Assessment and Collection of Regulatory Fees for Fiscal Year 2013; Procedures for Assessment and Collection of Regulatory Fees; and Assessment and Collection of Regulatory Fees for Fiscal Year 2008, 34612-34634 [2013-13679]

Download as PDF 34612 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules Dated: June 5, 2013. Tommy P. Beaudreau, Acting Assistant Secretary, Land and Minerals Management. [FR Doc. 2013–13708 Filed 6–7–13; 8:45 am] BILLING CODE 4310–84–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 1 [MD Docket Nos. 12–201, 13–140, 08–65; FCC 13–74] Assessment and Collection of Regulatory Fees for Fiscal Year 2013; Procedures for Assessment and Collection of Regulatory Fees; and Assessment and Collection of Regulatory Fees for Fiscal Year 2008 Federal Communications Commission. ACTION: Notice of proposed rulemaking. AGENCY: In this document, the Federal Communications Commission (Commission) will revise its Schedule of Regulatory Fees in order to recover an amount of $339,844,000 that Congress has required the Commission to collect for fiscal year 2013. Section 9 of the Communications Act of 1934, as amended, provides for the annual assessment and collection of regulatory fees, respectively, for annual ‘‘Mandatory Adjustments’’ and ‘‘Permitted Amendments’’ to the Schedule of Regulatory Fees. DATES: Submit comments on or before June 19, 2013, and reply comments on or before June 26, 2013. ADDRESSES: You may submit comments, identified by MD Docket No. 13–140, 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 email: FCC504@fcc.gov or phone: 202–418–0530 or TTY: 202– 418–0432. • Email: ecfs@fcc.gov. Include MD Docket No. 13–140 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 mstockstill on DSK4VPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 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 13– 74, MD Docket No. 13–140, adopted on May 22, 2013 and released May 23, 2013. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th 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 12th 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 email: 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. The Notice of Proposed Rulemaking (FY 2013 NPRM) and Further Notice of Proposed Rulemaking (FNPRM) shall be treated as a ‘‘permit-but-disclose’’ proceeding in accordance with the Commission’s ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with § 1.1206(b). In proceedings governed by § 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules. B. Comment Filing Procedures 2. Comments and Replies. Pursuant to §§ 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. D 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 8:00 a.m. to 7:00 p.m. All hand E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. D 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. D 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 email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202–418–0530 (voice), 202– 418–0432 (tty). 3. Availability of Documents. Comments, reply comments, and ex parte submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY– A257, Washington, DC 20554. These documents will also be available free online, via ECFS. Documents will be available electronically in ASCII, Word, and/or Adobe Acrobat. 4. Accessibility Information. To request information in accessible formats (computer diskettes, large print, audio recording, and Braille), send an email 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. mstockstill on DSK4VPTVN1PROD with PROPOSALS C. Paperwork Reduction Act 5. This NPRM and FNPRM document solicits possible proposed information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the possible proposed information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104–13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107–198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 D. Initial Regulatory Flexibility Analysis 6. 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 of Proposed Rulemaking (NPRM). The Commission will send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. II. Introduction and Executive Summary 7. In the FY 2013 NPRM and FNPRM, two interrelated proceedings, we seek comment on the collection of regulatory fees in Fiscal Year (FY) 2013 and on proposals to more generally reform the Commission’s policies and procedures for assessing and collecting regulatory fees. Specifically, in the FY 2013 NPRM, we seek comment on our annual process of assessing regulatory fees to offset the Commission’s FY 2013 appropriation, as directed by Congress. We propose several reforms to the process for calculating and collecting the FY 2013 fees. The regulatory fees calculated in response to the FY 2013 NPRM will be collected later this year. We also seek comment on more long-range proposals to reform and revise our regulatory fee schedule after FY 2013 (for FY 2014 and beyond) to take into account changes in the communications industry and in the Commission’s regulatory processes and staffing in recent years. 8. The FY 2013 NPRM seeks comment concerning adoption and implementation of proposals to reallocate regulatory fees to more accurately reflect the subject areas worked on by current Commission full time employees (FTEs) 1 for FY 2013. We seek comment on, among other things, reallocating for purposes of regulatory fee calculations: Direct FTEs working on Interstate Telecommunications Service Providers (ITSPs) and other fee categories to reflect current workloads devoted to these subject areas and FTEs in the International Bureau to more accurately reflect the Commission’s regulation and oversight of the International Bureau regulatees. We also seek comment on whether, if these proposals are adopted, we should limit any increase in regulatory fee assessments to industry 1 One FTE, typically called a ‘‘Full Time Equivalent,’’ is a unit of measure equal to the work performed annually by a full time person (working a 40 hour workweek for a full year) assigned to the particular job, and subject to agency personnel staffing limitations established by the U.S. Office of Management and Budget. Any reference to FTE or ‘‘Full Time Employee’’ used herein refers to such Full Time Equivalent. PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 34613 segments resulting from such reallocation. In addition, we seek comment generally on whether direct and indirect FTEs should be allocated differently as described below. Further, we seek comment on whether to delay our proposal to reallocate FTEs for regulatory fee purposes and, in the interim, maintain the same allocation percentages from last year for FY 2013. 9. In addition, we seek comment concerning adoption and implementation of proposals for FY 2014 and beyond, which include: (1) Combining ITSPs with wireless telecommunications services into one regulatory fee category and using revenues as the basis for calculating the resulting regulatory fees; (2) using revenues to calculate regulatory fees for other industries that now use subscribers as the basis for regulatory fee calculations, such as the cable industry; (3) consolidating UHF and VHF television stations into one regulatory fee category; (4) proposing a regulatory fee for Internet Protocol TV (IPTV) at the rate of cable fees; (5) alleviating large fluctuations in the fee rate of Multiyear Wireless Services; and (6) determining whether the Commission should modify the methodology in collecting regulatory fees for regulatees in declining industries (e.g., CMRS Messaging). We also clarify that licensees of Digital Low Power, Class A, and TV Translators/ Boosters should pay only one regulatory fee on their analog or digital station, but not on both. As required by Treasury and Office of Management and Budget (OMB) initiatives, we also announce and seek comment on our proposal to require that all regulatory fee payments be made electronically beginning in FY 2014. Finally, we state that beginning in FY 2014 the Commission will no longer mail out initial regulatory fee assessments to CMRS licensees, and we propose to transfer unpaid regulatory fees for collection by the Department of the Treasury at the end of the payment period (instead of waiting 180 days) beginning in FY 2014. 10. The attached FNPRM seeks comment on the treatment of non-U.S.Licensed Space Stations; Direct Broadcast Satellites; and other services, such as broadband, in our regulatory fee process. We invite comment on these topics to better inform the Commission on whether and/or how these services should be assessed under our regulatory fee methodology in future years. 11. We propose to collect $339,844,000 in regulatory fees for Fiscal Year (FY) 2013, pursuant to Section 9 of the Communications Act of 1934, as amended (the Act or E:\FR\FM\10JNP1.SGM 10JNP1 34614 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules Communications Act) and the FY 2013 Continuing Appropriations Resolution. Section 9 regulatory fees are mandated by Congress and collected to recover the regulatory costs associated with the Commission’s enforcement, policy and rulemaking, user information, and international activities.2 Further, as provided by section 9(a)(2), the amount of regulatory fees to be collected is established each year by Congress,3 which directs the Commission to use the fees to offset its entire appropriation. For FY 2013, the sequester effectuated by the Budget Control Act of 2011 4 reduces the agency’s permitted FY 2013 salary and expenses expenditures by $17M to $322,844,000. However, that Act does not alter the congressional directive set out in the FY 2012 appropriation 5 (and continued in effect in FY 2013 by virtue of the Further Continuing Appropriations Act, 2013) to collect $339,844,000 in regulatory fees.6 III. Background 12. We began this regulatory fee reform analysis in the Fiscal Year (FY) 2008 Further Notice of Proposed Rulemaking.7 In 2012, a report on the Commission’s regulatory fee program issued by the Government Accountability Office (GAO Report) provided further support for a more fundamental reevaluation of how to align regulatory fees more closely with regulatory costs.8 In our FY 2012 NPRM proposing basic changes to the current fee assessment process, we incorporated the GAO Report into the record and sought comment on it.9 To encourage a 2 47 U.S.C. 159(a). FY 2013, the Consolidated and Further Continuing Appropriations Act, Public Law 113–6 (2013) at Division F authorizes the Commission to collect offsetting regulatory fees at the level provided to the Commission’s FY 2012 appropriation of $339,844.00. See Financial Services and General Government Appropriations Act, 2012, Division C of Public Law 112–74, 125 Stat. 108–9 (2011). 4 Budget Control Act of 2011, Public Law 112–15, 101, 125 Stat. 241 (2011) (amending 251 of the Balanced Budget and Emergency Deficit Control Act of 1985, Public Law 99–177, 99 Stat. 1037 (2005). 5 See Financial Services and General Government Appropriations Act, 2012, Division C of Public Law 112–74, 125 Stat. 108–9 (2011); 6 Further Continuing Appropriations Act, 2013, Public Law 113–6, xxx Stat. xxx (2013) at Division F, 1101(c). 7 See Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Report and Order and Further Notice of Proposed Rulemaking, 24 FCC Rcd 6388 (2008) (FY 2008 FNPRM). 8 See GAO, ‘‘Federal Communications Commission Regulatory Fee Process Needs to be Updated,’’ Aug. 2012, GAO–12–686. 9 Assessment and Collection of Regulatory Fees, Notice of Proposed Rulemaking, 27 FCC Rcd 8458 (2012) (FY 2012 NPRM). We cite some of the comments filed in response to the FY 2012 NPRM in the discussion herein. mstockstill on DSK4VPTVN1PROD with PROPOSALS 3 In VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 more robust discussion of the record in this docket, the Commission invited all the parties who filed comments to the FY 2012 NPRM to further discuss their comments and any other regulatory fee reform issues they wished to raise with Commission staff. Staff has met with commenters representing the wireline, wireless, broadcast, cable, satellite, and submarine cable industries. Their additional comments have been summarized in ex parte filings and placed in the record of the proceeding in compliance with the Commission’s rules.10 To facilitate a more robust record to better inform the Commission as it contemplates further reform of our regulatory fee policies and procedures for FY 2013 and beyond, we seek comment not only on the issues raised herein, but also on the concerns and comments raised by the GAO Report, the issues presented and comments filed in response to the FY 2012 NPRM and any issues raised in ex parte filings by industry representatives. We anticipate that in the Report and Order we will adopt certain proposals discussed herein for FY 2013 and other proposals for implementation in FY 2014 and beyond. IV. Notice of Proposed Rulemaking A. Regulatory Fee Allocation Process and Need for Reform. 13. Each year the Commission derives the fees that Congress requires it to collect ‘‘by determining the full-time equivalent number of employees performing’’ these activities ‘‘adjusted to take into account factors that are reasonably related to the benefits provided to the payer of the fee by the Commission’s activities . . . .’’ 11 To calculate regulatory fees, the Commission allocates the total amount to be collected, among the various regulatory fee categories. Each regulatee within a fee category must pay its proportionate share based on an objective measure, e.g., revenues, subscribers, or licenses. The first step, allocating fees to fee categories, is based on the Commission’s calculation of the number of FTEs devoted to each regulatory fee category. FTEs are categorized as either ‘‘direct’’ or ‘‘indirect.’’ An FTE is considered ‘‘direct’’ if the employee is in one of the 10 See, e.g., American Cable Association, Notice of Ex Parte Presentation (Feb. 22, 2013); North American Submarine Cable Association, MD Docket Nos. 12–201 and 08–65, Notice of Ex Parte Presentation (Feb. 15, 2013); Enterprise Wireless Alliance, MD 12–201 Ex Parte Presentation (Feb. 15, 2013); North American Submarine Cable Association, MD Docket Nos. 12–201 and 08–65, Notice of Ex Parte Presentation (Mar. 27, 2013). 11 47 U.S.C. 159(b)(1)(A). PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 core bureaus, i.e., the Wireless Telecommunications Bureau, Media Bureau, Wireline Competition Bureau, or International Bureau.12 If an employee is not assigned to one of those four bureaus, that employee is considered an ‘‘indirect’’ FTE.13 Thus, the total FTEs for each fee category includes the direct FTEs associated with that category (i.e., the FTEs in the bureau associated with that category), plus a proportional allocation of the indirect FTEs. This preliminary allocation has been based on the concept that the FTEs in each of those four bureaus perform activities related to the service providers regulated by those bureaus. 14. The current allocations of direct and indirect FTEs are taken from FTE data compiled in FY 1998.14 A comparison of current FTE numbers in the various bureaus to their respective share of the overall regulatory fee burden illustrates the need to reexamine the FTE data used. For example, the International Bureau currently employs 22 percent of the Commission’s direct FTEs, yet International Bureau regulatees contribute 6.3 percent of the total regulatory fee collection.15 On the other hand, ITSPs, regulated by the Wireline Competition Bureau, pay 47 percent of the total annual regulatory fee collection, while the Wireline Competition Bureau employs only 29.2 percent of the Commission’s direct FTEs. The proposals herein seek not only to address this issue, but also to make the allocation of regulatory fee burden more transparent.16 Although we seek to better align regulatory fees with the level of current regulation, it is important to note that there is no statutory requirement that regulatory 12 The current numbers of direct FTEs are as follows: International Bureau, [119]; Media Bureau, [171]; Wireline Competition Bureau, [160]; and Wireless Telecommunications Bureau, [98]. FTEs involved in Section 309 auctions, [194 FTEs], are not included in this analysis because auctions activities are funded separately. 13 The ‘‘indirect’’ FTEs are the employees from the following bureaus and offices: Enforcement Bureau, Consumer and Governmental Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman and Commissioners’ offices, Office of Managing Director, Office of General Counsel, Office of the Inspector General, Office of Communications Business Opportunities, Office of Engineering and Technology, Office of Legislative Affairs, Office of Strategic Planning and Policy Analysis, Office of Workplace Diversity, Office of Media Relations, and Office of Administrative Law Judges, totaling [967] FTEs. 14 FY 2012 NPRM, 27 FCC Rcd at 8461, para. 8. 15 See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24–25. 16 The GAO noted the lack of transparency of the regulatory fee process, and was particularly concerned with the regulatory fee allocations for the International Bureau and the Wireline Competition Bureau, see GAO Report at p. 23. E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules mstockstill on DSK4VPTVN1PROD with PROPOSALS fees offset only the actual costs of regulating each service. In fact, the FY 2013 Further Continuing Resolution requires that the Commission collect an amount of regulatory fees sufficient to offset its entire appropriation. Thus the total benefit received by any particular regulatee from Commission actions will not necessarily correlate directly with the quantity of Commission resources used for that regulatee’s benefit.17 For example, regulatory fees also cover the costs the Commission incurs in regulating entities that are statutorily exempt from paying regulatory fees,18 entities whose regulatory fees are waived,19 and entities that provide nonregulated services, as well other Commission activities, such as consumer-related services. 15. As discussed in the FY 2012 NPRM, the FY 1998 FTE data may no longer fairly and accurately reflect the time that Commission employees devote to these activities.20 Using updated 21 FTE data (without other significant changes in our methodology) would reduce the percentage of regulatory fees allocated to Wireline Competition Bureau regulatees from 47 percent to 29.2 percent and increase the percentage of fees allocated to International Bureau regulatees from 6.3 percent to 22 percent.22 Therefore, substituting current FTE data for FY 1998 FTE data would subject some international service providers to significant fee increases.23 In determining how to update the FTE data to more accurately reflect the current composition of the Commission, we recognize that not only can the regulatory fees not be calculated to reflect the exact costs of each regulated industry, but such direct relationship of costs to each industry is not consistent with the statutory mandate to allocate based on the FTEs performing the enumerated functions in each named bureau. Nevertheless, we find that it is consistent with section 9 of the Act to better align, to the extent feasible, these regulatory fees with the current costs of Commission oversight and regulation of each industry group. Specifically, a more accurate alignment of FTE work to subject matter promotes the requirement in section 9 to ensure 17 FY 2004 Report and Order, 19 FCC Rcd at 11667, para. 11. 18 Id. For example, governmental and nonprofit entities are exempt from regulatory fees under section 9(h) of the Act. 47 U.S.C. 159(h); 47 CFR 1.1162. 19 47 CFR 1.1166. 20 FY 2012 NPRM, 27 FCC Rcd at 8464, para. 12. 21 The FTEs used herein are determined as of Sept. 30, 2012. 22 FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25. 23 Id. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 the benefits provided to the payor of the fee are consistent with the Commission’s activities.24 16. The GAO Report concluded that, due to changes in the communications industry and in the Commission during the past 15 years, the Commission should perform an updated FTE analysis, determine whether the fee categories should be revised, and increase the transparency of the regulatory fee process.25 For this purpose, we examine whether these functions and activities performed by FTEs in the International Bureau, often to the benefit of multiple categories of regulatees, warrant considering only a portion of the International Bureau as a ‘‘core bureau.’’ We also examine whether wireline and wireless telecommunications services should be combined into a single new category. B. Discussion 1. Changes to the Interstate Telecommunications Service Providers (ITSPs) Fee Category 17. One of the primary issues discussed in the FY 2012 NPRM is how to fairly allocate the FTEs for ITSPs, which are the Wireline Competition Bureau fee payors.26 ITSPs— interexchange carriers (IXCs), incumbent local exchange carriers (LECs), toll resellers, and other IXC service providers—use end-user revenues to calculate regulatory fee assessments based on the reported revenue in the FCC Form 499–A, filed April 1 of each year with the prior year’s interstate and international revenue.27 As stated previously, in FY 2012, ITSPs paid 47 percent of the total regulatory fees collection, even though the Wireline Competition Bureau employees comprised 29.2 percent of the Commission’s direct FTEs. In addition, since ITSPs pay regulatory fees based on revenues, the regulatory fee assessment rates for ITSPs generally have increased over time due to a declining revenue base in that industry segment.28 At the same time, wireless 24 47 U.S.C. 159. Report at 36. 26 See FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25. 27 The Commission has separated revenues listed on Form 499–A into two fee categories: ITSP providers and non-ITSP providers. Providers that derive a predominant amount of their revenues from Lines 412(e), 420(d), and 420(e) on FCC Form 499–A are ITSP providers and subject to ITSP regulatory fees. Those providers that do not derive their revenues predominantly from Lines 412(e), 420(d), and 420(e) on FCC Form 499–A, non-ITSP providers, paid a regulatory fee calculated differently, such as by number of subscribers. 28 Wireline revenues have not decreased for all carriers. Verizon, for example, reported for 2012 25 GAO PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 34615 revenues have increased significantly, in part due to substitution of wireless services for wireline services. Nevertheless, as wireless revenues have increased, the proportion of all regulatory fees paid by wireless providers has not significantly increased. Thus, our regulatory fee methodology has not kept pace with the changes in both the communications industry and within the Commission. We seek comment on reallocating the direct FTEs for ITSP for FY 2013, based on current FTEs in the core bureaus, which would significantly decrease the regulatory fee allocation for ITSPs. We propose this reallocation in conjunction with a reallocation of International Bureau FTEs, as explained in more detail below. We also seek comment on revising our methodology to account for changes in the wireless and wireline industries by making additional changes to the ITSP fee category for FY 2014, such as combining wireless and wireline into a new ITSP category, as discussed below. 18. Currently wireless and wireline telecommunications services are in separate regulatory fee categories. The Independent Telephone and Telecommunications Alliance (ITTA) proposes that the Commission assess all voice service providers on the basis of revenues to ensure that like services are treated in a similar manner.29 We agree with ITTA that wireless services are comparable to wireline services in many ways and therefore both encompass similar regulatory policies and programs, such as universal service and number portability.30 As wireless services are increasingly displacing wireline services, we seek comment on whether it would be fair to combine both services into one category by including all wireless and wireline FTEs in the same allocation to arrive at one uniform regulatory fee rate for ITSP and wireless providers, assessed based on revenues. 19. Under section 9 of the Communications Act, the Commission must make certain changes to the regulatory fee schedule if it ‘‘determines that the Schedule requires amendment to comply with the requirements’’ of section 9(b)(1)(A).31 The Commission must add, delete, or reclassify services in the fee schedule to reflect additions, that ‘‘Consumer wireline revenues grew by 3.2 percent for the year—the best in a decade—fueled by double-digit growth in FiOS.’’ Verizon 2012 Annual Report at p. 3. 29 ITTA Comments at 3. 30 The GAO Report discussed using revenues for assessing wireless providers’ regulatory fees, as proposed by ITTA. See GAO Report at 19–20. 31 47 U.S.C. 159(b)(3). E:\FR\FM\10JNP1.SGM 10JNP1 34616 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules deletions, or changes in the nature of its services ‘‘as a consequence of Commission rulemaking proceedings or changes in law.’’ 32 These ‘‘permitted amendments’’ require Congressional notification 33 and resulting changes in fees are not subject to judicial review.34 Combining wireless and wireline FTEs in the same allocation, for a new ITSP category, would be such a ‘‘permitted amendment’’ requiring Congressional notification. Therefore, if adopted, this allocation change would not take effect until FY 2014. 20. We recognize, however, that carriers whose regulatory fees are calculated on the basis of revenues, instead of subscribers, may have an incentive to allocate more of their revenues to data services in order to reduce their regulatory fees.35 Therefore, we invite commenters to also discuss whether there are alternate ways to assess regulatory fees for wireless and wireline telecommunications services to achieve fair, sustainable, and predictable results, such as moving both industry groups to another common objective measure as the basis for calculating regulatory fees, and what such common measure should be. 2. Reallocation of FTEs 21. The GAO Report recommended that the Commission reexamine the activities performed by FTEs in the various bureaus.36 This Notice of Proposed Rulemaking is responsive to the GAO’s recommendation. Adjusting the allocation fee category percentages and rates to reflect current FTEs, without further examining precisely what regulatory functions these FTEs are performing would result in an incomplete reexamination of the issues involved in updating our FTE allocations. Moreover, using updated FTE calculations without other significant changes in our methodology would subject some classes of regulatees to significant fee increases. 22. While we are required by section 9 of the Act to calculate regulatory fees based on an allocation of FTEs, we are not required to use the same methodology year after year. We tentatively conclude that our methodology of using the direct and indirect FTEs based on the four core bureaus and supporting bureaus and offices should be revised to more accurately reflect the direct and indirect costs for those regulatees. Such revisions should take into account the impact on all regulatees, because any change in the allocation of the total regulatory fee amount for one category of fee payors necessarily affects the fees paid by payors in all the other fee categories. The GAO Report noted the disparity in the allocation for the International Bureau, the Wireline Competition Bureau, and the Wireless Telecommunications Bureau.37 The current FTE allocations, as of September 30, 2012, and the FTE allocations what would result from our reallocation proposals are shown in the table below. TABLE 1—DIRECT AND INDIRECT FTE ALLOCATIONS/CURRENT AND PROPOSED Current allocations based on 1998 direct FTE analysis (percent) Bureaus (all FTE amounts shown exclude auctions-funded employees) mstockstill on DSK4VPTVN1PROD with PROPOSALS International Bureau ................................................................................................................ Media Bureau .......................................................................................................................... Wireline Competition Bureau ................................................................................................... Wireless Telecommunications Bureau .................................................................................... 23. We propose to update our FTE analysis using data from September 30, 2012. The International Bureau, which employs 22 percent of the Commission’s direct FTEs, currently pays, as illustrated in the table above, 6.3 percent of the total regulatory fees. 40 Conversely, ITSPs, based on the current allocation, would pay almost 47 percent of the total regulatory fees while the Wireline Competition Bureau employs roughly 30 percent of the Commission’s direct FTEs. We seek comment on how to revise the apportionment of direct and indirect FTEs to reach a fair and equitable regulatory fee allocation, under proposals including, but not limited to, those described herein. Our 32 47 U.S.C. 159(b)(3). U.S.C. 159(b)(4)(B). 34 47 U.S.C. 159(b)(3). 35 We do not currently assess regulatory fees on broadband revenues. 36 GAO Report at 36. 37 See GAO Report at 14–15. 33 47 VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 6.3 30.2 46.7 16.8 Effective FY 2013 allocation resulting from the reallocation proposal in this NPRM, applying proposed cap of 7.5% on fee rate increases 38 (percent) 5.99 33.33 39 41.26 19.42 proposed reallocation, without further reforms or adjustments (such as the caps discussed herein at paragraphs 30 and 31) would result in allocation of 5.92 percent to the International Bureau, 37.50 percent to the Media Bureau, 35.09 percent to the Wireline Competition Bureau, and 21.49 percent to the Wireless Telecommunications Bureau. When these figures are adjusted to reflect the proposed 7.5 percent cap on rate increases for FY 2013, the resulting effective allocations for FY 2013 are as set forth in the far right column in the table above. 24. We had previously sought comment on revising the regulatory fee schedule, which would thereby increase the amount paid by the International Bureau’s regulatees to 22 percent of the total.41 Although our proposals in this proceeding are based, in part, on such a reallocation, we believe that, as discussed below, fairness warrants an allocation that more closely reflects the appropriate proportion of direct costs required for regulation and oversight of International Bureau regulatees. Under such an analysis, the regulatory fee allocation of these regulatees, should be decreased, rather than significantly increased, for the reasons stated herein. When section 9 was adopted, the total FTEs were to be calculated based on the number of FTEs in the Private Radio 38 The percentages shown are the estimated allocations for FY 2013 when the fee rate increases are capped at 7.5%. The actual fees to be paid for FY 2013 may be affected by additional factors, such as number of subscribers, revenues, or other units to which the capped fee rate will be applied. 39 This result reflects an approximately ten percent (10%) reduction in the ITSP fee rate from what it would have been in FY 2012 but for the offsetting rate freeze for ITSP’s applied in our FY 2012 Order. 40 See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24–25. 41 FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24– 25. PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules Bureau,42 Mass Media Bureau,43 and Common Carrier Bureau.44 Satellites and submarine cable were regulated through the Common Carrier Bureau before the International Bureau was created. As discussed below, the services offered by regulatees in the Wireline Competition Bureau, Wireless Telecommunications Bureau, and Media Bureau have evolved and converged over time and, therefore their regulation involves many similar issues and generates common Commission costs. To cite but one example, wireline, wireless, and cable companies compete with each other for customers.45 25. During this technological convergence among wireline, wireless, and cable services, the International Bureau’s work has expanded beyond its regulation of international licensees. It also has unique duties to assist bureaus and their regulatees throughout the Commission, and represent the Commission on a variety of international issues affecting those regulatees. In discharging these duties, the International Bureau works on matters including but not limited to spectrum use, cross-border coordination, broadband deployment, and foreign ownership. At the same time, International Bureau licensees have required less Commission oversight and regulation. Thus, the International Bureau now serves the entire Commission’s international needs, not just the specific requirements of the International Bureau regulatees. For these reasons, we propose that the International Bureau should no longer be entirely classified as a ‘‘core bureau’’ in the way that the Wireline Competition Bureau, Wireless Telecommunications Bureau, and Media Bureau are classified today. Below, we seek comment on proposals to reallocate the International Bureau FTEs for regulatory fee purposes. mstockstill on DSK4VPTVN1PROD with PROPOSALS a. Strategic Analysis and Negotiations Division, International Bureau 26. Consistent with section 9(b) of the Act, any reallocation methodology we adopt must be reasonably related to the benefits provided to the payor of the fee by the Commission’s activities. A reallocation that reflects benefits provided to the fee payor will also meet 42 The predecessor to the Wireless Telecommunications Bureau. 43 Now the Media Bureau. 44 The predecessor to the Wireline Competition Bureau. 45 Apart from DBS video services, for the most part the International Bureau regulatees do not offer the same services as the wireline, wireless, and cable companies, although wireline and wireless companies use the services, e.g. submarine cables that International Bureau regulatees provide. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 our objectives of being fair and sustainable. Revising the percentage of the total regulatory fees paid by international service providers to reflect the full percentage of direct FTEs in the International Bureau would promote fairness if we determined that the increase in International Bureau FTEs is due to a corresponding increase in FTEs working on regulation and oversight of international service providers. If, instead, the increase is attributable to the increasing number of International Bureau FTEs performing duties that are related to the Commission as a whole or benefit service providers regulated by other Bureaus, the fee increase should not be imposed solely on international service providers. Rather, it should also be allocated to the other regulatory fee categories whose fee payors benefit from that work. 27. For example, the largest division in the International Bureau is the Strategic Analysis and Negotiations Division (SAND), which is not significantly involved in regulation or oversight of International Bureau regulatees. Instead, SAND is responsible for intergovernmental and regional leadership, negotiating, and planning— processes that benefit offices and bureaus throughout the Commission. SAND oversees the Commission’s global participation in international forums such as the International Telecommunication Union (ITU), including World Radio-communication Conferences; various regional organizations, such as the Asia-Pacific Economic Cooperation, the InterAmerican Telecommunications Conference, and the Organization for Economic Cooperation and Development; and cross-border negotiations with Canada and Mexico. These activities cover telecommunications services outside of the bureau’s direct oversight and regulatory activities, e.g., coordination of wireless services with Canada and Mexico.46 SAND also performs oversight to enable the International Bureau to integrate international and bilateral meetings with visits to the Commission by foreign regulators and other government officials. SAND is responsible for performing economic and policy analyses for the International Bureau concerning trends in the international communications markets and services. Finally, SAND conducts research and studies concerning international regulatory trends, as well as their implications on U.S. policy. For these reasons we propose excluding the 46 See FY 2012 NPRM, 27 FCC Rcd at 8467–68, para. 26. PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 34617 SAND FTEs from the International Bureau for regulatory fee purposes and instead allocating them as indirect FTEs.47 We seek comment on this proposal. b. Satellite Division, International Bureau 28. In contrast to SAND, the International Bureau’s Satellite Division is responsible for the regulation and oversight of satellite system licensees, specifically operators of space stations and earth stations, by authorizing satellite systems to facilitate deployment of satellite services and fostering efficient use of the radio frequency spectrum and orbital resources. In addition to the application and licensing process, the Satellite Division provides expertise about the commercial satellite industry in the domestic spectrum management process and advocates U.S. satellite radiocommunication interests in international coordinations and negotiations. The Satellite Division is also responsible for the process of placing non-U.S.