S.C. 632.
54 See SBA, Office of Advocacy, ‘‘Frequently
Asked Questions,’’ https://web.sba.gov/faqs
(accessed Jan. 2009).
55 Independent Sector, The New Nonprofit
Almanac & Desk Reference (2002).
56 5 U.S.C. 601(4).
51 5
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Box
Box
Box
Box
Box
979084,
979084,
979084,
979084,
979084,
St.
St.
St.
St.
St.
Louis,
Louis,
Louis,
Louis,
Louis,
MO
MO
MO
MO
MO
63197–9000.
63197–9000.
63197–9000.
63197–9000.
63197–9000.
special districts, with a population of
less than fifty thousand.’’ 57 Census
Bureau data for 2002 indicate that there
were 87,525 local governmental
jurisdictions in the United States.58 We
estimate that, of this total, 84,377
entities were ‘‘small governmental
jurisdictions.’’ 59 Thus, we estimate that
most governmental jurisdictions are
small.
46. 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.’’ 60 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.61
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.
47. Incumbent Local Exchange
Carriers (‘‘ILECs’’). Neither the
Commission nor the SBA has developed
a small business size standard
specifically for incumbent local
57 5
U.S.C. 601(5).
Census Bureau, Statistical Abstract of the
United States: 2006, Section 8, p. 272, Table 415.
59 We assume that the villages, school districts,
and special districts are small, and total 48,558. See
U.S. Census Bureau, Statistical Abstract of the
United States: 2006, Section 8, p. 273, Table 417.
For 2002, Census Bureau data indicate that the total
number of county, municipal, and township
governments nationwide was 38,967, of which
35,819 were small. Id.
60 15 U.S.C. 632.
61 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).
58 U.S.
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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.62 According to
Commission data,63 1,311 carriers have
reported that they are engaged in the
provision of incumbent local exchange
services. Of these 1,311 carriers, an
estimated 1,024 have 1,500 or fewer
employees and 287 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 action.
48. Competitive Local Exchange
Carriers (‘‘CLECs’’), Competitive Access
Providers (‘‘CAPs’’), ‘‘Shared-Tenant
Service Providers,’’ and ‘‘Other Local
Service Providers.’’ Neither the
Commission nor the SBA has developed
a small business size standard
specifically for these service providers.
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.64 According to Commission
data,65 1,005 carriers have reported that
they are engaged in the provision of
either competitive access provider
services or competitive local exchange
carrier services. Of these 1,005 carriers,
an estimated 918 have 1,500 or fewer
employees and 87 have more than 1,500
employees. In addition, 16 carriers have
reported that they are ‘‘Shared-Tenant
Service Providers,’’ and all 16 are
estimated to have 1,500 or fewer
employees. In addition, 89 carriers have
reported that they are ‘‘Other Local
Service Providers.’’ Of the 89, all have
1,500 or fewer employees.
Consequently, the Commission
estimates that most providers of
competitive local exchange service,
competitive access providers, ‘‘SharedTenant Service Providers,’’ and ‘‘Other
Local Service Providers’’ are small
entities that may be affected by our
action.
49. Local Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
that size standard, such a business is
small if it has 1,500 or fewer
62 13 CFR 121.201, North American Industry
Classification System (NAICS) code 517110.
63 FCC, Wireline Competition Bureau, Industry
Analysis and Technology Division, ‘‘Trends in
Telephone Service’’ at Table 5.3, Page 5–5 (Aug.
2008) (‘‘Trends in Telephone Service’’). This source
uses data that are current as of November 1, 2006.
64 13 CFR 121.201, NAICS code 517110.
65 ‘‘Trends in Telephone Service’’ at Table 5.3.
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employees.66 According to Commission
data,67 151 carriers have reported that
they are engaged in the provision of
local resale services. Of these, an
estimated 149 have 1,500 or fewer
employees and two have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of local resellers are small entities that
may be affected by our action.
50. Toll Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
that size standard, such a business is
small if it has 1,500 or fewer
employees.68 According to Commission
data,69 815 carriers have reported that
they are engaged in the provision of toll
resale services. Of these, an estimated
787 have 1,500 or fewer employees and
28 have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of toll
resellers are small entities that may be
affected by our action.
51. Payphone Service Providers
(‘‘PSPs’’). Neither the Commission nor
the SBA has developed a small business
size standard specifically for payphone
services providers. 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.70 According to
Commission data,71 526 carriers have
reported that they are engaged in the
provision of payphone services. Of
these, an estimated 524 have 1,500 or
fewer employees and two have more
than 1,500 employees. Consequently,
the Commission estimates that the
majority of payphone service providers
are small entities that may be affected
by our action.
52. Interexchange Carriers (‘‘IXCs’’).
Neither the Commission nor the SBA
has developed a small business size
standard specifically for providers of
interexchange 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.72 According to
Commission data,73 300 carriers have
reported that they are engaged in the
provision of interexchange service. Of
these, an estimated 268 have 1,500 or
CFR 121.201, NAICS code 517310.
in Telephone Service’’ at Table 5.3.
68 13 CFR 121.201, NAICS code 517310.
69 ‘‘Trends in Telephone Service’’ at Table 5.3.
70 3 CFR 121.201, NAICS code 517110.
71 ‘‘Trends in Telephone Service’’ at Table 5.3.
72 13 CFR 121.201, NAICS code 517110.
73 ‘‘Trends in Telephone Service’’ at Table 5.3.
fewer employees and 32 have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of IXCs are small entities that may be
affected by our action.
53. Operator Service Providers
(‘‘OSPs’’). Neither the Commission nor
the SBA has developed a small business
size standard specifically for operator
service providers. 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.74 According to
Commission data,75 28 carriers have
reported that they are engaged in the
provision of operator services. Of these,
an estimated 27 have 1,500 or fewer
employees and one has more than 1,500
employees. Consequently, the
Commission estimates that the majority
of OSPs are small entities that may be
affected by our action.
54. Prepaid Calling Card Providers.
Neither the Commission nor the SBA
has developed a small business size
standard specifically for prepaid calling
card providers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees.76 According to Commission
data,77 88 carriers have reported that
they are engaged in the provision of
prepaid calling cards. Of these, an
estimated 85 have 1,500 or fewer
employees and three have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of prepaid calling card providers are
small entities that may be affected by
our action.
55. 800 and 800-Like Service
Subscribers.78 Neither the Commission
nor the SBA has developed a small
business size standard specifically for
800 and 800-like service (‘‘toll free’’)
subscribers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees.79 The most reliable source
of information regarding the number of
these service subscribers appears to be
data the Commission receives from
Database Service Management on the
800, 866, 877, and 888 numbers in
66 13
67 ‘‘Trends
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74 13
CFR 121.201, NAICS code 517110.
in Telephone Service’’ at Table 5.3.
76 13 CFR 121.201, NAICS code 517310.
77 ‘‘Trends in Telephone Service’’ at Table 5.3.
78 We include all toll-free number subscribers in
this category.
79 13 CFR 121.201, NAICS code 517310.
75 ‘‘Trends
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use.80 According to our data, at the end
of December 2007, the number of 800
numbers assigned was 7,860,000; the
number of 888 numbers assigned was
5,210,184; the number of 877 numbers
assigned was 4,388,682; and the number
of 866 numbers assigned was 7,029,116.
We do not have data specifying the
number of these subscribers that are
independently owned and operated or
have 1,500 or fewer employees, and
thus are unable at this time to estimate
with greater precision the number of toll
free subscribers that would qualify as
small businesses under the SBA size
standard. Consequently, we estimate
that there are 7,860,000 or fewer small
entity 800 subscribers; 5,210,184 or
fewer small entity 888 subscribers;
4,388,682 or fewer small entity 877
subscribers, and 7,029,116 or fewer
entity 866 subscribers.
56. Satellite Telecommunications and
All Other Telecommunications. These
two economic census categories address
the satellite industry. The first category
has a small business size standard of
$15 million or less in average annual
receipts, under SBA rules.81 The second
has a size standard of $25 million or less
in annual receipts.82 The most current
Census Bureau data in this context,
however, are from the (last) economic
census of 2002, and we will use those
figures to gauge the prevalence of small
businesses in these categories.83
57. The category of Satellite
Telecommunications ‘‘comprises
establishments primarily engaged in
providing telecommunications services
to other establishments in the
telecommunications and broadcasting
industries by forwarding and receiving
communications signals via a system of
satellites or reselling satellite
telecommunications.’’ 84 For this
category, Census Bureau data for 2002
show that there were a total of 371 firms
that operated for the entire year.85 Of
this total, 307 firms had annual receipts
of under $10 million, and 26 firms had
receipts of $10 million to $24,999,999.86
Consequently, we estimate that the
majority of Satellite
Telecommunications firms are small
80 ‘‘Trends in Telephone Service’’ at Tables 18.4,
18.5, 18.6, and 18.7.
81 13 CFR 121.201, NAICS code 517410.
82 13 CFR 121.201, NAICS code 517919.
83 13 CFR 121.201, NAICS codes 517410 and
517910 (2002).
84 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517410 Satellite Telecommunications’’; https://
www.census.gov/naics/2007/def/ND517410.HTM.
85 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization),’’
Table 4, NAICS code 517410 (issued Nov. 2005).
86 Id. An additional 38 firms had annual receipts
of $25 million or more.
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entities that might be affected by our
action.
58. The second category of All Other
Telecommunications comprises, inter
alia, ‘‘establishments primarily engaged
in providing specialized
telecommunications services, such as
satellite tracking, communications
telemetry, and radar station operation.
This industry also includes
establishments primarily engaged in
providing satellite terminal stations and
associated facilities connected with one
or more terrestrial systems and capable
of transmitting telecommunications to,
and receiving telecommunications from,
satellite systems.’’ 87 For this category,
Census Bureau data for 2002 show that
there were a total of 332 firms that
operated for the entire year.88 Of this
total, 303 firms had annual receipts of
under $10 million and 15 firms had
annual receipts of $10 million to
$24,999,999.89 Consequently, we
estimate that the majority of All Other
Telecommunications firms are small
entities that might be affected by our
action.
59. Wireless Telecommunications
Carriers (except Satellite). Since 2007,
the Census Bureau has placed wireless
firms within this new, broad, economic
census category.90 Prior to that time,
such firms were within the nowsuperseded categories of ‘‘Paging’’ and
‘‘Cellular and Other Wireless
Telecommunications.’’ 91 Under the
present and prior categories, the SBA
has deemed a wireless business to be
small if it has 1,500 or fewer
employees.92 Because Census Bureau
data are not yet available for the new
category, we will estimate small
business prevalence using the prior
categories and associated data. For the
category of Paging, data for 2002 show
that there were 807 firms that operated
87 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517919 All Other Telecommunications’’; https://
www.census.gov/naics/2007/def/
ND517919.HTM#N517919.
88 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization),’’
Table 4, NAICS code 517910 (issued Nov. 2005).
89 Id. An additional 14 firms had annual receipts
of $25 million or more.
90 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517210 Wireless Telecommunications Categories
(Except Satellite)’’; https://www.census.gov/naics/
2007/def/ND517210.HTM#N517210.
91 U.S. Census Bureau, 2002 NAICS Definitions,
‘‘517211 Paging’’; https://www.census.gov/epcd/
naics02/def/NDEF517.HTM.; U.S. Census Bureau,
2002 NAICS Definitions, ‘‘517212 Cellular and
Other Wireless Telecommunications’’; https://
www.census.gov/epcd/naics02/def/NDEF517.HTM.
92 13 CFR 121.201, NAICS code 517210 (2007
NAICS). The now-superseded, pre-2007 CFR
citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
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for the entire year.93 Of this total, 804
firms had employment of 999 or fewer
employees, and three firms had
employment of 1,000 employees or
more.94 For the category of Cellular and
Other Wireless Telecommunications,
data for 2002 show that there were 1,397
firms that operated for the entire year.95
Of this total, 1,378 firms had
employment of 999 or fewer employees,
and 19 firms had employment of 1,000
employees or more.96 Thus, we estimate
that the majority of wireless firms are
small.
60. Auctions. Initially, we note that,
as a general matter, the number of
winning bidders that qualify as small
businesses at the close of an auction
does not necessarily represent the
number of small businesses currently in
service. Also, the Commission does not
generally track subsequent business size
unless, in the context of assignments or
transfers, unjust enrichment issues are
implicated.
61. Common Carrier Paging. As noted,
the SBA has developed a small business
size standard for Wireless
Telecommunications Carriers (except
Satellite) firms within the broad
economic census categories of ‘‘Cellular
and Other Wireless
Telecommunications.’’ 97 Since 2007,
the Census Bureau has placed wireless
firms within this new, broad, economic
census category.98 Prior to that time,
such firms were within the nowsuperseded categories of ‘‘Paging’’ and
‘‘Cellular and Other Wireless
Telecommunications.’’ 99 Under the
present and prior categories, the SBA
has deemed a wireless business to be
small if it has 1,500 or fewer
93 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization,’’
Table 5, NAICS code 517211 (issued Nov. 2005).
94 Id. The census data do not provide a more
precise estimate of the number of firms that have
employment of 1,500 or fewer employees; the
largest category provided is for firms with ‘‘1000
employees or more.’’
95 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization,’’
Table 5, NAICS code 517212 (issued Nov. 2005).
96 Id. The census data do not provide a more
precise estimate of the number of firms that have
employment of 1,500 or fewer employees; the
largest category provided is for firms with ‘‘1000
employees or more.’’
97 13 CFR 121.201, NAICS code 517212.
98 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517210 Wireless Telecommunications Categories
(Except Satellite)’’; https://www.census.gov/naics/
2007/def/ND517210.HTM#N517210.
99 U.S. Census Bureau, 2002 NAICS Definitions,
‘‘517211 Paging’’; https://www.census.gov/epcd/
naics02/def/NDEF517.HTM.; U.S. Census Bureau,
2002 NAICS Definitions, ‘‘517212 Cellular and
Other Wireless Telecommunications’’; https://
www.census.gov/epcd/naics02/def/NDEF517.HTM.
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employees.100 Because Census Bureau
data are not yet available for the new
category, we will estimate small
business prevalence using the prior
categories and associated data. For the
category of Paging, data for 2002 show
that there were 807 firms that operated
for the entire year.101 Of this total, 804
firms had employment of 999 or fewer
employees, and three firms had
employment of 1,000 employees or
more.102 For the category of Cellular and
Other Wireless Telecommunications,
data for 2002 show that there were 1,397
firms that operated for the entire
year.103 Of this total, 1,378 firms had
employment of 999 or fewer employees,
and 19 firms had employment of 1,000
employees or more.104 Thus, we
estimate that the majority of wireless
firms are small.
62. In addition, in the Paging Second
Report and Order, the Commission
adopted a size standard for ‘‘small
businesses’’ for purposes of determining
their eligibility for special provisions
such as bidding credits and installment
payments.105 A small business is an
entity that, together with its affiliates
and controlling principals, has average
gross revenues not exceeding $15
million for the preceding three years.106
The SBA has approved this
definition.107 An initial auction of
Metropolitan Economic Area (‘‘MEA’’)
licenses was conducted in the year
100 13 CFR 121.201, NAICS code 517210 (2007
NAICS). The now-superseded, pre-2007 CFR
citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
101 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization,’’
Table 5, NAICS code 517211 (issued Nov. 2005).
102 Id. The census data do not provide a more
precise estimate of the number of firms that have
employment of 1,500 or fewer employees; the
largest category provided is for firms with ‘‘1000
employees or more.’’
103 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization,’’
Table 5, NAICS code 517212 (issued Nov. 2005).
104 Id. The census data do not provide a more
precise estimate of the number of firms that have
employment of 1,500 or fewer employees; the
largest category provided is for firms with ‘‘1000
employees or more.’’
105 Revision of Part 22 and Part 90 of the
Commission’s Rules to Facilitate Future
Development of Paging Systems, Second Report and
Order, 12 FCC Rcd 2732, 2811–2812, paras. 178–
181 (‘‘Paging Second Report and Order’’); see also
Revision of Part 22 and Part 90 of the Commission’s
Rules to Facilitate Future Development of Paging
Systems, Memorandum Opinion and Order on
Reconsideration, 14 FCC Rcd 10030, 10085–10088,
paras. 98–107 (1999).
106 Paging Second Report and Order, 12 FCC Rcd
at 2811, para. 179.
107 See Letter from Aida Alvarez, Administrator,
SBA, to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications
Bureau (‘‘WTB’’), FCC (Dec. 2, 1998) (‘‘Alvarez Letter
1998’’).
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2000. Of the 2,499 licenses auctioned,
985 were sold.108 Fifty-seven companies
claiming small business status won 440
licenses.109 A subsequent auction of
MEA and Economic Area (‘‘EA’’)
licenses was held in the year 2001. Of
the 15,514 licenses auctioned, 5,323
were sold.110 One hundred thirty-two
companies claiming small business
status purchased 3,724 licenses. A third
auction, consisting of 8,874 licenses in
each of 175 EAs and 1,328 licenses in
all but three of the 51 MEAs, was held
in 2003. Seventy-seven bidders claiming
small or very small business status won
2,093 licenses.111
63. Currently, there are approximately
74,000 Common Carrier Paging licenses.
According to the most recent Trends in
Telephone Service, 281 carriers reported
that they were engaged in the provision
of ‘‘paging and messaging’’ services.112
Of these, an estimated 279 have 1,500 or
fewer employees and two have more
than 1,500 employees.113 We estimate
that the majority of common carrier
paging providers would qualify as small
entities under the SBA definition.
64. 2.3 GHz Wireless Communications
Services. This service can be used for
fixed, mobile, radiolocation, and digital
audio broadcasting satellite uses. The
Commission defined ‘‘small business’’
for the wireless communications
services (‘‘WCS’’) auction as an entity
with average gross revenues of $40
million for each of the three preceding
years, and a ‘‘very small business’’ as an
entity with average gross revenues of
$15 million for each of the three
preceding years.114 The SBA has
approved these definitions.115 The
Commission auctioned geographic area
licenses in the WCS service. In the
auction, which was conducted in 1997,
there were seven bidders that won 31
licenses that qualified as very small
business entities, and one bidder that
108 See ‘‘929 and 931 MHz Paging Auction
Closes,’’ Public Notice, 15 FCC Rcd 4858 (WTB
2000).