-licensed space stations on a ‘‘Permitted List,’’ 48 a process that is similar to the application process and allows access to the U.S. market for certain non-U.S. licensed satellites.49 The Satellite Division also reviews market access requests that are not eligible for inclusion on a Permitted List. 29. We propose that of all the International Bureau’s Satellite Division employees whose work involves regulation of International Bureau regulatees, we use 25 direct FTEs 50 to determine the regulatory fees for both 47 See id., 27 FCC Rcd at 8467–68, paras. 26–27; North American Submarine Cable Association Comments at 28. 48 See Amendment of the Commission’s Regulatory Policies to Allow Non-U.S.-Licensed Space Stations to Provide Domestic and International Satellite Service in the United States, IB Docket No. 96–111, First Order on Reconsideration, 15 FCC Rcd 7207 (1999) (DISCO II First Reconsideration Order) (adopting the original procedure for making changes to the Permitted List). See also 2006 Biennial Regulatory Review—Revision of Part 25, Establishment of a Permitted List Procedure for Ka-band Space Stations, IB Docket 06–154, Declaratory Order, 25 FCC Rcd 1542 (2010). 49 This is the process used by certain non-U.S.licensed satellite operators to serve customers in the United States. These satellite operators may file a petition for a Declaratory Ruling seeking approval to provide service in the United States. These operators do not pay application fees or regulatory fees to the Commission, yet their petitions, together with the information required by an application, are analyzed by Satellite Division staff and these operators benefit from International Bureau regulatory activities. 50 Indirect FTEs would be allocated to these entities as they are for all regulatory fee payors. E:\FR\FM\10JNP1.SGM 10JNP1 34618 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules satellite space stations and earth stations.51 We seek comment on this proposal. c. Policy Division, International Bureau 30. The work of the third division in the International Bureau, the Policy Division, is multifaceted. The Policy Division work involves development of polices in connection with regulation and licensing of international facilities and services (including submarine cable systems, which provide bearer circuits). The Policy Division conducts international spectrum rulemakings, handles applications for transfer and assignment of international service providers and implements Commission policies designed to protect competition in international telecommunications, and promotes lower international calling rates for U.S. consumers. It coordinates and provides guidance to and shares its expertise with the Commission and other agencies. For example, the Policy Division oversees Commission policies involving foreign ownership of U.S. telecommunications providers, and in this connection, coordinates major mergers and other license applications with U.S. agencies on matters relating to national security, law enforcement, foreign policy, and trade policy. Many of these functions involve wireless and wireline issues and therefore benefit regulatees in other Bureaus.52 Commenters to the FY 2012 NPRM argued that the Policy Division’s limited regulation and oversight of submarine cable systems does not support the current allocation of 36.08 percent of all the International Bureau regulatory fees or 2.28 percent of all regulatory fees to the submarine cable industry.53 31. Sixty submarine cable systems are licensed by the Commission, including 43 international submarine cable systems.54 Submarine cable systems transport most of the U.S. international traffic,55 including Internet broadband, video, other high bandwidth applications, voice services (public 51 See Satellite Industry Association Comments at 13. 52 See Satellite Industry Association Comments at mstockstill on DSK4VPTVN1PROD with PROPOSALS 14. 53 See Joint Reply Comments of International Carrier Coalition at 3. See also Telstra Incorporated and Australia-Japan Cable (Guam) Limited Comments at 3 (‘‘the Commission’s primary regulatory activity is the granting of the cable landing license.’’). 54 There are 42 international submarine cable systems in operation subject to regulatory fees and one more licensed system that will become subject to regulatory fees when it becomes operational. 55 Submarine cables transport approximately 95 percent of U.S. international traffic. See North American Submarine Cable Association Comments at 15. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 switched and interconnected VoIP), and non-public, private traffic for various international carriers, content and Internet providers, corporations, wholesale operators, and governments. Large corporate customers include financial and news companies and other content providers. Cable capacity is generally sold on an indefeasible right of use (IRU) basis for 10–15 year terms and also on a long-term lease basis; 56 therefore, a large increase in regulatory fees is likely difficult to recover from customers as a ‘‘pass-through’’ charge.57 Commenters responding to the FY 2012 NPRM noted that regulatory fee charges in the U.S. are much higher than those charged by other countries.58 Therefore, substantially increasing the regulatory fees paid by submarine cable service providers would serve as a disincentive for carriers to land new cables in the U.S. and an incentive to land new cables in Mexico and Canada instead. Over time, this would result in increased costs to American consumers as well as potential national security issues.59 These commenters contend that if the newer submarine cable systems choose to land in Canada or Mexico to avoid our high regulatory fees, eventually almost all international traffic will leave from (or arrive into) Canada or Mexico instead of the U.S.60 32. We recognize that submarine cable systems have been subject to significant 56 See North American Submarine Cable Association Comments at 4. 57 See id. at 18–19; Telstra Incorporated and Australia-Japan Cable (Guam) Limited Comments at 4. 58 The annual regulatory fees charged to submarine cable systems are much higher in the U.S. than in other countries. See Joint Comments of International Carrier Coalition at 13. Canada charges $100 (Canadian) per year. Id. at 14. Several other countries charge fees on telecommunications companies that would include submarine cable operators, although there is no special category or assessment for submarine cable systems; e.g., the United Kingdom (.0609% of UK revenues); Spain (less than .2% of revenues in Spain); the Netherlands (.077% of revenues in the Netherlands), Argentina (.5% of revenues in Argentina); and Australia ($1,000 (Australian) plus .00118% Australian revenues. Id. Many other countries, such as Japan, Germany, and Mexico, do not charge regulatory fees at all. Id. See also North American Submarine Cable Association, MD Docket Nos. 12–201 and 08–65, Notice of Ex Parte Presentation (Mar. 27, 2013) at 3 (‘‘Asia, Hong Kong, Singapore, and Malaysia compete fiercely for submarine cable landings to maintain and improve their connectivity and support their services industries.’’). 59 See, e.g., Joint Comments of International Carrier Coalition at 17 (additionally, ‘‘[l]andings outside of the US are also outside the reach of US law enforcement authorities and cannot be monitored for evidence of criminal or terrorist activity.’’). 60 Id. PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 regulatory fee reform recently.61 In the Submarine Cable Order, the Commission adopted a new submarine cable bearer circuit methodology to assess regulatory fees on a cable landing license basis, based on the proposal (the ‘‘Consensus Proposal’’) of a large group of submarine cable operators representing both common carriers and non-common carriers with both large and small submarine cable systems.62 This methodology allocates international bearer circuit (IBC) costs among service providers without distinguishing between common carriers and non-common carriers, by assessing a flat per cable landing license fee for all submarine cable systems, with higher fees for larger submarine cable systems and lower fees for smaller systems. The Submarine Cable Order did not assess a particular regulatory fee for the submarine cable systems but instead it adopted a new methodology that was considered fairer and easier to administer than the previous method of assessing regulatory fees. This recent indepth review and revision of the regulatory fee methodology for submarine cable serves as another important factor to consider in determining the appropriate allocation of regulatory fees in this proceeding. 33. The 2.28 percent of all regulatory fees submarine cable service providers now pay is the sixth highest regulatory fee percentage among all fee categories,63 notwithstanding the fact that the provision of international submarine cable service involves little regulation and oversight from the Commission after the initial licensing process. Under Part 43 of the Commission’s rules, common carriers must file Traffic and Revenue Reports regarding international services and, for U.S. facilities-based international common carriers, Circuit Status Reports for information concerning leased or owned circuits.64 Within the Policy Division, submarine cable licensing, 61 Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order, 24 FCC Rcd 4208 (2009) (Submarine Cable Order). 62 The 15 parties to the Consensus Proposal represented 35 of the 42 international submarine cable systems in operation as well as three planned systems. Submarine Cable Order, 24 FCC Rcd at 4213, para. 11. 63 Geostationary Space Stations are higher, at 3.23%, as are ITSP (46.66%), CMRS Mobile (14.33%), Cable TV (16.55%), and FM Classes B, C, C0, C1, & C2 (2.62%). Of all the International Bureau regulatees, (presently, 6.32% of all regulatory fees) the Submarine Cable systems pay 36.08%. 64 The Commission recently made changes to the international reporting requirements, which have yet to go into effect. See Reporting Requirements for U.S. Providers of International Telecommunications Services, IB Docket No. 04–112, Second Report and Order, 28 FCC Rcd 575 (2013). E:\FR\FM\10JNP1.SGM 10JNP1 34619 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules regulation, and oversight is handled by a small number of FTEs during each fiscal year.65 The Policy Division employees whose work involves the regulation of submarine cable systems and bearer circuits, equates to only two FTEs. The remaining Policy Division FTEs handle other matters involving international issues and, like the SAND FTEs, should more accurately be considered indirect FTEs, together with the remaining bureau level employees. 34. To summarize, we propose to reclassify SAND’s FTEs as indirect FTEs and reallocate them among the remaining core bureaus. In light of the number of employees in the Satellite Division who work on satellite and earth station issues, the number of employees in the Policy Division who work on bearer circuits and submarine cable issues, and the amount of time Satellite Division and Policy Division employees spend on other issues that are not specific to the International Bureau regulatees, we estimate that the appropriate number of FTEs to allocate as direct for regulatory fee purposes is 27. This calculation factors in 25 FTEs from the Satellite Division and 2 from the Policy Division. We recognize in reaching this estimate that most of the International Bureau FTEs should be considered indirect because their activities benefit the Commission as a whole and are not specifically focused on International Bureau regulatees. Therefore, we also propose that only a total of 27 of the FTEs in the Satellite Division and the Policy Division involved in regulation and oversight of International Bureau regulatees, i.e., satellites, earth stations, submarine cable, and bearer circuits, be considered in the direct International Bureau FTE allocation for regulatory fee purposes. All remaining International Bureau FTEs would be indirect because their activities benefit the Commission as a whole and are not focused on International Bureau regulatees. This proposal, if adopted, would be implemented in FY 2013. We ask commenters to address the substance and timing of this proposal. divisions within the core bureaus that should be treated as indirect FTEs instead of as direct FTEs and reassigned proportionally among the bureaus. d. Reallocation of Other FTEs 35. Many Commission functions are not directly attributable to only one specific regulated industry; the regulatory fee allocation, therefore, has a large number of FTEs that we currently consider indirect. As explained in the FY 2012 NPRM, our current approach is to distribute these indirect FTEs proportionally across the core bureaus according to these bureaus’ respective percentages of the Commission’s total direct FTE costs. As we also noted, this approach is based on the view that ‘‘the work of the FTEs in the support bureaus and offices is not primarily focused on any one bureau or regulatory fee category, but instead services the needs of all four core bureaus.’’ Further analysis indicates, however, that work of the FTEs in a support bureau may tend to focus disproportionately more on some of the core bureaus than others and that this focus may shift over time. It might be difficult to allocate these indirect FTEs on a task-by-task basis. We seek comment on whether the work of indirect FTEs is focused disproportionately on one or more core bureaus and if we should allocate indirect FTEs among the core bureaus on this basis. For example, if a particular support bureau or office routinely does a disproportionate amount of work on matters affecting the regulatees of a particular core bureau or bureaus, should the allocation of its indirect FTEs be adjusted to reflect such focus in its work? We seek comment on whether there are any divisions in noncore bureaus that should be assigned as indirect FTEs in a different manner or assigned as direct FTEs for a particular group of regulatees. We also seek comment on whether there are other 3. Limitation on Increases of Regulatory Fees 36. The proposals set forth above will likely reduce the regulatory fee assessment for some regulatory fee categories, such as ITSPs and regulatees of the International Bureau, significantly, while increasing the assessment for many other fee categories. In order to provide a reasonable transition to our new allocations and because there are unresolved regulatory fee reform issues that may be adopted in FY 2014 that could further impact these allocations, we propose limiting any rate increases resulting from our reallocations for this fiscal year. Such a limitation of, for example, 7.5 percent, would prevent ‘‘unexpected, substantial increases which could severely impact the economic wellbeing of these licensees [regulatees].’’ 66 We propose implementing such a limitation on the increase in regulatory fee rates, before any rounding to the nearest applicable dollar unit as set forth in our rules, above FY 2012 fee rates.67 This limitation, if adopted, would be effective in FY 2013. Below are tables illustrating the impact of limiting the increase to 7.5 percent on regulatory fee collection and its associated Schedule of Fees. This will allow us to begin the transition toward better alignment of regulatory fees with Commission work performed, permitting necessary downward adjustment of regulatory fees in some sectors without imposing undue economic hardship on regulates in other sectors. Limiting increases will, necessarily, limit the decrease in fees for other regulatory fee categories, since the overall fee collection amount does not change. TABLE 2—MAINTAIN THE SAME PERCENTAGE ALLOCATIONS AS IN PRIOR YEARS CALCULATION OF FY 2013 REVENUE REQUIREMENTS AND PRO-RATA FEES FY 2013 Payment units mstockstill on DSK4VPTVN1PROD with PROPOSALS Fee category Years FY 2012 Revenue estimate Pro-rated FY 2013 revenue requirement Computed new FY 2013 regulatory fee Rounded new FY 2013 regulatory fee 1,400 15,000 13,200 5 6,550 7,900 2,900 10 10 10 10 10 5 10 490,000 2,250,000 2,640,000 3,500 655,000 192,500 290,000 507,072 2,426,700 2,390,480 3,622 796,827 289,755 362,194 36 16 18 72 12 7 12 35 15 20 70 10 5 10 PLMRS (Exclusive Use) ...................................... PLMRS (Shared use) .......................................... Microwave ........................................................... 218–219 MHz (Formerly IVDS) .......................... Marine (Ship) ....................................................... GMRS .................................................................. Aviation (Aircraft) ................................................. 65 The Commission, through the International Bureau Policy Division, seeks to ensure that the applicant controls one of the necessary inputs of the submarine cable system (the wet link, cable landing station, or back haul facilities). VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 66 See Assessment and Collection of Regulatory Fees for Fiscal Year 1997, Report and Order, 12 FCC 17161, 17176, para. 37 (1997). PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 Expected FY 2013 revenue 490,000 2,250,000 2,640,000 3,500 655,000 197,500 290,000 67 The cap would not limit changes in regulatory fees paid by a particular payor resulting from other factors, such as increased or decreased revenues, changes in subscriber numbers, number of licenses, etc. E:\FR\FM\10JNP1.SGM 10JNP1 34620 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules TABLE 2—MAINTAIN THE SAME PERCENTAGE ALLOCATIONS AS IN PRIOR YEARS CALCULATION OF FY 2013 REVENUE REQUIREMENTS AND PRO-RATA FEES—Continued FY 2013 Payment units Fee category Marine (Coast) .................................................... Aviation (Ground) ................................................ Amateur Vanity Call Signs .................................. AM Class A 4 ....................................................... AM Class B 4 ....................................................... AM Class C 4 ....................................................... AM Class D 4 ....................................................... FM Classes A, B1 & C3 4 ................................... FM Classes B, C, C0, C1 & C2 4 ........................ AM Construction Permits .................................... FM Construction Permits 1 .................................. Satellite TV .......................................................... Satellite TV Construction Permit ......................... VHF Markets 1–10 .............................................. VHF Markets 11–25 ............................................ VHF Markets 26–50 ............................................ VHF Markets 51–100 .......................................... VHF Remaining Markets ..................................... VHF Remaining Markets ..................................... VHF Construction Permits 1 ................................ UHF Markets 1–10 .............................................. UHF Markets 11–25 ............................................ UHF Markets 26–50 ............................................ UHF Markets 51–100 .......................................... UHF Remaining Markets ..................................... UHF Construction Permits 1 ................................ Broadcast Auxiliaries ........................................... LPTV/Translators/Boosters/Class A TV .............. CARS Stations .................................................... Cable TV Systems .............................................. Interstate Telecommunication Service Providers CMRS Mobile Services (Cellular/Public Mobile) CMRS Messag. Services .................................... BRS 2 ................................................................... LMDS .................................................................. Per 64 kbps Int’l Bearer Circuits Terrestrial (Common) & Satellite (Common & Non-Common) ................................................................. Submarine Cable Providers (see chart in Table 3) 3 ................................................................... Earth Stations ...................................................... Space Stations (Geostationary) .......................... Space Stations (Non-Geostationary) .................. Years FY 2012 Revenue estimate Pro-rated FY 2013 revenue requirement Computed new FY 2013 regulatory fee Rounded new FY 2013 regulatory fee Expected FY 2013 revenue 285 900 14,300 68 1,454 837 1,406 2,935 3,110 51 170 129 3 22 23 39 61 140 140 1 109 106 135 225 247 7 25,400 3,725 325 60,000,000 $39,000,000,000 321,000,000 3,000,000 920 170 10 10 10 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 142,500 135,000 214,500 250,100 3,125,875 1,107,975 3,698,400 7,764,750 9,513,000 35,750 84,000 178,125 3,580 1,761,650 1,836,875 1,512,400 1,255,500 798,025 798,025 11,650 3,853,150 3,458,250 2,959,875 2,868,750 845,975 23,975 248,000 1,436,820 178,125 59,090,000 148,875,000 53,210,000 272,000 451,250 225,625 144,878 144,878 217,316 253,978 3,161,850 1,129,223 3,742,299 7,836,522 9,611,273 28,658 118,614 181,097 3,622 1,804,524 1,880,596 1,549,293 1,290,409 814,033 814,033 5,825 3,880,922 3,478,876 2,977,132 2,884,066 852,059 24,150 254,000 1,448,776 181,097 59,943,108 146,250,000 52,821,422 240,000 588,800 108,800 51 16 1.52 3,735 2,175 1,349 2,662 2,670 3,090 562 698 1,404 1,207 82,024 81,765 39,725 21,154 5,815 5,815 5,825 35,605 32,820 22,053 12,818 3,450 3,450 10 389 557 .99905 0.003750 0.1646 0.0800 640 640 50 15 1.52 3,725 2,175 1,350 2,650 2,675 3,100 560 700 1,400 1,200 82,025 81,775 39,725 21,150 5,825 5,825 5,825 35,600 32,825 22,050 12,825 3,450 3,450 10 390 555 1.00 0.00375 0.17 0.080 640 640 142,500 135,000 217,360 253,300 3,162,450 1,129,950 3,725,900 7,851,125 9,641,000 28,560 119,000 180,600 3,600 1,804,550 1,880,825 1,549,275 1,290,150 815,500 815,500 5,825 3,880,400 3,479,450 2,976,750 2,885,625 852,150 24,150 254,000 1,452,750 180,375 60,000,000 146,250,000 54,570,000 240,000 588,800 108,800 4,220,000 1 1,157,602 1,167,825 .277 .28 1,181,600 38.313 3,400 87 6 1 1 1 1 8,150,984 893,750 11,560,125 858,900 8,249,219 905,485 11,698,866 869,266 215,314 266 134,470 144,878 215,325 265 134,475 144,875 8,249,639 901,000 11,699,325 869,250 ****** Total Estimated Revenue to be Collected ........................................................ .............................. ............ 340,568,811 339,521,495 ........................ ........................ 341,106,534 ****** Total Revenue Requirement .............. Difference ..................................................... .............................. .............................. ............ ............ 339,844,000 724,811 339,844,000 ¥322,505 ........................ ........................ ........................ ........................ 339,844,000 1,262,534 1 The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for VHF and UHF television stations, respectively. 2 MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission’s Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150–2162 and 2500–2690 MHz Bands, Report & Order and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ¶ 6 (2004). 3 The chart at the end of Table 3 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No. 08–65, RM–11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09–65, MD Docket No. 08–65), released on May 14, 2009. 4 The fee amounts listed in the column entitled ‘‘Rounded New FY 2013 Regulatory Fee’’ constitute a weighted average media regulatory fee by class of service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 3. TABLE 3—MAINTAIN THE SAME PERCENTAGE ALLOCATIONS AS IN PRIOR YEARS mstockstill on DSK4VPTVN1PROD with PROPOSALS [FY 2013 schedule of regulatory fees] Annual regulatory fee (U.S. $’s) Fee category PLMRS (per license) (Exclusive Use) (47 CFR part 90) .............................................................................................................. Microwave (per license) (47 CFR part 101) .................................................................................................................................. 218–219 MHz (Formerly Interactive Video Data Service) (per license) (47 CFR part 95) .......................................................... Marine (Ship) (per station) (47 CFR part 80) ................................................................................................................................ Marine (Coast) (per license) (47 CFR part 80) ............................................................................................................................. General Mobile Radio Service (per license) (47 CFR part 95) ..................................................................................................... Rural Radio (47 CFR part 22) (previously listed under the Land Mobile category) ..................................................................... VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 35 20 70 10 50 5 15 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules 34621 TABLE 3—MAINTAIN THE SAME PERCENTAGE ALLOCATIONS AS IN PRIOR YEARS—Continued [FY 2013 schedule of regulatory fees] Annual regulatory fee (U.S. $’s) Fee category PLMRS (Shared Use) (per license) (47 CFR part 90) .................................................................................................................. Aviation (Aircraft) (per station) (47 CFR part 87) .......................................................................................................................... Aviation (Ground) (per license) (47 CFR part 87) ......................................................................................................................... Amateur Vanity Call Signs (per call sign) (47 CFR part 97) ......................................................................................................... CMRS Mobile/Cellular Services (per unit) (47 CFR parts 20, 22, 24, 27, 80 and 90) ................................................................. CMRS Messaging Services (per unit) (47 CFR parts 20, 22, 24 and 90) .................................................................................... Broadband Radio Service (formerly MMDS/MDS) (per license) (47 CFR part 27) ...................................................................... Local Multipoint Distribution Service (per call sign) (47 CFR, part 101) ...................................................................................... AM Radio Construction Permits .................................................................................................................................................... FM Radio Construction Permits .................................................................................................................................................... TV (47 CFR part 73) VHF Commercial: Markets 1–10 .......................................................................................................................................................................... Markets 11–25 ........................................................................................................................................................................ Markets 26–50 ........................................................................................................................................................................ Markets 51–100 ...................................................................................................................................................................... Remaining Markets ................................................................................................................................................................. Construction Permits .............................................................................................................................................................. TV (47 CFR part 73) UHF Commercial: Markets 1–10 .......................................................................................................................................................................... Markets 11–25 ........................................................................................................................................................................ Markets 26–50 ........................................................................................................................................................................ Markets 51–100 ...................................................................................................................................................................... Remaining Markets ................................................................................................................................................................. Construction Permits .............................................................................................................................................................. Satellite Television Stations (All Markets) ..................................................................................................................................... Construction Permits—Satellite Television Stations ..................................................................................................................... Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74) ........................................................................... Broadcast Auxiliaries (47 CFR part 74) ........................................................................................................................................ CARS (47 CFR part 78) ................................................................................................................................................................ Cable Television Systems (per subscriber) (47 CFR part 76) ...................................................................................................... Interstate Telecommunication Service Providers (per revenue dollar) ......................................................................................... Earth Stations (47 CFR part 25) ................................................................................................................................................... Space Stations (per operational station in geostationary orbit) (47 CFR part 25) also includes DBS Service (per operational station) (47 CFR part 100) ......................................................................................................................................................... Space Stations (per operational system in non-geostationary orbit) (47 CFR part 25) ............................................................... International Bearer Circuits—Terrestrial/Satellites (per 64KB circuit) ......................................................................................... International Bearer Circuits—Submarine Cable .......................................................................................................................... 15 10 15 1.52 .17 .08 640 640 560 700 82,025 81,775 39,725 21,150 5,825 5,825 35,600 32,825 22,050 12,825 3,450 3,450 1,400 1,200 390 10 555 1.00 .00375 265 134,475 144,875 .28 See Table Below TABLE 3 (CONTINUED)—FY 2013 SCHEDULE OF REGULATORY FEES: MAINTAIN ALLOCATION FY 2013 Radio station regulatory fees Population served 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 ............................................... AM class B $750 1,500 2,250 3,375 4,875 7,500 9,000 AM class C $625 1,250 1,575 2,650 4,075 6,250 7,500 FM classes A, B1 & C3 AM class D $575 875 1,150 1,725 2,875 4,325 5,475 $650 975 1,625 1,950 3,250 5,200 6,500 $700 1,400 1,925 2,975 4,725 7,700 9,800 FM classes B, C, C0, C1 & C2 $875 1,525 2,850 3,725 5,475 8,750 11,375 FY 2013 SCHEDULE OF REGULATORY FEES mstockstill on DSK4VPTVN1PROD with PROPOSALS [International bearer circuits—submarine cable] Submarine cable systems (capacity as of December 31, 2012) Fee amount <2.5 Gbps ................................................................................... $13,450 2.5 Gbps or greater, but less than 5 Gbps ................................ 26,925 5 Gbps or greater, but less than 10 Gbps ................................. 53,825 10 Gbps or greater, but less than 20 Gbps ............................... 107,675 VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00033 Fmt 4702 Sfmt 4702 Address FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– E:\FR\FM\10JNP1.SGM 10JNP1 34622 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules FY 2013 SCHEDULE OF REGULATORY FEES—Continued [International bearer circuits—submarine cable] Submarine cable systems (capacity as of December 31, 2012) Fee amount 20 Gbps or greater ..................................................................... 37. We seek comment on the reasonableness of this proposed limitation for FY 2013. We also invite comment on higher or lower percentages, and whether, rather than a uniform limitation for increases to all regulatory fee categories resulting solely from the reallocations proposed herein, we should consider different limitations for certain industry groups in light of other reform proposals and the likely impact on the regulatory fees of such groups. For example, as we seek to combine regulatory fees for ITSP and wireless services into one category, should we consider a limitation that brings the allocation of FTEs for these two groups closer to equal in this fiscal year? Without such limitation, would increases for certain regulatory fee categories still be fair, taking into account the work of the Commission 215,325 Address FCC, International, P.O. Box 979084, St. Louis, MO 63197– 9000. benefiting such payors? Commenters suggesting a different percentage for regulatory fee increases applicable to any or all fee categories should explain how their proposals would prevent a severe impact on the economic wellbeing of regulatees, be consistent with the goals of more accurately aligning FTEs with their areas of work, promoting fairness, and allowing the Commission to recover its regulatory costs as Congress has directed. As we continue with regulatory fee reform in the future, we will consider the need for similar limits if significant increases in regulatory fee rates occur in any one year as a result of our adoption of further reform measures. We, therefore, seek comment on the appropriate timeline for fully implementing the reallocation proposed herein and whether similar limits to increases in regulatory fee rates resulting from such reallocation should be used in FY 2014 and beyond. 4. Interim Measures for FY 2013 38. We seek comment on whether, in lieu of using updated FTE data and implementing the FTE reallocations proposed above in FY 2013, we should maintain the allocation percentages we now use for all fee categories in FY 2013 and maintain the ITSP fee rate for FY 2013 at .00375 per revenue dollar for the third consecutive year. The tables below illustrate the impact of this proposal on regulatory fee collection, and its associated Schedule of Fees. If we maintained the allocation percentages we now use, but did not maintain the ITSP fee rate for FY 2013 at .00375, the FY 2013 ITSP fee rate would increase to .00409.68 TABLE 4—REVISED FTE (AS OF 9/30/12) ALLOCATIONS,5 FEE RATE INCREASES CAPPED AT 7.5%, PRIOR TO ROUNDING 6 [Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees] FY 2013 Payment units mstockstill on DSK4VPTVN1PROD with PROPOSALS Fee category PLMRS (Exclusive Use) ...................................... PLMRS (Shared use) .......................................... Microwave ........................................................... 218–219 MHz (Formerly IVDS) .......................... Marine (Ship) ....................................................... GMRS .................................................................. Aviation (Aircraft) ................................................. Marine (Coast) .................................................... Aviation (Ground) ................................................ Amateur Vanity Call Signs .................................. AM Class A 4 ....................................................... AM Class B 4 ....................................................... AM Class C 4 ....................................................... AM Class D 4 ....................................................... FM Classes A, B1 & C3 4 ................................... FM Classes B, C, C0, C1 & C2 4 ........................ AM Construction Permits .................................... FM Construction Permits 1 .................................. Satellite TV .......................................................... Satellite TV Construction Permit ......................... VHF Markets 1–10 .............................................. VHF Markets 11–25 ............................................ VHF Markets 26–50 ............................................ VHF Markets 51–100 .......................................... VHF Remaining Markets ..................................... VHF Construction Permits 1 ................................ UHF Markets 1–10 .............................................. UHF Markets 11–25 ............................................ UHF Markets 26–50 ............................................ UHF Markets 51–100 .......................................... UHF Remaining Markets ..................................... UHF Construction Permits 1 ................................ Broadcast Auxiliaries ........................................... LPTV/Translators/Boosters/Class A TV .............. 1,400 15,000 13,200 5 6,550 7,700 2,900 285 900 14,300 68 1,454 837 1,406 2,935 3,110 51 170 129 3 22 23 39 61 140 1 109 106 135 225 247 7 25,400 3,725 68 The fee rate of .00409 is based on the current allocation percent of 46.67 of our target goal of VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 Years 10 10 10 10 10 5 10 10 10 10 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Pro-rated FY 2013 revenue requirement FY 2012 Revenue stimate 490,000 2,250,000 2,640,000 3,500 655,000 192,500 290,000 142,500 135,000 214,500 250,100 3,125,875 1,107,975 3,698,400 7,764,750 9,513,000 35,750 84,000 178,125 3,580 1,761,650 1,836,875 1,512,400 1,255,500 798,025 11,650 3,853,150 3,458,250 2,959,875 2,868,750 845,975 23,975 248,000 1,436,820 Uncapped FY 2013 regulatory fee Rounded & capped FY 2013 regulatory fee 43 19 22 87 15 4 15 61 19 1.82 4,345 2,525 1,563 3,092 3,063 3,556 828 2,483 1,636 1,407 107,493 106,647 52,097 28,819 7,311 42,205 38,321 34,992 23,404 13,571 3,716 42,205 13 453 40 15 20 75 10 5 10 55 15 1.61 4,350 2,275 1,375 2,575 2,750 3,375 590 750 1,525 960 86,075 78,975 42,775 22,500 6,250 6,250 38,000 35,000 23,400 13,575 3,675 3,675 10 415 606,762 2,903,790 2,860,449 4,334 953,483 346,721 433,401 173,361 173,361 260,041 295,438 3,671,874 1,308,369 4,347,161 8,989,760 11,057,826 42,205 422,054 211,027 4,221 2,364,840 2,452,884 2,031,796 1,757,986 1,023,545 42,205 4,177,004 3,709,111 3,159,479 3,053,435 917,906 295,438 337,644 1,688,218 $339,844,000 with a projected ITSP revenue base (calendar year 2012) of $39 billion. PO 00000 Frm 00034 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 Expected FY 2013 revenue 560,000 2,250,000 2,640,000 3,750 655,000 395,000 290,000 156,750 135,000 230,230 295,800 3,307,850 1,150,875 3,620,450 8,071,250 10,496,250 30,090 127,500 196,725 2,880 1,893,650 1,816,425 1,668,225 1,372,500 875,000 6,250 4,142,000 3,710,000 3,159,000 3,054,375 907,725 25,725 254,000 1,545,875 34623 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules TABLE 4—REVISED FTE (AS OF 9/30/12) ALLOCATIONS,5 FEE RATE INCREASES CAPPED AT 7.5%, PRIOR TO ROUNDING 6—Continued [Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees] FY 2013 Payment units Fee category Years Pro-rated FY 2013 revenue requirement FY 2012 Revenue stimate Uncapped FY 2013 regulatory fee Rounded & capped FY 2013 regulatory fee Expected FY 2013 revenue CARS Stations .................................................... Cable TV Systems .............................................. Interstate Telecommunication Service Providers CMRS Mobile Services (Cellular/Public Mobile) CMRS Messag. Services .................................... BRS 2 ................................................................... LMDS .................................................................. Per 64 kbps Int’l Bearer Circuits Terrestrial (Common) & Satellite (Common & Non-Common) ................................................................. Submarine Cable Providers (see chart in Table 5) 3 ................................................................... Earth Stations ...................................................... Space Stations (Geostationary) .......................... Space Stations (Non-Geostationary ................... 325 60,000,000 $39,000,000,000 321,000,000 3,000,000 920 170 1 1 1 1 1 1 1 178,125 59,090,000 148,875,000 53,210,000 272,000 451,250 225,625 211,085 69,868,996 119,251,260 63,253,310 240,000 693,442 130,020 649 1.164 0.0030577 0.1899 0.0800 754 765 510 1.02 0.00359 0.18 0.080 510 510 165,750 61,200,000 140,010,000 57,780,000 240,000 469,200 86,700 4,220,000 1 1,157,602 1,030,004 .244 .23 970,600 38.313 3,400 87 6 1 1 1 1 8,150,984 893,750 11,560,125 858,900 7,246,703 795,837 10,282,217 764,004 189,145 234 118,186 127,334 191,475 250 119,600 128,825 7,335,886 850,000 10,405,200 772,950 Total Estimated Revenue to be Collected ... Total Revenue Requirement ........................ .............................. .............................. ............ ............ 340,568,811 339,844,000 339,844,006 339,844,000 ........................ ........................ ........................ ........................ 339,332,436 339,844,000 Difference .............................................. .............................. ............ 724,811 6 ........................ ........................ (511,564) 1 The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for VHF and UHF television stations, respectively. 2 MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission’s Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150–2162 and 2500–2690 MHz Bands, Report & Order and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ¶ 6 (2004). 3 The chart at the end of Table 5 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No. 08–65, RM–11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09–65, MD Docket No. 08–65), released on May 14, 2009. 4 The fee amounts listed in the column entitled ‘‘Rounded New FY 2012 Regulatory Fee’’ constitute a weighted average media regulatory fee by class of service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 5. 5 The allocation percentages represent FTE data as of September 30, 2012, and include the proposal to use 27 Direct FTEs (rather than 119 FTEs) for the International Bureau. 6 The ITSP and international services fee categories received a fee rate reduction. TABLE 5—REVISED FTE (AS OF 9/30/12) ALLOCATIONS,5 FEE RATE INCREASES CAPPED AT 7.5%, PRIOR TO ROUNDING 6 [FY 2013 Schedule of regulatory fees] Annual regulatory fee (U.S. $’s) mstockstill on DSK4VPTVN1PROD with PROPOSALS Fee category PLMRS (per license) (Exclusive Use) (47 CFR part 90) .............................................................................................................. Microwave (per license) (47 CFR part 101) .................................................................................................................................. 218–219 MHz (Formerly Interactive Video Data Service) (per license) (47 CFR part 95) .......................................................... Marine (Ship) (per station) (47 CFR part 80) ................................................................................................................................ Marine (Coast) (per license) (47 CFR part 80) ............................................................................................................................. General Mobile Radio Service (per license) (47 CFR part 95) ..................................................................................................... Rural Radio (47 CFR part 22) (previously listed under the Land Mobile category) ..................................................................... PLMRS (Shared Use) (per license) (47 CFR part 90) .................................................................................................................. Aviation (Aircraft) (per station) (47 CFR part 87) .......................................................................................................................... Aviation (Ground) (per license) (47 CFR part 87) ......................................................................................................................... Amateur Vanity Call Signs (per call sign) (47 CFR part 97) ......................................................................................................... CMRS Mobile/Cellular Services (per unit) (47 CFR parts 20, 22, 24, 27, 80 and 90) ................................................................. CMRS Messaging Services (per unit) (47 CFR parts 20, 22, 24 and 90) .................................................................................... Broadband Radio Service (formerly MMDS/MDS) (per license) (47 CFR part 27) ...................................................................... Local Multipoint Distribution Service (per call sign) (47 CFR, part 101) ...................................................................................... AM Radio Construction Permits .................................................................................................................................................... FM Radio Construction Permits .................................................................................................................................................... TV (47 CFR part 73) VHF Commercial: Markets 1–10 .......................................................................................................................................................................... Markets 11–25 ........................................................................................................................................................................ Markets 26–50 ........................................................................................................................................................................ Markets 51–100 ...................................................................................................................................................................... Remaining Markets ................................................................................................................................................................. Construction Permits .............................................................................................................................................................. TV (47 CFR part 73) UHF Commercial: Markets 1–10 .......................................................................................................................................................................... Markets 11–25 ........................................................................................................................................................................ Markets 26–50 ........................................................................................................................................................................ VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00035 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 40 20 75 10 55 5 15 15 10 15 1.61 .18 .08 510 510 590 750 86,075 78,975 42,775 22,500 6,250 6,250 38,000 35,000 23,400 34624 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules TABLE 5—REVISED FTE (AS OF 9/30/12) ALLOCATIONS,5 FEE RATE INCREASES CAPPED AT 7.5%, PRIOR TO ROUNDING 6—Continued [FY 2013 Schedule of regulatory fees] Annual regulatory fee (U.S. $’s) Fee category Markets 51–100 ...................................................................................................................................................................... Remaining Markets ................................................................................................................................................................. Construction Permits .............................................................................................................................................................. Satellite Television Stations (All Markets) ..................................................................................................................................... Construction Permits—Satellite Television Stations ..................................................................................................................... Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74) ........................................................................... Broadcast Auxiliaries (47 CFR part 74) ........................................................................................................................................ CARS (47 CFR part 78) ................................................................................................................................................................ Cable Television Systems (per subscriber) (47 CFR part 76) ...................................................................................................... Interstate Telecommunication Service Providers (per revenue dollar) ......................................................................................... Earth Stations (47 CFR part 25) ................................................................................................................................................... Space Stations (per operational station in geostationary orbit) (47 CFR part 25) also includes DBS Service (per operational station) (47 CFR part 100) ......................................................................................................................................................... Space Stations (per operational system in non-geostationary orbit) (47 CFR part 25) ............................................................... International Bearer Circuits—Terrestrial/Satellites (per 64KB circuit) ......................................................................................... International Bearer Circuits—Submarine Cable .......................................................................................................................... 13,575 3,675 3,675 1,525 960 415 10 510 1.02 .00359 250 119,600 128,825 .23 See Table Below TABLE 5 (CONTINUED)—FY 2013 SCHEDULE OF REGULATORY FEES: FEE RATE INCREASES [Capped at 7.5%, prior to rounding 6] FY 2013 Radio station regulatory fees Population served 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 ............................................... AM class B $775 1,575 2,375 3,550 5,125 7,900 9,475 AM class C $650 1,325 1,650 2,800 4,275 6,550 7,875 FM classes A, B1 & C3 AM class D $600 925 1,200 1,800 3,000 4,525 5,725 $675 1,025 1,725 2,050 3,425 5,450 6,825 $750 1,525 2,100 3,250 5,150 8,375 10,700 FM classes B, C, C0, C1 & C2 $950 1,675 3,100 4,025 5,950 9,525 12,375 FY 2013 SCHEDULE OF REGULATORY FEES: FEE RATE INCREASES [Capped at 7.5%, Prior to Rounding 6] International bearer circuits— submarine cable submarine cable systems (capacity as of December 31, 2012) Fee amount $11,975 2.5 Gbps or greater, but less than 5 Gbps ................................ 23,925 5 Gbps or greater, but less than 10 Gbps ................................. 47,875 10 Gbps or greater, but less than 20 Gbps ............................... 95,750 20 Gbps or greater ..................................................................... mstockstill on DSK4VPTVN1PROD with PROPOSALS < 2.5 Gbps .................................................................................. 191,475 5. Revenue Based Regulatory Fee Assessments 39. In addition to using revenues to calculate regulatory fees for the wireless industry, discussed above, we invite comment on whether revenues would be a more appropriate measure for other industries in FY 2014 or future years. For example, should the Commission use revenues instead of number of VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 Address FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. subscribers in determining the regulatory fee for the cable industry? Would revenues be a more appropriate measure for calculating regulatory fees for the satellite industry? If so, how should the Commission account for satellite revenue from foreign sources? Commenters should address whether foreign revenues would be relevant if we assessed fees in that manner. PO 00000 Frm 00036 Fmt 4702 Sfmt 4702 P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– Commenters also should discuss how we would determine the revenues for companies that do not file a FCC Form 499–A, what information should be provided to the Commission, and whether such information would require confidential treatment. Conversely, we seek comment on whether it would be fairer and more sustainable to assess more fee categories E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules on some other basis, such as subscribers. C. Other Telecommunications Regulatory Fee Issues 1. Regulatory Fee Obligations for Digital Low Power, Class A, and TV Translators/Boosters 40. 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 still remains voluntary with a transition date of September 1, 2015. Historically, we have considered the digital transition only in the context of regulatory fees applicable to full-service television stations, and not to Low Power, Class A, and TV Translators/Boosters. Because the digital transition in the Low Power, Class A, and TV Translator/Booster facilities is still voluntary, some of these facilities may transition from analog to digital service more rapidly than others. During this period of transition, 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. Therefore, for regulatory fee purposes, we clarify that we are assessing a fee for each facility operating either in an analog or digital mode. In instances in which a licensee is simulcasting in both analog and digital modes, a single regulatory fee will be assessed for the analog facility and its corresponding digital component. As greater numbers of facilities convert to digital mode, the Commission will provide revised instructions on how regulatory fees will be assessed. 2. Combining UHF/VHF Television Media Regulatory Fees 41. Regulatory fees for full-service television stations are calculated based on two, five-tiered market segments for Ultra High Frequency (UHF) and Very High Frequency (VHF) television stations, respectively. There is also a construction permit fee category for UHF and VHF. After the transition to digital television on June 12, 2009, we received comment on this issue, suggesting that the Commission combine the UHF and VHF regulatory fee categories.69 Combining UHF and 34625 VHF full-service television stations into a single five-tiered fee category (by market size) would in effect eliminate any distinctions between UHF and VHF services. 42. Historically, analog VHF channels (channels 1–13) have been coveted for their greater prestige and larger audience, and thus the regulatory fees assessed on VHF stations have been higher than the regulatory fees assessed for UHF (channels 14 and above) stations in the same market area. Conversely, digital VHF channels are less desirable than digital UHF channels, and thus there may no longer be a basis on which to assess higher regulatory fees for VHF channels. Combining VHF and UHF into one fee category would eliminate the current fee disparity between UHF and VHF television stations. We propose that the UHF and VHF full service television station categories be combined into one fee category, divided into tiers based on market size, with one resulting rate. This proposal, if adopted, will be implemented in FY 2014. We seek comment on this proposal. TABLE 6—PROPOSED COMBINED UHF/VHF DIGITAL TELEVISION FEE [Based on Figures from Table 2, Allocation % Same as in Prior Years] Combined fee category mstockstill on DSK4VPTVN1PROD with PROPOSALS Digital Digital Digital Digital Digital Digital Television Television Television Television Television Television Units Markets 1–10 .................................................................................. Markets 11–25 ................................................................................. Markets 26–50 ................................................................................. Markets 51–100 .............................................................................. Remaining Markets ......................................................................... Construction Permits ....................................................................... 131 129 174 286 387 8 3. Internet Protocol TV (IPTV) 43. IPTV is digital television delivered through a high speed Internet connection, instead of through traditional formats such as cable or terrestrial broadcast. IPTV service generally is offered bundled with the customer’s Internet and telephone or VoIP services. In the FY 2008 Report and Order we sought comment on whether this video service should be subject to regulatory fees, and if so, should the IPTV provider count this service for regulatory fee purposes in the same manner as cable services, which is on a per subscriber basis.70 By assessing regulatory fees on cable services but not on IPTV, we may place cable providers at a competitive disadvantage. Commenters should discuss whether IPTV is sufficiently similar to cable services to be included in the same regulatory fee category and to be assessed regulatory fees in the same manner. This proposal, if adopted, would be implemented in FY 2014. 69 See Assessment and Collection of Regulatory Fees for Fiscal Year 2010, Report and Order, 25 FCC Rcd 9278, 9285–86, at paras. 18–20 (2010) (FY 2010 Report and Order) (Fireweed Communications argued that we should base the regulatory fee structure on three tiers; Sky Television, LLC, Spanish Broadcasting System, Inc., and Sarkes Tarzian argued that instead of six separate categories for both VHF and UHF we should combine them into six categories based on market size and thus eliminate any distinction between VHF and UHF.). See also Notice of Ex Parte Presentation, filed by Sarkes Tarzian, Inc. and Sky Television, LLC (Feb. 15, 2013) (arguing that VHF VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 4. Multi-Year Wireless Services 44. Multi-year wireless services is a fee category that encompasses various different wireless services (e.g., microwave, land mobile) whose regulatory fees are paid up front only at the time that the five-year or 10-year PO 00000 Frm 00037 Fmt 4702 Sfmt 4702 Pro-rated rev. req. $5,685,446 5,359,471 4,526,425 4,174,475 1,666,092 34,400 Rounded FY12 fee $43,400 41,550 26,025 14,600 4,300 4,300 Expected revenue $5,685,400 5,359,950 4,528,350 4,175,600 1,664,100 34,400 license is renewed. Most of these multiyear wireless licenses are 10-year licenses. The number of licensees seeking renewal or filing new applications for licenses (the unit count) could fluctuate dramatically from one year to the next as companies go out of business, directly impacting the fee rate for that year. Further, because the time between license renewals is 10 years, the regulatory fee amount paid can also increase or decrease substantially from one renewal to the next because of unit fluctuations and changes in the annual appropriation from one year to the next. We seek comment on appropriate steps to take, if any, when the fee rate in this stations are less desirable than UHF stations and it was unfair to have higher fees for such stations; instead the fee category should be combined.). 70 FY 2008 FNPRM, 24 FCC Rcd at 6406–07, paras. 48–49. E:\FR\FM\10JNP1.SGM 10JNP1 34626 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules fee category fluctuates dramatically from one year to the next because of changes in the unit count. These proposals, if adopted, would be implemented in FY 2014. 5. Commercial Mobile Radio Service (CMRS) Messaging mstockstill on DSK4VPTVN1PROD with PROPOSALS 45. CMRS Messaging Service, which replaced the CMRS One-Way Paging fee category in 1997, includes all narrowband services.71 Initially, as a measure to provide relief to the paging industry, the Commission froze the regulatory fee for this fee category at the FY 2002 level, setting an applicable rate at $0.08 per subscriber beginning in FY 2003.72 At that time we noted that CMRS Messaging units had significantly declined from 40.8 million in FY 1997 to 19.7 million in FY 2003—a decline of 51.7 percent.73 Commenters argued this decline in subscribership was not just a temporary phenomenon, but a lasting one. Commenters further argued that, because the messaging industry is spectrum-limited, geographically localized, and very cost sensitive, it is difficult for this industry to pass on increases in costs to its subscribers.74 46. The decline in subscribership for this industry raises a more fundamental issue: Whether the Commission should modify the methodology in collecting regulatory fees from entities in declining industries. For industries such as paging, our methodology may be burdensome on the industry and of negligible value to the Commission, due to the administrative burden of assessing the fee on many very small companies. We seek comment on whether to modify the way in which we assess fees from providers in declining industries and how to define a declining industry. Commenters should discuss whether there are other similarly situated categories that need regulatory fee relief. Proposals, if adopted, would be implemented in FY 2014. 71 See Assessment and Collection of Regulatory Fees for Fiscal Year 1997, Report and Order, 12 FCC Rcd 17161, 17184–85, para. 60 (1997) (FY 1997 Report and Order). 72 Assessment and Collection of Regulatory Fees for Fiscal Year 2003, Report and Order, 18 FCC Rcd 15985, 15992, para. 22 (2003) (FY 2003 Report and Order). 73 FY 2003 Report and Order, 18 FCC Rcd 15992, para. 21. The subscriber base in the paging industry declined 92 percent from 40.8 million to 3.2 million between FY 1997 and FY 2012, according to FY 2012 collection data, as of Sept. 30, 2012. See FY 2010 Report and Order at note 8. 74 FY 2003 Report and Order, 18 FCC Rcd 15992, para. 22. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 3. Discontinuation of Paper and Check Transactions Beginning October 1, 2013 50. Together with the U.S. Department of Treasury, the Commission is taking further steps to meet the OMB Open Government Directive.76 A component part of the Treasury’s current flagship initiative pursuant to this Directive is moving to a paperless Treasury, which includes related activities in both disbursing and collecting select federal government payments and receipts.77 Going paperless is expected to produce cost savings, reduce errors, and improve efficiencies across government. Accordingly, beginning on October 1, 2013, the Commission will no longer accept checks (including cashier’s checks) and the accompanying hardcopy forms (e.g., Form 159’s, Form 159–B’s, Form 159–E’s, Form 159–W’s) for the payment of regulatory fees. This new paperless procedure will require that all payments be made by credit card, wire transfer, or ACH payment. Any other form of payment (e.g., checks) will be rejected and sent back to the payor. This change will affect all payments for regulatory fees made on or after that October 1, 2013.78 51. Currently, the Commission is working with Treasury to implement procedures that will reduce manual and subscale accounts receivables, reduce hidden costs associated with collections, and increase recoveries. We anticipate measurable enhancements in our program achieved by reducing our delinquency rate, increasing collections, and reducing costs. Under section 9 of the Act, Commission rules, and the debt collection laws, a licensee’s regulatory fee is due on the first day of the fiscal year and payable at a date established by our annual regulatory fee Report and Order. The Commission will work with Treasury to facilitate end-to-end billing and collections capabilities for our receivables in the pre-delinquency stage and seeks to implement these changes in FY 2014. Under these revised procedures, the Commission will begin transferring appropriate receivables (unpaid regulatory fees) to Treasury at the end of the payment period instead of waiting for a period of 180 days from the date of delinquency to transfer a delinquent debt to Treasury for further collection action.79 Accordingly, we anticipate that transfer to Treasury will occur much earlier than it now does. Regulatees, however, likely will not see substantial change in the current procedures of how they are required to pay the fee for FY 2013 and FY 2014. After the date on which the FY 2014 payment fee window closes; however, if a FY 2013 receivable is past due, we 75 See Assessment and Collection of Regulatory Fees for Fiscal Year 2012, Report and Order, 27 FCC Rcd 8390, 8395–97, paras. 17–20, 24–26 (2012) (FY 2012 Report and Order). 76 Office of Management and Budget (OMB) Memorandum M–10–06, Open Government Directive, Dec. 8, 2009; see also https:// www.whitehouse.gov/the-press-office/2011/06/13/ executive-order-13576-delivering-efficient-effectiveand-accountable-gov. 77 See U.S. Department of the Treasury, Open Government Plan 2.1, Sep. 2012. 78 Payors should note that this change will mean that, to the extent certain entities have, to date, paid both regulatory fees and application fees at the same time via paper check, they will no longer be able to do so, as the regulatory fees payment via paper check will no longer be accepted. 79 See 31 U.S.C. 3711(g); 31 CFR 285.12; 47 CFR 1.1917. D. Administrative Issues 1. Electronic Filing and Payment System 47. In FY 2009, the Commission implemented several procedural changes that simplified the payment and reconciliation processes for FY 2009 regulatory fees. The Commission’s current regulatory fee collection procedures can be found in the Report and Order on Assessment and Collection of Regulatory Fees for FY 2012.75 48. In FY 2013, the Commission will continue to promote greater use of technology (and less use of paper) in improving our regulatory fee notification and collection process. These changes, and the dates on which they will take place, are discussed in more detail below. Specifically, as of October 1, 2013, we will no longer accept paper and transfer electronic invoicing and receivables collection to the Treasury in FY 2014. Finally, in FY 2014, we will no longer mail out initial CMRS assessments, and will instead require licensees to log into the Commission’s Web site to view and revise their subscriber counts. 2. Discontinuation of Mail Outs of Initial CMRS Assessments 49. In FY 2014, as part of the Commission’s effort to become more ‘‘paperless,’’ the Commission will no longer mail out its initial CMRS assessments, but will require licensees to log into the Commission’s Web site to view and revise their subscriber counts. A system currently exists for providers to revise their CMRS subscriber counts electronically, and it is possible that this system can be expanded to include letters that can be downloaded to serve as the initial CMRS assessment letter. The Commission will provide more details in future announcements as this system is developed. PO 00000 Frm 00038 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules expect some changes in notification procedures and in the process by which to submit payments to Treasury or its designated financial agent. Consistent with those anticipated modifications and any future Treasury procedure, the Commission expects it will modify its informative guidance and amend its rules. We invite comments on this proposed change. V. Further Notice of Proposed Rulemaking 52. Above we seek comment concerning regulatory reforms we believe may potentially be adopted in FY 2013 or FY 2014.80 The FNPRM below invites comment on proposals and issues that require additional time for consideration and implementation. Accordingly, we seek comment on the viability of these proposals and whether they should be implemented in future years. mstockstill on DSK4VPTVN1PROD with PROPOSALS A. Non-U.S.-Licensed Space Stations Serving the United States 53. The Commission’s goal in assessing satellite regulatory fees is to recover all of the costs associated with satellite regulatory activities and to distribute these costs fairly among fee payers. To recover the costs associated with policy and rulemaking activities associated with space stations, section 1.1156 of the Commission’s rules includes ‘‘Space Station (Geostationary Orbit)’’ and ‘‘Space Stations (NonGeostationary Orbit)’’ in the regulatory fee schedule.81 These fees are assessed only for U.S.-licensed space stations. Regulatory fees are not assessed for nonU.S.-licensed space stations that provide service to customers in the United States.82 54. The Commission’s policies, regulations, international, user information, and enforcement activities all benefit non-U.S. licensed satellite operators that access the U.S. market. Rulemaking proceedings establishing authorization procedures or service rules for satellite services apply both to U.S. licensed satellites and non-U.S. licensed satellites providing service in the United States.83 A non-U.S. licensed 80 As noted above, some of these proposals, if adopted, would be effective in FY 2013 and others in FY 2014. 81 47 CFR 1.1156. 82 This issue was raised in the FY 1999 Report and Order where the Commission observed that that the legislative history provides that only space stations licensed under Title III—which does not include non-U.S.-licensed satellite operators—may be subject to regulatory fees. Assessment and Collection of Regulatory Fees for Fiscal Year 1999, Report and Order, 14 FCC Rcd 9896, 9882, para. 39 (1999) (FY 1999 Report and Order). 83 See, e.g., Establishment of Policies and Service Rules for the Broadcasting-Satellite Service at the VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 satellite operator may file a petition for a declaratory ruling seeking Commission approval to provide service in the United States. The International Bureau evaluates this petition for consistency with the Commission’s legal and technical requirements in the same manner as the Bureau evaluates the application for an FCC space station license and, on the basis of this review, imposes any appropriate conditions for the grant of market access. Once the non-U.S. licensed space stations are granted access to earth stations in the United States, the grant is recorded together with any conditions of access, in the International Bureau Filing System. After a grant of market access, the operations of non-U.S. space stations with U.S. licensed earth stations are also monitored to ensure that their operators satisfy all conditions placed on their grant of U.S. market access, including space station implementation milestones and operational requirements, and are subject to enforcement action if the conditions are not met. Despite the regulatory benefits provided by the Commission to non-U.S. licensed satellite systems serving the United States they do not incur the regulatory fees (or application fees) paid by U.S.licensed satellite systems. As a result, U.S.-licensed space station operators, which are assessed these fees by the Commission and compete with the nonU.S. licensed operators, may be at a competitive disadvantage. 55. We therefore seek comment on whether regulatory fees should be assessed on non-U.S. licensed space station operators providing service in the United States. Commenters should discuss whether the Commission should revisit the Commission’s 1999 conclusion that the regulatory fee category for Space Stations (Geostationary Orbit) and Space Stations (Non-Geostationary Orbit) in section 1.1156(a) of the Commission’s rules covers only Title III license holders.84 Commenters that advocate assessing regulatory fees on non-U.S. licensed space stations providing service in the United States should propose how the fees should be calculated and applied, particularly in instances where the nonU.S. licensed space station operator 17.3–17.8 GHz Frequency Band and at the 17.7– 17.8 GHz Frequency Band Internationally, and at the 24.75–25.25 GHz Frequency Band for Fixed Satellite Services Providing Feeder Links to the Broadcasting-Satellite Service for the Satellite Services Operating Bi-Directionally in the 17.3–17.8 GHz Frequency Band, IB 06–123, Report and Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 8842 (2007). 84 FY 1999 Report and Order, 14 FCC Rcd at 9882, para. 39. PO 00000 Frm 00039 Fmt 4702 Sfmt 4702 34627 accesses the U.S. market solely through an application by a U.S.-licensed earth station operator to list the non-U.S. licensed space station as a point of communication. Commenters should also provide specific information as to whether other countries already assess regulatory fees in one form or another on U.S. licensed satellite systems accessing their markets. Would assessing regulatory fees on non-U.S. licensed space stations encourage foreign countries to assess such fees on U.S. licensed space stations? If so, would that place U.S. licensed space stations at a competitive disadvantage in the marketplace? B. Video Services—Direct Broadcast Satellite (DBS) 56. DBS programming is similar to cable services; it differs in that the programming is not transmitted terrestrially by cable but instead by satellites stationed in geosynchronous orbit. DBS operators are considered multichannel video programming distributors (MVPDs), pursuant to section 522(13) of the Act.85 DBS operators are licensed as geostationary satellite operators and currently pay a per-geostationary orbit (GSO) satellite regulatory fee but do not pay a persubscriber regulatory fee.86 We seek comment on whether regulatory fees paid by DBS providers should be calculated on the same basis as cable television system operators and cable antenna relay system licensees, based on Media Bureau FTEs. In this regard, we note that there are regulatory similarities between these providers; for example, DBS providers may file program access complaints 87 and complaints seeking relief under the retransmission consent good faith rules; 88 and they must comply with the Commercial Advertisement Loudness Mitigation Act (CALM Act),89 the Twenty-First Century Video Accessibility Act (CVAA),90 and the closed captioning and video description rules. 57. There are also regulatory differences between cable operators and DBS operators, however. There are only 85 47 U.S.C. 522(13). An MVPD is a service provider delivering video programming services, such as cable television operators, DBS providers, and wireline video providers. 86 Previously, the Commission declined to adopt the same per-subscriber fee for DBS. See FY 2005 Report and Order, 20 FCC Rcd at 12264, paras. 10– 11. 87 47 U.S.C. 548; 47 CFR 76.1000–1004. 88 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b). 89 See Implementation of the Commercial Advertisement, Loudness Mitigation (CALM) Act, Report and Order, 26 FCC Rcd 17222 (2011). 90 47 U.S.C. 618(b). E:\FR\FM\10JNP1.SGM 10JNP1 34628 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules two DBS operators in the Nation, while there are 1,141 cable operators and 6,635 cable systems. Each cable operator must keep certain records for each of its cable systems; e.g., Political,91 Equal Employment Opportunity,92 Commercial Records on Children’s Programs,93 Proof-of-Performance Test Data,94 Signal Leakage Logs and Repair Records,95 Aeronautical Notifications,96 Leased Access,97 Principal Headend Location,98 Availability of Signals,99 Operator Interests in Video Programming,100 Emergency Alert System Tests and Activation,101 Complaint Resolution,102 Regulatory,103 and the Sponsorship Identification.104 (DBS operators also are required to keep Political, Equal Employment Opportunity, Commercial Records on Children’s Programs files, and Emergency Alert System Tests and Activation files.) 58. For FY 2012, cable service providers paid approximately $0.95 per subscriber in regulatory fees.105 The two DBS providers, DirectTV and DISH Network, paid much lower regulatory fees on a per subscriber basis, and their regulatory fees were based on International Bureau FTEs, not Media Bureau FTEs. We seek comment on whether the DBS providers should instead pay regulatory fees that are comparable to the regulatory fees paid by cable service providers; i.e., based on the Media Bureau FTEs. To that end, because DBS providers benefit directly from the work not only of the International Bureau, but also the Media Bureau, should a portion of Media Bureau FTEs be allocated to DBS providers? Or is there some alternative way to more fairly assess regulatory fees to DBS and cable providers? Commenters should also discuss whether we should require both DBS and cable operators to pay regulatory fees based on revenues, and, if so, how we would collect revenue information from these entities. C. Other Services 59. Should additional regulatory fee categories be added to the regulatory fee schedule set forth in section 9? If so, what categories should be added, and why? 106 To the extent that licensees offer services that are regulated by more than one core bureau, how would the addition of new fee categories affect the allocation of FTEs by core bureau? VI. Conclusion 60. We are confident the FY 2013 NPRM and FNPRM propose a portfolio of options to achieve our goal for revising the regulatory fee schedule in order to fairly address the changing and converging communications industry, changes in the Commission’s regulatory processes since established in 1994, and the recommendations in the GAO Report. We invite and encourage interested parties to submit comments in response to numerous proposals discussed above so that a robust record is created to better inform the Commission as it examines reforming the regulatory fee structure. VII. Additional Tables TABLE 7—Sources of Payment Unit Estimates for FY 2013 In order to calculate individual service fees for FY 2013, we adjusted FY 2012 payment units for each service to more accurately reflect expected FY 2013 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee databases, 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 2013 estimates with actual FY 2012 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 2013 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 2013 payment units are based on FY 2012 actual payment units, it does not necessarily mean that our FY 2013 projection is exactly the same number as in FY 2012. We have either rounded the FY 2013 number or adjusted it slightly to account for these variables. TABLE 8—FACTORS, MEASUREMENTS, AND CALCULATIONS THAT DETERMINES STATION SIGNAL CONTOURS AND ASSOCIATED POPULATION COVERAGES 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 ........................ mstockstill on DSK4VPTVN1PROD with PROPOSALS Fee category 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 12 payment data. Based on WTB reports, and FY 12 payment data. Based on CDBS data, adjusted for exemptions, and actual FY 2012 payment units. Based on CDBS data, adjusted for exemptions, and actual FY 2012 payment units. Based on CDBS data, adjusted for exemptions, and actual FY 2012 payment units. 91 47 CFR 76.1701. CFR 76.1702. 93 47 CFR 76.1703. 94 47 CFR 76.1704. 95 47 CFR 76.1706. 96 47 CFR 76.1804. 97 47 CFR 76.1707. 98 47 CFR 76.1708. 99 47 CFR 76.1709. CFR 76.1710. 101 47 CFR 76.1711. 102 47 CFR 76.1713. 103 47 CFR 76.1714. 104 47 CFR 76.1715. 105 Assessment and Collection of Regulatory Fees for Fiscal Year 2012, Report and Order, 27 FCC Rcd at Attachment C (2012) (FY 2012 Order). 100 47 92 47 VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 106 In our FY 2012 NPRM, for example, we sought comment on whether the Commission has authority, under section 9, to include broadband as a fee category, and asked how the costs of any such additional fee categories should be assessed. We continue to seek comment on this issue, specifically, and more generally: Are there other fee categories that should be added? E:\FR\FM\10JNP1.SGM 10JNP1 34629 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules TABLE 8—FACTORS, MEASUREMENTS, AND CALCULATIONS THAT DETERMINES STATION SIGNAL CONTOURS AND ASSOCIATED POPULATION COVERAGES—Continued Fee category Sources of payment unit estimates LPTV, Translators and Boosters, Class A Television. Broadcast Auxiliaries .......................................... BRS (formerly MDS/MMDS) ............................... LMDS .................................................................. Cable Television Relay Service (‘‘CARS’’) Stations. Cable Television System Subscribers ................ Interstate Telecommunication Service Providers Earth Stations ..................................................... Space Stations (GSOs & NGSOs) ..................... International Bearer Circuits ............................... Submarine Cable Licenses ................................. 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, phase, spacing, and orientation was retrieved, as well as the theoretical pattern rootmean-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 augmented 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.1 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 R3.2 Using the calculated horizontal radiation values, and the Based on CDBS data, adjusted for exemptions, and actual FY 2012 payment units. Based Based Based Based on on on on actual FY 2012 payment units. WTB reports and actual FY 2012 payment units. WTB reports and actual FY 2012 payment units. data from Media Bureau’s COALS database and actual FY 2012 payment units. Based on publicly available data sources for estimated subscriber counts and actual FY 2011 payment units. Based on FCC Form 499–Q data for the four quarters of calendar year 2012, the Wireline Competition Bureau projected the amount of calendar year 2012 revenue that will be reported on 2013 FCC Form 499–A worksheets in April, 2013. Based on International Bureau (‘‘IB’’) licensing data and actual FY 2012 payment units. Based on IB data reports and actual FY 2012 payment units. Based on IB reports and submissions by licensees. Based on IB license information. 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 2010 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 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.3 The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2010 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. TABLE 9—REFERENCE TO FY 2012 SCHEDULE OF REGULATORY FEES Annual regulatory fee (U.S. $’s) mstockstill on DSK4VPTVN1PROD with PROPOSALS Fee category PLMRS (per license) (Exclusive Use) (47 CFR part 90) .................................................................................................................... Microwave (per license) (47 CFR part 101) ........................................................................................................................................ 218–219 MHz (Formerly Interactive Video Data Service) (per license) (47 CFR part 95) ................................................................ Marine (Ship) (per station) (47 CFR part 80) ...................................................................................................................................... Marine (Coast) (per license) (47 CFR part 80) ................................................................................................................................... General Mobile Radio Service (per license) (47 CFR part 95) ........................................................................................................... Rural Radio (47 CFR part 22) (previously listed under the Land Mobile category) ........................................................................... PLMRS (Shared Use) (per license) (47 CFR part 90) ........................................................................................................................ Aviation (Aircraft) (per station) (47 CFR part 87) ................................................................................................................................ Aviation (Ground) (per license) (47 CFR part 87) ............................................................................................................................... Amateur Vanity Call Signs (per call sign) (47 CFR part 97) ............................................................................................................... CMRS Mobile/Cellular Services (per unit) (47 CFR parts 20, 22, 24, 27, 80 and 90) ....................................................................... CMRS Messaging Services (per unit) (47 CFR parts 20, 22, 24 and 90) .......................................................................................... Broadband Radio Service (formerly MMDS/MDS) (per license) (47 CFR part 27) ............................................................................ Local Multipoint Distribution Service (per call sign) (47 CFR, part 101) ............................................................................................ AM Radio Construction Permits .......................................................................................................................................................... FM Radio Construction Permits .......................................................................................................................................................... VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00041 Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM 10JNP1 35 20 70 10 50 5 15 15 10 15 1.50 .17 .08 475 475 550 700 34630 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules TABLE 9—REFERENCE TO FY 2012 SCHEDULE OF REGULATORY FEES—Continued Annual regulatory fee (U.S. $’s) Fee category TV (47 CFR part 73) VHF Commercial: Markets 1–10 ................................................................................................................................................................................ Markets 11–25 .............................................................................................................................................................................. Markets 26–50 .............................................................................................................................................................................. Markets 51–100 ............................................................................................................................................................................ Remaining Markets ....................................................................................................................................................................... Construction Permits .................................................................................................................................................................... TV (47 CFR part 73) UHF Commercial: Markets 1–10 ................................................................................................................................................................................ Markets 11–25 .............................................................................................................................................................................. Markets 26–50 .............................................................................................................................................................................. Markets 51–100 ............................................................................................................................................................................ Remaining Markets ....................................................................................................................................................................... Construction Permits .................................................................................................................................................................... Satellite Television Stations (All Markets) ........................................................................................................................................... Construction Permits—Satellite Television Stations ........................................................................................................................... Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74) ................................................................................. Broadcast Auxiliaries (47 CFR part 74) .............................................................................................................................................. CARS (47 CFR part 78) ...................................................................................................................................................................... Cable Television Systems (per subscriber) (47 CFR part 76) ............................................................................................................ Interstate Telecommunication Service Providers (per revenue dollar) ............................................................................................... Earth Stations (47 CFR part 25) ......................................................................................................................................................... Space Stations (per operational station in geostationary orbit) (47 CFR part 25) also includes DBS Service (per operational station) (47 CFR part 100) .................................................................................................................................................................... Space Stations (per operational system in non-geostationary orbit) (47 CFR part 25) ..................................................................... International Bearer Circuits—Terrestrial/Satellites (per 64KB circuit) ............................................................................................... International Bearer Circuits—Submarine Cable ................................................................................................................................ 80,075 73,475 39,800 20,925 5,825 5,825 35,350 32,625 21,925 12,750 3,425 3,425 1,425 895 385 10 475 .95 .00375 275 132,875 143,150 .26 See Table Below TABLE 9 (CONTINUED)—FY 2012 SCHEDULE OF REGULATORY FEES FY 2012 Radio station regulatory fees Population served 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 ............................................... AM class B $725 1,475 2,200 3,300 4,775 7,350 8,825 AM class C $600 1,225 1,525 2,600 3,975 6,100 7,325 FM classes A, B1 & C3 AM class D $550 850 1,125 1,675 2,800 4,200 5,325 FM classes B, C, C0, C1 & C2 $700 1,425 1,950 3,025 4,800 7,800 9,950 $875 1,550 2,875 3,750 5,525 8,850 11,500 $625 950 1,600 1,900 3,175 5,075 6,350 FY 2012 SCHEDULE OF REGULATORY FEES [International Bearer Circuits—Submarine Cable] Submarine cable systems (capacity as of December 31, 2011) Fee amount $13,300 2.5 Gbps or greater, but less than 5 Gbps ................................ $26,600 5 Gbps or greater, but less than 10 Gbps ................................. $53,200 10 Gbps or greater, but less than 20 Gbps ............................... mstockstill on DSK4VPTVN1PROD with PROPOSALS < 2.5 Gbps .................................................................................. $106,375 20 Gbps or greater ..................................................................... $212,750 VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 PO 00000 Frm 00042 Fmt 4702 Sfmt 4702 Address FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. FCC, International, 9000. P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– P.O. Box 979084, St. Louis, MO 63197– E:\FR\FM\10JNP1.SGM 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules mstockstill on DSK4VPTVN1PROD with PROPOSALS VIII. Initial Regulatory Flexibility Analysis 61. As required by the Regulatory Flexibility Act (RFA),107 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 Notice of Proposed Rulemaking (FY 2013 NPRM) and FNPRM of Proposed Rulemaking (FNPRM) (collectively, ‘‘Notice’’). Written comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadline for comments on this Notice. The Commission will send a copy of the Notice, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).108 In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register.109 A. Need for, and Objectives of, the Notice 62. In the FY 2013 NPRM we seek comment on our annual process of assessing regulatory fees to cover the Commission’s costs to offset the Commission’s Fiscal Year (FY) 2013 appropriation, as directed by Congress. The regulatory fees calculated in response to the FY 2013 NPRM will be collected later this year. We also seek comment in the FY 2013 NPRM on reforming and revising our regulatory fee schedule for FY 2013 and beyond to take into account changes in the communications industry and changes in the Commission’s regulatory processes and staffing in recent years. 63. The FY 2013 NPRM seeks comment concerning adoption and implementation of proposals to reallocate regulatory fees to more accurately reflect the subject areas worked on by current Commission FTEs for FY 2013. As such, we seek comment on, among other things, reallocating: (1) direct FTEs currently allocated to the Interstate Telecommunications Service Providers (ITSPs) fee category and other fee categories to reflect current workloads devoted to these subject areas; and (2) FTEs in the International Bureau to more accurately reflect the Commission’s regulation and oversight of the International Bureau regulatees. If these proposals are adopted, we also seek comment on limiting any increase in assessments to 10 percent or some 107 5 U.S.C. 603. The RFA, 5 U.S.C. 601–612 has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104–121, Title II, 110 Stat. 847 (1996). 108 5 U.S.C. 603(a). 109 Id. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 other amount to avoid fee shock to industry segments paying higher regulatory fees as a result of reallocation. We ask whether direct FTEs in other Bureaus should be reclassified as indirect and reallocated or, conversely, whether FTEs currently allocated as indirect should be reallocated differently or reclassified as direct and reallocated accordingly. Finally, we seek comment on whether to delay our proposal to reallocate FTEs and, in the interim, maintain the same allocation percentages from last year for FY 2013, including the current .00375 rate for ITSP regulatees. 64. The FNPRM seeks comment concerning adoption and implementation of proposals for FY 2014 and beyond, which include: (1) Combining Interstate Telecommunications Service Providers (ITSPs) with wireless telecommunications services, using revenues as the basis for calculating regulatory fees; (2) using revenues to calculate regulatory fees for industries that now use subscribers, such as the wireless and cable industries; (3) eliminating the regulatory fee component pertaining to General Mobile Radio Service; (4) clarifying that licensees of Digital Low Power, Class A, and TV Translators/Boosters should pay only one regulatory fee on their analog or digital station, but not both; (5) consolidating the UHF and VHF Television stations into one fee category; (6) proposing a fee for Internet Protocol TV (IPTV) at the rate of cable fees; (7) alleviating large fluctuations in the fee rate of Multiyear Wireless Services; and (8) providing fee relief for declining industries (e.g., CMRS Messaging). Finally, the FNPRM seeks comment on the treatment of non-U.S.Licensed Space Stations; Direct Broadcast Satellites; and other services, such as broadband in our regulatory fee process. We invite comment on these topics to better inform the Commission concerning whether and/or how these services should be assessed under our regulatory fee methodology in future years. The Notice also makes two administrative changes to the regulatory fee collection process and propose a third. Specifically, as required by Treasury and OMB initiatives, we announce that effective in FY 2013 all regulatory fee payments must be made electronically. We also state that beginning in FY 2014 the Commission will no longer mail out initial regulatory fee assessments to CMRS licensees. Finally, we propose to refer to the Department of the Treasury end-to-end PO 00000 Frm 00043 Fmt 4702 Sfmt 4702 34631 billing and collection beginning in FY 2014. B. Legal Basis 65. 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.110 C. Description and Estimate of the Number of Small Entities to Which the Rules Will Apply 66. 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.111 The RFA generally defines the term ‘‘small entity’’ as having the same meaning as the terms ‘‘small business,’’ ‘‘small organization,’’ and ‘‘small governmental jurisdiction.’’ 112 In addition, the term ‘‘small business’’ has the same meaning as the term ‘‘small business concern’’ under the Small Business Act.113 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.114 67. Small Businesses. Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.115 68. Wired Telecommunications Carriers. The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees.116 Thus, under this size standard, the majority of firms can be considered small. 69. Local Exchange Carriers (LECs). Neither the Commission nor the SBA 110 47 U.S.C. 154(i) and (j), 159, and 303(r). U.S.C. 603(b)(3). 112 5 U.S.C. 601(6). 113 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.’’ 114 15 U.S.C. 632. 115 See SBA, Office of Advocacy, ‘‘Frequently Asked Questions,’’ https://www.sba.gov/sites/ default/files/FAQ_Sept_2012.pdf. 116 See id. 111 5 E:\FR\FM\10JNP1.SGM 10JNP1 34632 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules mstockstill on DSK4VPTVN1PROD with PROPOSALS has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.117 According to Commission data, census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees.118 The Commission estimates that most providers of local exchange service are small entities that may be affected by the rules and policies proposed in the FNPRM. 70. Incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable 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.119 According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers.120 Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees.121 Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies proposed in the FNPRM. 71. Competitive Local Exchange Carriers (Competitive LECs), 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.122 According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local 117 13 CFR 121.201, NAICS code 517110. id. 119 13 CFR 121.201, NAICS code 517110. 120 See Trends in Telephone Service, Federal Communications Commission, Wireline Competition Bureau, Industry Analysis and Technology Division at Table 5.3 (Sept. 2010) (Trends in Telephone Service). 121 Id. 122 13 CFR 121.201, NAICS code 517110. 118 See VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 exchange services or competitive access provider services.123 Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 186 have more than 1,500 employees.124 In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees.125 In addition, 72 carriers have reported that they are Other Local Service Providers.126 Of the 72, seventy have 1,500 or fewer employees and two have more than 1,500 employees.127 Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities that may be affected by rules adopted pursuant to the proposals in this FNPRM. 72. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a small business size standard specifically applicable to interexchange services. The applicable size standard under SBA rules is for the Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.128 According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services.129 Of these 359 companies, an estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 employees.130 Consequently, the Commission estimates that the majority of interexchange service providers are small entities that may be affected by rules adopted pursuant to the FNPRM. 73. 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.131 Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1000 employees and one operated with more than 1,000.132 Thus under this 123 See category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards.133 Of these, all 193 have 1,500 or fewer employees and none have more than 1,500 employees.134 Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by rules adopted pursuant to the FNPRM. 74. 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 employees.135 Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1000 employees and one operated with more than 1,000.136 Under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services.137 Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 employees.138 Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by rules adopted pursuant to the proposals in this FNPRM. 75. 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.139 Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000.140 Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services.141 Of these, an estimated 857 have 1,500 or fewer employees and 24 Trends in Telephone Service, at table. 5.3. 124 Id. 133 See 125 Id. 134 Id. 126 Id. 135 13 127 Id. 136 Id. 128 13 CFR 121.201, NAICS code 517110. Trends in Telephone Service, at table 5.3. CFR 121.201, NAICS code 517911. 137 See 129 See 139 13 Trends in Telephone Service, at table 5.3. 138 Id. 130 Id. Trends in Telephone Service, at table 5.3. 131 13 CFR 121.201, NAICS code 517911. 132 Id. PO 00000 Frm 00044 CFR 121.201, NAICS code 517911. 140 Id. 141 Trends Fmt 4702 Sfmt 4702 E:\FR\FM\10JNP1.SGM in Telephone Service, at table 5.3. 10JNP1 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules have more than 1,500 employees.142 Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by our proposals in the FNPRM. 76. Other Toll Carriers. Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.143 Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees.144 Thus, under this category and the associated small business size standard, the majority of Other Toll Carriers can be considered small. According to Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage.145 Of these, an estimated 279 have 1,500 or fewer employees and five have more than 1,500 employees.146 Consequently, the Commission estimates that most Other Toll Carriers are small entities that may be affected by the rules and policies adopted pursuant to the FNPRM. 77. Wireless Telecommunications Carriers (except Satellite). Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category.147 Prior to that time, such firms were within the nowsuperseded categories of Paging and Cellular and Other Wireless Telecommunications.148 Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer 142 Id. 143 13 CFR 121.201, NAICS code 517110. 144 Id. mstockstill on DSK4VPTVN1PROD with PROPOSALS 145 Trends in Telephone Service, at table 5.3. 146 Id. 147 13 CFR 121.201, NAICS code 517210. Census Bureau, 2002 NAICS Definitions, ‘‘517211 Paging,’’ available at https://www.census. gov/cgibin/sssd/naics/naicsrch?code=517211& search=2002%20NAICS%20Search; U.S. Census Bureau, 2002 NAICS Definitions, ‘‘517212 Cellular and Other Wireless Telecommunications,’’ available at https://www.census.gov/cgi-bin/sssd/naics/ naicsrch?code=517212&search=2002% 20NAICS%20Search. 148 U.S. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 employees.149 For this category, census data for 2007 show that there were 11,163 establishments that operated for the entire year.150 Of this total, 10,791 establishments had employment of 999 or fewer employees and 372 had employment of 1000 employees or more.151 Thus, under this category and the associated small business size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities that may be affected by our proposed action. 78. Similarly, according to Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) Telephony services.152 Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees.153 Consequently, the Commission estimates that approximately half or more of these firms can be considered small. Thus, using available data, we estimate that the majority of wireless firms can be considered small. 79. Cable Television and other Program Distribution. 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. Transmission facilities may be based on a single technology or a combination of technologies.’’ 154 The SBA has developed a small business size standard for this category, which is: all such firms having 1,500 or fewer 149 13 CFR 121.201, NAICS code 517210. The now-superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 517211 and 517212 (referring to the 2002 NAICS). 150 U.S. Census Bureau, Subject Series: Information, Table 5, ‘‘Establishment and Firm Size: Employment Size of Firms for the United States: 2007 NAICS Code 517210’’ (issued Nov. 2010). 151 Id. Available 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 ‘‘100 employees or more.’’ 152 Trends in Telephone Service, at table 5.3. 153 Id. 154 U.S. Census Bureau, 2007 NAICS Definitions, ‘‘517110 Wired Telecommunications Carriers’’ (partial definition), available at https://www.census. gov/cgi-bin/sssd/naics/ naicsrch?code=517110&search=2007%20NAICS% 20Search. PO 00000 Frm 00045 Fmt 4702 Sfmt 4702 34633 employees.155 Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 had more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus under this size standard, the majority of firms offering cable and other program distribution services can be considered small and may be affected by rules adopted pursuant to the FNPRM. 80. Cable Companies and Systems. The Commission has 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.156 Industry data indicate that, of 1,076 cable operators nationwide, all but eleven are small under this size standard.157 In addition, under the Commission’s rules, a ‘‘small system’’ is a cable system serving 15,000 or fewer subscribers.158 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.159 Thus, under this second size standard, most cable systems are small and may be affected by rules adopted pursuant to the FNPRM. 81. All Other Telecommunications. The Census Bureau defines this industry as including ‘‘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, 155 13 CFR 121.201, NAICS code 517110. 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. See Implementation of Sections of the 1992 Cable Television Consumer Protection and Competition Act: Rate Regulation, MM Docket Nos. 92–266, 93–215, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408, para. 28 (1995). 157 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. 158 See 47 CFR 76.901(c). 159 WARREN COMMUNICATIONS NEWS, TELEVISION & CABLE FACTBOOK 2006, ‘‘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. 156 See E:\FR\FM\10JNP1.SGM 10JNP1 34634 Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Proposed Rules satellite systems. Establishments providing Internet services or Voice over Internet Protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.’’ 160 The SBA has developed a small business size standard for this category; that size standard is $30.0 million or less in average annual receipts.161 According to Census Bureau data for 2007, there were 2,623 firms in this category that operated for the entire year.162 Of these, 2478 establishments had annual receipts of under $10 million and 145 establishments had annual receipts of $10 million or more.163 Consequently, we estimate that the majority of these firms are small entities that may be affected by our action. In addition, some small businesses whose primary line of business does not involve provision of communications services hold FCC licenses or other authorizations for purposes incidental to their primary business. We estimate that there are many entities that hold private wireless licenses, but we do not have a reliable estimate of how many of these entities are small businesses. D. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements 82. This Notice seeks comment on changes to the Commission’s current regulatory fee methodology and schedule which may result in additional information collection, reporting, and recordkeeping requirements. Specifically, the Notice seeks comment on using revenues instead of subscribers in our regulatory fee procedures. If adopted, this would require entities that do not currently file a Form 499–A to provide the Commission with revenue mstockstill on DSK4VPTVN1PROD with PROPOSALS 160 U.S. Census Bureau, ‘‘2007 NAICS Definitions: 517919 All Other Telecommunications,’’ available at https://www.census.gov/cgi-bin/sssd/naics/ naicsrch?code=517919&search=2007%20NAICS% 20Search. 161 13 CFR 121.201, NAICS code 517919. 162 U.S. Census Bureau, 2007 Economic Census, Subject Series: Information, Table 4, ‘‘Establishment and Firm Size: Receipts Size of Firms for the United States: 2007 NAICS Code 517919’’ (issued Nov. 2010). 163 Id. VerDate Mar<15>2010 16:04 Jun 07, 2013 Jkt 229001 information. The Notice also seeks comment on adding categories to our regulatory fee schedule by changing the treatment of non-U.S.-Licensed Space Stations; Direct Broadcast Satellites; IPTV; and other services, such as broadband in our regulatory fee process. If adopted, those entities that currently do not pay regulatory fees—non-U.S.Licensed Space Stations, IPTV, and other service providers—would be required to pay regulatory fees to the Commission and DBS providers would pay regulatory fees in a different category. E. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered 83. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the 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.164 84. With respect to reporting requirements, the Commission is aware that some of the proposals under consideration will impact small entities by imposing costs and administrative burdens if these entities will be required to calculate regulatory fees under a different methodology. For example, if the Commission were to adopt a revenue-based approach for calculating regulatory fees, certain entities that currently do not report revenues to the Commission—or that only report some revenues and not others— would have to report such information. 85. The NPRM seeks to reform the regulatory fee methodology. We do not propose increasing or imposing a regulatory fee burden on small entities, unless it would be specifically in furtherance of the reform measures proposed. If our proposals in this Notice result in fee increases to small entities, above the annual fee increases that generally occur each year, we intend to mitigate any inequities that might result from such increases, by, for example, limiting the annual increase in regulatory fees. In keeping with the requirements of the Regulatory Flexibility Act, we have considered certain alternative means of mitigating the effects of fee increases to a particular industry segment. One option is to avoid significant fee increases, which is also proposed in the NPRM. Another option is to provide interim adjustments, by phasing in the new fees over a period of time. The Commission seeks comment on the abovementioned, and any other, means and methods that would minimize any significant economic impact of our proposed rules on small entities. In addition, the Commission’s rules provide a process by which regulatory fee payors may seek waivers or other relief on the basis of financial hardship. 47 CFR 0.1166 IX. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules 86. None. X. Ordering Clauses 87. Accordingly, it is ordered that, pursuant to sections 4(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed Rulemaking is hereby adopted. 88. It is further ordered that the Commission’s Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the U.S. Small Business Administration. Federal Communications Commission. Gloria J Miles, Federal Register Liaison. [FR Doc. 2013–13679 Filed 6–7–13; 8:45 am] 164 5 PO 00000 U.S.C. 603(c)(1)–(c)(4). Frm 00046 Fmt 4702 Sfmt 9990 BILLING CODE 6712–01–P E:\FR\FM\10JNP1.SGM 10JNP1