109 See id.
110 See ‘‘Lower and Upper Paging Band Auction
Closes,’’ Public Notice, 16 FCC Rcd 21821 (WTB
2002).
111 See ‘‘Lower and Upper Paging Bands Auction
Closes,’’ Public Notice, 18 FCC Rcd 11154 (WTB
2003). The current number of small or very small
business entities that hold wireless licenses may
differ significantly from the number of such entities
that won in spectrum auctions due to assignments
and transfers of licenses in the secondary market
over time. In addition, some of the same small
business entities may have won licenses in more
than one auction.
112 ‘‘Trends in Telephone Service’’ at Table 5.3.
113 Id.
114 Amendment of the Commission’s Rules to
Establish Part 27, the Wireless Communications
Service (WCS), Report and Order, 12 FCC Rcd
10785, 10879, para. 194 (1997).
115 See Alvarez Letter 1998.
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won one license that qualified as a small
business entity.
65. 1670–1675 MHz Services. An
auction for one license in the 1670–1675
MHz band was conducted in 2003. One
license was awarded. The winning
bidder was not a small entity.
66. Wireless Telephony. Wireless
telephony includes cellular, personal
communications services, and
specialized mobile radio telephony
carriers. As noted, the SBA has
developed a small business size
standard for Wireless
Telecommunications Carriers (except
Satellite).116 Under the SBA small
business size standard, a business is
small if it has 1,500 or fewer
employees.117 According to Trends in
Telephone Service data, 434 carriers
reported that they were engaged in
wireless telephony.118 Of these, an
estimated 222 have 1,500 or fewer
employees and 212 have more than
1,500 employees.119 We have estimated
that 222 of these are small under the
SBA small business size standard.
67. Broadband Personal
Communications Service. The
broadband personal communications
services (‘‘PCS’’) spectrum is divided
into six frequency blocks designated A
through F, and the Commission has held
auctions for each block. The
Commission has created a small
business size standard for Blocks C and
F as an entity that has average gross
revenues of less than $40 million in the
three previous calendar years.120 For
Block F, an additional small business
size standard for ‘‘very small business’’
was added and is defined as an entity
that, together with its affiliates, has
average gross revenues of not more than
$15 million for the preceding three
calendar years.121 These small business
size standards, in the context of
broadband PCS auctions, have been
approved by the SBA.122 No small
businesses within the SBA-approved
small business size standards bid
successfully for licenses in Blocks A
and B. There were 90 winning bidders
that qualified as small entities in the
Block C auctions. A total of 93 ‘‘small’’
and ‘‘very small’’ business bidders won
approximately 40 percent of the 1,479
116 13
CFR 121.201, NAICS code 517210.
117 Id.
in Telephone Service’’ at Table 5.3.
in Telephone Service’’ at Table 5.3.
120 See Amendment of Parts 20 and 24 of the
Commission’s Rules—Broadband PCS Competitive
Bidding and the Commercial Mobile Radio Service
Spectrum Cap, Report and Order, 11 FCC Rcd 7824,
7850–7852, paras. 57–60 (1996) (‘‘PCS Report and
Order’’); see also 47 CFR 24.720(b).
121 See PCS Report and Order, 11 FCC Rcd at
7852, para. 60.
122 See Alvarez Letter 1998.
118 ‘‘Trends
119 ‘‘Trends
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licenses for Blocks D, E, and F.123 In
1999, the Commission reauctioned 155
C, D, E, and F Block licenses; there were
113 small business winning bidders.124
68. In 2001, the Commission
completed the auction of 422 C and F
Broadband PCS licenses in Auction 35.
Of the 35 winning bidders in this
auction, 29 qualified as ‘‘small’’ or ‘‘very
small’’ businesses.125 Subsequent
events, concerning Auction 35,
including judicial and agency
determinations, resulted in a total of 163
C and F Block licenses being available
for grant. In 2005, the Commission
completed an auction of 188 C block
licenses and 21 F block licenses in
Auction 58. There were 24 winning
bidders for 217 licenses.126 Of the 24
winning bidders, 16 claimed small
business status and won 156 licenses. In
2007, the Commission completed an
auction of 33 licenses in the A, C, and
F Blocks in Auction 71.127 Of the 14
winning bidders, six were designated
entities.128 In 2008, the Commission
completed an auction of 20 Broadband
PCS licenses in the C, D, E and F block
licenses in Auction 78.129
69. Advanced Wireless Services. In
2006, the Commission conducted its
first auction of Advanced Wireless
Services licenses in the 1710–1755 MHz
and 2110–2155 MHz bands (‘‘AWS–1’’),
designated as Auction 66.130 The
Commission defined ‘‘small business’’ as
an entity with attributed average annual
gross revenues that exceeded $15
million and did not exceed $40 million
for the preceding three years.131 A small
business received a 15 percent discount
123 FCC News, ‘‘Broadband PCS, D, E and F Block
Auction Closes,’’ No. 71744 (rel. Jan. 14, 1997).
124 See ‘‘C, D, E, and F Block Broadband PCS
Auction Closes,’’ Public Notice, 14 FCC Rcd 6688
(WTB 1999).
125 See ‘‘C and F Block Broadband PCS Auction
Closes; Winning Bidders Announced,’’ Public
Notice, 16 FCC Rcd 2339 (2001).
126 See ‘‘Broadband PCS Spectrum Auction
Closes; Winning Bidders Announced for Auction
No. 58,’’ Public Notice, 20 FCC Rcd 3703 (2005).
127 See ‘‘Auction of Broadband PCS Spectrum
Licenses Closes; Winning Bidders Announced for
Auction No. 71,’’ Public Notice, 22 FCC Rcd 9247
(2007).
128 Id.
129 See Auction of AWS–1 and Broadband PCS
Licenses Rescheduled For August 13, 2008, Notice
of Filing Requirements, Minimum Opening Bids,
Upfront Payments and Other Procedures For
Auction 78, Public Notice, 23 FCC Rcd 7496 (2008)
(‘‘AWS–1 and Broadband PCS Procedures Public
Notice’’).
130 See Auction of Advanced Wireless Services
Licenses Scheduled for June 29, 2006; Notice and
Filing Requirements, Minimum Opening Bids,
Upfront Payments and Other Procedures for
Auction No. 66, AU Docket No. 06–30, Public
Notice, 21 FCC Rcd 4562 (2006) (‘‘Auction 66
Procedures Public Notice’’);
131 47 CFR 27.1102(a)(1).
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on its winning bid.132 A ‘‘very small
business’’ is defined as an entity with
attributed average annual gross revenues
that did not exceed $15 million for the
preceding three years.133 A very small
business received a 25 percent discount
on its winning bid.134 In Auction 66,
thirty-one winning bidders identified
themselves as very small businesses and
won 142 licenses.135 Twenty-six of the
winning bidders identified themselves
as small businesses and won 73
licenses.136 In 2008, the Commission
conducted an auction of AWS–1
licenses, designated as Auction 78,
which offered 35 licenses for which
there were no winning bids in Auction
66.137 Four winning bidders that
identified themselves as very small
businesses won 17 AWS–1 licenses.138
Three of the winning bidders that
identified themselves as a small
business won five AWS–1 licenses.
70. Narrowband Personal
Communications Services. In 1994, the
Commission conducted an auction for
Narrowband PCS licenses. A second
auction was also conducted later in
1994. For purposes of the first two
Narrowband PCS auctions, ‘‘small
businesses’’ were entities with average
gross revenues for the prior three
calendar years of $40 million or less.139
Through these auctions, the
Commission awarded a total of 41
licenses, 11 of which were obtained by
four small businesses.140 To ensure
meaningful participation by small
business entities in future auctions, the
Commission adopted a two-tiered small
business size standard in the
Narrowband PCS Second Report and
132 See
47 CFR 1.2110(f)(2).
CFR 27.1102(a)(2)
134 See 47 CFR 1.2110(f)(2).
135 See Auction of Advanced Wireless Services
Licenses Closes; Winning Bidders Announced for
Auction No. 66, Public Notice, 21 FCC Rcd 10,521
(2006) (‘‘Auction 66 Closing Public Notice’’)
136 See id.
137 See AWS–1 and Broadband PCS Procedures
Public Notice, 23 FCC Rcd 7496. Auction 78 also
included an auction of Broadband PCS licenses.
138 See ‘‘Auction of AWS–1 and Broadband PCS
Licenses Closes, Winning Bidders Announced for
Auction 78, Down Payments Due September 9,
2008, FCC Forms 601 and 602 Due September 9,
2008, Final Payments Due September 23, 2008, TenDay Petition to Deny Period’’, Public Notice, 23 FCC
Rcd 12749–65 (2008).
139 Implementation of Section 309(j) of the
Communications Act—Competitive Bidding
Narrowband PCS, Third Memorandum Opinion and
Order and Further Notice of Proposed Rulemaking,
10 FCC Rcd 175, 196, para. 46 (1994).
140 See ‘‘Announcing the High Bidders in the
Auction of ten Nationwide Narrowband PCS
Licenses, Winning Bids Total $617,006,674,’’ Public
Notice, PNWL 94–004 (released Aug. 2, 1994);
‘‘Announcing the High Bidders in the Auction of 30
Regional Narrowband PCS Licenses; Winning Bids
Total $490,901,787,’’ Public Notice, PNWL 94–27
(released Nov. 9, 1994).
133 47
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Order.141 A ‘‘small business’’ is an entity
that, together with affiliates and
controlling interests, has average gross
revenues for the three preceding years of
not more than $40 million.142 A ‘‘very
small business’’ is an entity that,
together with affiliates and controlling
interests, has average gross revenues for
the three preceding years of not more
than $15 million.143 The SBA has
approved these small business size
standards.144 A third auction was
conducted in 2001. Here, five bidders
won 317 (Metropolitan Trading Areas
and nationwide) licenses.145 Three of
these claimed status as a small or very
small entity and won 311 licenses.
71. 700 MHz Band Licenses. The
Commission previously adopted criteria
for defining three groups of small
businesses for purposes of determining
their eligibility for special provisions
such as bidding credits.146 The
Commission defined a ‘‘small business’’
as an entity that, together with its
affiliates and controlling principals, has
average gross revenues not exceeding
$40 million for the preceding three
years.147 A ‘‘very small business’’ is
defined as an entity that, together with
its affiliates and controlling principals,
has average gross revenues that are not
more than $15 million for the preceding
three years.148 Additionally, the lower
700 MHz Service had a third category of
small business status for Metropolitan/
Rural Service Area (‘‘MSA/RSA’’)
licenses. The third category is
‘‘entrepreneur,’’ which is defined as an
entity that, together with its affiliates
and controlling principals, has average
gross revenues that are not more than $3
million for the preceding three years.149
The SBA approved these small size
standards.150 The Commission
conducted an auction in 2002 of 740
licenses (one license in each of the 734
MSAs/RSAs and one license in each of
141 Amendment of the Commission’s Rules to
Establish New Personal Communications Services,
Narrowband PCS, Second Report and Order and
Second Further Notice of Proposed Rule Making, 15
FCC Rcd 10456, 10476, para. 40 (2000)
(‘‘Narrowband PCS Second Report and Order’’).
142 Narrowband PCS Second Report and Order,
15 FCC Rcd at 10476, para. 40.
143 Id.
144 See Alvarez Letter 1998.
145 See ‘‘Narrowband PCS Auction Closes,’’ Public
Notice, 16 FCC Rcd 18663 (WTB 2001).
146 See Reallocation and Service Rules for the
698–746 MHz Spectrum Band (Television Channels
52–59), Report and Order, 17 FCC Rcd 1022 (2002)
(‘‘Channels 52–59 Report and Order’’).
147 See Channels 52–59 Report and Order, 17 FCC
Rcd at 1087–88, para. 172.
148 See id.
149 See id, 17 FCC Rcd at 1088, para. 173.
150 See Letter from Aida Alvarez, Administrator,
SBA, to Thomas Sugrue, Chief, WTB, FCC (Aug. 10,
1999) (‘‘Alvarez Letter 1999’’).
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the six Economic Area Groupings
(EAGs)). Of the 740 licenses available
for auction, 484 licenses were sold to
102 winning bidders. Seventy-two of the
winning bidders claimed small
business, very small business or
entrepreneur status and won a total of
329 licenses.151 The Commission
conducted a second auction in 2003 that
included 256 licenses: 5 EAG licenses
and 476 Cellular Market Area
licenses.152 Seventeen winning bidders
claimed small or very small business
status and won 60 licenses, and nine
winning bidders claimed entrepreneur
status and won 154 licenses.153 In 2005,
the Commission completed an auction
of 5 licenses in the lower 700 MHz band
(Auction 60). There were three winning
bidders for five licenses. All three
winning bidders claimed small business
status.
72. In 2007, the Commission adopted
the 700 MHz Second Report and
Order.154 The Order revised the band
plan for the commercial (including
Guard Band) and public safety
spectrum, adopted services rules,
including stringent build-out
requirements, an open platform
requirement on the C Block, and a
requirement on the D Block licensee to
construct and operate a nationwide,
interoperable wireless broadband
network for public safety users. In 2008,
the Commission conducted Auction 73
which offered all available, commercial
700 MHz Band licenses (1,099 licenses)
for bidding using the Commission’s
standard simultaneous multiple-round
(‘‘SMR’’) auction format for the A, B, D,
and E block licenses and an SMR
auction design with hierarchical
package bidding (‘‘HPB’’) for the C Block
151 See ‘‘Lower 700 MHz Band Auction Closes,’’
Public Notice, 17 FCC Rcd 17272 (WTB 2002).
152 See ‘‘Lower 700 MHz Band Auction Closes,’’
Public Notice, 18 FCC Rcd 11873 (WTB 2003).
153 See id.
154 Service Rules for the 698–746, 747–762 and
777–792 MHz Band, WT Docket No. 06–150,
Revision of the Commission’s Rules to Ensure
Compatibility with Enhanced 911 Emergency
Calling Systems, CC Docket No. 94–102, Section
68.4(a) of the Commission’s Rules Governing
Hearing Aid-Compatible Telephone, WT Docket No.
01–309, Biennial Regulatory Review—Amendment
of Parts 1, 22, 24, 27, and 90 to Streamline and
Harmonize Various Rules Affecting Wireless Radio
Services, WT Docket No. 03–264, Former Nextel
Communications, Inc. Upper 700 MHz Guard Band
Licenses and Revisions to Part 27 of the
Commission’s Rules, WT Docket No. 06–169,
Implementing a Nationwide, Broadband
Interoperable Public Safety Network in the 700 MHz
Band, PS Docket No. 06–229, Development of
Operational, Technical and Spectrum
Requirements for Meeting Federal, State, and Local
Public Safety Communications Requirements
Through the Year 2010, WT Docket No. 96–86,
Second Report and Order, FCC 07–132 (2007) (‘‘700
MHz Second Report and Order’’), 22 FCC Rcd 15289
(2007).
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licenses. A bidder with attributed
average annual gross revenues that did
not exceed $15 million for the preceding
three years (very small business)
qualified for a 25 percent discount on its
winning bids. A bidder with attributed
average annual gross revenues that
exceeded $15 million, but did not
exceed $40 million for the preceding
three years, qualified for a 15 percent
discount on its winning bids. At the
conclusion of Auction 73, there were 36
winning bidders (who won 330 of the
1,090 licenses won) that identified
themselves as very small businesses.155
There were 20 winning bidders that
identified themselves as a small
business that won 49 of the 1,090
licenses won.156 The provisionally
winning bids for the A, B, C, and E
Block licenses exceeded the aggregate
reserve prices for those blocks.
However, the provisionally winning bid
for the D Block license did not meet the
applicable reserve price and thus did
not become a winning bid.157
73. 700 MHz Guard Band Licenses. In
the 700 MHz Guard Band Order, the
Commission adopted size standards for
‘‘small businesses’’ and ‘‘very small
businesses’’ for purposes of determining
their eligibility for special provisions
such as bidding credits and installment
payments.158 A small business in this
service is an entity that, together with
its affiliates and controlling principals,
has average gross revenues not
exceeding $40 million for the preceding
three years.159 Additionally, a very
small business is an entity that, together
with its affiliates and controlling
principals, has average gross revenues
that are not more than $15 million for
the preceding three years.160 SBA
approval of these definitions is not
required.161 In 2000, the Commission
conducted an auction of 52 Major
Economic Area (‘‘MEA’’) licenses.162 Of
155 See Auction of 700 MHz Band Licenses
Closes, Winning Bidders Announced for Auction
73, Down Payments Due April 3, 2008, FCC Forms
601 and 602 April 3, 2008, Final Payment Due April
17, 2008, Ten-Day Petition to Deny Period, Public
Notice, 23 FCC Rcd 4572 (2008).
156 Id. 23 FCC Rcd at 4572–73.
157 Id.
158 See Service Rules for the 746–764 MHz Bands,
and Revisions to Part 27 of the Commission’s Rules,
Second Report and Order, 15 FCC Rcd 5299 (2000)
(‘‘746–764 MHz Band Second Report and Order’’).
159 See 746–764 MHz Band Second Report and
Order, 15 FCC Rcd at 5343, para. 108.
160 See id.
161 See id., 15 FCC Rcd 5299, 5343, para. 108
n.246 (for the 746–764 MHz and 776–794 MHz
bands, the Commission is exempt from 15 U.S.C.
§ 632, which requires Federal agencies to obtain
SBA approval before adopting small business size
standards).
162 See ‘‘700 MHz Guard Bands Auction Closes:
Winning Bidders Announced,’’ Public Notice, 15
FCC Rcd 18026 (2000).
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the 104 licenses auctioned, 96 licenses
were sold to nine bidders. Five of these
bidders were small businesses that won
a total of 26 licenses. A second auction
of eight 700 MHz Guard Band licenses
commenced and closed in 2001. Of the
three winning bidders, one was a small
business that won two of the eight
licenses.163
74. Specialized Mobile Radio. The
Commission awards small business
bidding credits in auctions for
Specialized Mobile Radio (SMR)
geographic area licenses in the 800 MHz
and 900 MHz bands to entities that had
revenues of no more than $15 million in
each of the three previous calendar
years.164 The Commission awards very
small business bidding credits to
entities that had revenues of no more
than $3 million in each of the three
previous calendar years.165 The SBA has
approved these small business size
standards for the 800 MHz and 900 MHz
SMR Service.166 The Commission has
held auctions for geographic area
licenses in the 800 MHz and 900 MHz
bands. The 900 MHz SMR auction was
completed in 1996. Sixty bidders
claiming that they qualified as small
businesses under the $15 million size
standard won 263 geographic area
licenses in the 900 MHz SMR band. The
800 MHz SMR auction for the upper 200
channels was conducted in 1997. Ten
bidders claiming that they qualified as
small businesses under the $15 million
size standard won 38 geographic area
licenses for the upper 200 channels in
the 800 MHz SMR band.167 A second
auction for the 800 MHz band was
conducted in 2002 and included 23 BEA
licenses. One bidder claiming small
business status won five licenses.168
75. The auction of the 1,053 800 MHz
SMR geographic area licenses for the
General Category channels was
conducted in 2000. Eleven bidders won
108 geographic area licenses for the
General Category channels in the 800
MHz SMR band qualified as small
businesses under the $15 million size
standard.169 In an auction completed in
163 See ‘‘700 MHz Guard Bands Auction Closes:
Winning Bidders Announced,’’ Public Notice, 16
FCC Rcd 4590 (WTB 2001).
164 47 CFR 90.810, 90.814(b), 90.912.
165 47 CFR 90.810, 90.814(b), 90.912.
166 See Alvarez Letter 1999.
167 See ‘‘Correction to Public Notice DA 96–586
‘FCC Announces Winning Bidders in the Auction
of 1020 Licenses to Provide 900 MHz SMR in Major
Trading Areas,’’’ Public Notice, 18 FCC Rcd 18367
(WTB 1996).
168 See ‘‘Multi-Radio Service Auction Closes,’’
Public Notice, 17 FCC Rcd 1446 (WTB 2002).
169 See ‘‘800 MHz Specialized Mobile Radio
(SMR) Service General Category (851–854 MHz) and
Upper Band (861–865 MHz) Auction Closes;
Winning Bidders Announced,’’ Public Notice, 15
FCC Rcd 17162 (2000).
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2000, a total of 2,800 Economic Area
licenses in the lower 80 channels of the
800 MHz SMR service were awarded.170
Of the 22 winning bidders, 19 claimed
small business status and won 129
licenses. Thus, combining all three
auctions, 40 winning bidders for
geographic licenses in the 800 MHz
SMR band claimed status as small
business.
76. In addition, there are numerous
incumbent site-by-site SMR licensees
and licensees with extended
implementation authorizations in the
800 and 900 MHz bands. We do not
know how many firms provide 800 MHz
or 900 MHz geographic area SMR
pursuant to extended implementation
authorizations, nor how many of these
providers have annual revenues of no
more than $15 million. One firm has
over $15 million in revenues. In
addition, we do not know how many of
these firms have 1500 or fewer
employees.171 We assume, for purposes
of this analysis, that all of the remaining
existing extended implementation
authorizations are held by small
entities, as that small business size
standard is approved by the SBA.
77. 220 MHz Radio Service—Phase I
Licensees. The 220 MHz service has
both Phase I and Phase II licenses. Phase
I licensing was conducted by lotteries in
1992 and 1993. There are approximately
1,515 such non-nationwide licensees
and four nationwide licensees currently
authorized to operate in the 220 MHz
band. The Commission has not
developed a definition of small entities
specifically applicable to such
incumbent 220 MHz Phase I licensees.
To estimate the number of such
licensees that are small businesses, we
apply the small business size standard
under the SBA rules applicable to
Wireless Telecommunications Carriers
(except Satellite).172 This category
provides that a small business is a
wireless company employing no more
than 1,500 persons.173 The Commission
estimates that most such licensees are
small businesses under the SBA’s small
business standard.
78. 220 MHz Radio Service—Phase II
Licensees. The 220 MHz service has
both Phase I and Phase II licenses. The
Phase II 220 MHz service licenses are
assigned by auction, where mutually
exclusive applications are accepted. In
the 220 MHz Third Report and Order,
170 See, ‘‘800 MHz SMR Service Lower 80
Channels Auction Closes; Winning Bidders
Announced,’’ Public Notice, 16 FCC Rcd 1736
(2000).
171 See generally 13 CFR 121.201, NAICS code
517210.
172 Id.
173 Id.
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the Commission adopted a small
business size standard for defining
‘‘small’’ and ‘‘very small’’ businesses for
purposes of determining their eligibility
for special provisions such as bidding
credits and installment payments.174
This small business standard indicates
that a ‘‘small business’’ is an entity that,
together with its affiliates and
controlling principals, has average gross
revenues not exceeding $15 million for
the preceding three years.175 A ‘‘very
small business’’ is defined as an entity
that, together with its affiliates and
controlling principals, has average gross
revenues that do not exceed $3 million
for the preceding three years.176 The
SBA has approved these small size
standards.177 A small business is
eligible for a 25 percent discount on its
winning bid. A very small business is
eligible for a 35 percent discount on its
winning bid. The first auction of Phase
II licenses was conducted in 1998.178 In
the first auction, 908 licenses were
offered in three different-sized
geographic areas: three nationwide
licenses, 30 Regional Economic Area
Group (‘‘EAG’’) Licenses, and 875
Economic Area (EA) Licenses. Of the
908 licenses auctioned, 693 were
sold.179 Thirty-nine small businesses
won 373 licenses in the first 220 MHz
auction. A second auction in 1999
included 225 licenses: 216 EA licenses
and 9 EAG licenses. Fourteen
companies claiming small business
status won 158 licenses.180 A third
auction included four licenses: 2 BEA
licenses and 2 EAG licenses in the 220
MHz Service. No small or very small
business won any of these licenses.181
In 2007, the Commission conducted a
fourth auction of the 220 MHz licenses,
designated as Auction 72.182 Auction 72
offered 94 Phase II 220 MHz Service
174 Amendment of Part 90 of the Commission’s
Rules to Provide For the Use of the 220–222 MHz
Band by the Private Land Mobile Radio Service,
Third Report and Order, 12 FCC Rcd 10943, 11068–
70, paras. 291–295 (1997).
175 Id. at 11068, para. 291.
176 Id.
177 See Letter from Aida Alvarez, Administrator,
SBA, to Daniel Phythyon, Chief, WTB, FCC (Jan. 6,
1998) (‘‘Alvarez to Phythyon Letter 1998’’).
178 See generally ‘‘220 MHz Service Auction
Closes,’’ Public Notice, 14 FCC Rcd 605 (1998).
179 See ‘‘FCC Announces It is Prepared to Grant
654 Phase II 220 MHz Licenses After Final Payment
is Made,’’ Public Notice, 14 FCC Rcd 1085 (1999).
180 See ‘‘Phase II 220 MHz Service Spectrum
Auction Closes,’’ Public Notice, 14 FCC Rcd 11218
(1999).
181 See ‘‘Multi-Radio Service Auction Closes,’’
Public Notice, 17 FCC Rcd 1446 (2002).
182 See ‘‘Auction of Phase II 220 MHz Service
Spectrum Scheduled for June 20, 2007, Notice and
Filing Requirements, Minimum Opening Bids,
Upfront Payments and Other Procedures for
Auction 72,’’ Public Notice, 22 FCC Rcd 3404
(2007).
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30629
licenses.183 In this auction, five winning
bidders won a total of 76 licenses.184
Two winning bidders identified
themselves as very small businesses
won 56 of the 76 licenses. One of the
winning bidders that identified itself as
a small business won 5 of the 76
licenses won.
79. Cellular Radiotelephone Service.
Auction 77 was held to resolve one
group of mutually exclusive
applications for Cellular Radiotelephone
Service licenses for unserved areas in
New Mexico.185 Bidding credits for
designated entities were not available in
Auction 77.186 In 2008, the Commission
completed the closed auction of one
unserved service area in the Cellular
Radiotelephone Service, designated as
Auction 77. Auction 77 concluded with
one provisionally winning bid for the
unserved area totaling $25,002.187
80. Private Land Mobile Radio
(‘‘PLMR’’). PLMR systems serve an
essential role in a range of industrial,
business, land transportation, and
public safety activities. These radios are
used by companies of all sizes operating
in all U.S. business categories, and are
often used in support of the licensee’s
primary (non-telecommunications)
business operations. For the purpose of
determining whether a licensee of a
PLMR system is a small business as
defined by the SBA, we use the broad
census category, Wireless
Telecommunications Carriers (except
Satellite). This definition provides that
a small entity is any such entity
employing no more than 1,500
persons.188 The Commission does not
require PLMR licensees to disclose
information about number of
employees, so the Commission does not
have information that could be used to
determine how many PLMR licensees
constitute small entities under this
definition. We note that PLMR licensees
generally use the licensed facilities in
support of other business activities, and
therefore, it would also be helpful to
183 Id.
184 See ‘‘Auction of Phase II 220 MHz Service
Spectrum Licenses Closes, Winning Bidders
Announced for Auction 72, Down Payments due
July 18, 2007, FCC Forms 601 and 602 due July 18,
2007, Final Payments due August 1, 2007, Ten-Day
Petition to Deny Period,’’ Public Notice, 22 FCC Rcd
11573 (2007).
185 See Closed Auction of Licenses for Cellular
Unserved Service Area Scheduled for June 17, 2008,
Notice and Filing Requirements, Minimum Opening
Bids, Upfront Payments, and Other Procedures for
Auction 77, Public Notice, 23 FCC Rcd 6670 (2008).
186 Id. at 6685.
187 See Auction of Cellular Unserved Service Area
License Closes, Winning Bidder Announced for
Auction 77, Down Payment due July 2, 2008, Final
Payment due July 17, 2008, Public Notice, 23 FCC
Rcd 9501 (2008).
188 See 13 CFR 121.201, NAICS code 517210.
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assess PLMR licensees under the
standards applied to the particular
industry subsector to which the licensee
belongs.189
81. As of March 2010, there were
424,162 PLMR licensees operating
921,909 transmitters in the PLMR bands
below 512 MHz. We note that any entity
engaged in a commercial activity is
eligible to hold a PLMR license, and that
any revised rules in this context could
therefore potentially impact small
entities covering a great variety of
industries.
82. Fixed Microwave Services. Fixed
microwave services include common
carrier,190 private operational-fixed,191
and broadcast auxiliary radio
services.192 At present, there are
approximately 22,015 common carrier
fixed licensees and 61,670 private
operational-fixed licensees and
broadcast auxiliary radio licensees in
the microwave services. The
Commission has not created a size
standard for a small business
specifically with respect to fixed
microwave services. For purposes of
this analysis, the Commission uses the
SBA small business size standard for the
category Wireless Telecommunications
Carriers (except Satellite), which is
1,500 or fewer employees.193 The
Commission does not have data
specifying the number of these licensees
that have no more than 1,500
employees, and thus are unable at this
time to estimate with greater precision
the number of fixed microwave service
licensees that would qualify as small
business concerns under the SBA’s
small business size standard.
Consequently, the Commission
estimates that there are 22,015 or fewer
common carrier fixed licensees and
61,670 or fewer private operationalfixed licensees and broadcast auxiliary
189 See
generally 13 CFR 121.201.
47 CFR 101 et seq. for common carrier
fixed microwave services (except Multipoint
Distribution Service).
191 Persons eligible under parts 80 and 90 of the
Commission’s Rules can use Private OperationalFixed Microwave services. See 47 CFR Parts 80 and
90. Stations in this service are called operationalfixed to distinguish them from common carrier and
public fixed stations. Only the licensee may use the
operational-fixed station, and only for
communications related to the licensee’s
commercial, industrial, or safety operations.
192 Auxiliary Microwave Service is governed by
Part 74 of Title 47 of the Commission’s Rules. See
47 CFR Part 74. This service is available to licensees
of broadcast stations and to broadcast and cable
network entities. Broadcast auxiliary microwave
stations are used for relaying broadcast television
signals from the studio to the transmitter, or
between two points such as a main studio and an
auxiliary studio. The service also includes mobile
television pickups, which relay signals from a
remote location back to the studio.
193 13 CFR 121.201, NAICS code 517210.
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radio licensees in the microwave
services that may be small and may be
affected by the rules and policies
proposed herein. We note, however, that
the common carrier microwave fixed
licensee category includes some large
entities.
83. 39 GHz Service. The Commission
created a special small business size
standard for 39 GHz licenses—an entity
that has average gross revenues of $40
million or less in the three previous
calendar years.194 An additional size
standard for ‘‘very small business’’ is: an
entity that, together with affiliates, has
average gross revenues of not more than
$15 million for the preceding three
calendar years.195 The SBA has
approved these small business size
standards.196 The auction of the 2,173,
39 GHz licenses was conducted in 2000.
The 18 bidders who claimed small
business status won 849 licenses.
84. Local Multipoint Distribution
Service. Local Multipoint Distribution
Service (‘‘LMDS’’) is a fixed broadband
point-to-multipoint microwave service
that provides for two-way video
telecommunications.197 The auction of
the 986 LMDS licenses began and closed
in 1998. The Commission established a
small business size standard for LMDS
licenses as an entity that has average
gross revenues of less than $40 million
in the three previous calendar years.198
An additional small business size
standard for ‘‘very small business’’ was
added as an entity that, together with its
affiliates, has average gross revenues of
not more than $15 million for the
preceding three calendar years.199 The
SBA has approved these small business
size standards in the context of LMDS
auctions.200 There were 93 winning
bidders that qualified as small entities
in the LMDS auctions. A total of 93
small and very small business bidders
194 See Amendment of the Commission’s Rules
Regarding the 37.0–38.6 GHz and 38.6–40.0 GHz
Bands, ET Docket No. 95–183, Report and Order, 12
FCC Rcd 18600 (1997).
195 Id.
196 See Letter from Aida Alvarez, Administrator,
SBA, to Kathleen O’Brien Ham, Chief, Auctions and
Industry Analysis Division, WTB, FCC (Feb. 4,
1998); see Letter from Hector Barreto,
Administrator, SBA, to Margaret Wiener, Chief,
Auctions and Industry Analysis Division, WTB,
FCC (Jan. 18, 2002).
197 See Rulemaking to Amend Parts 1, 2, 21, 25,
of the Commission’s Rules to Redesignate the 27.5–
29.5 GHz Frequency Band, Reallocate the 29.5–30.5
Frequency Band, to Establish Rules and Policies for
Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order
on Reconsideration, and Fifth Notice of Proposed
Rule Making, 12 FCC Rcd 12545, 12689–90, para.
348 (1997) (‘‘LMDS Second Report and Order’’).
198 See LMDS Second Report and Order, 12 FCC
Rcd at 12689–90, para. 348.
199 See id.
200 See Alvarez to Phythyon Letter 1998.
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won approximately 277 A Block
licenses and 387 B Block licenses. In
1999, the Commission re-auctioned 161
licenses; there were 32 small and very
small businesses that won 119 licenses.
85. 218–219 MHz Service. The first
auction of 218–219 MHz (previously
referred to as the Interactive and Video
Data Service or IVDS) spectrum resulted
in 178 entities winning licenses for 594
Metropolitan Statistical Areas
(‘‘MSAs’’).201 Of the 594 licenses, 567
were won by 167 entities qualifying as
a small business. For that auction, the
Commission defined a small business as
an entity that, together with its affiliates,
has no more than a $6 million net worth
and, after Federal income taxes
(excluding any carry over losses), has no
more than $2 million in annual profits
each year for the previous two years.202
In the 218–219 MHz Report and Order
and Memorandum Opinion and Order,
we defined a small business as an entity
that, together with its affiliates and
persons or entities that hold interests in
such an entity and their affiliates, has
average annual gross revenues not
exceeding $15 million for the preceding
three years.203 A very small business is
defined as an entity that, together with
its affiliates and persons or entities that
hold interests in such an entity and its
affiliates, has average annual gross
revenues not exceeding $3 million for
the preceding three years.204 The SBA
has approved of these definitions.205
86. Location and Monitoring Service
(‘‘LMS’’). Multilateration LMS systems
use non-voice radio techniques to
determine the location and status of
mobile radio units. For purposes of
auctioning LMS licenses, the
Commission has defined ‘‘small
business’’ as an entity that, together with
controlling interests and affiliates, has
average annual gross revenues for the
preceding three years not exceeding $15
million.206 A ‘‘very small business’’ is
defined as an entity that, together with
controlling interests and affiliates, has
average annual gross revenues for the
201 See ‘‘Interactive Video and Data Service
(IVDS) Applications Accepted for Filing,’’ Public
Notice, 9 FCC Rcd 6227 (1994).
202 Implementation of Section 309(j) of the
Communications Act—Competitive Bidding, Fourth
Report and Order, 9 FCC Rcd 2330 (1994).
203 Amendment of Part 95 of the Commission’s
Rules to Provide Regulatory Flexibility in the 218–
219 MHz Service, Report and Order and
Memorandum Opinion and Order, 15 FCC Rcd 1497
(1999).
204 Id.
205 See Alvarez to Phythyon Letter 1998.
206 Amendment of Part 90 of the Commission’s
Rules to Adopt Regulations for Automatic Vehicle
Monitoring Systems, Second Report and Order, 13
FCC Rcd 15182, 15192, para. 20 (1998) (‘‘Automatic
Vehicle Monitoring Systems Second Report and
Order’’); see also 47 CFR 90.1103.
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preceding three years not exceeding $3
million.207 These definitions have been
approved by the SBA.208 An auction for
LMS licenses was conducted in 1999. Of
the 528 licenses auctioned, 289 licenses
were sold to four small businesses.
87. Rural Radiotelephone Service. The
Commission has not adopted a size
standard for small businesses specific to
the Rural Radiotelephone Service.209 A
significant subset of the Rural
Radiotelephone Service is the Basic
Exchange Telephone Radio System
(‘‘BETRS’’).210 In the present context, we
will use the SBA’s small business size
standard applicable to Wireless
Telecommunications Carriers (except
Satellite), i.e., an entity employing no
more than 1,500 persons.211 There are
approximately 1,000 licensees in the
Rural Radiotelephone Service, and the
Commission estimates that there are
1,000 or fewer small entity licensees in
the Rural Radiotelephone Service that
may be affected by our action.