Agencies

FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Proposed Rules]
[Pages 34612-34634]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13679]

=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket Nos. 12-201, 13-140, 08-65; FCC 13-74]

Assessment and Collection of Regulatory Fees for Fiscal Year
2013; Procedures for Assessment and Collection of Regulatory Fees; and
Assessment and Collection of Regulatory Fees for Fiscal Year 2008

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission
(Commission) will revise its Schedule of Regulatory Fees in order to
recover an amount of $339,844,000 that Congress has required the
Commission to collect for fiscal year 2013. Section 9 of the
Communications Act of 1934, as amended, provides for the annual
assessment and collection of regulatory fees, respectively, for annual
``Mandatory Adjustments'' and ``Permitted Amendments'' to the Schedule
of Regulatory Fees.

DATES: Submit comments on or before June 19, 2013, and reply comments
on or before June 26, 2013.

ADDRESSES: You may submit comments, identified by MD Docket No. 13-140,
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 email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
Email: ecfs@fcc.gov. Include MD Docket No. 13-140 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 13-74, MD Docket No. 13-140, adopted
on May 22, 2013 and released May 23, 2013. The full text of this
document is available for inspection and copying during normal business
hours in the FCC Reference Center, 445 12th 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 12th 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 email:
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. The Notice of Proposed Rulemaking (FY 2013 NPRM) and Further
Notice of Proposed Rulemaking (FNPRM) shall be treated as a ``permit-
but-disclose'' proceeding in accordance with the Commission's ex parte
rules. Persons making ex parte presentations must file a copy of any
written presentation or a memorandum summarizing any oral presentation
within two business days after the presentation (unless a different
deadline applicable to the Sunshine period applies). Persons making
oral ex parte presentations are reminded that memoranda summarizing the
presentation must list all persons attending or otherwise participating
in the meeting at which the ex parte presentation was made, and
summarize all data presented and arguments made during the
presentation. If the presentation consisted in whole or in part of the
presentation of data or arguments already reflected in the presenter's
written comments, memoranda, or other filings in the proceeding, the
presenter may provide citations to such data or arguments in his or her
prior comments, memoranda, or other filings (specifying the relevant
page and/or paragraph numbers where such data or arguments can be
found) in lieu of summarizing them in the memorandum. Documents shown
or given to Commission staff during ex parte meetings are deemed to be
written ex parte presentations and must be filed consistent with Sec.
1.1206(b). In proceedings governed by Sec. 1.49(f) or for which the
Commission has made available a method of electronic filing, written ex
parte presentations and memoranda summarizing oral ex parte
presentations, and all attachments thereto, must be filed through the
electronic comment filing system available for that proceeding, and
must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission's ex parte rules.

B. Comment Filing Procedures

2. Comments and Replies. Pursuant to Sec. Sec. 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.
[ssquf] 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
8:00 a.m. to 7:00 p.m. All hand

[[Page 34613]]

deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building.
[ssquf] 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.
[ssquf] 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 email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
3. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC
20554. These documents will also be available free online, via ECFS.
Documents will be available electronically in ASCII, Word, and/or Adobe
Acrobat.
4. Accessibility Information. To request information in accessible
formats (computer diskettes, large print, audio recording, and
Braille), send an email 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 and FNPRM document solicits possible proposed
information collection requirements. The Commission, as part of its
continuing effort to reduce paperwork burdens, invites the general
public and the Office of Management and Budget (OMB) to comment on the
possible proposed information collection requirements contained in this
document, as required by the Paperwork Reduction Act of 1995, Public
Law 104-13. In addition, pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we
seek specific comment on how we might further reduce the information
collection burden for small business concerns with fewer than 25
employees.

D. Initial Regulatory Flexibility Analysis

6. 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 of
Proposed Rulemaking (NPRM). The Commission will send a copy of this
NPRM, including the IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration.

II. Introduction and Executive Summary

7. In the FY 2013 NPRM and FNPRM, two interrelated proceedings, we
seek comment on the collection of regulatory fees in Fiscal Year (FY)
2013 and on proposals to more generally reform the Commission's
policies and procedures for assessing and collecting regulatory fees.
Specifically, in the FY 2013 NPRM, we seek comment on our annual
process of assessing regulatory fees to offset the Commission's FY 2013
appropriation, as directed by Congress. We propose several reforms to
the process for calculating and collecting the FY 2013 fees. The
regulatory fees calculated in response to the FY 2013 NPRM will be
collected later this year. We also seek comment on more long-range
proposals to reform and revise our regulatory fee schedule after FY
2013 (for FY 2014 and beyond) to take into account changes in the
communications industry and in the Commission's regulatory processes
and staffing in recent years.
8. The FY 2013 NPRM seeks comment concerning adoption and
implementation of proposals to reallocate regulatory fees to more
accurately reflect the subject areas worked on by current Commission
full time employees (FTEs) \1\ for FY 2013. We seek comment on, among
other things, reallocating for purposes of regulatory fee calculations:
Direct FTEs working on Interstate Telecommunications Service Providers
(ITSPs) and other fee categories to reflect current workloads devoted
to these subject areas and FTEs in the International Bureau to more
accurately reflect the Commission's regulation and oversight of the
International Bureau regulatees. We also seek comment on whether, if
these proposals are adopted, we should limit any increase in regulatory
fee assessments to industry segments resulting from such reallocation.
In addition, we seek comment generally on whether direct and indirect
FTEs should be allocated differently as described below. Further, we
seek comment on whether to delay our proposal to reallocate FTEs for
regulatory fee purposes and, in the interim, maintain the same
allocation percentages from last year for FY 2013.
---------------------------------------------------------------------------

\1\ One FTE, typically called a ``Full Time Equivalent,'' is a
unit of measure equal to the work performed annually by a full time
person (working a 40 hour workweek for a full year) assigned to the
particular job, and subject to agency personnel staffing limitations
established by the U.S. Office of Management and Budget. Any
reference to FTE or ``Full Time Employee'' used herein refers to
such Full Time Equivalent.
---------------------------------------------------------------------------

9. In addition, we seek comment concerning adoption and
implementation of proposals for FY 2014 and beyond, which include: (1)
Combining ITSPs with wireless telecommunications services into one
regulatory fee category and using revenues as the basis for calculating
the resulting regulatory fees; (2) using revenues to calculate
regulatory fees for other industries that now use subscribers as the
basis for regulatory fee calculations, such as the cable industry; (3)
consolidating UHF and VHF television stations into one regulatory fee
category; (4) proposing a regulatory fee for Internet Protocol TV
(IPTV) at the rate of cable fees; (5) alleviating large fluctuations in
the fee rate of Multiyear Wireless Services; and (6) determining
whether the Commission should modify the methodology in collecting
regulatory fees for regulatees in declining industries (e.g., CMRS
Messaging). We also clarify that licensees of Digital Low Power, Class
A, and TV Translators/Boosters should pay only one regulatory fee on
their analog or digital station, but not on both. As required by
Treasury and Office of Management and Budget (OMB) initiatives, we also
announce and seek comment on our proposal to require that all
regulatory fee payments be made electronically beginning in FY 2014.
Finally, we state that beginning in FY 2014 the Commission will no
longer mail out initial regulatory fee assessments to CMRS licensees,
and we propose to transfer unpaid regulatory fees for collection by the
Department of the Treasury at the end of the payment period (instead of
waiting 180 days) beginning in FY 2014.
10. The attached FNPRM seeks comment on the treatment of non-U.S.-
Licensed Space Stations; Direct Broadcast Satellites; and other
services, such as broadband, in our regulatory fee process. We invite
comment on these topics to better inform the Commission on whether and/
or how these services should be assessed under our regulatory fee
methodology in future years.
11. We propose to collect $339,844,000 in regulatory fees for
Fiscal Year (FY) 2013, pursuant to Section 9 of the Communications Act
of 1934, as amended (the Act or

[[Page 34614]]

Communications Act) and the FY 2013 Continuing Appropriations
Resolution. Section 9 regulatory fees are mandated by Congress and
collected to recover the regulatory costs associated with the
Commission's enforcement, policy and rulemaking, user information, and
international activities.\2\ Further, as provided by section 9(a)(2),
the amount of regulatory fees to be collected is established each year
by Congress,\3\ which directs the Commission to use the fees to offset
its entire appropriation. For FY 2013, the sequester effectuated by the
Budget Control Act of 2011 \4\ reduces the agency's permitted FY 2013
salary and expenses expenditures by $17M to $322,844,000. However, that
Act does not alter the congressional directive set out in the FY 2012
appropriation \5\ (and continued in effect in FY 2013 by virtue of the
Further Continuing Appropriations Act, 2013) to collect $339,844,000 in
regulatory fees.\6\
---------------------------------------------------------------------------

\2\ 47 U.S.C. 159(a).
\3\ In FY 2013, the Consolidated and Further Continuing
Appropriations Act, Public Law 113-6 (2013) at Division F authorizes
the Commission to collect offsetting regulatory fees at the level
provided to the Commission's FY 2012 appropriation of $339,844.00.
See Financial Services and General Government Appropriations Act,
2012, Division C of Public Law 112-74, 125 Stat. 108-9 (2011).
\4\ Budget Control Act of 2011, Public Law 112-15, 101, 125
Stat. 241 (2011) (amending 251 of the Balanced Budget and Emergency
Deficit Control Act of 1985, Public Law 99-177, 99 Stat. 1037
(2005).
\5\ See Financial Services and General Government Appropriations
Act, 2012, Division C of Public Law 112-74, 125 Stat. 108-9 (2011);
\6\ Further Continuing Appropriations Act, 2013, Public Law 113-
6, xxx Stat. xxx (2013) at Division F, 1101(c).
---------------------------------------------------------------------------

III. Background

12. We began this regulatory fee reform analysis in the Fiscal Year
(FY) 2008 Further Notice of Proposed Rulemaking.\7\ In 2012, a report
on the Commission's regulatory fee program issued by the Government
Accountability Office (GAO Report) provided further support for a more
fundamental reevaluation of how to align regulatory fees more closely
with regulatory costs.\8\ In our FY 2012 NPRM proposing basic changes
to the current fee assessment process, we incorporated the GAO Report
into the record and sought comment on it.\9\ To encourage a more robust
discussion of the record in this docket, the Commission invited all the
parties who filed comments to the FY 2012 NPRM to further discuss their
comments and any other regulatory fee reform issues they wished to
raise with Commission staff. Staff has met with commenters representing
the wireline, wireless, broadcast, cable, satellite, and submarine
cable industries. Their additional comments have been summarized in ex
parte filings and placed in the record of the proceeding in compliance
with the Commission's rules.\10\ To facilitate a more robust record to
better inform the Commission as it contemplates further reform of our
regulatory fee policies and procedures for FY 2013 and beyond, we seek
comment not only on the issues raised herein, but also on the concerns
and comments raised by the GAO Report, the issues presented and
comments filed in response to the FY 2012 NPRM and any issues raised in
ex parte filings by industry representatives. We anticipate that in the
Report and Order we will adopt certain proposals discussed herein for
FY 2013 and other proposals for implementation in FY 2014 and beyond.
---------------------------------------------------------------------------

\7\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, Report and Order and Further Notice of Proposed
Rulemaking, 24 FCC Rcd 6388 (2008) (FY 2008 FNPRM).
\8\ See GAO, ``Federal Communications Commission Regulatory Fee
Process Needs to be Updated,'' Aug. 2012, GAO-12-686.
\9\ Assessment and Collection of Regulatory Fees, Notice of
Proposed Rulemaking, 27 FCC Rcd 8458 (2012) (FY 2012 NPRM). We cite
some of the comments filed in response to the FY 2012 NPRM in the
discussion herein.
\10\ See, e.g., American Cable Association, Notice of Ex Parte
Presentation (Feb. 22, 2013); North American Submarine Cable
Association, MD Docket Nos. 12-201 and 08-65, Notice of Ex Parte
Presentation (Feb. 15, 2013); Enterprise Wireless Alliance, MD 12-
201 Ex Parte Presentation (Feb. 15, 2013); North American Submarine
Cable Association, MD Docket Nos. 12-201 and 08-65, Notice of Ex
Parte Presentation (Mar. 27, 2013).
---------------------------------------------------------------------------

IV. Notice of Proposed Rulemaking

A. Regulatory Fee Allocation Process and Need for Reform.

13. Each year the Commission derives the fees that Congress
requires it to collect ``by determining the full-time equivalent number
of employees performing'' these activities ``adjusted to take into
account factors that are reasonably related to the benefits provided to
the payer of the fee by the Commission's activities . . . .'' \11\ To
calculate regulatory fees, the Commission allocates the total amount to
be collected, among the various regulatory fee categories. Each
regulatee within a fee category must pay its proportionate share based
on an objective measure, e.g., revenues, subscribers, or licenses. The
first step, allocating fees to fee categories, is based on the
Commission's calculation of the number of FTEs devoted to each
regulatory fee category. FTEs are categorized as either ``direct'' or
``indirect.'' An FTE is considered ``direct'' if the employee is in one
of the core bureaus, i.e., the Wireless Telecommunications Bureau,
Media Bureau, Wireline Competition Bureau, or International Bureau.\12\
If an employee is not assigned to one of those four bureaus, that
employee is considered an ``indirect'' FTE.\13\ Thus, the total FTEs
for each fee category includes the direct FTEs associated with that
category (i.e., the FTEs in the bureau associated with that category),
plus a proportional allocation of the indirect FTEs. This preliminary
allocation has been based on the concept that the FTEs in each of those
four bureaus perform activities related to the service providers
regulated by those bureaus.
---------------------------------------------------------------------------

\11\ 47 U.S.C. 159(b)(1)(A).
\12\ The current numbers of direct FTEs are as follows:
International Bureau, [119]; Media Bureau, [171]; Wireline
Competition Bureau, [160]; and Wireless Telecommunications Bureau,
[98]. FTEs involved in Section 309 auctions, [194 FTEs], are not
included in this analysis because auctions activities are funded
separately.
\13\ The ``indirect'' FTEs are the employees from the following
bureaus and offices: Enforcement Bureau, Consumer and Governmental
Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman
and Commissioners' offices, Office of Managing Director, Office of
General Counsel, Office of the Inspector General, Office of
Communications Business Opportunities, Office of Engineering and
Technology, Office of Legislative Affairs, Office of Strategic
Planning and Policy Analysis, Office of Workplace Diversity, Office
of Media Relations, and Office of Administrative Law Judges,
totaling [967] FTEs.
---------------------------------------------------------------------------

14. The current allocations of direct and indirect FTEs are taken
from FTE data compiled in FY 1998.\14\ A comparison of current FTE
numbers in the various bureaus to their respective share of the overall
regulatory fee burden illustrates the need to reexamine the FTE data
used. For example, the International Bureau currently employs 22
percent of the Commission's direct FTEs, yet International Bureau
regulatees contribute 6.3 percent of the total regulatory fee
collection.\15\ On the other hand, ITSPs, regulated by the Wireline
Competition Bureau, pay 47 percent of the total annual regulatory fee
collection, while the Wireline Competition Bureau employs only 29.2
percent of the Commission's direct FTEs. The proposals herein seek not
only to address this issue, but also to make the allocation of
regulatory fee burden more transparent.\16\ Although we seek to better
align regulatory fees with the level of current regulation, it is
important to note that there is no statutory requirement that
regulatory

[[Page 34615]]

fees offset only the actual costs of regulating each service. In fact,
the FY 2013 Further Continuing Resolution requires that the Commission
collect an amount of regulatory fees sufficient to offset its entire
appropriation. Thus the total benefit received by any particular
regulatee from Commission actions will not necessarily correlate
directly with the quantity of Commission resources used for that
regulatee's benefit.\17\ For example, regulatory fees also cover the
costs the Commission incurs in regulating entities that are statutorily
exempt from paying regulatory fees,\18\ entities whose regulatory fees
are waived,\19\ and entities that provide nonregulated services, as
well other Commission activities, such as consumer-related services.
---------------------------------------------------------------------------

\14\ FY 2012 NPRM, 27 FCC Rcd at 8461, para. 8.
\15\ See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
\16\ The GAO noted the lack of transparency of the regulatory
fee process, and was particularly concerned with the regulatory fee
allocations for the International Bureau and the Wireline
Competition Bureau, see GAO Report at p. 23.
\17\ FY 2004 Report and Order, 19 FCC Rcd at 11667, para. 11.
\18\ Id. For example, governmental and nonprofit entities are
exempt from regulatory fees under section 9(h) of the Act. 47 U.S.C.
159(h); 47 CFR 1.1162.
\19\ 47 CFR 1.1166.
---------------------------------------------------------------------------

15. As discussed in the FY 2012 NPRM, the FY 1998 FTE data may no
longer fairly and accurately reflect the time that Commission employees
devote to these activities.\20\ Using updated \21\ FTE data (without
other significant changes in our methodology) would reduce the
percentage of regulatory fees allocated to Wireline Competition Bureau
regulatees from 47 percent to 29.2 percent and increase the percentage
of fees allocated to International Bureau regulatees from 6.3 percent
to 22 percent.\22\ Therefore, substituting current FTE data for FY 1998
FTE data would subject some international service providers to
significant fee increases.\23\ In determining how to update the FTE
data to more accurately reflect the current composition of the
Commission, we recognize that not only can the regulatory fees not be
calculated to reflect the exact costs of each regulated industry, but
such direct relationship of costs to each industry is not consistent
with the statutory mandate to allocate based on the FTEs performing the
enumerated functions in each named bureau. Nevertheless, we find that
it is consistent with section 9 of the Act to better align, to the
extent feasible, these regulatory fees with the current costs of
Commission oversight and regulation of each industry group.
Specifically, a more accurate alignment of FTE work to subject matter
promotes the requirement in section 9 to ensure the benefits provided
to the payor of the fee are consistent with the Commission's
activities.\24\
---------------------------------------------------------------------------

\20\ FY 2012 NPRM, 27 FCC Rcd at 8464, para. 12.
\21\ The FTEs used herein are determined as of Sept. 30, 2012.
\22\ FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25.
\23\ Id.
\24\ 47 U.S.C. 159.
---------------------------------------------------------------------------

16. The GAO Report concluded that, due to changes in the
communications industry and in the Commission during the past 15 years,
the Commission should perform an updated FTE analysis, determine
whether the fee categories should be revised, and increase the
transparency of the regulatory fee process.\25\ For this purpose, we
examine whether these functions and activities performed by FTEs in the
International Bureau, often to the benefit of multiple categories of
regulatees, warrant considering only a portion of the International
Bureau as a ``core bureau.'' We also examine whether wireline and
wireless telecommunications services should be combined into a single
new category.
---------------------------------------------------------------------------

\25\ GAO Report at 36.
---------------------------------------------------------------------------

B. Discussion

1. Changes to the Interstate Telecommunications Service Providers
(ITSPs) Fee Category
17. One of the primary issues discussed in the FY 2012 NPRM is how
to fairly allocate the FTEs for ITSPs, which are the Wireline
Competition Bureau fee payors.\26\ ITSPs--interexchange carriers
(IXCs), incumbent local exchange carriers (LECs), toll resellers, and
other IXC service providers--use end-user revenues to calculate
regulatory fee assessments based on the reported revenue in the FCC
Form 499-A, filed April 1 of each year with the prior year's interstate
and international revenue.\27\ As stated previously, in FY 2012, ITSPs
paid 47 percent of the total regulatory fees collection, even though
the Wireline Competition Bureau employees comprised 29.2 percent of the
Commission's direct FTEs. In addition, since ITSPs pay regulatory fees
based on revenues, the regulatory fee assessment rates for ITSPs
generally have increased over time due to a declining revenue base in
that industry segment.\28\ At the same time, wireless revenues have
increased significantly, in part due to substitution of wireless
services for wireline services. Nevertheless, as wireless revenues have
increased, the proportion of all regulatory fees paid by wireless
providers has not significantly increased. Thus, our regulatory fee
methodology has not kept pace with the changes in both the
communications industry and within the Commission. We seek comment on
reallocating the direct FTEs for ITSP for FY 2013, based on current
FTEs in the core bureaus, which would significantly decrease the
regulatory fee allocation for ITSPs. We propose this reallocation in
conjunction with a reallocation of International Bureau FTEs, as
explained in more detail below. We also seek comment on revising our
methodology to account for changes in the wireless and wireline
industries by making additional changes to the ITSP fee category for FY
2014, such as combining wireless and wireline into a new ITSP category,
as discussed below.
---------------------------------------------------------------------------

\26\ See FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25.
\27\ The Commission has separated revenues listed on Form 499-A
into two fee categories: ITSP providers and non-ITSP providers.
Providers that derive a predominant amount of their revenues from
Lines 412(e), 420(d), and 420(e) on FCC Form 499-A are ITSP
providers and subject to ITSP regulatory fees. Those providers that
do not derive their revenues predominantly from Lines 412(e),
420(d), and 420(e) on FCC Form 499-A, non-ITSP providers, paid a
regulatory fee calculated differently, such as by number of
subscribers.
\28\ Wireline revenues have not decreased for all carriers.
Verizon, for example, reported for 2012 that ``Consumer wireline
revenues grew by 3.2 percent for the year--the best in a decade--
fueled by double-digit growth in FiOS.'' Verizon 2012 Annual Report
at p. 3.
---------------------------------------------------------------------------

18. Currently wireless and wireline telecommunications services are
in separate regulatory fee categories. The Independent Telephone and
Telecommunications Alliance (ITTA) proposes that the Commission assess
all voice service providers on the basis of revenues to ensure that
like services are treated in a similar manner.\29\ We agree with ITTA
that wireless services are comparable to wireline services in many ways
and therefore both encompass similar regulatory policies and programs,
such as universal service and number portability.\30\ As wireless
services are increasingly displacing wireline services, we seek comment
on whether it would be fair to combine both services into one category
by including all wireless and wireline FTEs in the same allocation to
arrive at one uniform regulatory fee rate for ITSP and wireless
providers, assessed based on revenues.
---------------------------------------------------------------------------

\29\ ITTA Comments at 3.
\30\ The GAO Report discussed using revenues for assessing
wireless providers' regulatory fees, as proposed by ITTA. See GAO
Report at 19-20.
---------------------------------------------------------------------------

19. Under section 9 of the Communications Act, the Commission must
make certain changes to the regulatory fee schedule if it ``determines
that the Schedule requires amendment to comply with the requirements''
of section 9(b)(1)(A).\31\ The Commission must add, delete, or
reclassify services in the fee schedule to reflect additions,

[[Page 34616]]

deletions, or changes in the nature of its services ``as a consequence
of Commission rulemaking proceedings or changes in law.'' \32\ These
``permitted amendments'' require Congressional notification \33\ and
resulting changes in fees are not subject to judicial review.\34\
Combining wireless and wireline FTEs in the same allocation, for a new
ITSP category, would be such a ``permitted amendment'' requiring
Congressional notification. Therefore, if adopted, this allocation
change would not take effect until FY 2014.
---------------------------------------------------------------------------

\31\ 47 U.S.C. 159(b)(3).
\32\ 47 U.S.C. 159(b)(3).
\33\ 47 U.S.C. 159(b)(4)(B).
\34\ 47 U.S.C. 159(b)(3).
---------------------------------------------------------------------------

20. We recognize, however, that carriers whose regulatory fees are
calculated on the basis of revenues, instead of subscribers, may have
an incentive to allocate more of their revenues to data services in
order to reduce their regulatory fees.\35\ Therefore, we invite
commenters to also discuss whether there are alternate ways to assess
regulatory fees for wireless and wireline telecommunications services
to achieve fair, sustainable, and predictable results, such as moving
both industry groups to another common objective measure as the basis
for calculating regulatory fees, and what such common measure should
be.
---------------------------------------------------------------------------

\35\ We do not currently assess regulatory fees on broadband
revenues.
---------------------------------------------------------------------------

2. Reallocation of FTEs
21. The GAO Report recommended that the Commission reexamine the
activities performed by FTEs in the various bureaus.\36\ This Notice of
Proposed Rulemaking is responsive to the GAO's recommendation.
Adjusting the allocation fee category percentages and rates to reflect
current FTEs, without further examining precisely what regulatory
functions these FTEs are performing would result in an incomplete
reexamination of the issues involved in updating our FTE allocations.
Moreover, using updated FTE calculations without other significant
changes in our methodology would subject some classes of regulatees to
significant fee increases.
---------------------------------------------------------------------------

\36\ GAO Report at 36.
---------------------------------------------------------------------------

22. While we are required by section 9 of the Act to calculate
regulatory fees based on an allocation of FTEs, we are not required to
use the same methodology year after year. We tentatively conclude that
our methodology of using the direct and indirect FTEs based on the four
core bureaus and supporting bureaus and offices should be revised to
more accurately reflect the direct and indirect costs for those
regulatees. Such revisions should take into account the impact on all
regulatees, because any change in the allocation of the total
regulatory fee amount for one category of fee payors necessarily
affects the fees paid by payors in all the other fee categories. The
GAO Report noted the disparity in the allocation for the International
Bureau, the Wireline Competition Bureau, and the Wireless
Telecommunications Bureau.\37\ The current FTE allocations, as of
September 30, 2012, and the FTE allocations what would result from our
reallocation proposals are shown in the table below.
---------------------------------------------------------------------------

\37\ See GAO Report at 14-15.

TABLE 1--Direct and Indirect FTE Allocations/Current and Proposed
----------------------------------------------------------------------------------------------------------------
Effective FY 2013
allocation resulting
from the reallocation
Bureaus (all FTE amounts shown exclude auctions-funded Current allocations proposal in this NPRM,
employees) based on 1998 direct applying proposed cap
FTE analysis (percent) of 7.5% on fee rate
increases \38\
(percent)
----------------------------------------------------------------------------------------------------------------
International Bureau.......................................... 6.3 5.99
Media Bureau.................................................. 30.2 33.33
Wireline Competition Bureau................................... 46.7 \39\ 41.26
Wireless Telecommunications Bureau............................ 16.8 19.42
----------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------

\38\ The percentages shown are the estimated allocations for FY
2013 when the fee rate increases are capped at 7.5%. The actual fees
to be paid for FY 2013 may be affected by additional factors, such
as number of subscribers, revenues, or other units to which the
capped fee rate will be applied.
\39\ This result reflects an approximately ten percent (10%)
reduction in the ITSP fee rate from what it would have been in FY
2012 but for the off-setting rate freeze for ITSP's applied in our
FY 2012 Order.
---------------------------------------------------------------------------

23. We propose to update our FTE analysis using data from September
30, 2012. The International Bureau, which employs 22 percent of the
Commission's direct FTEs, currently pays, as illustrated in the table
above, 6.3 percent of the total regulatory fees. \40\ Conversely,
ITSPs, based on the current allocation, would pay almost 47 percent of
the total regulatory fees while the Wireline Competition Bureau employs
roughly 30 percent of the Commission's direct FTEs. We seek comment on
how to revise the apportionment of direct and indirect FTEs to reach a
fair and equitable regulatory fee allocation, under proposals
including, but not limited to, those described herein. Our proposed
reallocation, without further reforms or adjustments (such as the caps
discussed herein at paragraphs 30 and 31) would result in allocation of
5.92 percent to the International Bureau, 37.50 percent to the Media
Bureau, 35.09 percent to the Wireline Competition Bureau, and 21.49
percent to the Wireless Telecommunications Bureau. When these figures
are adjusted to reflect the proposed 7.5 percent cap on rate increases
for FY 2013, the resulting effective allocations for FY 2013 are as set
forth in the far right column in the table above.
---------------------------------------------------------------------------

\40\ See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
---------------------------------------------------------------------------

24. We had previously sought comment on revising the regulatory fee
schedule, which would thereby increase the amount paid by the
International Bureau's regulatees to 22 percent of the total.\41\
Although our proposals in this proceeding are based, in part, on such a
reallocation, we believe that, as discussed below, fairness warrants an
allocation that more closely reflects the appropriate proportion of
direct costs required for regulation and oversight of International
Bureau regulatees. Under such an analysis, the regulatory fee
allocation of these regulatees, should be decreased, rather than
significantly increased, for the reasons stated herein. When section 9
was adopted, the total FTEs were to be calculated based on the number
of FTEs in the Private Radio

[[Page 34617]]

Bureau,\42\ Mass Media Bureau,\43\ and Common Carrier Bureau.\44\
Satellites and submarine cable were regulated through the Common
Carrier Bureau before the International Bureau was created. As
discussed below, the services offered by regulatees in the Wireline
Competition Bureau, Wireless Telecommunications Bureau, and Media
Bureau have evolved and converged over time and, therefore their
regulation involves many similar issues and generates common Commission
costs. To cite but one example, wireline, wireless, and cable companies
compete with each other for customers.\45\
---------------------------------------------------------------------------

\41\ FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
\42\ The predecessor to the Wireless Telecommunications Bureau.
\43\ Now the Media Bureau.
\44\ The predecessor to the Wireline Competition Bureau.
\45\ Apart from DBS video services, for the most part the
International Bureau regulatees do not offer the same services as
the wireline, wireless, and cable companies, although wireline and
wireless companies use the services, e.g. submarine cables that
International Bureau regulatees provide.
---------------------------------------------------------------------------

25. During this technological convergence among wireline, wireless,
and cable services, the International Bureau's work has expanded beyond
its regulation of international licensees. It also has unique duties to
assist bureaus and their regulatees throughout the Commission, and
represent the Commission on a variety of international issues affecting
those regulatees. In discharging these duties, the International Bureau
works on matters including but not limited to spectrum use, cross-
border coordination, broadband deployment, and foreign ownership. At
the same time, International Bureau licensees have required less
Commission oversight and regulation. Thus, the International Bureau now
serves the entire Commission's international needs, not just the
specific requirements of the International Bureau regulatees. For these
reasons, we propose that the International Bureau should no longer be
entirely classified as a ``core bureau'' in the way that the Wireline
Competition Bureau, Wireless Telecommunications Bureau, and Media
Bureau are classified today. Below, we seek comment on proposals to
reallocate the International Bureau FTEs for regulatory fee purposes.
a. Strategic Analysis and Negotiations Division, International Bureau
26. Consistent with section 9(b) of the Act, any reallocation
methodology we adopt must be reasonably related to the benefits
provided to the payor of the fee by the Commission's activities. A
reallocation that reflects benefits provided to the fee payor will also
meet our objectives of being fair and sustainable. Revising the
percentage of the total regulatory fees paid by international service
providers to reflect the full percentage of direct FTEs in the
International Bureau would promote fairness if we determined that the
increase in International Bureau FTEs is due to a corresponding
increase in FTEs working on regulation and oversight of international
service providers. If, instead, the increase is attributable to the
increasing number of International Bureau FTEs performing duties that
are related to the Commission as a whole or benefit service providers
regulated by other Bureaus, the fee increase should not be imposed
solely on international service providers. Rather, it should also be
allocated to the other regulatory fee categories whose fee payors
benefit from that work.
27. For example, the largest division in the International Bureau
is the Strategic Analysis and Negotiations Division (SAND), which is
not significantly involved in regulation or oversight of International
Bureau regulatees. Instead, SAND is responsible for intergovernmental
and regional leadership, negotiating, and planning--processes that
benefit offices and bureaus throughout the Commission. SAND oversees
the Commission's global participation in international forums such as
the International Telecommunication Union (ITU), including World Radio-
communication Conferences; various regional organizations, such as the
Asia-Pacific Economic Cooperation, the Inter-American
Telecommunications Conference, and the Organization for Economic
Cooperation and Development; and cross-border negotiations with Canada
and Mexico. These activities cover telecommunications services outside
of the bureau's direct oversight and regulatory activities, e.g.,
coordination of wireless services with Canada and Mexico.\46\ SAND also
performs oversight to enable the International Bureau to integrate
international and bilateral meetings with visits to the Commission by
foreign regulators and other government officials. SAND is responsible
for performing economic and policy analyses for the International
Bureau concerning trends in the international communications markets
and services. Finally, SAND conducts research and studies concerning
international regulatory trends, as well as their implications on U.S.
policy. For these reasons we propose excluding the SAND FTEs from the
International Bureau for regulatory fee purposes and instead allocating
them as indirect FTEs.\47\ We seek comment on this proposal.
---------------------------------------------------------------------------