88. Air-Ground Radiotelephone
Service.212 The Commission has
previously used the SBA’s small
business definition applicable to
Wireless Telecommunications Carriers
(except Satellite), i.e., an entity
employing no more than 1,500
persons.213 There are approximately 100
licensees in the Air-Ground
Radiotelephone Service, and under that
definition, we estimate that almost all of
them qualify as small entities under the
SBA definition. For purposes of
assigning Air-Ground Radiotelephone
Service licenses through competitive
bidding, the Commission has defined
‘‘small business’’ as an entity that,
together with controlling interests and
affiliates, has average annual gross
revenues for the preceding three years
not exceeding $40 million.214 A ‘‘very
small business’’ is defined as an entity
that, together with controlling interests
207 Automatic Vehicle Monitoring Systems
Second Report and Order, 13 FCC Rcd at 15192,
para. 20; see also 47 CFR 90.1103.
208 See Alvarez Letter 1998.
209 The service is defined in Section 22.99 of the
Commission’s rules, 47 CFR 22.99.
210 BETRS is defined in Sections 22.757 and
22.759 of the Commission’s rules, 47 CFR 22.757
and 22.759.
211 13 CFR 121.201, NAICS code 517210.
212 The service is defined in Section 22.99 of the
Commission’s rules, 47 CFR 22.99.
213 13 CFR 121.201, NAICS codes 517210.
214 Amendment of Part 22 of the Commission’s
Rules to Benefit the Consumers of Air-Ground
Telecommunications Services, Biennial Regulatory
Review—Amendment of Parts 1, 22, and 90 of the
Commission’s Rules, Amendment of Parts 1 and 22
of the Commission’s Rules to Adopt Competitive
Bidding Rules for Commercial and General Aviation
Air-Ground Radiotelephone Service, WT Docket
Nos. 03–103 and 05–42, Order on Reconsideration
and Report and Order, 20 FCC Rcd 19663, paras.
28–42 (2005).
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and affiliates, has average annual gross
revenues for the preceding three years
not exceeding $15 million.215 These
definitions were approved by the
SBA.216 In 2006, the Commission
completed an auction of nationwide
commercial Air-Ground Radiotelephone
Service licenses in the 800 MHz band
(Auction 65). The auction closed with
two winning bidders winning two AirGround Radiotelephone Services
licenses. Neither of the winning bidders
claimed small business status.
89. Aviation and Marine Radio
Services. There are approximately
26,162 aviation, 34,555 marine (ship),
and 3,296 marine (coast) licensees.217
The Commission has not developed a
small business size standard specifically
applicable to all licensees. For purposes
of this analysis, we will use the SBA
small business size standard for the
category Wireless Telecommunications
Carriers (except Satellite), which is
1,500 or fewer employees.218 We are
unable to determine how many of those
licensed fall under this standard. For
purposes of our evaluations in this
analysis, we estimate that there are up
to approximately 62,969 licensees that
are small businesses under the SBA
standard.219 In 1998, the Commission
held an auction of 42 VHF Public Coast
licenses in the 157.1875–157.4500 MHz
(ship transmit) and 161.775–162.0125
MHz (coast transmit) bands. For this
auction, the Commission defined a
‘‘small’’ business as an entity that,
together with controlling interests and
affiliates, has average gross revenues for
the preceding three years not to exceed
$15 million dollars. In addition, a ‘‘very
small’’ business is one that, together
with controlling interests and affiliates,
has average gross revenues for the
preceding three years not to exceed $3
million dollars.220 Further, the
Commission made available Automated
Maritime Telecommunications System
215 Id.
216 See
Letter from Hector V. Barreto,
Administrator, SBA, to Gary D. Michaels, Deputy
Chief, Auctions and Spectrum Access Division,
WTB, FCC (Sept. 19, 2005).
217 Vessels that are not required by law to carry
a radio and do not make international voyages or
communications are not required to obtain an
individual license. See Amendment of Parts 80 and
87 of the Commission’s Rules to Permit Operation
of Certain Domestic Ship and Aircraft Radio
Stations Without Individual Licenses, Report and
Order, WT Docket No. 96–82, 11 FCC Rcd 14849
(1996).
218 13 CFR 121.201, NAICS code 517210.
219 A licensee may have a license in more than
one category.
220 Amendment of the Commission’s Rules
Concerning Maritime Communications, PR Docket
No. 92–257, Third Report and Order and
Memorandum Opinion and Order, 13 FCC Rcd
19853 (1998).
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(‘‘AMTS’’) licenses in Auctions 57 and
61.221 Winning bidders could claim
status as a very small business or a very
small business. A very small business
for this service is defined as an entity
with attributed average annual gross
revenues that do not exceed $3 million
for the preceding three years, and a
small business is defined as an entity
with attributed average annual gross
revenues of more than $3 million but
less than $15 million for the preceding
three years.222 Three of the winning
bidders in Auction 57 qualified as small
or very small businesses, while three
winning entities in Auction 61 qualified
as very small businesses.
90. Offshore Radiotelephone Service.
This service operates on several ultra
high frequencies (‘‘UHF’’) television
broadcast channels that are not used for
television broadcasting in the coastal
areas of states bordering the Gulf of
Mexico.223 There is presently 1 licensee
in this service. We do not have
information whether that licensee
would qualify as small under the SBA’s
small business size standard for
Wireless Telecommunications Carriers
(except Satellite) services.224 Under that
SBA small business size standard, a
business is small if it has 1,500 or fewer
employees.225
91. Multiple Address Systems
(‘‘MAS’’). Entities using MAS spectrum,
in general, fall into two categories: (1)
Those using the spectrum for profitbased uses, and (2) those using the
spectrum for private internal uses. The
Commission defines a small business for
MAS licenses as an entity that has
average gross revenues of less than $15
million in the three previous calendar
years.226 A very small business is
defined as an entity that, together with
its affiliates, has average gross revenues
of not more than $3 million for the
preceding three calendar years.227 The
221 See ‘‘Automated Maritime
Telecommunications System Spectrum Auction
Scheduled for September 15, 2004, Notice and
Filing Requirements, Minimum Opening Bids,
Upfront Payments and Other Auction Procedures,’’
Public Notice, 19 FCC Rcd 9518 (WTB 2004);
‘‘Auction of Automated Maritime
Telecommunications System Licenses Scheduled
for August 3, 2005, Notice and Filing Requirements,
Minimum Opening Bids, Upfront Payments and
Other Auction Procedures for Auction No. 61,’’
Public Notice, 20 FCC Rcd 7811 (WTB 2005).
222 47 CFR 80.1252.
223 This service is governed by Subpart I of Part
22 of the Commission’s rules. See 47 CFR 22.1001–
22.1037.
224 13 CFR 121.201, NAICS code 517210.
225 Id.
226 See Amendment of the Commission’s Rules
Regarding Multiple Address Systems, Report and
Order, 15 FCC Rcd 11956, 12008, para. 123 (2000).
227 Id.
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SBA has approved these definitions.228
The majority of these entities will most
likely be licensed in bands where the
Commission has implemented a
geographic area licensing approach that
would require the use of competitive
bidding procedures to resolve mutually
exclusive applications. The
Commission’s licensing database
indicates that, as of March 5, 2010, there
were over 11,500 MAS station
authorizations. In addition, an auction
for 5,104 MAS licenses in 176 EAs was
conducted in 2001.229 Seven winning
bidders claimed status as small or very
small businesses and won 611 licenses.
In 2005, the Commission completed an
auction (Auction 59) of 4,226 MAS
licenses in the Fixed Microwave
Services from the 928/959 and 932/941
MHz bands. Twenty-six winning
bidders won a total of 2,323 licenses. Of
the 26 winning bidders in this auction,
five claimed small business status and
won 1,891 licenses.
92. With respect to entities that use,
or seek to use, MAS spectrum to
accommodate internal communications
needs, we note that MAS serves an
essential role in a range of industrial,
safety, business, and land transportation
activities. MAS radios are used by
companies of all sizes, operating in
virtually all U.S. business categories,
and by all types of public safety entities.
For the majority of private internal
users, the small business size standard
developed by the SBA would be more
appropriate. The applicable size
standard in this instance appears to be
that of Wireless Telecommunications
Carriers (except Satellite). This
definition provides that a small entity is
any such entity employing no more than
1,500 persons.230 The Commission’s
licensing database indicates that, as of
January 20, 1999, of the 8,670 total MAS
station authorizations, 8,410
authorizations were for private radio
service, and of these, 1,433 were for
private land mobile radio service.
93. 1.4 GHz Band Licensees. The
Commission conducted an auction of 64
1.4 GHz band licenses 231 in 2007.232 In
that auction, the Commission defined
‘‘small business’’ as an entity that,
together with its affiliates and
controlling interests, had average gross
srobinson on DSK4SPTVN1PROD with PROPOSALS
228 See
Alvarez Letter 1999.
‘‘Multiple Address Systems Spectrum
Auction Closes,’’ Public Notice, 16 FCC Rcd 21011
(2001).
230 See 13 CFR 121.201, NAICS code 517210.
231 See ‘‘Auction of 1.4 GHz Bands Licenses
Scheduled for February 7, 2007,’’ Public Notice, 21
FCC Rcd 12393 (WTB 2006).
232 See ‘‘Auction of 1.4 GHz Band Licenses Closes;
Winning Bidders Announced for Auction No. 69,’’
Public Notice, 22 FCC Rcd 4714 (2007) (‘‘Auction
No. 69 Closing PN’’).
229 See
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revenues that exceed $15 million but do
not exceed $40 million for the preceding
three years, and a ‘‘very small business’’
as an entity that, together with its
affiliates and controlling interests, has
had average annual gross revenues not
exceeding $15 million for the preceding
three years.233 Neither of the two
winning bidders sought designated
entity status.234
94. Incumbent 24 GHz Licensees. This
analysis may affect incumbent licensees
who were relocated to the 24 GHz band
from the 18 GHz band, and applicants
who wish to provide services in the 24
GHz band. The applicable SBA small
business size standard is that of
Wireless Telecommunications Carriers
(except Satellite). This category
provides that such a company is small
if it employs no more than 1,500
persons.235 The broader census data
notwithstanding, we believe that there
are only two licensees in the 24 GHz
band that were relocated from the 18
GHz band, Teligent236 and TRW, Inc. It
is our understanding that Teligent and
its related companies have fewer than
1,500 employees, though this may
change in the future. TRW is not a small
entity. There are approximately 122
licensees in the Rural Radiotelephone
Service, and the Commission estimates
that there are 122 or fewer small entity
licensees in the Rural Radiotelephone
Service that may be affected by our
action.
95. Future 24 GHz Licensees. With
respect to new applicants in the 24 GHz
band, we have defined ‘‘small business’’
as an entity that, together with
controlling interests and affiliates, has
average annual gross revenues for the
three preceding years not exceeding $15
million.237 ‘‘Very small business’’ in the
24 GHz band is defined as an entity that,
together with controlling interests and
affiliates, has average gross revenues not
exceeding $3 million for the preceding
three years.238 The SBA has approved
these definitions.239 In a 2004 auction of
24 GHz licenses, three winning bidders
won seven licenses. Two of the winning
233 Auction
No. 69 Closing PN, Attachment C.
Auction No. 69 Closing PN.
235 13 CFR 121.201, NAICS code 517210.
236 Teligent acquired the DEMS licenses of
FirstMark, the only licensee other than TRW in the
24 GHz band whose license has been modified to
require relocation to the 24 GHz band.
237 Amendments to Parts 1, 2, 87 and 101 of the
Commission’s Rules To License Fixed Services at 24
GHz, Report and Order, 15 FCC Rcd 16934, 16967,
para. 77 (2000) (‘‘24 GHz Report and Order’’); see
also 47 CFR 101.538(a)(2).
238 24 GHz Report and Order, 15 FCC Rcd at
16967, para. 77; see also 47 CFR 101.538(a)(1).
239 See Letter from Gary M. Jackson, Assistant
Administrator, SBA, to Margaret W. Wiener, Deputy
Chief, Auctions and Industry Analysis Division,
WTB, FCC (July 28, 2000).
bidders were very small businesses that
won five licenses.
96. Broadband Radio Service and
Educational Broadband Service.
Broadband Radio Service systems,
previously referred to as Multipoint
Distribution Service (‘‘MDS’’) and
Multichannel Multipoint Distribution
Service (‘‘MMDS’’) systems, and
‘‘wireless cable,’’ transmit video
programming to subscribers and provide
two-way high speed data operations
using the microwave frequencies of the
Broadband Radio Service (‘‘BRS’’) and
Educational Broadband Service (‘‘EBS’’)
(previously referred to as the
Instructional Television Fixed Service
(‘‘ITFS’’)).240 In connection with the
1996 BRS auction, the Commission
established a small business size
standard as an entity that had annual
average gross revenues of no more than
$40 million in the previous three
calendar years.241 The BRS auctions
resulted in 67 successful bidders
obtaining licensing opportunities for
493 Basic Trading Areas (‘‘BTAs’’). Of
the 67 auction winners, 61 met the
definition of a small business. BRS also
includes licensees of stations authorized
prior to the auction. At this time, we
estimate that of the 61 small business
BRS auction winners, 48 remain small
business licensees. In addition to the 48
small businesses that hold BTA
authorizations, there are approximately
392 incumbent BRS licensees that are
considered small entities.242 After
adding the number of small business
auction licensees to the number of
incumbent licensees not already
counted, we find that there are currently
approximately 440 BRS licensees that
are defined as small businesses under
either the SBA or the Commission’s
rules. The Commission has adopted
three levels of bidding credits for BRS:
(i) A bidder with attributed average
annual gross revenues that exceed $15
million and do not exceed $40 million
for the preceding three years (small
business) will receive a 15 percent
discount on its winning bid; (ii) a bidder
with attributed average annual gross
revenues that exceed $3 million and do
234 See
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240 Amendment of Parts 21 and 74 of the
Commission’s Rules with Regard to Filing
Procedures in the Multipoint Distribution Service
and in the Instructional Television Fixed Service
and Implementation of Section 309(j) of the
Communications Act—Competitive Bidding, MM
Docket No. 94–131 and PP Docket No. 93–253,
Report and Order, 10 FCC Rcd 9589, 9593, para. 7
(1995) (‘‘MDS Auction R&O’’).
241 47 CFR 21.961(b)(1).
242 47 U.S.C. 309(j). Hundreds of stations were
licensed to incumbent MDS licensees prior to
implementation of Section 309(j) of the
Communications Act of 1934, 47 U.S.C. 309(j). For
these pre-auction licenses, the applicable standard
is SBA’s small business size standard.
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not exceed $15 million for the preceding
three years (very small business) will
receive a 25 percent discount on its
winning bid; and (iii) a bidder with
attributed average annual gross revenues
that do not exceed $3 million for the
preceding three years (entrepreneur)
will receive a 35 percent discount on its
winning bid.243 In 2009, the
Commission conducted Auction 86,
which offered 78 BRS licenses.244
Auction 86 concluded with the sale of
61 licenses.245 Of the ten winning
bidders, three bidders that claimed
small business status won 7 licenses,
and two bidders that claimed
entrepreneur status won six licenses.
97. In addition, the SBA’s Cable
Television Distribution Services small
business size standard is applicable to
EBS. There are presently 2,032 EBS
licensees. All but 100 of these licenses
are held by educational institutions.
Educational institutions are included in
this analysis as small entities.246 Thus,
we estimate that at least 1,932 licensees
are small businesses. Since 2007, Cable
Television Distribution Services have
been defined within the broad economic
census category of Wired
Telecommunications Carriers; that
category is defined as follows: ‘‘This
industry comprises establishments
primarily engaged in operating and/or
providing access to transmission
facilities and infrastructure that they
own and/or lease for the transmission of
voice, data, text, sound, and video using
wired telecommunications networks.
Transmission facilities may be based on
a single technology or a combination of
technologies.’’ 247 The SBA has
developed a small business size
standard for this category, which is: all
such firms having 1,500 or fewer
employees. To gauge small business
prevalence for these cable services we
must, however, use current census data
that are based on the previous category
of Cable and Other Program Distribution
and its associated size standard; that
size standard was: all such firms having
$13.5 million or less in annual
receipts.248 According to Census Bureau
data for 2002, there were a total of 1,191
firms in this previous category that
operated for the entire year.249 Of this
total, 1,087 firms had annual receipts of
under $10 million, and 43 firms had
receipts of $10 million or more but less
than $25 million.250 Thus, the majority
of these firms can be considered small.
98. Television Broadcasting. This
Economic Census category ‘‘comprises
establishments primarily engaged in
broadcasting images together with
sound. These establishments operate
television broadcasting studios and
facilities for the programming and
transmission of programs to the
public.’’ 251 The SBA has created the
following small business size standard
for Television Broadcasting firms: those
having $14 million or less in annual
receipts.252 The Commission has
estimated the number of licensed
commercial television stations to be
1,392.253 In addition, according to
Commission staff review of the BIA
Publications, Inc., Master Access
Television Analyzer Database (BIA) on
March 30, 2007, about 986 of an
estimated 1,395 commercial television
stations (or approximately 72 percent)
had revenues of $13 million or less.254
We therefore estimate that the majority
of commercial television broadcasters
are small entities.
99. We note, however, that in
assessing whether a business concern
qualifies as small under the above
definition, business (control)
affiliations 255 must be included. Our
estimate, therefore, likely overstates the
number of small entities that might be
affected by our action, because the
revenue figure on which it is based does
248 13
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243 Id.
at 8296.
244 Auction of Broadband Radio Service (BRS)
Licenses, Scheduled for October 27, 2009, Notice
and Filing Requirements, Minimum Opening Bids,
Upfront Payments, and Other Procedures for
Auction 86, Public Notice, 24 FCC Rcd 8277 (2009).
245 Auction of Broadband Radio Service Licenses
Closes, Winning Bidders Announced for Auction
86, Down Payments Due November 23, 2009, Final
Payments Due December 8, 2009, Ten-Day Petition
to Deny Period, Public Notice, 24 FCC Rcd 13572
(2009).
246 The term ‘‘small entity’’ within SBREFA
applies to small organizations (nonprofits) and to
small governmental jurisdictions (cities, counties,
towns, townships, villages, school districts, and
special districts with populations of less than
50,000). 5 U.S.C. 601(4)–(6). We do not collect
annual revenue data on EBS licensees.
247 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517110 Wired Telecommunications Carriers’’
(partial definition); https://www.census.gov/naics/
2007/def/ND517110.HTM#N517110.
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CFR 121.201, NAICS code 517110.
Census Bureau, 2002 Economic Census,
Subject Series: Information, Table 4, Receipts Size
of Firms for the United States: 2002, NAICS code
517510 (issued November 2005).
250 Id. An additional 61 firms had annual receipts
of $25 million or more.
251 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘515120 Television Broadcasting’’ (partial
definition); https://www.census.gov/naics/2007/def/
ND515120.HTM#N515120.
252 13 CFR 121.201, NAICS code 515120 (updated
for inflation in 2008).
253 See FCC News Release, ‘‘Broadcast Station
Totals as of September 30, 2010,’’ dated October 22,
2010; https://www.fcc.gov/Daily_Releases/
Daily_Business/2008/db0318/DOC–280836A1.pdf.
254 We recognize that BIA’s estimate differs
slightly from the FCC total given supra.
255 ‘‘[Business concerns] are affiliates of each
other when one concern controls or has the power
to control the other or a third party or parties
controls or has the power to control both.’’ 13 CFR
21.103(a)(1).
249 U.S.
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30633
not include or aggregate revenues from
affiliated companies. In addition, an
element of the definition of ‘‘small
business’’ is that the entity not be
dominant in its field of operation. We
are unable at this time to define or
quantify the criteria that would
establish whether a specific television
station is dominant in its field of
operation. Accordingly, the estimate of
small businesses to which rules may
apply does not exclude any television
station from the definition of a small
business on this basis and is therefore
possibly over-inclusive to that extent.
100. In addition, the Commission has
estimated the number of licensed
noncommercial educational (NCE)
television stations to be 391.256 These
stations are non-profit, and therefore
considered to be small entities.257
101. In addition, there are also 2,387
low power television stations (LPTV).258
Given the nature of this service, we will
presume that all LPTV licensees qualify
as small entities under the above SBA
small business size standard.
102. Radio Broadcasting. This
Economic Census category ‘‘comprises
establishments primarily engaged in
broadcasting aural programs by radio to
the public. Programming may originate
in their own studio, from an affiliated
network, or from external sources.’’259
The SBA has established a small
business size standard for this category,
which is: such firms having $7 million
or less in annual receipts.260 According
to Commission staff review of BIA
Publications, Inc.’s Master Access Radio
Analyzer Database on March 31, 2005,
about 10,840 (95%) of 11,410
commercial radio stations had revenues
of $6 million or less. Therefore, the
majority of such entities are small
entities.
103. We note, however, that in
assessing whether a business concern
qualifies as small under the above size
standard, business affiliations must be
included.261 In addition, to be
256 See FCC News Release, ‘‘Broadcast Station
Totals as of September 30, 2010,’’ dated October 22,
2010; https://www.fcc.gov/Daily_Releases/
Daily_Business/2008/db0318/DOC–280836A1.pdf.
257 See generally 5 U.S.C. 601(4), (6).
258 See FCC News Release, ‘‘Broadcast Station
Totals as of September 30, 2010,’’ dated October 22,
2010; https://www.fcc.gov/Daily_Releases/
Daily_Business/2008/db0318/DOC–280836A1.pdf.
259 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘515112 Radio Stations’’; https://www.census.gov/
naics/2007/def/ND515112.HTM#N515112.
260 13 CFR 121.201, NAICS code 515112 (updated
for inflation in 2008).
261 ‘‘Concerns and entities are affiliates of each
other when one controls or has the power to control
the other, or a third party or parties controls or has
the power to control both. It does not matter
whether control is exercised, so long as the power
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determined to be a ‘‘small business,’’ the
entity may not be dominant in its field
of operation.262 We note that it is
difficult at times to assess these criteria
in the context of media entities, and our
estimate of small businesses may
therefore be over-inclusive.
104. Auxiliary, Special Broadcast and
Other Program Distribution Services.
This service involves a variety of
transmitters, generally used to relay
broadcast programming to the public
(through translator and booster stations)
or within the program distribution chain
(from a remote news gathering unit back
to the station). The Commission has not
developed a definition of small entities
applicable to broadcast auxiliary
licensees. The applicable definitions of
small entities are those, noted
previously, under the SBA rules
applicable to radio broadcasting stations
and television broadcasting stations.263
105. The Commission estimates that
there are approximately 5,618 FM
translators and boosters.264 The
Commission does not collect financial
information on any broadcast facility,
and the Department of Commerce does
not collect financial information on
these auxiliary broadcast facilities. We
believe that most, if not all, of these
auxiliary facilities could be classified as
small businesses by themselves. We also
recognize that most commercial
translators and boosters are owned by a
parent station which, in some cases,
would be covered by the revenue
definition of small business entity
discussed above. These stations would
likely have annual revenues that exceed
the SBA maximum to be designated as
a small business ($7.0 million for a
radio station or $14.0 million for a TV
station). Furthermore, they do not meet
the Small Business Act’s definition of a
‘‘small business concern’’ because they
are not independently owned and
operated. 265
106. Cable Television Distribution
Services. Since 2007, these services
have been defined within the broad
economic census category of Wired
Telecommunications Carriers; that
category is defined as follows: ‘‘This
industry comprises establishments
primarily engaged in operating and/or
providing access to transmission
facilities and infrastructure that they
own and/or lease for the transmission of
voice, data, text, sound, and video using
wired telecommunications networks.
to control exists.’’ 13 CFR 121.103(a)(1) (an SBA
regulation).
262 13 CFR 121.102(b) (an SBA regulation).
263 13 CFR 121.201, NAICS codes 515112 and
515120.
264 See supra note 242.
265 See 15 U.S.C. 632.
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Transmission facilities may be based on
a single technology or a combination of
technologies.’’ 266 The SBA has
developed a small business size
standard for this category, which is: all
such firms having 1,500 or fewer
employees. To gauge small business
prevalence for these cable services we
must, however, use current census data
that are based on the previous category
of Cable and Other Program Distribution
and its associated size standard; that
size standard was: all such firms having
$13.5 million or less in annual
receipts.267 According to Census Bureau
data for 2002, there were a total of 1,191
firms in this previous category that
operated for the entire year.268 Of this
total, 1,087 firms had annual receipts of
under $10 million, and 43 firms had
receipts of $10 million or more but less
than $25 million.269 Thus, the majority
of these firms can be considered small.
107. Cable Companies and Systems.
The Commission has also developed its
own small business size standards, for
the purpose of cable rate regulation.
Under the Commission’s rules, a ‘‘small
cable company’’ is one serving 400,000
or fewer subscribers, nationwide.270
Industry data indicate that, of 1,076
cable operators nationwide, all but
eleven are small under this size
standard.271 In addition, under the
Commission’s rules, a ‘‘small system’’ is
a cable system serving 15,000 or fewer
subscribers.272 Industry data indicate
that, of 6,635 systems nationwide, 5,802
systems have under 10,000 subscribers,
and an additional 302 systems have
10,000–19,999 subscribers.273 Thus,
266 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517110 Wired Telecommunications Carriers’’
(partial definition); https://www.census.gov/naics/
2007/def/ND517110.HTM#N517110.
267 13 CFR 121.201, NAICS code 517110.
268 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, Table 4, Receipts Size
of Firms for the United States: 2002, NAICS code
517510 (issued November 2005).
269 Id. An additional 61 firms had annual receipts
of $25 million or more.
270 47 CFR 76.901(e). The Commission
determined that this size standard equates
approximately to a size standard of $100 million or
less in annual revenues. Implementation of Sections
of the 1992 Cable Act: Rate Regulation, Sixth Report
and Order and Eleventh Order on Reconsideration,
10 FCC Rcd 7393, 7408 (1995).
271 These data are derived from: R.R. Bowker,
Broadcasting & Cable Yearbook 2006, ‘‘Top 25
Cable/Satellite Operators,’’ pages A–8 & C–2 (data
current as of June 30, 2005); Warren
Communications News, Television & Cable
Factbook 2006, ‘‘Ownership of Cable Systems in the
United States,’’ pages D–1805 to D–1857.
272 47 CFR 76.901(c).
273 Warren Communications News, Television &
Cable Factbook 2008, ‘‘U.S. Cable Systems by
Subscriber Size,’’ page F–2 (data current as of Oct.
2007). The data do not include 851 systems for
which classifying data were not available.
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under this second size standard, most
cable systems are small.
108. Cable System Operators. The
Communications Act of 1934, as
amended, also contains a size standard
for small cable system operators, which
is ‘‘a cable operator that, directly or
through an affiliate, serves in the
aggregate fewer than 1 percent of all
subscribers in the United States and is
not affiliated with any entity or entities
whose gross annual revenues in the
aggregate exceed $250,000,000.’’ 274 The
Commission has determined that an
operator serving fewer than 677,000
subscribers shall be deemed a small
operator, if its annual revenues, when
combined with the total annual
revenues of all its affiliates, do not
exceed $250 million in the aggregate.275
Industry data indicate that, of 1,076
cable operators nationwide, all but ten
are small under this size standard.276
We note that the Commission neither
requests nor collects information on
whether cable system operators are
affiliated with entities whose gross
annual revenues exceed $250
million,277 and therefore we are unable
to estimate more accurately the number
of cable system operators that would
qualify as small under this size
standard.
109. Open Video Systems. The open
video system (‘‘OVS’’) framework was
established in 1996, and is one of four
statutorily recognized options for the
provision of video programming
services by local exchange carriers.278
The OVS framework provides
opportunities for the distribution of
video programming other than through
cable systems. Because OVS operators
provide subscription services,279 OVS
falls within the SBA small business size
standard covering cable services, which
274 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) &
nn. 1–3.
275 47 CFR 76.901(f); see Public Notice, FCC
Announces New Subscriber Count for the Definition
of Small Cable Operator, DA 01–158 (Cable
Services Bureau, Jan. 24, 2001).
276 These data are derived from: R.R. Bowker,
Broadcasting & Cable Yearbook 2006, ‘‘Top 25
Cable/Satellite Operators,’’ pages A–8 & C–2 (data
current as of June 30, 2005); Warren
Communications News, Television & Cable
Factbook 2006, ‘‘Ownership of Cable Systems in the
United States,’’ pages D–1805 to D–1857.
277 The Commission does receive such
information on a case-by-case basis if a cable
operator appeals a local franchise authority’s
finding that the operator does not qualify as a small
cable operator pursuant to Section 76.901(f) of the
Commission’s rules. See 47 CFR 76.909(b).
278 47 U.S.C. 571(a)(3)–(4). See Annual
Assessment of the Status of Competition in the
Market for the Delivery of Video Programming,
Thirteenth Annual Report, 24 FCC Rcd 542, 606
para. 135 (2009) (‘‘Thirteenth Annual Cable
Competition Report’’).
279 See 47 U.S.C. 573.
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is ‘‘Wired Telecommunications
Carriers.’’ 280 The SBA has developed a
small business size standard for this
category, which is: all such firms having
1,500 or fewer employees. To gauge
small business prevalence for such
services we must, however, use current
census data that are based on the
previous category of Cable and Other
Program Distribution and its associated
size standard; that size standard was: all
such firms having $13.5 million or less
in annual receipts.281 According to
Census Bureau data for 2002, there were
a total of 1,191 firms in this previous
category that operated for the entire
year.282 Of this total, 1,087 firms had
annual receipts of under $10 million,
and 43 firms had receipts of $10 million
or more but less than $25 million.283
Thus, the majority of cable firms can be
considered small. In addition, we note
that the Commission has certified some
OVS operators, with some now
providing service.284 Broadband service
providers (‘‘BSPs’’) are currently the
only significant holders of OVS
certifications or local OVS franchises.285
The Commission does not have
financial or employment information
regarding the entities authorized to
provide OVS, some of which may not
yet be operational. Thus, again, at least
some of the OVS operators may qualify
as small entities.
110. Cable Television Relay Service.
This service includes transmitters
generally used to relay cable
programming within cable television
system distribution systems. This cable
service is defined within the broad
economic census category of Wired
Telecommunications Carriers; that
category is defined as follows: ‘‘This
industry comprises establishments
primarily engaged in operating and/or
providing access to transmission
facilities and infrastructure that they
own and/or lease for the transmission of
voice, data, text, sound, and video using
wired telecommunications networks.
Transmission facilities may be based on
a single technology or a combination of
280 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517110 Wired Telecommunications Carriers’’;
https://www.census.gov/naics/2007/def/
ND517110.HTM#N517110.
281 13 CFR 121.201, NAICS code 517110.
282 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, Table 4, Receipts Size
of Firms for the United States: 2002, NAICS code
517510 (issued November 2005).
283 Id. An additional 61 firms had annual receipts
of $25 million or more.
284 A list of OVS certifications may be found at
https://www.fcc.gov/mb/ovs/csovscer.html.
285 See Thirteenth Annual Cable Competition
Report, 24 FCC Rcd at 606–07 para. 135. BSPs are
newer firms that are building state-of-the-art,
facilities-based networks to provide video, voice,
and data services over a single network.
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technologies.’’ 286 The SBA has
developed a small business size
standard for this category, which is: All
such firms having 1,500 or fewer
employees. To gauge small business
prevalence for cable services we must,
however, use current census data that
are based on the previous category of
Cable and Other Program Distribution
and its associated size standard; that
size standard was: All such firms having
$13.5 million or less in annual
receipts.287 According to Census Bureau
data for 2002, there were a total of 1,191
firms in this previous category that
operated for the entire year.288 Of this
total, 1,087 firms had annual receipts of
under $10 million, and 43 firms had
receipts of $10 million or more but less
than $25 million.289 Thus, the majority
of these firms can be considered small.
111. Multichannel Video Distribution
and Data Service. MVDDS is a terrestrial
fixed microwave service operating in
the 12.2–12.7 GHz band. The
Commission adopted criteria for
defining three groups of small
businesses for purposes of determining
their eligibility for special provisions
such as bidding credits. It defined a very
small business as an entity with average
annual gross revenues not exceeding $3
million for the preceding three years; a
small business as an entity with average
annual gross revenues not exceeding
$15 million for the preceding three
years; and an entrepreneur as an entity
with average annual gross revenues not
exceeding $40 million for the preceding
three years.290 These definitions were
approved by the SBA.291 On January 27,
2004, the Commission completed an
auction of 214 MVDDS licenses
286 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517110 Wired Telecommunications Carriers’’
(partial definition); https://www.census.gov/naics/
2007/def/ND517110.HTM#N517110.
287 13 CFR 121.201, NAICS code 517110.
288 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, Table 4, Receipts Size
of Firms for the United States: 2002, NAICS code
517510 (issued November 2005).
289 Id. An additional 61 firms had annual receipts
of $25 million or more.
290 Amendment of Parts 2 and 25 of the
Commission’s Rules to Permit Operation of NGSO
FSS Systems Co-Frequency with GSO and
Terrestrial Systems in the Ku-Band Frequency
Range; Amendment of the Commission’s Rules to
Authorize Subsidiary Terrestrial Use of the 12.2–
12.7 GHz Band by Direct Broadcast Satellite
Licenses and their Affiliates; and Applications of
Broadwave USA, PDC Broadband Corporation, and
Satellite Receivers, Ltd. to provide A Fixed Service
in the 12.2–12.7 GHz Band, ET Docket No. 98–206,
Memorandum Opinion and Order and Second
Report and Order, 17 FCC Rcd 9614, 9711, para. 252
(2002).
291 See Letter from Hector V. Barreto,
Administrator, U.S. Small Business Administration,
to Margaret W. Wiener, Chief, Auctions and
Industry Analysis Division, WTB, FCC (Feb. 13,
2002).
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(Auction No. 53). In this auction, ten
winning bidders won a total of 192
MVDDS licenses.292 Eight of the ten
winning bidders claimed small business
status and won 144 of the licenses. The
Commission also held an auction of
MVDDS licenses on December 7, 2005
(Auction 63). Of the three winning
bidders who won 22 licenses, two
winning bidders, winning 21 of the
licenses, claimed small business
status.293
112. Amateur Radio Service. These
licensees are held by individuals in a
noncommercial capacity; these licensees
are not small entities.
113. Aviation and Marine Services.
Small businesses in the aviation and
marine radio services use a very high
frequency (‘‘VHF’’) marine or aircraft
radio and, as appropriate, an emergency
position-indicating radio beacon (and/or
radar) or an emergency locator
transmitter. The Commission has not
developed a small business size
standard specifically applicable to these
small businesses. For purposes of this
analysis, the Commission uses the SBA
small business size standard for the
category Wireless Telecommunications
Carriers (except Satellite), which is
1,500 or fewer employees.294 Most
applicants for recreational licenses are
individuals. Approximately 581,000
ship station licensees and 131,000
aircraft station licensees operate
domestically and are not subject to the
radio carriage requirements of any
statute or treaty. For purposes of our
evaluations in this analysis, we estimate
that there are up to approximately
712,000 licensees that are small
businesses (or individuals) under the
SBA standard. In addition, between
December 3, 1998 and December 14,
1998, the Commission held an auction
of 42 VHF Public Coast licenses in the
157.1875–157.4500 MHz (ship transmit)
and 161.775–162.0125 MHz (coast
transmit) bands. For purposes of the
auction, the Commission defined a
‘‘small’’ business as an entity that,
together with controlling interests and
affiliates, has average gross revenues for
the preceding three years not to exceed
$15 million dollars. In addition, a ‘‘very
small’’ business is one that, together
with controlling interests and affiliates,
has average gross revenues for the
preceding three years not to exceed $3
292 See ‘‘Multichannel Video Distribution and
Data Service Auction Closes,’’ Public Notice, 19 FCC
Rcd 1834 (2004).
293 See ‘‘Auction of Multichannel Video
Distribution and Data Service Licenses Closes;
Winning Bidders Announced for Auction No. 63,’’
Public Notice, 20 FCC Rcd 19807 (2005).
294 13 CFR 121.201, NAICS code 517210.
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million dollars.295 There are
approximately 10,672 licensees in the
Marine Coast Service, and the
Commission estimates that almost all of
them qualify as ‘‘small’’ businesses
under the above special small business
size standards.