\46\ See FY 2012 NPRM, 27 FCC Rcd at 8467-68, para. 26.
\47\ See id., 27 FCC Rcd at 8467-68, paras. 26-27; North
American Submarine Cable Association Comments at 28.
---------------------------------------------------------------------------

b. Satellite Division, International Bureau
28. In contrast to SAND, the International Bureau's Satellite
Division is responsible for the regulation and oversight of satellite
system licensees, specifically operators of space stations and earth
stations, by authorizing satellite systems to facilitate deployment of
satellite services and fostering efficient use of the radio frequency
spectrum and orbital resources. In addition to the application and
licensing process, the Satellite Division provides expertise about the
commercial satellite industry in the domestic spectrum management
process and advocates U.S. satellite radiocommunication interests in
international coordinations and negotiations. The Satellite Division is
also responsible for the process of placing non-U.S.-licensed space
stations on a ``Permitted List,'' \48\ a process that is similar to the
application process and allows access to the U.S. market for certain
non-U.S. licensed satellites.\49\ The Satellite Division also reviews
market access requests that are not eligible for inclusion on a
Permitted List.
---------------------------------------------------------------------------

\48\ See Amendment of the Commission's Regulatory Policies to
Allow Non-U.S.-Licensed Space Stations to Provide Domestic and
International Satellite Service in the United States, IB Docket No.
96-111, First Order on Reconsideration, 15 FCC Rcd 7207 (1999)
(DISCO II First Reconsideration Order) (adopting the original
procedure for making changes to the Permitted List). See also 2006
Biennial Regulatory Review--Revision of Part 25, Establishment of a
Permitted List Procedure for Ka-band Space Stations, IB Docket 06-
154, Declaratory Order, 25 FCC Rcd 1542 (2010).
\49\ This is the process used by certain non-U.S.-licensed
satellite operators to serve customers in the United States. These
satellite operators may file a petition for a Declaratory Ruling
seeking approval to provide service in the United States. These
operators do not pay application fees or regulatory fees to the
Commission, yet their petitions, together with the information
required by an application, are analyzed by Satellite Division staff
and these operators benefit from International Bureau regulatory
activities.
---------------------------------------------------------------------------

29. We propose that of all the International Bureau's Satellite
Division employees whose work involves regulation of International
Bureau regulatees, we use 25 direct FTEs \50\ to determine the
regulatory fees for both

[[Page 34618]]

satellite space stations and earth stations.\51\ We seek comment on
this proposal.
---------------------------------------------------------------------------

\50\ Indirect FTEs would be allocated to these entities as they
are for all regulatory fee payors.
\51\ See Satellite Industry Association Comments at 13.
---------------------------------------------------------------------------

c. Policy Division, International Bureau
30. The work of the third division in the International Bureau, the
Policy Division, is multifaceted. The Policy Division work involves
development of polices in connection with regulation and licensing of
international facilities and services (including submarine cable
systems, which provide bearer circuits). The Policy Division conducts
international spectrum rulemakings, handles applications for transfer
and assignment of international service providers and implements
Commission policies designed to protect competition in international
telecommunications, and promotes lower international calling rates for
U.S. consumers. It coordinates and provides guidance to and shares its
expertise with the Commission and other agencies. For example, the
Policy Division oversees Commission policies involving foreign
ownership of U.S. telecommunications providers, and in this connection,
coordinates major mergers and other license applications with U.S.
agencies on matters relating to national security, law enforcement,
foreign policy, and trade policy. Many of these functions involve
wireless and wireline issues and therefore benefit regulatees in other
Bureaus.\52\ Commenters to the FY 2012 NPRM argued that the Policy
Division's limited regulation and oversight of submarine cable systems
does not support the current allocation of 36.08 percent of all the
International Bureau regulatory fees or 2.28 percent of all regulatory
fees to the submarine cable industry.\53\
---------------------------------------------------------------------------

\52\ See Satellite Industry Association Comments at 14.
\53\ See Joint Reply Comments of International Carrier Coalition
at 3. See also Telstra Incorporated and Australia-Japan Cable (Guam)
Limited Comments at 3 (``the Commission's primary regulatory
activity is the granting of the cable landing license.'').
---------------------------------------------------------------------------

31. Sixty submarine cable systems are licensed by the Commission,
including 43 international submarine cable systems.\54\ Submarine cable
systems transport most of the U.S. international traffic,\55\ including
Internet broadband, video, other high bandwidth applications, voice
services (public switched and interconnected VoIP), and non-public,
private traffic for various international carriers, content and
Internet providers, corporations, wholesale operators, and governments.
Large corporate customers include financial and news companies and
other content providers. Cable capacity is generally sold on an
indefeasible right of use (IRU) basis for 10-15 year terms and also on
a long-term lease basis; \56\ therefore, a large increase in regulatory
fees is likely difficult to recover from customers as a ``pass-
through'' charge.\57\ Commenters responding to the FY 2012 NPRM noted
that regulatory fee charges in the U.S. are much higher than those
charged by other countries.\58\ Therefore, substantially increasing the
regulatory fees paid by submarine cable service providers would serve
as a disincentive for carriers to land new cables in the U.S. and an
incentive to land new cables in Mexico and Canada instead. Over time,
this would result in increased costs to American consumers as well as
potential national security issues.\59\ These commenters contend that
if the newer submarine cable systems choose to land in Canada or Mexico
to avoid our high regulatory fees, eventually almost all international
traffic will leave from (or arrive into) Canada or Mexico instead of
the U.S.\60\
---------------------------------------------------------------------------

\54\ There are 42 international submarine cable systems in
operation subject to regulatory fees and one more licensed system
that will become subject to regulatory fees when it becomes
operational.
\55\ Submarine cables transport approximately 95 percent of U.S.
international traffic. See North American Submarine Cable
Association Comments at 15.
\56\ See North American Submarine Cable Association Comments at
4.
\57\ See id. at 18-19; Telstra Incorporated and Australia-Japan
Cable (Guam) Limited Comments at 4.
\58\ The annual regulatory fees charged to submarine cable
systems are much higher in the U.S. than in other countries. See
Joint Comments of International Carrier Coalition at 13. Canada
charges $100 (Canadian) per year. Id. at 14. Several other countries
charge fees on telecommunications companies that would include
submarine cable operators, although there is no special category or
assessment for submarine cable systems; e.g., the United Kingdom
(.0609% of UK revenues); Spain (less than .2% of revenues in Spain);
the Netherlands (.077% of revenues in the Netherlands), Argentina
(.5% of revenues in Argentina); and Australia ($1,000 (Australian)
plus .00118% Australian revenues. Id. Many other countries, such as
Japan, Germany, and Mexico, do not charge regulatory fees at all.
Id. See also North American Submarine Cable Association, MD Docket
Nos. 12-201 and 08-65, Notice of Ex Parte Presentation (Mar. 27,
2013) at 3 (``Asia, Hong Kong, Singapore, and Malaysia compete
fiercely for submarine cable landings to maintain and improve their
connectivity and support their services industries.'').
\59\ See, e.g., Joint Comments of International Carrier
Coalition at 17 (additionally, ``[l]andings outside of the US are
also outside the reach of US law enforcement authorities and cannot
be monitored for evidence of criminal or terrorist activity.'').
\60\ Id.
---------------------------------------------------------------------------

32. We recognize that submarine cable systems have been subject to
significant regulatory fee reform recently.\61\ In the Submarine Cable
Order, the Commission adopted a new submarine cable bearer circuit
methodology to assess regulatory fees on a cable landing license basis,
based on the proposal (the ``Consensus Proposal'') of a large group of
submarine cable operators representing both common carriers and non-
common carriers with both large and small submarine cable systems.\62\
This methodology allocates international bearer circuit (IBC) costs
among service providers without distinguishing between common carriers
and non-common carriers, by assessing a flat per cable landing license
fee for all submarine cable systems, with higher fees for larger
submarine cable systems and lower fees for smaller systems. The
Submarine Cable Order did not assess a particular regulatory fee for
the submarine cable systems but instead it adopted a new methodology
that was considered fairer and easier to administer than the previous
method of assessing regulatory fees. This recent in-depth review and
revision of the regulatory fee methodology for submarine cable serves
as another important factor to consider in determining the appropriate
allocation of regulatory fees in this proceeding.
---------------------------------------------------------------------------

\61\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, Second Report and Order, 24 FCC Rcd 4208 (2009)
(Submarine Cable Order).
\62\ The 15 parties to the Consensus Proposal represented 35 of
the 42 international submarine cable systems in operation as well as
three planned systems. Submarine Cable Order, 24 FCC Rcd at 4213,
para. 11.
---------------------------------------------------------------------------

33. The 2.28 percent of all regulatory fees submarine cable service
providers now pay is the sixth highest regulatory fee percentage among
all fee categories,\63\ notwithstanding the fact that the provision of
international submarine cable service involves little regulation and
oversight from the Commission after the initial licensing process.
Under Part 43 of the Commission's rules, common carriers must file
Traffic and Revenue Reports regarding international services and, for
U.S. facilities-based international common carriers, Circuit Status
Reports for information concerning leased or owned circuits.\64\ Within
the Policy Division, submarine cable licensing,

[[Page 34619]]

regulation, and oversight is handled by a small number of FTEs during
each fiscal year.\65\ The Policy Division employees whose work involves
the regulation of submarine cable systems and bearer circuits, equates
to only two FTEs. The remaining Policy Division FTEs handle other
matters involving international issues and, like the SAND FTEs, should
more accurately be considered indirect FTEs, together with the
remaining bureau level employees.
---------------------------------------------------------------------------

\63\ Geostationary Space Stations are higher, at 3.23%, as are
ITSP (46.66%), CMRS Mobile (14.33%), Cable TV (16.55%), and FM
Classes B, C, C0, C1, & C2 (2.62%). Of all the International Bureau
regulatees, (presently, 6.32% of all regulatory fees) the Submarine
Cable systems pay 36.08%.
\64\ The Commission recently made changes to the international
reporting requirements, which have yet to go into effect. See
Reporting Requirements for U.S. Providers of International
Telecommunications Services, IB Docket No. 04-112, Second Report and
Order, 28 FCC Rcd 575 (2013).
\65\ The Commission, through the International Bureau Policy
Division, seeks to ensure that the applicant controls one of the
necessary inputs of the submarine cable system (the wet link, cable
landing station, or back haul facilities).
---------------------------------------------------------------------------

34. To summarize, we propose to reclassify SAND's FTEs as indirect
FTEs and reallocate them among the remaining core bureaus. In light of
the number of employees in the Satellite Division who work on satellite
and earth station issues, the number of employees in the Policy
Division who work on bearer circuits and submarine cable issues, and
the amount of time Satellite Division and Policy Division employees
spend on other issues that are not specific to the International Bureau
regulatees, we estimate that the appropriate number of FTEs to allocate
as direct for regulatory fee purposes is 27. This calculation factors
in 25 FTEs from the Satellite Division and 2 from the Policy Division.
We recognize in reaching this estimate that most of the International
Bureau FTEs should be considered indirect because their activities
benefit the Commission as a whole and are not specifically focused on
International Bureau regulatees. Therefore, we also propose that only a
total of 27 of the FTEs in the Satellite Division and the Policy
Division involved in regulation and oversight of International Bureau
regulatees, i.e., satellites, earth stations, submarine cable, and
bearer circuits, be considered in the direct International Bureau FTE
allocation for regulatory fee purposes. All remaining International
Bureau FTEs would be indirect because their activities benefit the
Commission as a whole and are not focused on International Bureau
regulatees. This proposal, if adopted, would be implemented in FY 2013.
We ask commenters to address the substance and timing of this proposal.
d. Reallocation of Other FTEs
35. Many Commission functions are not directly attributable to only
one specific regulated industry; the regulatory fee allocation,
therefore, has a large number of FTEs that we currently consider
indirect. As explained in the FY 2012 NPRM, our current approach is to
distribute these indirect FTEs proportionally across the core bureaus
according to these bureaus' respective percentages of the Commission's
total direct FTE costs. As we also noted, this approach is based on the
view that ``the work of the FTEs in the support bureaus and offices is
not primarily focused on any one bureau or regulatory fee category, but
instead services the needs of all four core bureaus.'' Further analysis
indicates, however, that work of the FTEs in a support bureau may tend
to focus disproportionately more on some of the core bureaus than
others and that this focus may shift over time. It might be difficult
to allocate these indirect FTEs on a task-by-task basis. We seek
comment on whether the work of indirect FTEs is focused
disproportionately on one or more core bureaus and if we should
allocate indirect FTEs among the core bureaus on this basis. For
example, if a particular support bureau or office routinely does a
disproportionate amount of work on matters affecting the regulatees of
a particular core bureau or bureaus, should the allocation of its
indirect FTEs be adjusted to reflect such focus in its work? We seek
comment on whether there are any divisions in non-core bureaus that
should be assigned as indirect FTEs in a different manner or assigned
as direct FTEs for a particular group of regulatees. We also seek
comment on whether there are other divisions within the core bureaus
that should be treated as indirect FTEs instead of as direct FTEs and
reassigned proportionally among the bureaus.
3. Limitation on Increases of Regulatory Fees
36. The proposals set forth above will likely reduce the regulatory
fee assessment for some regulatory fee categories, such as ITSPs and
regulatees of the International Bureau, significantly, while increasing
the assessment for many other fee categories. In order to provide a
reasonable transition to our new allocations and because there are
unresolved regulatory fee reform issues that may be adopted in FY 2014
that could further impact these allocations, we propose limiting any
rate increases resulting from our reallocations for this fiscal year.
Such a limitation of, for example, 7.5 percent, would prevent
``unexpected, substantial increases which could severely impact the
economic wellbeing of these licensees [regulatees].'' \66\ We propose
implementing such a limitation on the increase in regulatory fee rates,
before any rounding to the nearest applicable dollar unit as set forth
in our rules, above FY 2012 fee rates.\67\ This limitation, if adopted,
would be effective in FY 2013. Below are tables illustrating the impact
of limiting the increase to 7.5 percent on regulatory fee collection
and its associated Schedule of Fees. This will allow us to begin the
transition toward better alignment of regulatory fees with Commission
work performed, permitting necessary downward adjustment of regulatory
fees in some sectors without imposing undue economic hardship on
regulates in other sectors. Limiting increases will, necessarily, limit
the decrease in fees for other regulatory fee categories, since the
overall fee collection amount does not change.
---------------------------------------------------------------------------

\66\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997, Report and Order, 12 FCC 17161, 17176, para. 37 (1997).
\67\ The cap would not limit changes in regulatory fees paid by
a particular payor resulting from other factors, such as increased
or decreased revenues, changes in subscriber numbers, number of
licenses, etc.

Table 2--Maintain the Same Percentage Allocations as in Prior Years Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2012 Pro-rated FY Computed new Rounded new FY
Fee category FY 2013 Payment Years Revenue 2013 revenue FY 2013 2013 Expected FY
units estimate requirement regulatory fee regulatory fee 2013 revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use)....................... 1,400 10 490,000 507,072 36 35 490,000
PLMRS (Shared use).......................... 15,000 10 2,250,000 2,426,700 16 15 2,250,000
Microwave................................... 13,200 10 2,640,000 2,390,480 18 20 2,640,000
218-219 MHz (Formerly IVDS)................. 5 10 3,500 3,622 72 70 3,500
Marine (Ship)............................... 6,550 10 655,000 796,827 12 10 655,000
GMRS........................................ 7,900 5 192,500 289,755 7 5 197,500
Aviation (Aircraft)......................... 2,900 10 290,000 362,194 12 10 290,000

[[Page 34620]]

Marine (Coast).............................. 285 10 142,500 144,878 51 50 142,500
Aviation (Ground)........................... 900 10 135,000 144,878 16 15 135,000
Amateur Vanity Call Signs................... 14,300 10 214,500 217,316 1.52 1.52 217,360
AM Class A \4\.............................. 68 1 250,100 253,978 3,735 3,725 253,300
AM Class B \4\.............................. 1,454 1 3,125,875 3,161,850 2,175 2,175 3,162,450
AM Class C \4\.............................. 837 1 1,107,975 1,129,223 1,349 1,350 1,129,950
AM Class D \4\.............................. 1,406 1 3,698,400 3,742,299 2,662 2,650 3,725,900
FM Classes A, B1 & C3 \4\................... 2,935 1 7,764,750 7,836,522 2,670 2,675 7,851,125
FM Classes B, C, C0, C1 & C2 \4\............ 3,110 1 9,513,000 9,611,273 3,090 3,100 9,641,000
AM Construction Permits..................... 51 1 35,750 28,658 562 560 28,560
FM Construction Permits \1\................. 170 1 84,000 118,614 698 700 119,000
Satellite TV................................ 129 1 178,125 181,097 1,404 1,400 180,600
Satellite TV Construction Permit............ 3 1 3,580 3,622 1,207 1,200 3,600
VHF Markets 1-10............................ 22 1 1,761,650 1,804,524 82,024 82,025 1,804,550
VHF Markets 11-25........................... 23 1 1,836,875 1,880,596 81,765 81,775 1,880,825
VHF Markets 26-50........................... 39 1 1,512,400 1,549,293 39,725 39,725 1,549,275
VHF Markets 51-100.......................... 61 1 1,255,500 1,290,409 21,154 21,150 1,290,150
VHF Remaining Markets....................... 140 1 798,025 814,033 5,815 5,825 815,500
VHF Remaining Markets....................... 140 1 798,025 814,033 5,815 5,825 815,500
VHF Construction Permits \1\................ 1 1 11,650 5,825 5,825 5,825 5,825
UHF Markets 1-10............................ 109 1 3,853,150 3,880,922 35,605 35,600 3,880,400
UHF Markets 11-25........................... 106 1 3,458,250 3,478,876 32,820 32,825 3,479,450
UHF Markets 26-50........................... 135 1 2,959,875 2,977,132 22,053 22,050 2,976,750
UHF Markets 51-100.......................... 225 1 2,868,750 2,884,066 12,818 12,825 2,885,625
UHF Remaining Markets....................... 247 1 845,975 852,059 3,450 3,450 852,150
UHF Construction Permits \1\................ 7 1 23,975 24,150 3,450 3,450 24,150
Broadcast Auxiliaries....................... 25,400 1 248,000 254,000 10 10 254,000
LPTV/Translators/Boosters/Class A TV........ 3,725 1 1,436,820 1,448,776 389 390 1,452,750
CARS Stations............................... 325 1 178,125 181,097 557 555 180,375
Cable TV Systems............................ 60,000,000 1 59,090,000 59,943,108 .99905 1.00 60,000,000
Interstate Telecommunication Service $39,000,000,000 1 148,875,000 146,250,000 0.003750 0.00375 146,250,000
Providers..................................
CMRS Mobile Services (Cellular/Public 321,000,000 1 53,210,000 52,821,422 0.1646 0.17 54,570,000
Mobile)....................................
CMRS Messag. Services....................... 3,000,000 1 272,000 240,000 0.0800 0.080 240,000
BRS \2\..................................... 920 1 451,250 588,800 640 640 588,800
LMDS........................................ 170 1 225,625 108,800 640 640 108,800
Per 64 kbps Int'l Bearer Circuits 4,220,000 1 1,157,602 1,167,825 .277 .28 1,181,600
Terrestrial (Common) & Satellite (Common &
Non-Common)................................
Submarine Cable Providers (see chart in 38.313 1 8,150,984 8,249,219 215,314 215,325 8,249,639
Table 3) \3\...............................
Earth Stations.............................. 3,400 1 893,750 905,485 266 265 901,000
Space Stations (Geostationary).............. 87 1 11,560,125 11,698,866 134,470 134,475 11,699,325
Space Stations (Non-Geostationary).......... 6 1 858,900 869,266 144,878 144,875 869,250
-----------------------------------------------------------------------------------------------------------
****** Total Estimated Revenue to be ................. ....... 340,568,811 339,521,495 .............. .............. 341,106,534
Collected..............................
-----------------------------------------------------------------------------------------------------------
****** Total Revenue Requirement........ ................. ....... 339,844,000 339,844,000 .............. .............. 339,844,000
Difference.............................. ................. ....... 724,811 -322,505 .............. .............. 1,262,534
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher
than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue
totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for
VHF and UHF television stations, respectively.
\2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate
the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order
and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ] 6 (2004).
\3\ The chart at the end of Table 3 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from
the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No.
08-65, RM-11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of
Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09-65, MD Docket No. 08-65), released on May 14, 2009.
\4\ The fee amounts listed in the column entitled ``Rounded New FY 2013 Regulatory Fee'' constitute a weighted average media regulatory fee by class of
service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 3.

Table 3--Maintain the Same Percentage Allocations as in Prior Years
[FY 2013 schedule of regulatory fees]
------------------------------------------------------------------------
Annual
Fee category regulatory fee
(U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90). 35
Microwave (per license) (47 CFR part 101)............ 20
218-219 MHz (Formerly Interactive Video Data Service) 70
(per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80)......... 10
Marine (Coast) (per license) (47 CFR part 80)........ 50
General Mobile Radio Service (per license) (47 CFR 5
part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under 15
the Land Mobile category)...........................

[[Page 34621]]

PLMRS (Shared Use) (per license) (47 CFR part 90).... 15
Aviation (Aircraft) (per station) (47 CFR part 87)... 10
Aviation (Ground) (per license) (47 CFR part 87)..... 15
Amateur Vanity Call Signs (per call sign) (47 CFR 1.52
part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR .17
parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20, .08
22, 24 and 90)......................................
Broadband Radio Service (formerly MMDS/MDS) (per 640
license) (47 CFR part 27)...........................
Local Multipoint Distribution Service (per call sign) 640
(47 CFR, part 101)..................................
AM Radio Construction Permits........................ 560
FM Radio Construction Permits........................ 700
TV (47 CFR part 73) VHF Commercial:
Markets 1-10..................................... 82,025
Markets 11-25.................................... 81,775
Markets 26-50.................................... 39,725
Markets 51-100................................... 21,150
Remaining Markets................................ 5,825
Construction Permits............................. 5,825
TV (47 CFR part 73) UHF Commercial:
Markets 1-10..................................... 35,600
Markets 11-25.................................... 32,825
Markets 26-50.................................... 22,050
Markets 51-100................................... 12,825
Remaining Markets................................ 3,450
Construction Permits............................. 3,450
Satellite Television Stations (All Markets).......... 1,400
Construction Permits--Satellite Television Stations.. 1,200
Low Power TV, Class A TV, TV/FM Translators & 390
Boosters (47 CFR part 74)...........................
Broadcast Auxiliaries (47 CFR part 74)............... 10
CARS (47 CFR part 78)................................ 555
Cable Television Systems (per subscriber) (47 CFR 1.00
part 76)............................................
Interstate Telecommunication Service Providers (per .00375
revenue dollar).....................................
Earth Stations (47 CFR part 25)...................... 265
Space Stations (per operational station in 134,475
geostationary orbit) (47 CFR part 25) also includes
DBS Service (per operational station) (47 CFR part
100)................................................
Space Stations (per operational system in non- 144,875
geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits--Terrestrial/Satellites .28
(per 64KB circuit)..................................
International Bearer Circuits--Submarine Cable....... See Table Below
------------------------------------------------------------------------

Table 3 (Continued)--FY 2013 Schedule of Regulatory Fees: Maintain Allocation
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2013 Radio station regulatory fees
---------------------------------------------------------------------------------------------------------------------------------------------------------
FM classes A, FM classes B,
Population served AM class A AM class B AM class C AM class D B1 & C3 C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................ $750 $625 $575 $650 $700 $875
25,001-75,000........................................... 1,500 1,250 875 975 1,400 1,525
75,001-150,000.......................................... 2,250 1,575 1,150 1,625 1,925 2,850
150,001-500,000......................................... 3,375 2,650 1,725 1,950 2,975 3,725
500,001-1,200,000....................................... 4,875 4,075 2,875 3,250 4,725 5,475
1,200,001-3,000,00...................................... 7,500 6,250 4,325 5,200 7,700 8,750
>3,000,000.............................................. 9,000 7,500 5,475 6,500 9,800 11,375
--------------------------------------------------------------------------------------------------------------------------------------------------------

FY 2013 Schedule of Regulatory Fees
[International bearer circuits--submarine cable]
------------------------------------------------------------------------
Submarine cable systems
(capacity as of December 31, Fee amount Address
2012)
------------------------------------------------------------------------
<2.5 Gbps...................... $13,450 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
2.5 Gbps or greater, but less 26,925 FCC, International,
than 5 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
5 Gbps or greater, but less 53,825 FCC, International,
than 10 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
10 Gbps or greater, but less 107,675 FCC, International,
than 20 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.

[[Page 34622]]

20 Gbps or greater............. 215,325 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
------------------------------------------------------------------------

37. We seek comment on the reasonableness of this proposed
limitation for FY 2013. We also invite comment on higher or lower
percentages, and whether, rather than a uniform limitation for
increases to all regulatory fee categories resulting solely from the
reallocations proposed herein, we should consider different limitations
for certain industry groups in light of other reform proposals and the
likely impact on the regulatory fees of such groups. For example, as we
seek to combine regulatory fees for ITSP and wireless services into one
category, should we consider a limitation that brings the allocation of
FTEs for these two groups closer to equal in this fiscal year? Without
such limitation, would increases for certain regulatory fee categories
still be fair, taking into account the work of the Commission
benefiting such payors? Commenters suggesting a different percentage
for regulatory fee increases applicable to any or all fee categories
should explain how their proposals would prevent a severe impact on the
economic wellbeing of regulatees, be consistent with the goals of more
accurately aligning FTEs with their areas of work, promoting fairness,
and allowing the Commission to recover its regulatory costs as Congress
has directed. As we continue with regulatory fee reform in the future,
we will consider the need for similar limits if significant increases
in regulatory fee rates occur in any one year as a result of our
adoption of further reform measures. We, therefore, seek comment on the
appropriate timeline for fully implementing the reallocation proposed
herein and whether similar limits to increases in regulatory fee rates
resulting from such reallocation should be used in FY 2014 and beyond.
4. Interim Measures for FY 2013
38. We seek comment on whether, in lieu of using updated FTE data
and implementing the FTE reallocations proposed above in FY 2013, we
should maintain the allocation percentages we now use for all fee
categories in FY 2013 and maintain the ITSP fee rate for FY 2013 at
.00375 per revenue dollar for the third consecutive year. The tables
below illustrate the impact of this proposal on regulatory fee
collection, and its associated Schedule of Fees. If we maintained the
allocation percentages we now use, but did not maintain the ITSP fee
rate for FY 2013 at .00375, the FY 2013 ITSP fee rate would increase to
.00409.\68\
---------------------------------------------------------------------------

\68\ The fee rate of .00409 is based on the current allocation
percent of 46.67 of our target goal of $339,844,000 with a projected
ITSP revenue base (calendar year 2012) of $39 billion.