114. Personal Radio Services.
Personal radio services provide shortrange, low power radio for personal
communications, radio signaling, and
business communications not provided
for in other services. The Personal Radio
Services include spectrum licensed
under Part 95 of our rules.296 These
services include Citizen Band Radio
Service (‘‘CB’’), General Mobile Radio
Service (‘‘GMRS’’), Radio Control Radio
Service (‘‘R/C’’), Family Radio Service
(‘‘FRS’’), Wireless Medical Telemetry
Service (‘‘WMTS’’), Medical Implant
Communications Service (‘‘MICS’’), Low
Power Radio Service (‘‘LPRS’’), and
Multi-Use Radio Service (‘‘MURS’’).297
There are a variety of methods used to
license the spectrum in these rule parts,
from licensing by rule, to conditioning
operation on successful completion of a
required test, to site-based licensing, to
geographic area licensing. Under the
RFA, the Commission is required to
make a determination of which small
entities are directly affected by the rules
being proposed. Since all such entities
are wireless, we apply the definition of
Wireless Telecommunications Carriers
(except Satellite), pursuant to which a
small entity is defined as employing
1,500 or fewer persons.298 Many of the
licensees in these services are
individuals, and thus are not small
entities. In addition, due to the mostly
unlicensed and shared nature of the
spectrum utilized in many of these
services, the Commission lacks direct
information upon which to base an
estimation of the number of small
entities under an SBA definition that
might be directly affected by our action.
115. Public Safety Radio Services.
Public Safety radio services include
police, fire, local government, forestry
conservation, highway maintenance,
and emergency medical services.299
295 Amendment of the Commission’s Rules
Concerning Maritime Communications, Third
Report and Order and Memorandum Opinion and
Order, 13 FCC Rcd 19853 (1998).
296 47 CFR Part 90.
297 The Citizens Band Radio Service, General
Mobile Radio Service, Radio Control Radio Service,
Family Radio Service, Wireless Medical Telemetry
Service, Medical Implant Communications Service,
Low Power Radio Service, and Multi-Use Radio
Service are governed by Subpart D, Subpart A,
Subpart C, Subpart B, Subpart H, Subpart I, Subpart
G, and Subpart J, respectively, of Part 95 of the
Commission’s rules. See generally 47 CFR Part 95.
298 13 CFR 121.201, NAICS Code 517210.
299 With the exception of the special emergency
service, these services are governed by Subpart B
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There are a total of approximately
127,540 licensees in these services.
Governmental entities300 as well as
private businesses comprise the
licensees for these services. All
governmental entities with populations
of less than 50,000 fall within the
definition of a small entity.301
116. Internet Service Providers. The
2007 Economic Census places these
firms, whose services might include
voice over Internet protocol (VoIP), in
either of two categories, depending on
whether the service is provided over the
provider’s own telecommunications
connections (e.g. cable and DSL, ISPs),
or over client-supplied
telecommunications connections (e.g.
dial-up ISPs). The former are within the
category of Wired Telecommunications
Carriers,302 which has an SBA small
business size standard of 1,500 or fewer
employees.303 The latter are within the
category of All Other
Telecommunications,304 which has a
size standard of annual receipts of $25
million or less.305 The most current
of part 90 of the Commission’s rules, 47 CFR 90.15–
90.27. The police service includes approximately
27,000 licensees that serve state, county, and
municipal enforcement through telephony (voice),
telegraphy (code) and teletype and facsimile
(printed material). The fire radio service includes
approximately 23,000 licensees comprised of
private volunteer or professional fire companies as
well as units under governmental control. The local
government service that is presently comprised of
approximately 41,000 licensees that are state,
county, or municipal entities that use the radio for
official purposes not covered by other public safety
services. There are approximately 7,000 licensees
within the forestry service which is comprised of
licensees from state departments of conservation
and private forest organizations who set up
communications networks among fire lookout
towers and ground crews. The approximately 9,000
state and local governments are licensed to highway
maintenance service provide emergency and
routine communications to aid other public safety
services to keep main roads safe for vehicular
traffic. The approximately 1,000 licensees in the
Emergency Medical Radio Service (‘‘EMRS’’) use the
39 channels allocated to this service for emergency
medical service communications related to the
delivery of emergency medical treatment. 47 CFR
90.15–90.27. The approximately 20,000 licensees in
the special emergency service include medical
services, rescue organizations, veterinarians,
handicapped persons, disaster relief organizations,
school buses, beach patrols, establishments in
isolated areas, communications standby facilities,
and emergency repair of public communications
facilities. 47 CFR 90.33–90.55.
300 47 CFR 1.1162.
301 5 U.S.C. 601(5).
302 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517110 Wired Telecommunications Carriers’’,
https://www.census.gov/naics/2007/def/
ND517110.HTM#N517110.
303 13 CFR 121.201, NAICS code 517110 (updated
for inflation in 2008).
304 U.S. Census Bureau, 2007 NAICS Definitions,
‘‘517919 All Other Telecommunications’’; https://
www.census.gov/naics/2007/def/
ND517919.HTM#N517919.
305 13 CFR 121.201, NAICS code 517919 (updated
for inflation in 2008).
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Census Bureau data for all such firms,
however, are the 2002 data for the
previous census category called Internet
Service Providers.306 That category had
a small business size standard of $21
million or less in annual receipts, which
was revised in late 2005 to $23 million.
The 2002 data show that there were
2,529 such firms that operated for the
entire year.307 Of those, 2,437 firms had
annual receipts of under $10 million,
and an additional 47 firms had receipts
of between $10 million and
$24,999,999.308 Consequently, we
estimate that the majority of ISP firms
are small entities.
117. The ISP industry has changed
dramatically since 2002. The 2002 data
cited above may therefore include
entities that no longer provide Internet
access service and may exclude entities
that now provide such service. To
ensure that this (IRFA/FRFA) describes
the universe of small entities that our
action might affect, we discuss in turn
several different types of entities that
might be providing Internet access
service.
118. We note that, although we have
no specific information on the number
of small entities that provide Internet
access service over unlicensed
spectrum, we include these entities in
our IRFA/FRFA.
D. Description of Projected Reporting,
Recordkeeping and Other Compliance
Requirements
119. With certain exceptions, the
Commission’s Schedule of Regulatory
Fees applies to all Commission
licensees and regulatees. Most licensees
will be required to count the number of
licenses or call signs authorized, and
pay a regulatory fee based on the
number of licenses or call signs.309 In
306 U.S. Census Bureau, ‘‘2002 NAICS Definitions,
‘‘518111 Internet Service Providers’’; https://
www.census.gov/eped/naics02/def/NDEF518.HTM.
307 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization),’’
Table 4, NAICS code 518111 (issued Nov. 2005).
308 An additional 45 firms had receipts of $25
million or more.
309 See 47 CFR 1.1162 for the general exemptions
from regulatory fees. E.g., Amateur radio licensees
(except applicants for vanity call signs) and
operators in other non-licensed services (e.g.,
Personal Radio, part 15, ship and aircraft).
Governments and non-profit (exempt under section
501(c) of the Internal Revenue Code) entities are
exempt from payment of regulatory fees and need
not submit payment. Non-commercial educational
broadcast licensees are exempt from regulatory fees
as are licensees of auxiliary broadcast services such
as low power auxiliary stations, television auxiliary
service stations, remote pickup stations and aural
broadcast auxiliary stations where such licenses are
used in conjunction with commonly owned noncommercial educational stations. Emergency Alert
System licenses for auxiliary service facilities are
also exempt as are instructional television fixed
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some instances, licensees may decide to
submit an FCC Form 159 Remittance
Advice. Interstate telephone service
providers must compute their annual
regulatory fee based on their interstate
and international end-user revenue
using information they already supply
to the Commission in compliance with
the Form 499–A, Telecommunications
Reporting Worksheet. Compliance with
the fee schedule will require some
licensees to tabulate the number of units
(e.g., cellular telephones, pagers, cable
TV subscribers) they have in service.
Licensees ordinarily will keep a list of
the number of units they have in service
as part of their normal business
practices. No additional outside
professional skills are required to
submit a regulatory fee payment, and it
can be completed by the employees
responsible for an entity’s business
records.
120. As discussed previously in this
Notice of Proposed Rulemaking, the
Commission concluded in its FY 2009
regulatory fee cycle that licensees filing
their annual regulatory fee payments
must begin the process by entering the
Commission’s Fee Filer system with a
valid FRN and password. In some
instances, it will be necessary to use a
specific FRN and password that is
linked to a particular regulatory fee bill.
Going forward, the submission of
hardcopy Form 159 documents will not
be permitted for making a regulatory fee
payment during the regulatory fee cycle.
By requiring licensees to use Fee Filer
to begin the regulatory fee payment
process, errors resulting from illegible
handwriting on hardcopy Form 159’s
will be reduced, and the Commission
will be able to create an electronic
record of licensee payment attributes
that are more easily traceable than
payments that were previously mailed
in with a hardcopy Form 159.
121. Licensees and regulatees are
advised that failure to submit the
required regulatory fee in a timely
manner will subject the licensee or
regulatee to a late payment penalty of 25
percent in addition to the required
fee.310 If payment is not received, new
or pending applications may be
dismissed, and existing authorizations
may be subject to rescission.311 Further,
in accordance with the DCIA, Federal
agencies may bar a person or entity from
obtaining a Federal loan or loan
insurance guarantee if that person or
entity fails to pay a delinquent debt
owed to any Federal agency.312
Nonpayment of regulatory fees is a debt
owed to the United States pursuant to
31 U.S.C. 3711 et seq., and the DCIA.
Appropriate enforcement measures, as
well as administrative and judicial
remedies, may be exercised by the
Commission. Debts owed to the
Commission may result in a person or
entity being denied a Federal loan or
loan guarantee pending before another
Federal agency until such obligations
are paid.313
122. The Commission’s rules
currently provide for relief in
exceptional circumstances. Persons or
entities may request a waiver, reduction
or deferment of payment of the
regulatory fee.314 However, timely
submission of the required regulatory
fee must accompany requests for
waivers or reductions. This will avoid
any late payment penalty if the request
is denied. The fee will be refunded if
the request is granted. In exceptional
and compelling instances (e.g. where
payment of the regulatory fee along with
the waiver or reduction request could
result in reduction of service to a
community or other financial hardship
to the licensee), the Commission will
defer payment in response to a request
filed with the appropriate supporting
documentation.
service licensees. Regulatory fees are automatically
waived for the licensee of any translator station
that: (1) Is not licensed to, in whole or in part, and
does not have common ownership with, the
licensee of a commercial broadcast station; (2) does
not derive income from advertising; and (3) is
dependent on subscriptions or contributions from
members of the community served for support.
Receive only earth station permittees are exempt
from payment of regulatory fees. A regulatee will
be relieved of its fee payment requirement if its
total fee due, including all categories of fees for
which payment is due by the entity, amounts to less
than $10.
E. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
123. The RFA requires an agency to
describe any significant alternatives that
it has considered in reaching its
approach, which may include the
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310 47
CFR 1.1164.
CFR 1.1164(c).
312 Public Law 104–134, 110 Stat. 1321 (1996).
313 31 U.S.C. 7701(c)(2)(B).
314 47 CFR 1.1166.
311 47
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following four alternatives, among
others: (1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for small entities; (3) the
use of performance, rather than design,
standards; and (4) an exemption from
coverage of the rule, or any part thereof,
for small entities.315 In our NPRM, we
sought comment on alternatives that
might simplify our fee procedures or
otherwise benefit filers, including small
entities, while remaining consistent
with our statutory responsibilities in
this proceeding. We received no
comments specifically in response to
the IRFA.
124. Several categories of licensees
and regulatees are exempt from payment
of regulatory fees. Also, waiver
procedures provide regulatees,
including small entity regulatees, relief
in exceptional circumstances. We note
that small entities should be assisted by
our implementation of the Fee Filer
program, and that we have continued
our practice of exempting fees whose
total sum owed is less than $10.00.
F. Federal Rules that May Duplicate,
Overlap, or Conflict With the Proposed
Rules
125. None.
V. Ordering Clauses
126. 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 NPRM is
hereby adopted.
127. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this NPRM including the Initial
Regulatory Flexibility Analysis in
Appendix E, to the Chief Counsel for
Advocacy of the U.S. Small Business
Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2011–12685 Filed 5–25–11; 8:45 am]
BILLING CODE 6712–01–P
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[Federal Register Volume 76, Number 102 (Thursday, May 26, 2011)]
[Proposed Rules]
[Pages 30605-30637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12685]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 11-76; FCC 11-68]
Assessment and Collection of Regulatory Fees For Fiscal Year 2011
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commission will revise its Schedule of Regulatory Fees in
order to recover an amount of $335,794,000 that Congress has required
the Commission to collect for fiscal year 2011. The Communications Act
of 1934, as amended, provides for the annual assessment and collection
of regulatory fees for annual ``Mandatory Adjustments'' and ``Permitted
Amendments'' to the Schedule of Regulatory Fees.
DATES: Submit comments on or before June 2, 2011, and reply comments on
or before June 9, 2011.
ADDRESSES: You may submit comments, identified by MD Docket No. 11-76,
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.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
E-mail: ecfs@fcc.gov. Include MD Docket No. 11-76 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 detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), FCC 11-68, MD Docket No. 11-76, adopted
and released May 3, 2011. The full text of this document is available
for inspection and copying during normal business hours in the FCC
Reference Center, 445 Twelfth Street, SW., Room CY-A257, Portals II,
Washington, DC 20554, and may also be purchased from the Commission's
copy contractor, BCPI, Inc., Portals II, 445 Twelfth Street, SW., Room
CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via
their Web site, https://www.bcpi.com, or call 1-800-378-3160. This
document is available in alternative formats (computer diskette, large
print, audio record, and braille). Persons with disabilities who need
documents in these formats may contact the FCC by e-mail:
FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.
I. Procedural Matters
A. Ex Parte Rules-Permit-But Disclose Proceeding
1. This is a ``permit-but-disclose'' proceeding subject to the
requirements under section 1.1206(b) of the Commission's rules.\1\ 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
[[Page 30606]]
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.\2\ Additional rules pertaining to oral
and written presentations are set forth in Section 1.1206(b).
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\1\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
\2\ See 47 CFR 1.1206(b)(2).
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B. Comment Filing Procedures
2. Pursuant to sections 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
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. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: https://www.regulations.gov.
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. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours
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 must be addressed to 445 12th Street, SW., Washington DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
3. Documents in MD Docket No. 11-76 will be available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., CY-
A257, Washington, DC 20554. These documents will also be available free
online, via ECFS. Documents will be available electronically in ASCII,
Word, and/or Adobe Acrobat.
4. 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 Commission'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.
C. Paperwork Reduction Act
5. This NPRM does not contain proposed or modified information
collection burden (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).
D. Congressional Review Act Analysis
6. The Commission will send a copy of this NPRM to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act.\3\
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\3\ See 5 U.S.C. 801(a)(1)(A). The Congressional Review Act is
contained in Title II, 251, of the CWAAA; see Public Law 104-121,
Title II, 251, 110 Stat. 868.
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E. Initial Regulatory Flexibility Analysis
7. An initial regulatory flexibility analysis (``IRFA'') is
contained herein. Comments to the IRFA must be identified as responses
to the IRFA and filed by the deadlines for comments on the Notice. The
Commission will send a copy of the Notice, including the IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration.
II. Notice of Proposed Rulemaking
Introduction
8. In this NPRM, we propose to collect $335,794,000 in regulatory
fees for Fiscal Year (``FY'') 2011, pursuant to Section 9 of the
Communications Act of 1934, as amended (the ``Act''). Section 9
regulatory 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.\4\ The annual regulatory fee amount to be collected is
established each year in the Commission's Annual Appropriations Act
which is adopted by Congress and signed by the President and which
funds the Commission.\5\ In this annual regulatory fee proceeding, we
retain many of the established methods, policies, and procedures for
collecting Section 9 regulatory fees adopted by the Commission in prior
years. Consistent with our established practice, we intend to collect
these regulatory fees during a September 2011 filing window in order to
collect the required amount by the end of our fiscal year.
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\4\ 47 U.S.C. 159(a).
\5\ See Consolidated Appropriations Act, 2010, Public Law 111-
117 for the FY 2010 appropriations act language for the Commission
establishing the amount of $335,794,000 of offsetting collections to
be assessed and collected by the Commission pursuant to Section 9 of
the Communications Act.
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III. Discussion
A. FY 2011 Regulatory Fee Assessment Methodology
9. In our FY 2011 regulatory fee assessment, we will use the same
Section 9 regulatory fee assessment methodology adopted in FY 2010 and
in prior years. Each fiscal year, the Commission proportionally
allocates the total amount that must be collected via Section 9
regulatory fees. The results of our FY 2011 regulatory fee assessment
methodology (including a comparison to the prior year's results) are
contained in the table below. To collect the $335,794,000 required by
Congress, we adjusted the FY 2010 amount upward by 4.7 percent and
allocated this amount across the various fee categories. Consistent
with past practice, we then divided the FY 2011 amount by the number of
estimated payment units in each fee category to determine the unit
fee.\6\ As in prior
[[Page 30607]]
years, for cases involving small fees, e.g., licenses that are renewed
over a multiyear term, we divided the resulting unit fee by the term of
the license and then rounded these unit fees consistent with the
requirements of Section 9(b)(2) of the Act.
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\6\ In many instances, the regulatory fee amount is a flat fee
per licensee or regulatee. In some instances, the fee amount
represents a per-unit fee (such as for International Bearer
Circuits), a per-unit subscriber fee (such as for Cable, Commercial
Mobile Radio Service (``CMRS'') Cellular/Mobile and CMRS Messaging),
or a fee factor per revenue dollar (Interstate Telecommunications
Service Provider (``ITSP'') fee). The payment unit is the measure
upon which the fee is based, such as a licensee, regulatee, or
subscriber fee.
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BILLING CODE 6712-01-P
[[Page 30608]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.007
[[Page 30609]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.008
[[Page 30610]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.009
BILLING CODE 6712-01-C
[[Page 30611]]
10. In calculating the FY 2011 regulatory fees listed in (see
Table--FY 2011 Schedule of Regulatory Fees below), we adjusted the FY
2011 list of payment units (see Table--Sources of Payment Unit
Estimates for FY 2011 below) based upon licensee databases, industry
and trade group projections, as well as prior year payment information.
In some instances, Commission licensee databases are used; in other
instances, actual prior year payment records and/or industry and trade
association projections are used in determining the payment units.\7\
Where appropriate, we adjusted and rounded our final estimates to take
into consideration events that may impact the number of units for which
regulatees submit payment, such as waivers and exemptions that may be
filed in FY 2011, and fluctuations in the number of licenses or station
operators due to economic, technical, or other reasons. Our estimated
FY 2011 payment units, therefore, are based on several variable factors
that are relevant to each fee category. The fee rate may also be
rounded or adjusted slightly to account for these variables.
BILLING CODE 6712-01-P
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\7\ The databases we consulted are the following: the
Commission's Universal Licensing System (``ULS''), International
Bureau Filing System (``IBFS''), Consolidated Database System
(``CDBS'') and Cable Operations and Licensing System (``COALS''). We
also consulted 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, as well as industry
sources including, but not limited to, Television & Cable Factbook
by Warren Publishing, Inc. and the Broadcasting and Cable Yearbook
by Reed Elsevier, Inc.
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[[Page 30612]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.010
[[Page 30613]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.011
BILLING CODE 6712-01-C
TABLE--FY 2011 Schedule of Regulatory Fees (Continued)
FY 2011 Radio Station Regulatory Fees
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FM Classes
Population served AM Class A AM Class B AM Class C AM Class D FM Classes B, C, C0, C1
A, B1 & C3 & C2
----------------------------------------------------------------------------------------------------------------
<=25,000.................... $700 $575 $525 $600 $675 $850
25,001-75,000............... 1,400 1,150 800 900 1,350 1,500
75,001-150,000.............. 2,100 1,450 1,050 1,500 1,850 2,750
150,001-500,000............. 3,150 2,450 1,575 1,800 2,875 3,600
500,001-1,200,000........... 4,550 3,750 2,625 3,000 4,550 5,300
1,200,001-3,000,00.......... 7,000 5,750 3,950 4,800 7,425 8,500
>3,000,000.................. 8,400 6,900 5,000 6,000 9,450 11,050
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[[Page 30614]]
FY 2011 Schedule of Regulatory Fees (Continued)
International Bearer Circuits--Submarine Cable
--------------------------------------------------------------------------------------------------------------------------------------------------------
Submarine cable systems (capacity as of
December 31, 2010) Fee amount Address
--------------------------------------------------------------------------------------------------------------------------------------------------------
<2.5 Gbps................................ $12,825 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
2.5 Gbps or greater, but less than 5 Gbps 25,650 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
5 Gbps or greater, but less than 10 Gbps. 51,275 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
10 Gbps or greater, but less than 20 Gbps 102,575 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
20 Gbps or greater....................... 205,125 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table--Sources of Payment Unit Estimates for FY 2011
In order to calculate individual service fees for FY 2011, we
adjusted FY 2010 payment units for each service to more accurately
reflect expected FY 2011 payment liabilities. We obtained our updated
estimates through a variety of means. For example, we used Commission
licensee data bases, actual prior year payment records and industry and
trade association projections when available. The databases we
consulted include our Universal Licensing System (``ULS''),
International Bureau Filing System (``IBFS''), Consolidated Database
System (``CDBS'') and Cable Operations and Licensing System
(``COALS''), 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.
We sought verification for these estimates from multiple sources
and, in all cases; we compared FY 2011 estimates with actual FY 2010
payment units to ensure that our revised estimates were reasonable.
Where appropriate, we adjusted and/or rounded our final estimates to
take into consideration the fact that certain variables that impact on
the number of payment units cannot yet be estimated with sufficient
accuracy. These include an unknown number of waivers and/or exemptions
that may occur in FY 2011 and the fact that, in many services, the
number of actual licensees or station operators fluctuates from time to
time due to economic, technical, or other reasons. When we note, for
example, that our estimated FY 2011 payment units are based on FY 2010
actual payment units, it does not necessarily mean that our FY 2011
projection is exactly the same number as in FY 2010. We have either
rounded the FY 2011 number or adjusted it slightly to account for these
variables.
Table--Sources of Payment Unit Estimates for FY 2011 (Continued)
------------------------------------------------------------------------
Fee Category Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, 218- Based on Wireless Telecommunications
219 MHz, Marine (Ship & Coast), Bureau (``WTB'') projections of new
Aviation (Aircraft & Ground), applications and renewals taking
GMRS, Amateur Vanity Call Signs, into consideration existing
Domestic Public Fixed. Commission licensee data bases.
Aviation (Aircraft) and Marine
(Ship) estimates have been adjusted
to take into consideration the
licensing of portions of these
services on a voluntary basis.
CMRS Cellular/Mobile Services..... Based on WTB projection reports, and
FY 10 payment data.
CMRS Messaging Services........... Based on WTB reports, and FY 10
payment data.
AM/FM Radio Stations.............. Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
UHF/VHF Television Stations....... Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
AM/FM/TV Construction Permits..... Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
LPTV, Translators and Boosters, Based on CDBS data, adjusted for
Class A Television. exemptions, and actual FY 2010
payment units.
Broadcast Auxiliaries............. Based on actual FY 2010 payment
units.
BRS (formerly MDS/MMDS)........... Based on WTB reports and actual FY
LMDS.............................. 2010 payment units.
Based on WTB reports and actual FY
2010 payment units.
Cable Television Relay Service Based on data from Media Bureau's
(``CARS'') Stations. COALS database and actual FY 2010
payment units.
Cable Television System Based on publicly available data
Subscribers. sources for estimated subscriber
counts and actual FY 2010 payment
units.
Interstate Telecommunication Based on FCC Form 499-Q data for the
Service Providers. four quarters of calendar year
2010, the Wireline Competition
Bureau projected the amount of
calendar year 2009 revenue that
will be reported on 2011 FCC Form
499-A worksheets in April, 2011.
Earth Stations.................... Based on International Bureau
(``IB'') licensing data and actual
FY 2010 payment units.
Space Stations (GSOs & NGSOs)..... Based on IB data reports and actual
FY 2010 payment units.
International Bearer Circuits..... Based on IB reports and submissions
by licensees.
Submarine Cable Licenses.......... Based on IB license information.
------------------------------------------------------------------------
11. When calculating the fee methodology for AM and FM radio
stations, we consider many factors, such as facility attributes and the
population served by each station. The calculation of the population
served is determined by coupling current United States Census Bureau
data with technical and engineering data, as detailed in the table
below. In FY 2011, we will begin to incorporate new Census data that
was taken in 2010, and this could have an impact in altering the fees
of some radio stations. Hence, the population served, as well as the
class and type of service (AM or FM), will continue to be the
[[Page 30615]]
principal variables in determining the amount of regulatory fees to be
paid.\8\
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\8\ 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 for a licensed station in
that respective service category. For example, in FY 2010 the
regulatory fee for an AM radio station Construction Permit was no
higher than the regulatory fee for an AM Class C radio station
serving a population of less than 25,000.
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Table--Factors, Measurements, and Calculations That Go Into Determining
Station Signal Contours and Associated Population Coverages
AM Stations
For stations with nondirectional daytime antennas, the theoretical
radiation was used at all azimuths. For stations with directional
daytime antennas, specific information on each day tower, including
field ratio, phasing, spacing and orientation was retrieved, as well as
the theoretical pattern root-mean-square of the radiation in all
directions in the horizontal plane (``RMS'') figure milliVolt per meter
(mV/m) @ 1 km) for the antenna system. The standard, or modified
standard if pertinent, horizontal plane radiation pattern was
calculated using techniques and methods specified in Sections 73.150
and 73.152 of the Commission's rules (see 47 CFR 73.150 and 73.152).
Radiation values were calculated for each of 360 radials around the
transmitter site. Next, estimated soil conductivity data was retrieved
from a database representing the information in FCC Figure R3 (see Map
of Estimated Effective Ground Conductivity in the United States, 47 CFR
73.190 Figure R3). Using the calculated horizontal radiation values,
and the retrieved soil conductivity data, the distance to the principal
community (5 mV/m) contour was predicted for each of the 360 radials.
The resulting distance to principal community contours were used to
form a geographical polygon. Population counting was accomplished by
determining which 2000 block centroids were contained in the polygon.
(A block centroid is the center point of a small area containing
population as computed by the U.S. Census Bureau.) The sum of the
population figures for all enclosed blocks represents the total
population for the predicted principal community coverage area.
FM Stations
The greater of the horizontal or vertical effective radiated power
(``ERP'') (kW) and respective height above average terrain (``HAAT'')
(m) combination was used. Where the antenna height above mean sea level
(``HAMSL'') was available, it was used in lieu of the average HAAT
figure to calculate specific HAAT figures for each of 360 radials under
study. Any available directional pattern information was applied as
well, to produce a radial-specific ERP figure. The HAAT and ERP figures
were used in conjunction with the Field Strength (50-50) propagation
curves specified in 47 CFR 73.313 of the Commission's rules to predict
the distance to the principal community (70 dBu (decibel above 1
microVolt per meter) or 3.17 mV/m) contour for each of the 360 radials
(47 CFR 73.313). The resulting distance to principal community contours
were used to form a geographical polygon. Population counting was
accomplished by determining which 2000 block centroids were contained
in the polygon. The sum of the population figures for all enclosed
blocks represents the total population for the predicted principal
community coverage area.
B. Regulatory Fee Obligations for Digital Low Power, Class A, and TV
Translators/Boosters
12. The digital transition to full-service television stations was
completed on June 12, 2009, but the digital transition for Low Power,
Class A, and TV Translators/Boosters remains voluntary, and there is
presently no set date for the completion of this transition.
Historically, the discussion of digital transition conversion with
respect to regulatory fees has applied only to full-service television
stations. As a result, the ``digital only'' exemption does not impact
this class of regulatees. Because the digital transition in the Low
Power, Class A, and TV Translators/Booster facilities is still
voluntary and the transition will occur over a period time, some
facilities may still be in the process of converting from an analog to
a digital service. During this transition period, licensees of Low
Power, Class A, and TV Translator/Booster facilities may be operating
in analog mode, in digital mode, or in an analog and digital simulcast
mode. For regulatory fee purposes, a fee will be assessed for each
facility operating either in an analog or digital mode. In instances in
which a licensee is operating in both an analog and digital mode as a
simulcast, a single regulatory fee will be assessed for this analog
facility that has a digital companion channel. As greater numbers of
facilities convert to digital mode, the Commission will provide revised
instructions on how regulatory fees will be assessed.
C. Commercial Mobile Radio Service Messaging Service
13. Commercial Mobile Radio Service (``CMRS'') Messaging Service,
which replaced the CMRS One-Way Paging fee category in 1997, includes
all narrowband services.\9\ Since 1997, the number of subscribers has
declined from 40.8 million to 4.9 million, and there does not appear to
be any sign of recovery to the subscriber levels of 1997-1999.\10\
Maintaining the fee at the existing level of $.08 per subscriber is the
minimum reasonable and appropriate action to take under the prevailing
circumstances in the paging industry. We propose in FY 2011 to continue
maintaining the regulatory fee rate at $0.08 per subscriber due to the
declining subscriber base in this industry. We seek comment on this
proposal.
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\9\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997, MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161,
17184-85, para. 60 (1997) (``FY 1997 Report and Order'').
\10\ Between FY 1997 and FY 2010, the subscriber base in the
paging industry declined 89 percent from 40.8 million to 4.9 million
subscribers, according to FY 2010 collections data as of September
30, 2010.
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D. Interstate Telecommunications Service Provider (ITSP)
14. In our FY 2010 Regulatory Fee Report and Order,\11\ we
acknowledged that the revenue base upon which the ITSP fee is
calculated has been decreasing for several years.\12\ Because of this
continued decline, we limited the increase in the FY 2010 ITSP fee rate
from $.00342 to $.00349, and assessed a slightly higher fee across all
other fee categories. In FY 2011, the ITSP revenue base has experienced
an even more significant decline. Over the past six months, we note an
additional decline of nine percent (9%) in the ITSP base revenue, which
would increase the ITSP
[[Page 30616]]
fee rate for FY 2011 to $.00402,\13\ an increase of 15% from the fee
rate adopted in FY 2010.\14\ This increase in the FY 2011 ITSP fee rate
from $.00349 to $.00402 will be detrimental to the operations of many
small and medium ITSP providers, and will further burden a regulatory
fee category already bearing the majority of the agency's overall
regulatory fee burden. Therefore, as we did in FY 2010, we propose to
limit the increase of the FY 2011 ITSP fee rate to $.00361 per revenue
dollar, and assess a slightly higher fee across all other regulatory
fee categories. We seek comment on this proposal.
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\11\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, MD Docket No. 10-87, Report and Order, 25 FCC Rcd 9278 at
para. 31 (2010) (``FY 2010 Report and Order'').
\12\ In FY 2010 ITSP, the fee factor in the FY 2010 NPRM of
$.00351 was based on December 2009 ITSP revenue data. April 2010
ITSP revenue data, however, reflected revenues 3.4 percent lower
than projections. This revenue decrease would have resulted in an
increase in the resulting fee factor from the projected $.00351 to a
fee factor of $.00364. Thus, based on the proposed methodology of
the FY 2010 NPRM and the revised revenue numbers, the ITSP fee
factor would have increased from $.00342 (FY 2009 ITSP fee rate) to
$.00364. The concerns of these providers, which collectively
represent 46.82 percent of all regulatory fees paid in any given
year, resulted in the adoption, as an interim measure, an ITSP fee
rate at $.00349, which is a 2.1% increase from FY 2009. We find this
to be a reasonable interim measure pending our review of whether
part of that 46.82 percent of the regulatory fee burden might be
moved from ITSP in the context of fundamental reform.
\13\ If the Commission did not provide any relief or consider
changes in the ITSP revenue stream, the fee factor rate would be
$0.00402 per revenue dollar.
\14\ See FY 2010 Report and Order at Appendix C, Page 28.
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15. Each year, the Commission downloads 499-A revenue data \15\
onto a FCC Form 159-W to establish an ITSP regulatory fee bill. These
bills are then loaded into the Commission's electronic payment and
filing system (``Fee Filer'') so that providers can view and pay their
annual regulatory fee bill. Historically, in creating ITSP regulatory
fee bills, the Commission separated 499-A filers into two categories:
(1) Those whose primary revenue stream categorized them as interstate
telecommunications service providers (ITSP), and (2) those whose
primary revenue stream was considered to be non-ITSP, such as wireless,
satellite, and other service providers. Simply stated, the logic here
was to categorize 499-A filers into two regulatory fee paying
categories--those that pay ITSP regulatory fees on the basis of a fee
factor per revenue dollar, and those whose primary revenue stream would
place them in a category other than ITSP (``non-ITSP providers''), such
as wireless or satellite carriers, that pay regulatory fees on some
other basis (e.g. wireless carriers pay regulatory fees on a per
subscriber basis). By separating 499-A filers into these two categories
(ITSP providers and non-ITSP providers), the Commission was not
assessing the ITSP revenues of certain particular entities (non-ITSP
providers) simply because these entities were paying another form of
regulatory fee (e.g. wireless or satellite fees). After more careful
consideration, we realize that this treatment resulted in predominantly
ITSP providers paying fees on both ITSP revenues and, if they also
provided other services, a per unit subscriber fee on other services
(e.g. wireless services), while non-ITSP paid on a per unit basis only
(e.g. for wireless services), and were not assessed fees on their ITSP
revenues. There is no basis for this disparate treatment; it is only
logical that these wireless providers and other non-ITSP providers be
subject to ITSP fees based on their ITSP revenues, similar to the fees
that are currently paid by wireline carriers. Therefore, instead of
separating 499-A filers into these two categories of regulatory fee
payers, we propose to assess ITSP regulatory fees on all ITSP revenues,
regardless of the predominant classification of the payor. More
specifically, we find that a more equitable way of assessing ITSP
regulatory fees is to assess an ITSP fee on 499-A reported ITSP revenue
items regardless of whether the payor is predominantly an ITSP or a
non-ITSP provider. If FCC Form 499-A has revenues identified on lines
412(e), 420(d), and/or 420(e), the provider would be subject to ITSP
regulatory fees.\16\
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\15\ FCC Form 499-A is filed annually with USAC on April 1st,
but it can be revised many times for up to a year of the April 1st
filing.
\16\ See FCC Form 159-W on page 7 of the Commission's Interstate
Telecommunications Service Provider (ITSP) Fact Sheet, August 2010.
499-A Form Line 412(e) corresponds with Line 1 of FCC Form 159-W;
499-A Form Line 420(d) corresponds with Line 2 of FCC Form 159-W;
and 499-A Form Line 420(e) corresponds with Line 3 of FCC Form 159-
W. However, from FCC Form 159-W revenue Lines 1 through 3, a
provider can also subtract Lines 5 through 12, resulting in a net
revenue amount upon which regulatory fees would be due.
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16. FCC Form 159-W was established in FY 2001 to assist providers
in transposing revenue information from their FCC Form 499-A to a
worksheet that would assist them in computing their regulatory fee
obligation. Initially, the Form 159-W worksheet was left blank for the
provider to complete and mail it in along with their check. In later
years, the Commission provided a pre-completed Form 159-W based on
revenue information directly from FCC Form 499-A. In this Notice of
Proposed Rulemaking, the Commission proposes to assess a regulatory fee
on all providers that have subject revenues on Line 14 of Form 159-W,
which after the fee factor is applied, results in a regulatory fee
obligation of $10 or greater. By assessing regulatory fees on all
providers ($10 or greater), we believe we can achieve a more equitable
assessment of ITSP regulatory fees across all providers, and reduce the
subjective factor involved in identifying some providers as non-ITSP
because their primary business is cellular or a satellite provider. If
ITSP revenues are derived from the service and identified on the
appropriate lines of Form 499-A (and subsequently transposed to Form
159-W), then a regulatory fee would be assessed on those revenues. In
FY 2011, we believe our proposal will add $2.0 billion to the unit base
estimate, which will help to support maintaining the FY 2011 ITSP fee
factor rate at $0.00361, reducing the impact of this limitation on all
other regulatory fee categories. We seek comment on this proposal of
assessing regulatory fees on ITSP revenues from all providers.
E. Fee Waiver Policies
17. As our rules expressly provide, petitions for waiver of a
regulatory fee must be accompanied by the required fee ``unless
accompanied by a petition to defer payment due to financial hardship,
supported by documentation of the financial hardship.'' \17\ Similarly,
petitions for reduction of fees filed with less than the full fee due
must be accompanied by a request for deferral ``supported by
documentation of financial hardship.'' \18\ However, citing section
1.1166(b) of the rules, which states that ``Deferrals of fees will be
granted for a period of six months following the date that the fee is
initially due,'' some have argued that, even where supporting
documentation of financial hardship is not provided, a regulatee can
delay its payment of the fees owed for up to six months simply by
requesting the deferral. That argument is inconsistent with sections
1.1166(c) and (d) of our rules, which provide that petitions for
waivers or reductions will be dismissed if they are not accompanied by
the full fee owed, unless the regulatee requests a deferral of payment
supported by documentation of financial hardship.\19\ A regulatee's
mere allegation of financial hardship thus does not automatically
entitle it to a deferral of its obligation to pay regulatory fees; only
a properly supported claim of financial hardship will entitle the
regulatee to a deferral. Accordingly, if a request for deferral is not
supported by documentation of financial hardship, it will be denied,
and an associated petition for waiver or reduction will be dismissed. A
regulatee cannot delay payment on the theory that its deferral request
triggered an automatic six-month extension of its obligation to pay. We
thus propose to amend section 1.1166(b) of the Rules \20\ to read,
``Deferrals of fees, if granted, will be for
[[Page 30617]]
a designated period of time not to exceed six months.'' We seek comment
on this rule clarification.