Table 4--Revised FTE (as of 9/30/12) Allocations,\5\ Fee Rate Increases Capped at 7.5%, Prior to Rounding \6\
[Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees]
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2012 Pro-rated FY Uncapped FY Rounded &
Fee category FY 2013 Payment Years Revenue 2013 revenue 2013 capped FY 2013 Expected FY
units estimate requirement regulatory fee regulatory fee 2013 revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use)....................... 1,400 10 490,000 606,762 43 40 560,000
PLMRS (Shared use).......................... 15,000 10 2,250,000 2,903,790 19 15 2,250,000
Microwave................................... 13,200 10 2,640,000 2,860,449 22 20 2,640,000
218-219 MHz (Formerly IVDS)................. 5 10 3,500 4,334 87 75 3,750
Marine (Ship)............................... 6,550 10 655,000 953,483 15 10 655,000
GMRS........................................ 7,700 5 192,500 346,721 4 5 395,000
Aviation (Aircraft)......................... 2,900 10 290,000 433,401 15 10 290,000
Marine (Coast).............................. 285 10 142,500 173,361 61 55 156,750
Aviation (Ground)........................... 900 10 135,000 173,361 19 15 135,000
Amateur Vanity Call Signs................... 14,300 10 214,500 260,041 1.82 1.61 230,230
AM Class A \4\.............................. 68 1 250,100 295,438 4,345 4,350 295,800
AM Class B \4\.............................. 1,454 1 3,125,875 3,671,874 2,525 2,275 3,307,850
AM Class C \4\.............................. 837 1 1,107,975 1,308,369 1,563 1,375 1,150,875
AM Class D \4\.............................. 1,406 1 3,698,400 4,347,161 3,092 2,575 3,620,450
FM Classes A, B1 & C3 \4\................... 2,935 1 7,764,750 8,989,760 3,063 2,750 8,071,250
FM Classes B, C, C0, C1 & C2 \4\............ 3,110 1 9,513,000 11,057,826 3,556 3,375 10,496,250
AM Construction Permits..................... 51 1 35,750 42,205 828 590 30,090
FM Construction Permits \1\................. 170 1 84,000 422,054 2,483 750 127,500
Satellite TV................................ 129 1 178,125 211,027 1,636 1,525 196,725
Satellite TV Construction Permit............ 3 1 3,580 4,221 1,407 960 2,880
VHF Markets 1-10............................ 22 1 1,761,650 2,364,840 107,493 86,075 1,893,650
VHF Markets 11-25........................... 23 1 1,836,875 2,452,884 106,647 78,975 1,816,425
VHF Markets 26-50........................... 39 1 1,512,400 2,031,796 52,097 42,775 1,668,225
VHF Markets 51-100.......................... 61 1 1,255,500 1,757,986 28,819 22,500 1,372,500
VHF Remaining Markets....................... 140 1 798,025 1,023,545 7,311 6,250 875,000
VHF Construction Permits \1\................ 1 1 11,650 42,205 42,205 6,250 6,250
UHF Markets 1-10............................ 109 1 3,853,150 4,177,004 38,321 38,000 4,142,000
UHF Markets 11-25........................... 106 1 3,458,250 3,709,111 34,992 35,000 3,710,000
UHF Markets 26-50........................... 135 1 2,959,875 3,159,479 23,404 23,400 3,159,000
UHF Markets 51-100.......................... 225 1 2,868,750 3,053,435 13,571 13,575 3,054,375
UHF Remaining Markets....................... 247 1 845,975 917,906 3,716 3,675 907,725
UHF Construction Permits \1\................ 7 1 23,975 295,438 42,205 3,675 25,725
Broadcast Auxiliaries....................... 25,400 1 248,000 337,644 13 10 254,000
LPTV/Translators/Boosters/Class A TV........ 3,725 1 1,436,820 1,688,218 453 415 1,545,875

[[Page 34623]]

CARS Stations............................... 325 1 178,125 211,085 649 510 165,750
Cable TV Systems............................ 60,000,000 1 59,090,000 69,868,996 1.164 1.02 61,200,000
Interstate Telecommunication Service $39,000,000,000 1 148,875,000 119,251,260 0.0030577 0.00359 140,010,000
Providers..................................
CMRS Mobile Services (Cellular/Public 321,000,000 1 53,210,000 63,253,310 0.1899 0.18 57,780,000
Mobile)....................................
CMRS Messag. Services....................... 3,000,000 1 272,000 240,000 0.0800 0.080 240,000
BRS \2\..................................... 920 1 451,250 693,442 754 510 469,200
LMDS........................................ 170 1 225,625 130,020 765 510 86,700
Per 64 kbps Int'l Bearer Circuits 4,220,000 1 1,157,602 1,030,004 .244 .23 970,600
Terrestrial (Common) & Satellite (Common &
Non-Common)................................
Submarine Cable Providers (see chart in 38.313 1 8,150,984 7,246,703 189,145 191,475 7,335,886
Table 5) \3\...............................
Earth Stations.............................. 3,400 1 893,750 795,837 234 250 850,000
Space Stations (Geostationary).............. 87 1 11,560,125 10,282,217 118,186 119,600 10,405,200
Space Stations (Non-Geostationary........... 6 1 858,900 764,004 127,334 128,825 772,950
-----------------------------------------------------------------------------------------------------------
Total Estimated Revenue to be Collected. ................. ....... 340,568,811 339,844,006 .............. .............. 339,332,436
Total Revenue Requirement............... ................. ....... 339,844,000 339,844,000 .............. .............. 339,844,000
-----------------------------------------------------------------------------------------------------------
Difference.......................... ................. ....... 724,811 6 .............. .............. (511,564)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher
than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue
totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for
VHF and UHF television stations, respectively.
\2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate
the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order
and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ] 6 (2004).
\3\ The chart at the end of Table 5 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from
the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No.
08-65, RM-11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of
Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09-65, MD Docket No. 08-65), released on May 14, 2009.
\4\ The fee amounts listed in the column entitled ``Rounded New FY 2012 Regulatory Fee'' constitute a weighted average media regulatory fee by class of
service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 5.
\5\ The allocation percentages represent FTE data as of September 30, 2012, and include the proposal to use 27 Direct FTEs (rather than 119 FTEs) for
the International Bureau.
\6\ The ITSP and international services fee categories received a fee rate reduction.

Table 5--Revised FTE (as of 9/30/12) Allocations,\5\ Fee Rate Increases
Capped at 7.5%, Prior to Rounding \6\
[FY 2013 Schedule of regulatory fees]
------------------------------------------------------------------------
Annual
Fee category regulatory fee
(U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90). 40
Microwave (per license) (47 CFR part 101)............ 20
218-219 MHz (Formerly Interactive Video Data Service) 75
(per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80)......... 10
Marine (Coast) (per license) (47 CFR part 80)........ 55
General Mobile Radio Service (per license) (47 CFR 5
part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under 15
the Land Mobile category)...........................
PLMRS (Shared Use) (per license) (47 CFR part 90).... 15
Aviation (Aircraft) (per station) (47 CFR part 87)... 10
Aviation (Ground) (per license) (47 CFR part 87)..... 15
Amateur Vanity Call Signs (per call sign) (47 CFR 1.61
part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR .18
parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20, .08
22, 24 and 90)......................................
Broadband Radio Service (formerly MMDS/MDS) (per 510
license) (47 CFR part 27)...........................
Local Multipoint Distribution Service (per call sign) 510
(47 CFR, part 101)..................................
AM Radio Construction Permits........................ 590
FM Radio Construction Permits........................ 750
TV (47 CFR part 73) VHF Commercial:
Markets 1-10..................................... 86,075
Markets 11-25.................................... 78,975
Markets 26-50.................................... 42,775
Markets 51-100................................... 22,500
Remaining Markets................................ 6,250
Construction Permits............................. 6,250
TV (47 CFR part 73) UHF Commercial:
Markets 1-10..................................... 38,000
Markets 11-25.................................... 35,000
Markets 26-50.................................... 23,400

[[Page 34624]]

Markets 51-100................................... 13,575
Remaining Markets................................ 3,675
Construction Permits............................. 3,675
Satellite Television Stations (All Markets).......... 1,525
Construction Permits--Satellite Television Stations.. 960
Low Power TV, Class A TV, TV/FM Translators & 415
Boosters (47 CFR part 74)...........................
Broadcast Auxiliaries (47 CFR part 74)............... 10
CARS (47 CFR part 78)................................ 510
Cable Television Systems (per subscriber) (47 CFR 1.02
part 76)............................................
Interstate Telecommunication Service Providers (per .00359
revenue dollar).....................................
Earth Stations (47 CFR part 25)...................... 250
Space Stations (per operational station in 119,600
geostationary orbit) (47 CFR part 25) also includes
DBS Service (per operational station) (47 CFR part
100)................................................
Space Stations (per operational system in non- 128,825
geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits--Terrestrial/Satellites .23
(per 64KB circuit)..................................
International Bearer Circuits--Submarine Cable....... See Table Below
------------------------------------------------------------------------

Table 5 (Continued)--FY 2013 Schedule of Regulatory Fees: Fee Rate Increases
[Capped at 7.5%, prior to rounding \6\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2013 Radio station regulatory fees
---------------------------------------------------------------------------------------------------------------------------------------------------------
FM classes A, FM classes B,
Population served AM class A AM class B AM class C AM class D B1 & C3 C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................ $775 $650 $600 $675 $750 $950
25,001-75,000........................................... 1,575 1,325 925 1,025 1,525 1,675
75,001-150,000.......................................... 2,375 1,650 1,200 1,725 2,100 3,100
150,001-500,000......................................... 3,550 2,800 1,800 2,050 3,250 4,025
500,001-1,200,000....................................... 5,125 4,275 3,000 3,425 5,150 5,950
1,200,001-3,000,00...................................... 7,900 6,550 4,525 5,450 8,375 9,525
>3,000,000.............................................. 9,475 7,875 5,725 6,825 10,700 12,375
--------------------------------------------------------------------------------------------------------------------------------------------------------

FY 2013 Schedule of Regulatory Fees: Fee Rate Increases
[Capped at 7.5%, Prior to Rounding \6\]
------------------------------------------------------------------------
International bearer circuits--
submarine cable submarine cable
systems (capacity as of Fee amount Address
December 31, 2012)
------------------------------------------------------------------------
< 2.5 Gbps..................... $11,975 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
2.5 Gbps or greater, but less 23,925 FCC, International,
than 5 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
5 Gbps or greater, but less 47,875 FCC, International,
than 10 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
10 Gbps or greater, but less 95,750 FCC, International,
than 20 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
20 Gbps or greater............. 191,475 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
------------------------------------------------------------------------

5. Revenue Based Regulatory Fee Assessments
39. In addition to using revenues to calculate regulatory fees for
the wireless industry, discussed above, we invite comment on whether
revenues would be a more appropriate measure for other industries in FY
2014 or future years. For example, should the Commission use revenues
instead of number of subscribers in determining the regulatory fee for
the cable industry? Would revenues be a more appropriate measure for
calculating regulatory fees for the satellite industry? If so, how
should the Commission account for satellite revenue from foreign
sources? Commenters should address whether foreign revenues would be
relevant if we assessed fees in that manner. Commenters also should
discuss how we would determine the revenues for companies that do not
file a FCC Form 499-A, what information should be provided to the
Commission, and whether such information would require confidential
treatment. Conversely, we seek comment on whether it would be fairer
and more sustainable to assess more fee categories

[[Page 34625]]

on some other basis, such as subscribers.

C. Other Telecommunications Regulatory Fee Issues

1. Regulatory Fee Obligations for Digital Low Power, Class A, and TV
Translators/Boosters
40. 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 still remains voluntary with a
transition date of September 1, 2015. Historically, we have considered
the digital transition only in the context of regulatory fees
applicable to full-service television stations, and not to Low Power,
Class A, and TV Translators/Boosters. Because the digital transition in
the Low Power, Class A, and TV Translator/Booster facilities is still
voluntary, some of these facilities may transition from analog to
digital service more rapidly than others. During this period of
transition, 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. Therefore, for regulatory fee
purposes, we clarify that we are assessing a fee for each facility
operating either in an analog or digital mode. In instances in which a
licensee is simulcasting in both analog and digital modes, a single
regulatory fee will be assessed for the analog facility and its
corresponding digital component. As greater numbers of facilities
convert to digital mode, the Commission will provide revised
instructions on how regulatory fees will be assessed.
2. Combining UHF/VHF Television Media Regulatory Fees
41. Regulatory fees for full-service television stations are
calculated based on two, five-tiered market segments for Ultra High
Frequency (UHF) and Very High Frequency (VHF) television stations,
respectively. There is also a construction permit fee category for UHF
and VHF. After the transition to digital television on June 12, 2009,
we received comment on this issue, suggesting that the Commission
combine the UHF and VHF regulatory fee categories.\69\ Combining UHF
and VHF full-service television stations into a single five-tiered fee
category (by market size) would in effect eliminate any distinctions
between UHF and VHF services.
---------------------------------------------------------------------------

\69\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, Report and Order, 25 FCC Rcd 9278, 9285-86, at paras. 18-
20 (2010) (FY 2010 Report and Order) (Fireweed Communications argued
that we should base the regulatory fee structure on three tiers; Sky
Television, LLC, Spanish Broadcasting System, Inc., and Sarkes
Tarzian argued that instead of six separate categories for both VHF
and UHF we should combine them into six categories based on market
size and thus eliminate any distinction between VHF and UHF.). See
also Notice of Ex Parte Presentation, filed by Sarkes Tarzian, Inc.
and Sky Television, LLC (Feb. 15, 2013) (arguing that VHF stations
are less desirable than UHF stations and it was unfair to have
higher fees for such stations; instead the fee category should be
combined.).
---------------------------------------------------------------------------

42. Historically, analog VHF channels (channels 1-13) have been
coveted for their greater prestige and larger audience, and thus the
regulatory fees assessed on VHF stations have been higher than the
regulatory fees assessed for UHF (channels 14 and above) stations in
the same market area. Conversely, digital VHF channels are less
desirable than digital UHF channels, and thus there may no longer be a
basis on which to assess higher regulatory fees for VHF channels.
Combining VHF and UHF into one fee category would eliminate the current
fee disparity between UHF and VHF television stations. We propose that
the UHF and VHF full service television station categories be combined
into one fee category, divided into tiers based on market size, with
one resulting rate. This proposal, if adopted, will be implemented in
FY 2014. We seek comment on this proposal.

Table 6--Proposed Combined UHF/VHF Digital Television Fee
[Based on Figures from Table 2, Allocation % Same as in Prior Years]
----------------------------------------------------------------------------------------------------------------
Pro-rated rev. Rounded FY12 Expected
Combined fee category Units req. fee revenue
----------------------------------------------------------------------------------------------------------------
Digital Television Markets 1-10........................ 131 $5,685,446 $43,400 $5,685,400
Digital Television Markets 11-25....................... 129 5,359,471 41,550 5,359,950
Digital Television Markets 26-50....................... 174 4,526,425 26,025 4,528,350
Digital Television Markets 51-100...................... 286 4,174,475 14,600 4,175,600
Digital Television Remaining Markets................... 387 1,666,092 4,300 1,664,100
Digital Television Construction Permits................ 8 34,400 4,300 34,400
----------------------------------------------------------------------------------------------------------------

3. Internet Protocol TV (IPTV)
43. IPTV is digital television delivered through a high speed
Internet connection, instead of through traditional formats such as
cable or terrestrial broadcast. IPTV service generally is offered
bundled with the customer's Internet and telephone or VoIP services. In
the FY 2008 Report and Order we sought comment on whether this video
service should be subject to regulatory fees, and if so, should the
IPTV provider count this service for regulatory fee purposes in the
same manner as cable services, which is on a per subscriber basis.\70\
By assessing regulatory fees on cable services but not on IPTV, we may
place cable providers at a competitive disadvantage. Commenters should
discuss whether IPTV is sufficiently similar to cable services to be
included in the same regulatory fee category and to be assessed
regulatory fees in the same manner. This proposal, if adopted, would be
implemented in FY 2014.
---------------------------------------------------------------------------

\70\ FY 2008 FNPRM, 24 FCC Rcd at 6406-07, paras. 48-49.
---------------------------------------------------------------------------

4. Multi-Year Wireless Services
44. Multi-year wireless services is a fee category that encompasses
various different wireless services (e.g., microwave, land mobile)
whose regulatory fees are paid up front only at the time that the five-
year or 10-year license is renewed. Most of these multi-year wireless
licenses are 10-year licenses. The number of licensees seeking renewal
or filing new applications for licenses (the unit count) could
fluctuate dramatically from one year to the next as companies go out of
business, directly impacting the fee rate for that year. Further,
because the time between license renewals is 10 years, the regulatory
fee amount paid can also increase or decrease substantially from one
renewal to the next because of unit fluctuations and changes in the
annual appropriation from one year to the next. We seek comment on
appropriate steps to take, if any, when the fee rate in this

[[Page 34626]]

fee category fluctuates dramatically from one year to the next because
of changes in the unit count. These proposals, if adopted, would be
implemented in FY 2014.
5. Commercial Mobile Radio Service (CMRS) Messaging
45. CMRS Messaging Service, which replaced the CMRS One-Way Paging
fee category in 1997, includes all narrowband services.\71\ Initially,
as a measure to provide relief to the paging industry, the Commission
froze the regulatory fee for this fee category at the FY 2002 level,
setting an applicable rate at $0.08 per subscriber beginning in FY
2003.\72\ At that time we noted that CMRS Messaging units had
significantly declined from 40.8 million in FY 1997 to 19.7 million in
FY 2003--a decline of 51.7 percent.\73\ Commenters argued this decline
in subscribership was not just a temporary phenomenon, but a lasting
one. Commenters further argued that, because the messaging industry is
spectrum-limited, geographically localized, and very cost sensitive, it
is difficult for this industry to pass on increases in costs to its
subscribers.\74\
---------------------------------------------------------------------------

\71\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997, Report and Order, 12 FCC Rcd 17161, 17184-85, para. 60
(1997) (FY 1997 Report and Order).
\72\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, Report and Order, 18 FCC Rcd 15985, 15992, para. 22
(2003) (FY 2003 Report and Order).
\73\ FY 2003 Report and Order, 18 FCC Rcd 15992, para. 21. The
subscriber base in the paging industry declined 92 percent from 40.8
million to 3.2 million between FY 1997 and FY 2012, according to FY
2012 collection data, as of Sept. 30, 2012. See FY 2010 Report and
Order at note 8.
\74\ FY 2003 Report and Order, 18 FCC Rcd 15992, para. 22.
---------------------------------------------------------------------------

46. The decline in subscribership for this industry raises a more
fundamental issue: Whether the Commission should modify the methodology
in collecting regulatory fees from entities in declining industries.
For industries such as paging, our methodology may be burdensome on the
industry and of negligible value to the Commission, due to the
administrative burden of assessing the fee on many very small
companies. We seek comment on whether to modify the way in which we
assess fees from providers in declining industries and how to define a
declining industry. Commenters should discuss whether there are other
similarly situated categories that need regulatory fee relief.
Proposals, if adopted, would be implemented in FY 2014.

D. Administrative Issues

1. Electronic Filing and Payment System
47. In FY 2009, the Commission implemented several procedural
changes that simplified the payment and reconciliation processes for FY
2009 regulatory fees. The Commission's current regulatory fee
collection procedures can be found in the Report and Order on
Assessment and Collection of Regulatory Fees for FY 2012.\75\
---------------------------------------------------------------------------

\75\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2012, Report and Order, 27 FCC Rcd 8390, 8395-97, paras. 17-20,
24-26 (2012) (FY 2012 Report and Order).
---------------------------------------------------------------------------

48. In FY 2013, the Commission will continue to promote greater use
of technology (and less use of paper) in improving our regulatory fee
notification and collection process. These changes, and the dates on
which they will take place, are discussed in more detail below.
Specifically, as of October 1, 2013, we will no longer accept paper and
transfer electronic invoicing and receivables collection to the
Treasury in FY 2014. Finally, in FY 2014, we will no longer mail out
initial CMRS assessments, and will instead require licensees to log
into the Commission's Web site to view and revise their subscriber
counts.
2. Discontinuation of Mail Outs of Initial CMRS Assessments
49. In FY 2014, as part of the Commission's effort to become more
``paperless,'' the Commission will no longer mail out its initial CMRS
assessments, but will require licensees to log into the Commission's
Web site to view and revise their subscriber counts. A system currently
exists for providers to revise their CMRS subscriber counts
electronically, and it is possible that this system can be expanded to
include letters that can be downloaded to serve as the initial CMRS
assessment letter. The Commission will provide more details in future
announcements as this system is developed.
3. Discontinuation of Paper and Check Transactions Beginning October 1,
2013
50. Together with the U.S. Department of Treasury, the Commission
is taking further steps to meet the OMB Open Government Directive.\76\
A component part of the Treasury's current flagship initiative pursuant
to this Directive is moving to a paperless Treasury, which includes
related activities in both disbursing and collecting select federal
government payments and receipts.\77\ Going paperless is expected to
produce cost savings, reduce errors, and improve efficiencies across
government. Accordingly, beginning on October 1, 2013, the Commission
will no longer accept checks (including cashier's checks) and the
accompanying hardcopy forms (e.g., Form 159's, Form 159-B's, Form 159-
E's, Form 159-W's) for the payment of regulatory fees. This new
paperless procedure will require that all payments be made by credit
card, wire transfer, or ACH payment. Any other form of payment (e.g.,
checks) will be rejected and sent back to the payor. This change will
affect all payments for regulatory fees made on or after that October
1, 2013.\78\
---------------------------------------------------------------------------

\76\ Office of Management and Budget (OMB) Memorandum M-10-06,
Open Government Directive, Dec. 8, 2009; see also https://www.whitehouse.gov/the-press-office/2011/06/13/executive-order-13576-delivering-efficient-effective-and-accountable-gov.
\77\ See U.S. Department of the Treasury, Open Government Plan
2.1, Sep. 2012.
\78\ Payors should note that this change will mean that, to the
extent certain entities have, to date, paid both regulatory fees and
application fees at the same time via paper check, they will no
longer be able to do so, as the regulatory fees payment via paper
check will no longer be accepted.
---------------------------------------------------------------------------

51. Currently, the Commission is working with Treasury to implement
procedures that will reduce manual and subscale accounts receivables,
reduce hidden costs associated with collections, and increase
recoveries. We anticipate measurable enhancements in our program
achieved by reducing our delinquency rate, increasing collections, and
reducing costs. Under section 9 of the Act, Commission rules, and the
debt collection laws, a licensee's regulatory fee is due on the first
day of the fiscal year and payable at a date established by our annual
regulatory fee Report and Order. The Commission will work with Treasury
to facilitate end-to-end billing and collections capabilities for our
receivables in the pre-delinquency stage and seeks to implement these
changes in FY 2014. Under these revised procedures, the Commission will
begin transferring appropriate receivables (unpaid regulatory fees) to
Treasury at the end of the payment period instead of waiting for a
period of 180 days from the date of delinquency to transfer a
delinquent debt to Treasury for further collection action.\79\
Accordingly, we anticipate that transfer to Treasury will occur much
earlier than it now does. Regulatees, however, likely will not see
substantial change in the current procedures of how they are required
to pay the fee for FY 2013 and FY 2014. After the date on which the FY
2014 payment fee window closes; however, if a FY 2013 receivable is
past due, we

[[Page 34627]]

expect some changes in notification procedures and in the process by
which to submit payments to Treasury or its designated financial agent.
Consistent with those anticipated modifications and any future Treasury
procedure, the Commission expects it will modify its informative
guidance and amend its rules. We invite comments on this proposed
change.
---------------------------------------------------------------------------

\79\ See 31 U.S.C. 3711(g); 31 CFR 285.12; 47 CFR 1.1917.
---------------------------------------------------------------------------

V. Further Notice of Proposed Rulemaking

52. Above we seek comment concerning regulatory reforms we believe
may potentially be adopted in FY 2013 or FY 2014.\80\ The FNPRM below
invites comment on proposals and issues that require additional time
for consideration and implementation. Accordingly, we seek comment on
the viability of these proposals and whether they should be implemented
in future years.
---------------------------------------------------------------------------

\80\ As noted above, some of these proposals, if adopted, would
be effective in FY 2013 and others in FY 2014.
---------------------------------------------------------------------------

A. Non-U.S.-Licensed Space Stations Serving the United States

53. The Commission's goal in assessing satellite regulatory fees is
to recover all of the costs associated with satellite regulatory
activities and to distribute these costs fairly among fee payers. To
recover the costs associated with policy and rulemaking activities
associated with space stations, section 1.1156 of the Commission's
rules includes ``Space Station (Geostationary Orbit)'' and ``Space
Stations (Non-Geostationary Orbit)'' in the regulatory fee
schedule.\81\ These fees are assessed only for U.S.-licensed space
stations. Regulatory fees are not assessed for non-U.S.-licensed space
stations that provide service to customers in the United States.\82\
---------------------------------------------------------------------------

\81\ 47 CFR 1.1156.
\82\ This issue was raised in the FY 1999 Report and Order where
the Commission observed that that the legislative history provides
that only space stations licensed under Title III--which does not
include non-U.S.-licensed satellite operators--may be subject to
regulatory fees. Assessment and Collection of Regulatory Fees for
Fiscal Year 1999, Report and Order, 14 FCC Rcd 9896, 9882, para. 39
(1999) (FY 1999 Report and Order).
---------------------------------------------------------------------------

54. The Commission's policies, regulations, international, user
information, and enforcement activities all benefit non-U.S. licensed
satellite operators that access the U.S. market. Rulemaking proceedings
establishing authorization procedures or service rules for satellite
services apply both to U.S. licensed satellites and non-U.S. licensed
satellites providing service in the United States.\83\ A non-U.S.
licensed satellite operator may file a petition for a declaratory
ruling seeking Commission approval to provide service in the United
States. The International Bureau evaluates this petition for
consistency with the Commission's legal and technical requirements in
the same manner as the Bureau evaluates the application for an FCC
space station license and, on the basis of this review, imposes any
appropriate conditions for the grant of market access. Once the non-
U.S. licensed space stations are granted access to earth stations in
the United States, the grant is recorded together with any conditions
of access, in the International Bureau Filing System. After a grant of
market access, the operations of non-U.S. space stations with U.S.
licensed earth stations are also monitored to ensure that their
operators satisfy all conditions placed on their grant of U.S. market
access, including space station implementation milestones and
operational requirements, and are subject to enforcement action if the
conditions are not met. Despite the regulatory benefits provided by the
Commission to non-U.S. licensed satellite systems serving the United
States they do not incur the regulatory fees (or application fees) paid
by U.S.-licensed satellite systems. As a result, U.S.-licensed space
station operators, which are assessed these fees by the Commission and
compete with the non-U.S. licensed operators, may be at a competitive
disadvantage.
---------------------------------------------------------------------------

\83\ See, e.g., Establishment of Policies and Service Rules for
the Broadcasting-Satellite Service at the 17.3-17.8 GHz Frequency
Band and at the 17.7-17.8 GHz Frequency Band Internationally, and at
the 24.75-25.25 GHz Frequency Band for Fixed Satellite Services
Providing Feeder Links to the Broadcasting-Satellite Service for the
Satellite Services Operating Bi-Directionally in the 17.3-17.8 GHz
Frequency Band, IB 06-123, Report and Order and Further Notice of
Proposed Rulemaking, 22 FCC Rcd 8842 (2007).
---------------------------------------------------------------------------

55. We therefore seek comment on whether regulatory fees should be
assessed on non-U.S. licensed space station operators providing service
in the United States. Commenters should discuss whether the Commission
should revisit the Commission's 1999 conclusion that the regulatory fee
category for Space Stations (Geostationary Orbit) and Space Stations
(Non-Geostationary Orbit) in section 1.1156(a) of the Commission's
rules covers only Title III license holders.\84\ Commenters that
advocate assessing regulatory fees on non-U.S. licensed space stations
providing service in the United States should propose how the fees
should be calculated and applied, particularly in instances where the
non-U.S. licensed space station operator accesses the U.S. market
solely through an application by a U.S.-licensed earth station operator
to list the non-U.S. licensed space station as a point of
communication. Commenters should also provide specific information as
to whether other countries already assess regulatory fees in one form
or another on U.S. licensed satellite systems accessing their markets.
Would assessing regulatory fees on non-U.S. licensed space stations
encourage foreign countries to assess such fees on U.S. licensed space
stations? If so, would that place U.S. licensed space stations at a
competitive disadvantage in the marketplace?
---------------------------------------------------------------------------

\84\ FY 1999 Report and Order, 14 FCC Rcd at 9882, para. 39.
---------------------------------------------------------------------------

B. Video Services--Direct Broadcast Satellite (DBS)

56. DBS programming is similar to cable services; it differs in
that the programming is not transmitted terrestrially by cable but
instead by satellites stationed in geosynchronous orbit. DBS operators
are considered multichannel video programming distributors (MVPDs),
pursuant to section 522(13) of the Act.\85\ DBS operators are licensed
as geostationary satellite operators and currently pay a per-
geostationary orbit (GSO) satellite regulatory fee but do not pay a
per-subscriber regulatory fee.\86\ We seek comment on whether
regulatory fees paid by DBS providers should be calculated on the same
basis as cable television system operators and cable antenna relay
system licensees, based on Media Bureau FTEs. In this regard, we note
that there are regulatory similarities between these providers; for
example, DBS providers may file program access complaints \87\ and
complaints seeking relief under the retransmission consent good faith
rules; \88\ and they must comply with the Commercial Advertisement
Loudness Mitigation Act (CALM Act),\89\ the Twenty-First Century Video
Accessibility Act (CVAA),\90\ and the closed captioning and video
description rules.
---------------------------------------------------------------------------

\85\ 47 U.S.C. 522(13). An MVPD is a service provider delivering
video programming services, such as cable television operators, DBS
providers, and wireline video providers.
\86\ Previously, the Commission declined to adopt the same per-
subscriber fee for DBS. See FY 2005 Report and Order, 20 FCC Rcd at
12264, paras. 10-11.
\87\ 47 U.S.C. 548; 47 CFR 76.1000-1004.
\88\ 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).
\89\ See Implementation of the Commercial Advertisement,
Loudness Mitigation (CALM) Act, Report and Order, 26 FCC Rcd 17222
(2011).
\90\ 47 U.S.C. 618(b).
---------------------------------------------------------------------------

57. There are also regulatory differences between cable operators
and DBS operators, however. There are only

[[Page 34628]]

two DBS operators in the Nation, while there are 1,141 cable operators
and 6,635 cable systems. Each cable operator must keep certain records
for each of its cable systems; e.g., Political,\91\ Equal Employment
Opportunity,\92\ Commercial Records on Children's Programs,\93\ Proof-
of-Performance Test Data,\94\ Signal Leakage Logs and Repair
Records,\95\ Aeronautical Notifications,\96\ Leased Access,\97\
Principal Headend Location,\98\ Availability of Signals,\99\ Operator
Interests in Video Programming,\100\ Emergency Alert System Tests and
Activation,\101\ Complaint Resolution,\102\ Regulatory,\103\ and the
Sponsorship Identification.\104\ (DBS operators also are required to
keep Political, Equal Employment Opportunity, Commercial Records on
Children's Programs files, and Emergency Alert System Tests and
Activation files.)
---------------------------------------------------------------------------

\91\ 47 CFR 76.1701.
\92\ 47 CFR 76.1702.
\93\ 47 CFR 76.1703.
\94\ 47 CFR 76.1704.
\95\ 47 CFR 76.1706.
\96\ 47 CFR 76.1804.
\97\ 47 CFR 76.1707.
\98\ 47 CFR 76.1708.
\99\ 47 CFR 76.1709.
\100\ 47 CFR 76.1710.
\101\ 47 CFR 76.1711.
\102\ 47 CFR 76.1713.
\103\ 47 CFR 76.1714.
\104\ 47 CFR 76.1715.
---------------------------------------------------------------------------

58. For FY 2012, cable service providers paid approximately $0.95
per subscriber in regulatory fees.\105\ The two DBS providers, DirectTV
and DISH Network, paid much lower regulatory fees on a per subscriber
basis, and their regulatory fees were based on International Bureau
FTEs, not Media Bureau FTEs. We seek comment on whether the DBS
providers should instead pay regulatory fees that are comparable to the
regulatory fees paid by cable service providers; i.e., based on the
Media Bureau FTEs. To that end, because DBS providers benefit directly
from the work not only of the International Bureau, but also the Media
Bureau, should a portion of Media Bureau FTEs be allocated to DBS
providers? Or is there some alternative way to more fairly assess
regulatory fees to DBS and cable providers? Commenters should also
discuss whether we should require both DBS and cable operators to pay
regulatory fees based on revenues, and, if so, how we would collect
revenue information from these entities.
---------------------------------------------------------------------------

\105\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2012, Report and Order, 27 FCC Rcd at Attachment C (2012) (FY
2012 Order).
---------------------------------------------------------------------------

C. Other Services

59. Should additional regulatory fee categories be added to the
regulatory fee schedule set forth in section 9? If so, what categories
should be added, and why? \106\ To the extent that licensees offer
services that are regulated by more than one core bureau, how would the
addition of new fee categories affect the allocation of FTEs by core
bureau?
---------------------------------------------------------------------------

\106\ In our FY 2012 NPRM, for example, we sought comment on
whether the Commission has authority, under section 9, to include
broadband as a fee category, and asked how the costs of any such
additional fee categories should be assessed. We continue to seek
comment on this issue, specifically, and more generally: Are there
other fee categories that should be added?
---------------------------------------------------------------------------

VI. Conclusion

60. We are confident the FY 2013 NPRM and FNPRM propose a portfolio
of options to achieve our goal for revising the regulatory fee schedule
in order to fairly address the changing and converging communications
industry, changes in the Commission's regulatory processes since
established in 1994, and the recommendations in the GAO Report. We
invite and encourage interested parties to submit comments in response
to numerous proposals discussed above so that a robust record is
created to better inform the Commission as it examines reforming the
regulatory fee structure.