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\17\ 47 CFR 1.1166(c).
\18\ 47 CFR 1.1166(d).
\19\ 47 CFR 1.1166(c) and (d) (requests for waivers and
reductions of fees ``that do not include the required fees or forms
will be dismissed unless accompanied by a petition to defer payment
due to financial hardship, supported by documentation of the
financial hardship.''
\20\ 47 CFR 1.1166(b).
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F. Administrative and Operational Issues
18. In FY 2009, the Commission implemented several changes in
procedures which simplified the payment and reconciliation processes of
FY 2009 regulatory fees. These changes proved to be very helpful to
both licensees and to the Commission, and we propose in the following
paragraphs to expand upon these improvements. In FY 2011, the
Commission will promote greater use of technology (and less use of
paper) to improve the regulatory fee notification and collection
process. In addition to seeking comment on the specific initiatives
discussed in the paragraphs below, we ask whether there are other steps
we could take to promote greater use of technology in collecting
regulatory fees.
1. Mandatory Use of Fee Filer
19. In FY 2009, we instituted a mandatory filing requirement using
the Commission's electronic filing and payment system (also known as
``Fee Filer'').\21\ Licensees filing their annual regulatory fee
payments were required to begin the process by entering the
Commission's Fee Filer system with a valid FRN and password.\22\ This
change was beneficial to both licensees and to the Commission. For
licensees, the mandatory use of Fee Filer eliminates the need to
manually complete and submit a hardcopy Form 159, and for the
Commission, the data in electronic format made it much easier to
process payments more efficiently and effectively. We propose to
continue to make the use of Fee Filer for filing annual regulatory fees
mandatory. We seek comment on this proposal. We also request comment on
ways we might improve the mandatory use of Fee Filer. The mandatory use
of Fee Filer does not mean that licensees are expected to pay only
through Fee Filer--it is only mandatory for licensees to begin the
process of filing their annual regulatory fees using Fee Filer.
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\21\ FY 2009 Report and Order at paras. 20 and 21.
\22\ Therefore, it is very important for licensees to have a
current and valid FRN address on file in the Commission's
Registration System (CORES).
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2. Notification and Collection of Regulatory Fees
a. Pre-Bills
20. In prior years, the Commission mailed pre-bills via surface
mail to licensees in select regulatory fee categories: Interstate
telecommunications service providers (``ITSPs''), Geostationary
(``GSO'') and Non-Geostationary (``NGSO'') satellite space station
licensees,\23\ holders of Cable Television Relay Service (``CARS'')
licenses, and Earth Station licensees.\24\ The remaining regulatees did
not receive pre-bills. In our FY 2009 Report and Order, the Commission
decided to have the attributes of these pre-bills viewed in Fee Filer,
rather than mailing pre-bills out to licensees via surface mail.\25\ In
FY 2011, the Commission will continue to reduce its use of hardcopy
documents by not mailing out annual regulatory fee pre-bills, and
instead place the pre-bill information on the Commission's Web site for
licensees to access through the Commission's electronic filing and
payment system (``Fee Filer''). Regulatees can also look to the
Commission's Web site for information on upcoming events and deadlines
relating to regulatory fees. We ask whether further changes to our
system of electronic notification would serve to more efficiently and
effectively inform regulatees of information and procedures pertaining
to regulatory fees.
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\23\ Geostationary orbit space station (``GSO'') licensees
received regulatory fee pre-bills 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 regulatory fee
pre-bills for systems that were licensed by the Commission and
operational on or before October 1 of the respective fiscal year.
\24\ A pre-bill is considered an account receivable in the
Commission's accounting system. Pre-bills reflect the amount owed
and have a payment due date of the last day of the regulatory fee
payment window. Consequently, if a pre-bill is not paid by the 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.
\25\ See FY 2009 Report and Order at paras. 24, 26.
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IV. Procedural Matters
21. Included below are procedural items as well as our current
payment and collection methods which we have revised over the past
several years to expedite the processing of regulatory fee payments. We
do not propose changes to these procedures. Rather, we include them
here as a useful way of reminding regulatory fee payers and the public
about these aspects of the annual regulatory fee collection process.
A. Public Notices and Fact Sheets
22. Each year we post public notices and fact sheets pertaining to
regulatory fees on our Web site. These documents contain information
about the payment due date and relevant regulatory fee payment
procedures. We will continue to post this information on https://www.fcc.gov/fees/regfees.html, but as in previous years, we will not
send out public notices and fact sheets to regulatees en masse.
B. Assessment Notifications
1. Media Services Licensees
23. Beginning in FY 2003, we sent fee assessment notifications via
surface mail to media services entities on a per-facility basis.\26\
These notifications provided the assessed fee amount for the facility
in question, as well as the data attributes that determined the fee
amount. We have since refined this initiative to be more electronic and
paperless.\27\ In our FY 2010 NPRM, we proposed to discontinue mailing
the media notifications beginning in FY 2011, relying instead on
information on the Commission's Web site and the use of the Commission-
authorized Web site at https://www.fccfees.com.\28\ We kept the comment
and reply comment period open until September 30, 2010 to be receptive
to the needs of media licensees. We received no comments or reply
comments on this particular issue. Therefore, beginning in FY 2011, we
will discontinue mailing hardcopy notification assessment letters to
media licensees.
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\26\ As stated previously in a footnote, a pre-bill is
considered an account receivable in the Commission's accounting
system. Pre-bills include an amount owed and have a payment due date
of the last day of the regulatory fee payment window. If a pre-bill
is not paid by the due date, it becomes delinquent and is subject to
our debt collection procedures. On the other hand, 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 accounting system as a
current debt.
\27\ Some of those refinements have been to provide licensees
with a Commission-authorized Web site to update or correct any
information concerning their facilities, and to amend their fee-
exempt status, if need be. The notifications also provide licensees
with a telephone number to call in the event that they need customer
assistance.
\28\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, Report and Order, 25 FCC Rcd 9278 at para. 42 (2010)
(``FY 2010 Report and Order'').
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24. Every ten years, when the United States Census data is
released, this data is incorporated into the population counts of AM &
FM radio stations on a county basis. These population counts, along
with the station's class and type of service, are the basis for
determining regulatory fees. Although the 2010 Census data has been
completed, the data is still subject to revisions. In addition, because
FY 2011 regulatory fees are determined on the basis of the station's
attributes as of October 1, 2010, it would be inappropriate to apply
incomplete 2010 Census data in
[[Page 30618]]
determining FY 2011 regulatory fees for radio stations. Therefore, we
will apply 2010 Census data in determining the population counts of
radio stations as of October 1, 2011, as part of our calculations of FY
2012 regulatory fees.
2. CMRS Cellular and Mobile Services Assessments
25. As we have done in prior years, our procedures for conveying
CMRS subscriber counts to providers are as follows. We will mail an
initial assessment letter to Commercial Mobile Radio Service (CMRS)
providers using data from the Numbering Resource Utilization Forecast
(``NRUF'') report that is based on ``assigned'' number counts that have
been adjusted for porting to net Type 0 ports (``in'' and ``out'').\29\
The letter will include a listing of the carrier's Operating Company
Numbers (``OCNs'') upon which the assessment is based.\30\ The letters
will not include OCNs with their respective assigned number counts, but
rather, an aggregate total of assigned numbers for each carrier.
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\29\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005 and Assessment and Collection of Regulatory Fees for
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paras. 38-44
(2005).
\30\ Id.
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26. A carrier wishing to revise their subscriber count can access
Fee Filer within a designated time frame to revise their count.
Providers should follow the prompts in Fee Filer to record their
subscriber revisions, along with any supporting documentation.\31\ The
Commission will then review the revised count and supporting
documentation and either approve or disapprove the submission in Fee
Filer. If the submission is disapproved, the Commission will attempt to
contact the provider so that the provider will have an opportunity to
discuss its revised subscriber count and/or provide additional
supporting documentation. If we receive no response or correction to
the initial assessment letter, or we do not reverse the disapproval of
the provider's revised count submission, we will expect the fee payment
to be based on the number of subscribers listed on the initial
assessment letter. Once the timeframe for revision has passed, the
subscriber counts will be finalized. These subscriber counts will then
be the basis upon which CMRS regulatory fees will be expected.
Providers will be able to view their final subscriber counts online in
Fee Filer. A final CMRS assessment letter will not be mailed out.
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\31\ In the supporting documentation, the provider will need to
state a reason for the change, such as a purchase or sale of a
subsidiary, the date of the transaction, and any other pertinent
information that will help to justify a reason for the change.
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27. Because some carriers do not file the NRUF report, they may not
receive an initial letter of assessment. In these instances, the
carriers should compute their fee payment using the standard
methodology \32\ that is currently in place for CMRS Wireless services
(e.g., compute their subscriber counts as of December 31, 2010), and
submit their fee payment accordingly. Whether a carrier receives an
assessment letter or not, the Commission reserves the right to audit
the number of subscribers for which regulatory fees are paid. In the
event that the Commission determines that the number of subscribers
paid is inaccurate, the Commission will bill the carrier for the
difference between what was paid and what should have been paid.
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\32\ See, e.g., Federal Communications Commission, Regulatory
Fees Fact Sheet: What You Owe--Commercial Wireless Services for FY
2010 at 1 (released September 2010).
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3. Submarine Cable Allocation
28. The Commission collects a revenue amount each year based on a
Congressional mandate. Because the dollar amount differs each year, a
revenue apportionment is required each year to determine the projected
regulatory fee revenue to be collected from submarine cable providers
and from terrestrial/satellite facilities.\33\ Since FY 2009, the
Commission has used the 87.4/12.6 percent allocation proposed in the
Consensus Proposal as the percentage upon which to determine the
regulatory fee revenue amounts for submarine cable providers and
terrestrial/satellite facilities, respectively.\34\ Each year, the
Commission reserves the right to revise this 87.4/12.6 allocation.
Although we will continue to review this allocation as part of our
annual regulatory fee proceeding, we do not at this time find any basis
to alter the 87.4/12.6 percent revenue allocation for 2011 regulatory
fees.
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\33\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, Second Report and Order, 24 FCC Rcd 4208 at n. 35 (2009)
(``Submarine Cable Order'').
\34\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2009, Report and Order, 24 FCC Rcd 10301 at para. 8 (2009)
(``FY 2009 Report and Order'').
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4. Re-Assessment of Regulatory Fee Issues in a Further Notice of
Proposed Rulemaking
29. Since 1994 when the first regulatory fees were collected, the
communications industry has undergone a rapid transformation. The
current basis of how regulatory fees are assessed, however, has changed
only slightly since its inception in 1994.\35\ In FY 2008, the
Commission released a FNPRM which identified some of the issues raised
by commenters with regard to the need for fundamental reform of our
regulatory fee assessment methodology \36\ From this rulemaking, the
Commission has already acted on three of the issues: 1) a change in the
bearer circuit methodology for calculating regulatory fees, 2) the
elimination of two regulatory fee categories, the International Public
Fixed Radio and International High Frequency Broadcast Stations, and 3)
the conversion of UHF and VHF Television stations from analog to
digital television. In our FY 2010 Regulatory Fees Report & Order, we
stated that in a future proceeding, we will ``further examine the
nature and extent of all changes that need to be made to our regulatory
fee schedule and calculations. In a separate and forthcoming action, we
will call for comment on issues including, but not limited to, how
changes in the telecommunications marketplace may warrant rebalancing
of regulatory fees among existing service providers * * *''\37\ As our
commitment to this ``forthcoming action'', the Commission will by the
end of 2011, initiate a further rulemaking that will update the record
on regulatory fee rebalancing, as well as expand this inquiry to
include new issues and services not covered by the 2008 FNPRM, such as
whether and how to re-assess the regulatory fee burden of all fee
categories, whether to incorporate 499-A wireless revenue in the
calculation of ITSP regulatory fees, and whether to eliminate the
regulatory fee portion (but not the application fee portion) of General
Mobile Radio Service (GMRS).
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\35\ 47 U.S.C. 159(a) and 159(b).
\36\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, MD Docket No. 08-65, RM-11312, Report and Order and
Further Notice of Proposed Rulemaking, 73 FR 50201 (August 26, 2008)
at paras. 38-41.
\37\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, MD Docket No. 10-87, Report and Order, 25 FCC Rcd 9278
para. 31 (2010).
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C. Streamlined Regulatory Fee Payment Process
1. Cable Television Subscribers
30. We will continue to permit cable television operators to base
their regulatory fee payment on their company's aggregate year-end
subscriber count, rather than requiring them to report cable subscriber
counts on a per community unit identifier (``CUID'') basis.
[[Page 30619]]
2. CMRS Cellular and Mobile Providers
31. In FY 2006, we streamlined the CMRS payment process by
eliminating the requirement for CMRS providers to identify their
individual call signs when making their regulatory fee payment, instead
allowing CMRS providers to pay their regulatory fees only at the
aggregate subscriber level without having to identify their various
call signs.\38\ We will continue this practice in FY 2011. In FY 2007,
we consolidated the CMRS cellular and CMRS mobile fee categories into
one fee category with a single fee code, thereby eliminating the
requirement for CMRS providers to separate their subscriber counts into
CMRS cellular and CMRS mobile fee categories during the regulatory fee
payment process. This consolidation of fee categories enabled the
Commission to process payments more quickly and accurately. For FY
2011, we will continue this practice of combining the CMRS cellular and
CMRS mobile fee categories into one regulatory fee category.
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\38\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092,
8105, para. 48 (2006).
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3. Interstate Telecommunications Service Providers (``ITSP'')
32. In FY 2007, we adopted a proposal to round lines 14 (total
subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W
to the nearest dollar. This revision enabled the Commission to process
the ITSP regulatory fee payments more quickly because rounding was
performed in a consistent manner and eliminated processing issues that
occurred in prior years. In FY 2011, we will continue rounding lines 14
and 16 when calculating the FY 2011 ITSP fee obligation. In addition,
we will continue the practice of not mailing out Form 159-W via surface
mail.
D. Payment of Regulatory Fees
1. Lock Box Bank
33. All lock box payments to the Commission for FY 2011 will be
processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC.
During the regulatory fee season, for those licensees paying by check,
money order, or by credit card using Form 159-E remittance advice, the
fee payment and Form 159-E remittance advice should be mailed to the
following address: Federal Communications Commission, Regulatory Fees,
P.O. Box 979084, St. Louis, MO 63197-9000. Additional payment options
and instructions are posted at https://www.fcc.gov/fees/regfees.html.
2. Receiving Bank for Wire Payments
34. The receiving bank for all wire payments is the Federal Reserve
Bank, New York, New York (TREAS NYC). When making a wire transfer,
regulatees must fax a copy of their Fee Filer generated Form 159-E to
U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour
before initiating the wire transfer (but on the same business day), so
as not to delay crediting their account. Regulatees should discuss
arrangements (including bank closing schedules) with their bankers
several days before they plan to make the wire transfer to allow
sufficient time for the transfer to be initiated and completed before
the deadline. Complete instructions for making wire payments are posted
at https://www.fcc.gov/fees/wiretran.html.
3. De Minimis Regulatory Fees
35. Regulatees whose total FY 2011 regulatory fee liability,
including all categories of fees for which payment is due, is less than
$10 are exempted from payment of FY 2011 regulatory fees.
4. Standard Fee Calculations and Payment Dates
36. The Commission will accept fee payments made in advance of the
window for the payment of regulatory fees. The responsibility for
payment of fees by service category is as follows:
Media Services: Regulatory fees must be paid for initial
construction permits that were granted on or before October 1, 2010 for
AM/FM radio stations, VHF/UHF full service television stations, and
satellite television stations. Regulatory fees must be paid for all
broadcast facility licenses granted on or before October 1, 2010. In
instances where a permit or license is transferred or assigned after
October 1, 2010, responsibility for payment rests with the holder of
the permit or license as of the fee due date.
Wireline (Common Carrier) Services: Regulatory fees must
be paid for authorizations that were granted on or before October 1,
2010. In instances where a permit or license is transferred or assigned
after October 1, 2010, responsibility for payment rests with the holder
of the permit or license as of the fee due date. We note that audio
bridging service providers are included in this category.\39\
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\39\ Audio bridging services are toll teleconferencing services,
and audio bridging service providers are required to contribute
directly to the universal service fund based on revenues from these
services. On June 30, 2008, the Commission released the InterCall
Order, in which the Commission stated that InterCall, Inc. and all
similarly situated audio bridging service providers are required to
contribute directly to the universal service fund. See Request for
Review by InterCall, Inc. of Decision of Universal Service
Administrator, CC Docket No. 96-45, Order, 23 FCC Rcd 10731 (2008)
(``InterCall Order'').
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Wireless Services: CMRS cellular, mobile, and messaging
services (fees based on number of subscribers or telephone number
count): Regulatory fees must be paid for authorizations that were
granted on or before October 1, 2010. The number of subscribers, units,
or telephone numbers on December 31, 2010 will be used as the basis
from which to calculate the fee payment. In instances where a permit or
license is transferred or assigned after October 1, 2010,
responsibility for payment rests with the holder of the permit or
license as of the fee due date.
The first eleven regulatory fee categories in our Schedule
of Regulatory Fees (see Table--Schedule of Regulatory Fees) pay ``small
multi-year wireless regulatory fees.'' Entities pay these regulatory
fees in advance for the entire amount of their five-year or ten-year
term of initial license, and only pay regulatory fees again when the
license is renewed or a new license is obtained. We include these fee
categories in our Schedule of Regulatory Fees to publicize our
estimates of the number of ``small multi-year wireless'' licenses that
will be renewed or newly obtained in FY 2011.
Multichannel Video Programming Distributor Services (cab