VII. Additional Tables

TABLE 7--Sources of Payment Unit Estimates for FY 2013

In order to calculate individual service fees for FY 2013, we
adjusted FY 2012 payment units for each service to more accurately
reflect expected FY 2013 payment liabilities. We obtained our updated
estimates through a variety of means. For example, we used Commission
licensee databases, 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 2013 estimates with actual FY 2012
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 2013 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 2013 payment units are based on FY 2012
actual payment units, it does not necessarily mean that our FY 2013
projection is exactly the same number as in FY 2012. We have either
rounded the FY 2013 number or adjusted it slightly to account for these
variables.

Table 8--Factors, Measurements, and Calculations That Determines Station
Signal Contours and Associated Population Coverages
------------------------------------------------------------------------
Fee category Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, Based on Wireless Telecommunications
218-219 MHz, Marine (Ship & Bureau (``WTB'') projections of new
Coast), Aviation (Aircraft & applications and renewals taking into
Ground), GMRS, Amateur consideration existing Commission
Vanity Call Signs, Domestic licensee data bases. Aviation (Aircraft)
Public Fixed. 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
12 payment data.
CMRS Messaging Services...... Based on WTB reports, and FY 12 payment
data.
AM/FM Radio Stations......... Based on CDBS data, adjusted for
exemptions, and actual FY 2012 payment
units.
UHF/VHF Television Stations.. Based on CDBS data, adjusted for
exemptions, and actual FY 2012 payment
units.
AM/FM/TV Construction Permits Based on CDBS data, adjusted for
exemptions, and actual FY 2012 payment
units.

[[Page 34629]]

LPTV, Translators and Based on CDBS data, adjusted for
Boosters, Class A Television. exemptions, and actual FY 2012 payment
units.
Broadcast Auxiliaries........ Based on actual FY 2012 payment units.
BRS (formerly MDS/MMDS)...... Based on WTB reports and actual FY 2012
payment units.
LMDS......................... Based on WTB reports and actual FY 2012
payment units.
Cable Television Relay Based on data from Media Bureau's COALS
Service (``CARS'') Stations. database and actual FY 2012 payment
units.
Cable Television System Based on publicly available data sources
Subscribers. for estimated subscriber counts and
actual FY 2011 payment units.
Interstate Telecommunication Based on FCC Form 499-Q data for the four
Service Providers. quarters of calendar year 2012, the
Wireline Competition Bureau projected
the amount of calendar year 2012 revenue
that will be reported on 2013 FCC Form
499-A worksheets in April, 2013.
Earth Stations............... Based on International Bureau (``IB'')
licensing data and actual FY 2012
payment units.
Space Stations (GSOs & NGSOs) Based on IB data reports and actual FY
2012 payment units.
International Bearer Circuits Based on IB reports and submissions by
licensees.
Submarine Cable Licenses..... Based on IB license information.
------------------------------------------------------------------------

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, phase, 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 augmented
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.\1\ 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.\2\ 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 2010 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.\3\ The resulting distance to principal community contours were
used to form a geographical polygon. Population counting was
accomplished by determining which 2010 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.

Table 9--Reference to FY 2012 Schedule of Regulatory Fees
------------------------------------------------------------------------
Annual
Fee category regulatory fee
(U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).... 35
Microwave (per license) (47 CFR part 101)............... 20
218-219 MHz (Formerly Interactive Video Data Service) 70
(per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............ 10
Marine (Coast) (per license) (47 CFR part 80)........... 50
General Mobile Radio Service (per license) (47 CFR part 5
95)....................................................
Rural Radio (47 CFR part 22) (previously listed under 15
the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90)....... 15
Aviation (Aircraft) (per station) (47 CFR part 87)...... 10
Aviation (Ground) (per license) (47 CFR part 87)........ 15
Amateur Vanity Call Signs (per call sign) (47 CFR part 1.50
97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts .17
20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22, .08
24 and 90).............................................
Broadband Radio Service (formerly MMDS/MDS) (per 475
license) (47 CFR part 27)..............................
Local Multipoint Distribution Service (per call sign) 475
(47 CFR, part 101).....................................
AM Radio Construction Permits........................... 550
FM Radio Construction Permits........................... 700

[[Page 34630]]

TV (47 CFR part 73) VHF Commercial:
Markets 1-10........................................ 80,075
Markets 11-25....................................... 73,475
Markets 26-50....................................... 39,800
Markets 51-100...................................... 20,925
Remaining Markets................................... 5,825
Construction Permits................................ 5,825
TV (47 CFR part 73) UHF Commercial:
Markets 1-10........................................ 35,350
Markets 11-25....................................... 32,625
Markets 26-50....................................... 21,925
Markets 51-100...................................... 12,750
Remaining Markets................................... 3,425
Construction Permits................................ 3,425
Satellite Television Stations (All Markets)............. 1,425
Construction Permits--Satellite Television Stations..... 895
Low Power TV, Class A TV, TV/FM Translators & Boosters 385
(47 CFR part 74).......................................
Broadcast Auxiliaries (47 CFR part 74).................. 10
CARS (47 CFR part 78)................................... 475
Cable Television Systems (per subscriber) (47 CFR part .95
76)....................................................
Interstate Telecommunication Service Providers (per .00375
revenue dollar)........................................
Earth Stations (47 CFR part 25)......................... 275
Space Stations (per operational station in geostationary 132,875
orbit) (47 CFR part 25) also includes DBS Service (per
operational station) (47 CFR part 100).................
Space Stations (per operational system in non- 143,150
geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits--Terrestrial/Satellites .26
(per 64KB circuit).....................................
International Bearer Circuits--Submarine Cable.......... See Table
Below
------------------------------------------------------------------------

Table 9 (Continued)--FY 2012 Schedule of Regulatory Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2012 Radio station regulatory fees
---------------------------------------------------------------------------------------------------------------------------------------------------------
FM classes A, FM classes B,
Population served AM class A AM class B AM class C AM class D B1 & C3 C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................ $725 $600 $550 $625 $700 $875
25,001--75,000.......................................... 1,475 1,225 850 950 1,425 1,550
75,001--150,000......................................... 2,200 1,525 1,125 1,600 1,950 2,875
150,001--500,000........................................ 3,300 2,600 1,675 1,900 3,025 3,750
500,001--1,200,000...................................... 4,775 3,975 2,800 3,175 4,800 5,525
1,200,001--3,000,000.................................... 7,350 6,100 4,200 5,075 7,800 8,850
>3,000,000.............................................. 8,825 7,325 5,325 6,350 9,950 11,500
--------------------------------------------------------------------------------------------------------------------------------------------------------

FY 2012 Schedule of Regulatory Fees
[International Bearer Circuits--Submarine Cable]
------------------------------------------------------------------------
Submarine cable systems
(capacity as of December 31, Fee amount Address
2011)
------------------------------------------------------------------------
< 2.5 Gbps..................... $13,300 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
2.5 Gbps or greater, but less $26,600 FCC, International,
than 5 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
5 Gbps or greater, but less $53,200 FCC, International,
than 10 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
10 Gbps or greater, but less $106,375 FCC, International,
than 20 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
20 Gbps or greater............. $212,750 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
------------------------------------------------------------------------

[[Page 34631]]

VIII. Initial Regulatory Flexibility Analysis

61. As required by the Regulatory Flexibility Act (RFA),\107\ 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 Notice of Proposed Rulemaking (FY
2013 NPRM) and FNPRM of Proposed Rulemaking (FNPRM) (collectively,
``Notice''). Written comments are requested on this IRFA. Comments must
be identified as responses to the IRFA and must be filed by the
deadline for comments on this Notice. The Commission will send a copy
of the Notice, including the IRFA, to the Chief Counsel for Advocacy of
the Small Business Administration (SBA).\108\ In addition, the Notice
and IRFA (or summaries thereof) will be published in the Federal
Register.\109\
---------------------------------------------------------------------------

\107\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended
by the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
\108\ 5 U.S.C. 603(a).
\109\ Id.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Notice

62. In the FY 2013 NPRM we seek comment on our annual process of
assessing regulatory fees to cover the Commission's costs to offset the
Commission's Fiscal Year (FY) 2013 appropriation, as directed by
Congress. The regulatory fees calculated in response to the FY 2013
NPRM will be collected later this year. We also seek comment in the FY
2013 NPRM on reforming and revising our regulatory fee schedule for FY
2013 and beyond to take into account changes in the communications
industry and changes in the Commission's regulatory processes and
staffing in recent years.
63. The FY 2013 NPRM seeks comment concerning adoption and
implementation of proposals to reallocate regulatory fees to more
accurately reflect the subject areas worked on by current Commission
FTEs for FY 2013. As such, we seek comment on, among other things,
reallocating: (1) direct FTEs currently allocated to the Interstate
Telecommunications Service Providers (ITSPs) fee category and other fee
categories to reflect current workloads devoted to these subject areas;
and (2) FTEs in the International Bureau to more accurately reflect the
Commission's regulation and oversight of the International Bureau
regulatees. If these proposals are adopted, we also seek comment on
limiting any increase in assessments to 10 percent or some other amount
to avoid fee shock to industry segments paying higher regulatory fees
as a result of reallocation. We ask whether direct FTEs in other
Bureaus should be reclassified as indirect and reallocated or,
conversely, whether FTEs currently allocated as indirect should be
reallocated differently or reclassified as direct and reallocated
accordingly. Finally, we seek comment on whether to delay our proposal
to reallocate FTEs and, in the interim, maintain the same allocation
percentages from last year for FY 2013, including the current .00375
rate for ITSP regulatees.
64. The FNPRM seeks comment concerning adoption and implementation
of proposals for FY 2014 and beyond, which include: (1) Combining
Interstate Telecommunications Service Providers (ITSPs) with wireless
telecommunications services, using revenues as the basis for
calculating regulatory fees; (2) using revenues to calculate regulatory
fees for industries that now use subscribers, such as the wireless and
cable industries; (3) eliminating the regulatory fee component
pertaining to General Mobile Radio Service; (4) clarifying that
licensees of Digital Low Power, Class A, and TV Translators/Boosters
should pay only one regulatory fee on their analog or digital station,
but not both; (5) consolidating the UHF and VHF Television stations
into one fee category; (6) proposing a fee for Internet Protocol TV
(IPTV) at the rate of cable fees; (7) alleviating large fluctuations in
the fee rate of Multiyear Wireless Services; and (8) providing fee
relief for declining industries (e.g., CMRS Messaging). Finally, the
FNPRM seeks comment on the treatment of non-U.S.-Licensed Space
Stations; Direct Broadcast Satellites; and other services, such as
broadband in our regulatory fee process. We invite comment on these
topics to better inform the Commission concerning whether and/or how
these services should be assessed under our regulatory fee methodology
in future years. The Notice also makes two administrative changes to
the regulatory fee collection process and propose a third.
Specifically, as required by Treasury and OMB initiatives, we announce
that effective in FY 2013 all regulatory fee payments must be made
electronically. We also state that beginning in FY 2014 the Commission
will no longer mail out initial regulatory fee assessments to CMRS
licensees. Finally, we propose to refer to the Department of the
Treasury end-to-end billing and collection beginning in FY 2014.

B. Legal Basis

65. 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.\110\
---------------------------------------------------------------------------

\110\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
---------------------------------------------------------------------------

C. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply

66. 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.\111\ The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \112\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\113\ 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.\114\
---------------------------------------------------------------------------

\111\ 5 U.S.C. 603(b)(3).
\112\ 5 U.S.C. 601(6).
\113\ 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.''
\114\ 15 U.S.C. 632.
---------------------------------------------------------------------------

67. Small Businesses. Nationwide, there are a total of
approximately 27.9 million small businesses, according to the SBA.\115\
---------------------------------------------------------------------------

\115\ See SBA, Office of Advocacy, ``Frequently Asked
Questions,'' https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf.
---------------------------------------------------------------------------

68. Wired Telecommunications Carriers. The SBA has developed a
small business size standard for Wired Telecommunications Carriers,
which consists of all such companies having 1,500 or fewer employees.
Census data for 2007 shows that there were 31,996 establishments that
operated that year. Of those 31,996, 1,818 operated with more than 100
employees, and 30,178 operated with fewer than 100 employees.\116\
Thus, under this size standard, the majority of firms can be considered
small.
---------------------------------------------------------------------------

\116\ See id.
---------------------------------------------------------------------------

69. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA

[[Page 34632]]

has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\117\ According to Commission data, census data for
2007 shows that there were 31,996 establishments that operated that
year. Of those 31,996, 1,818 operated with more than 100 employees, and
30,178 operated with fewer than 100 employees.\118\ The Commission
estimates that most providers of local exchange service are small
entities that may be affected by the rules and policies proposed in the
FNPRM.
---------------------------------------------------------------------------

\117\ 13 CFR 121.201, NAICS code 517110.
\118\ See id.
---------------------------------------------------------------------------

70. Incumbent LECs. Neither the Commission nor the SBA has
developed a small business size standard specifically for incumbent
local exchange services. The closest applicable 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.\119\ According to Commission data, 1,307 carriers reported
that they were incumbent local exchange service providers.\120\ Of
these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees
and 301 have more than 1,500 employees.\121\ Consequently, the
Commission estimates that most providers of incumbent local exchange
service are small businesses that may be affected by the rules and
policies proposed in the FNPRM.
---------------------------------------------------------------------------

\119\ 13 CFR 121.201, NAICS code 517110.
\120\ See Trends in Telephone Service, Federal Communications
Commission, Wireline Competition Bureau, Industry Analysis and
Technology Division at Table 5.3 (Sept. 2010) (Trends in Telephone
Service).
\121\ Id.
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71. Competitive Local Exchange Carriers (Competitive LECs),
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.\122\ According to Commission data, 1,442 carriers reported
that they were engaged in the provision of either competitive local
exchange services or competitive access provider services.\123\ Of
these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees
and 186 have more than 1,500 employees.\124\ In addition, 17 carriers
have reported that they are Shared-Tenant Service Providers, and all 17
are estimated to have 1,500 or fewer employees.\125\ In addition, 72
carriers have reported that they are Other Local Service
Providers.\126\ Of the 72, seventy have 1,500 or fewer employees and
two have more than 1,500 employees.\127\ Consequently, the Commission
estimates that most providers of competitive local exchange service,
competitive access providers, Shared-Tenant Service Providers, and
Other Local Service Providers are small entities that may be affected
by rules adopted pursuant to the proposals in this FNPRM.
---------------------------------------------------------------------------

\122\ 13 CFR 121.201, NAICS code 517110.
\123\ See Trends in Telephone Service, at table. 5.3.
\124\ Id.
\125\ Id.
\126\ Id.
\127\ Id.
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72. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically
applicable to interexchange services. The applicable size standard
under SBA rules is for the Wired Telecommunications Carriers. Under
that size standard, such a business is small if it has 1,500 or fewer
employees.\128\ According to Commission data, 359 companies reported
that their primary telecommunications service activity was the
provision of interexchange services.\129\ Of these 359 companies, an
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500
employees.\130\ Consequently, the Commission estimates that the
majority of interexchange service providers are small entities that may
be affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

\128\ 13 CFR 121.201, NAICS code 517110.
\129\ See Trends in Telephone Service, at table 5.3.
\130\ Id.
---------------------------------------------------------------------------

73. 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.\131\ Census data for 2007 show that 1,523 firms provided
resale services during that year. Of that number, 1,522 operated with
fewer than 1000 employees and one operated with more than 1,000.\132\
Thus under this category and the associated small business size
standard, the majority of these prepaid calling card providers can be
considered small entities. According to Commission data, 193 carriers
have reported that they are engaged in the provision of prepaid calling
cards.\133\ Of these, all 193 have 1,500 or fewer employees and none
have more than 1,500 employees.\134\ Consequently, the Commission
estimates that the majority of prepaid calling card providers are small
entities that may be affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

\131\ 13 CFR 121.201, NAICS code 517911.
\132\ Id.
\133\ See Trends in Telephone Service, at table 5.3.
\134\ Id.
---------------------------------------------------------------------------

74. 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
employees.\135\ Census data for 2007 show that 1,523 firms provided
resale services during that year. Of that number, 1,522 operated with
fewer than 1000 employees and one operated with more than 1,000.\136\
Under this category and the associated small business size standard,
the majority of these local resellers can be considered small entities.
According to Commission data, 213 carriers have reported that they are
engaged in the provision of local resale services.\137\ Of these, an
estimated 211 have 1,500 or fewer employees and two have more than
1,500 employees.\138\ Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
rules adopted pursuant to the proposals in this FNPRM.
---------------------------------------------------------------------------

\135\ 13 CFR 121.201, NAICS code 517911.
\136\ Id.
\137\ See Trends in Telephone Service, at table 5.3.
\138\ Id.
---------------------------------------------------------------------------

75. 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.\139\ Census data for 2007 show that 1,523 firms provided
resale services during that year. Of that number, 1,522 operated with
fewer than 1,000 employees and one operated with more than 1,000.\140\
Thus, under this category and the associated small business size
standard, the majority of these resellers can be considered small
entities. According to Commission data, 881 carriers have reported that
they are engaged in the provision of toll resale services.\141\ Of
these, an estimated 857 have 1,500 or fewer employees and 24

[[Page 34633]]

have more than 1,500 employees.\142\ Consequently, the Commission
estimates that the majority of toll resellers are small entities that
may be affected by our proposals in the FNPRM.
---------------------------------------------------------------------------

\139\ 13 CFR 121.201, NAICS code 517911.
\140\ Id.
\141\ Trends in Telephone Service, at table 5.3.
\142\ Id.
---------------------------------------------------------------------------

76. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator
service providers, prepaid calling card providers, satellite service
carriers, or toll resellers. The closest applicable size standard under
SBA rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer
employees.\143\ Census data for 2007 shows that there were 31,996
establishments that operated that year. Of those 31,996, 1,818 operated
with more than 100 employees, and 30,178 operated with fewer than 100
employees.\144\ Thus, under this category and the associated small
business size standard, the majority of Other Toll Carriers can be
considered small. According to Commission data, 284 companies reported
that their primary telecommunications service activity was the
provision of other toll carriage.\145\ Of these, an estimated 279 have
1,500 or fewer employees and five have more than 1,500 employees.\146\
Consequently, the Commission estimates that most Other Toll Carriers
are small entities that may be affected by the rules and policies
adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

\143\ 13 CFR 121.201, NAICS code 517110.
\144\ Id.
\145\ Trends in Telephone Service, at table 5.3.
\146\ Id.
---------------------------------------------------------------------------

77. Wireless Telecommunications Carriers (except Satellite). Since
2007, the SBA has recognized wireless firms within this new, broad,
economic census category.\147\ Prior to that time, such firms were
within the now-superseded categories of Paging and Cellular and Other
Wireless Telecommunications.\148\ Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees.\149\ For this category, census data for
2007 show that there were 11,163 establishments that operated for the
entire year.\150\ Of this total, 10,791 establishments had employment
of 999 or fewer employees and 372 had employment of 1000 employees or
more.\151\ Thus, under this category and the associated small business
size standard, the Commission estimates that the majority of wireless
telecommunications carriers (except satellite) are small entities that
may be affected by our proposed action.
---------------------------------------------------------------------------

\147\ 13 CFR 121.201, NAICS code 517210.
\148\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211
Paging,'' available at https://www.census.gov/cgibin/sssd/naics/naicsrch?code=517211&search=2002%20NAICS%20Search; U.S. Census
Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other Wireless
Telecommunications,'' available at https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517212&search=2002%20NAICS%20Search.
\149\ 13 CFR 121.201, NAICS code 517210. The now-superseded,
pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 517211 and
517212 (referring to the 2002 NAICS).
\150\ U.S. Census Bureau, Subject Series: Information, Table 5,
``Establishment and Firm Size: Employment Size of Firms for the
United States: 2007 NAICS Code 517210'' (issued Nov. 2010).
\151\ Id. Available 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
``100 employees or more.''
---------------------------------------------------------------------------

78. Similarly, according to Commission data, 413 carriers reported
that they were engaged in the provision of wireless telephony,
including cellular service, Personal Communications Service (PCS), and
Specialized Mobile Radio (SMR) Telephony services.\152\ Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees.\153\ Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
---------------------------------------------------------------------------

\152\ Trends in Telephone Service, at table 5.3.
\153\ Id.
---------------------------------------------------------------------------

79. Cable Television and other Program Distribution. 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. Transmission facilities may be based on a single technology
or a combination of technologies.'' \154\ The SBA has developed a small
business size standard for this category, which is: all such firms
having 1,500 or fewer employees.\155\ Census data for 2007 shows that
there were 31,996 establishments that operated that year. Of those
31,996, 1,818 had more than 100 employees, and 30,178 operated with
fewer than 100 employees. Thus under this size standard, the majority
of firms offering cable and other program distribution services can be
considered small and may be affected by rules adopted pursuant to the
FNPRM.
---------------------------------------------------------------------------

\154\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition), available at
https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517110&search=2007%20NAICS%20Search.
\155\ 13 CFR 121.201, NAICS code 517110.
---------------------------------------------------------------------------

80. Cable Companies and Systems. The Commission has 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.\156\ Industry
data indicate that, of 1,076 cable operators nationwide, all but eleven
are small under this size standard.\157\ In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers.\158\ 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.\159\ Thus, under
this second size standard, most cable systems are small and may be
affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

\156\ See 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. See Implementation of Sections
of the 1992 Cable Television Consumer Protection and Competition
Act: Rate Regulation, MM Docket Nos. 92-266, 93-215, Sixth Report
and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393,
7408, para. 28 (1995).
\157\ 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.
\158\ See 47 CFR 76.901(c).
\159\ WARREN COMMUNICATIONS NEWS, TELEVISION & CABLE FACTBOOK
2006, ``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.
---------------------------------------------------------------------------

81. All Other Telecommunications. The Census Bureau defines this
industry as including ``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,

[[Page 34634]]

satellite systems. Establishments providing Internet services or Voice
over Internet Protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry.''
\160\ The SBA has developed a small business size standard for this
category; that size standard is $30.0 million or less in average annual
receipts.\161\ According to Census Bureau data for 2007, there were
2,623 firms in this category that operated for the entire year.\162\ Of
these, 2478 establishments had annual receipts of under $10 million and
145 establishments had annual receipts of $10 million or more.\163\
Consequently, we estimate that the majority of these firms are small
entities that may be affected by our action. In addition, some small
businesses whose primary line of business does not involve provision of
communications services hold FCC licenses or other authorizations for
purposes incidental to their primary business. We estimate that there
are many entities that hold private wireless licenses, but we do not
have a reliable estimate of how many of these entities are small
businesses.
---------------------------------------------------------------------------

\160\ U.S. Census Bureau, ``2007 NAICS Definitions: 517919 All
Other Telecommunications,'' available at https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517919&search=2007%20NAICS%20Search.
\161\ 13 CFR 121.201, NAICS code 517919.
\162\ U.S. Census Bureau, 2007 Economic Census, Subject Series:
Information, Table 4, ``Establishment and Firm Size: Receipts Size
of Firms for the United States: 2007 NAICS Code 517919'' (issued
Nov. 2010).
\163\ Id.
---------------------------------------------------------------------------

D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements

82. This Notice seeks comment on changes to the Commission's
current regulatory fee methodology and schedule which may result in
additional information collection, reporting, and recordkeeping
requirements. Specifically, the Notice seeks comment on using revenues
instead of subscribers in our regulatory fee procedures. If adopted,
this would require entities that do not currently file a Form 499-A to
provide the Commission with revenue information. The Notice also seeks
comment on adding categories to our regulatory fee schedule by changing
the treatment of non-U.S.-Licensed Space Stations; Direct Broadcast
Satellites; IPTV; and other services, such as broadband in our
regulatory fee process. If adopted, those entities that currently do
not pay regulatory fees--non-U.S.-Licensed Space Stations, IPTV, and
other service providers--would be required to pay regulatory fees to
the Commission and DBS providers would pay regulatory fees in a
different category.

E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered

83. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the 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.\164\
---------------------------------------------------------------------------

\164\ 5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

84. With respect to reporting requirements, the Commission is aware
that some of the proposals under consideration will impact small
entities by imposing costs and administrative burdens if these entities
will be required to calculate regulatory fees under a different
methodology. For example, if the Commission were to adopt a revenue-
based approach for calculating regulatory fees, certain entities that
currently do not report revenues to the Commission--or that only report
some revenues and not others-- would have to report such information.
85. The NPRM seeks to reform the regulatory fee methodology. We do
not propose increasing or imposing a regulatory fee burden on small
entities, unless it would be specifically in furtherance of the reform
measures proposed. If our proposals in this Notice result in fee
increases to small entities, above the annual fee increases that
generally occur each year, we intend to mitigate any inequities that
might result from such increases, by, for example, limiting the annual
increase in regulatory fees. In keeping with the requirements of the
Regulatory Flexibility Act, we have considered certain alternative
means of mitigating the effects of fee increases to a particular
industry segment. One option is to avoid significant fee increases,
which is also proposed in the NPRM. Another option is to provide
interim adjustments, by phasing in the new fees over a period of time.
The Commission seeks comment on the abovementioned, and any other,
means and methods that would minimize any significant economic impact
of our proposed rules on small entities. In addition, the Commission's
rules provide a process by which regulatory fee payors may seek waivers
or other relief on the basis of financial hardship. 47 CFR 0.1166

IX. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules

86. None.

X. Ordering Clauses

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

Federal Communications Commission.
Gloria J Miles,
Federal Register Liaison.
[FR Doc. 2013-13679 Filed 6-7-13; 8:45 am]
BILLING CODE 6712-01-P

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