[Federal Register: December 17, 2002 (Volume 67, Number 242)]
[Rules and Regulations]
[Page 77173-77174]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de02-10]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 01-76; FCC 02-320]
Assessment and Collection of Regulatory Fees for Fiscal Year 2001
AGENCY: Federal Communications Commission.
ACTION: Final rule; denial of petition for reconsideration.
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SUMMARY: In this document, the Commission denies the petition for
reconsideration of Bennet & Bennet, PLLC, on behalf of its local
multipoint distribution service (LMDS) clients, filed August 10, 2001.
FOR FURTHER INFORMATION CONTACT: Rob Fream, Office of Managing Director
at (202) 418-0408 or Roland Helvajian, Office of Managing Director at
(202) 418-0444.
SUPPLEMENTARY INFORMATION: Adopted: November 21, 2002; Released
December 4, 2002.
I. Introduction
1. By this order we deny the petition for reconsideration of Bennet
& Bennet, PLLC, on behalf of its LMDS clients, filed August 10,
2001.\1\ Bennet seeks reconsideration of Assessment of Regulatory Fees
for Fiscal Year 2001, 16 FCC Rcd 13525 (2001), 66 FR 36177, July 11,
2001, (2001 Fee Order), to the extent that order reaffirmed the
classification of the LMDS within the category of MDS services for
purposes of assessing regulatory fees for FY 2001. As a result of this
determination, LMDS facilities are subject to an annual fee of $450 per
call sign. Bennet asserts that LMDS should be classified as a microwave
service, which would subject it to a $5 annual fee payable for an
entire ten year license term at the time of renewal (total payment
$50). Bennet also argues that the FY 2001 MDS fee is excessive.
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\1\ Sprint Corp. filed an opposition on August 27, 2001.
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II. Background
2. In the 2001 Fee Order, the Commission rejected the arguments of
Winstar Communications, Inc. that LMDS should be reclassified as a
microwave service. Fee Order, 16 FCC Rcd 13532 paragraph 22. Winstar
justified its proposal by arguing that there had been increased
administrative activity associated with part 21 MDS this year, whereas
there had been little activity associated with LMDS. It also noted
generally that it could think of no similarity between LMDS and MDS and
no reason why LMDS should be treated differently than other part 101
fixed Microwave services. Sprint opposed the proposal, noting that the
LMDS administrative burden had been higher in the year 2000 and had
been supported by fee contributions by MDS users. Further, Sprint
argued that there were many similarities between the services,
including that they both provided the same high speed voice and data
services, although LMDS focused on large business users and MMDS
focused on residential consumers. The Commission held that although
LMDS and microwave services may utilize the same equipment, LMDS is
operationally similar to MDS. The Commission concluded that this
functional classification had proven adequate for more than 2 years and
there was no reason to change it. Additionally, the Commission rejected
the arguments of Worldcom, Inc. that the increase in the MDS fee from
$275 in FY 2000 to $450 was excessive. Fee Order, 16 FCC Rcd at 13531-
32 paragraphs 18-20. The Commission found that the $450 figure
reflected the best accounting methods and the most accurate data
available.
III. Bennet's Petition for Reconsideration
3. Bennet, who did not file comments earlier in this proceeding,
now seeks reconsideration of the Commission's decision to continue to
include LMDS in the MDS category for assessing regulatory fees. Bennet
contends that LMDS should be included in the microwave category for
purposes of assessing fees. In support of its contention, Bennet posits
that significant differences exist between the LMDS and MDS services.
According to Bennet, these differences include: That MDS uses site
based licenses and individually licensed station hub sites, while LMDS
uses geographically based licenses and generally does not use
individually licensed hubs; that MDS is primarily a one-way video
service, while LMDS is primarily a two-way service; and that LMDS and
MDS use different equipment and network configurations and have
different propagation characteristics, with LMDS and microwave services
having more propagation limitations. It further states that the
services serve different markets. In this regard, it notes that LMDS
and other part 101 microwave services compete against each other in the
same target markets and that the Commission's regulatory fee scheme
unjustifiably places LMDS at a competitive disadvantage because the
other part 101 services pay only a nominal regulatory fee. It also
notes that licensing and rulemaking actions for MDS require more
administrative resources than the resources required for LMDS. As to
the size of the MDS fee, Bennet maintains that the increase from $275
to $450 is burdensome and not supported by any corresponding increase
in regulatory costs.
4. Sprint responds that MDS and LMDS are operationally,
competitively, and legally similar, both providing high speed wireless
voice and data services, but noting that MDS serves primarily
residential users and LMDS primarily serves large business users.
Sprint contends that differences in the cost of licensing LMDS and MDS
are irrelevant since the cost of licensing is not included in
calculating annual fees. Fee Order, 16 FCC Rcd at 13595. In Sprint's
view, reclassifying LMDS would
[[Page 77174]]
unfairly increase the fees for other MDS operators.
IV. Discussion
5. Based on our review of the record in this proceeding, we find
that Bennet's petition fails to provide sufficient grounds for us to
depart summarily from the Commission's previous analysis regarding this
matter. The Commission's decision to subject LMDS and MDS to identical
regulatory fees stemmed largely from the fact that LMDS was
operationally similar to MDS and MMDS.\2\ In this regard, we note, for
example, that we have previously noted that LMDS is competitive with
MMDS.\3\ Moreover, as the Commission has permitted licensees increasing
flexibility in the use of their spectrum, the pattern has been for
distinctions between LMDS and MMDS to erode.\4\ While Bennet attempts
to illustrate that LMDS more closely parallels certain microwave
services, it does not dispute the similarities which we have previously
noted between LMDS and MMDS. We also concur with Sprint's argument that
licensing costs, which are covered by application fees assessed under
section 8 of the Act, 47 U.S.C. 158, are not recovered through section
9 regulatory fees of the Act, 47 U.S.C. 159, and, therefore, have no
bearing on our decision. We note, moreover, that, pending changes to
the statutory schedule of fees in section 8, LMDS services have not
been assessed any section 8 application fees. Consequently, we continue
to believe, based on the record before us, that LMDS should be included
in the MDS category for regulatory fees for FY 2001. As to the increase
in the MDS fee, we believe that we have thoroughly explained this
matter in the 2001 Fee Order. No further discussion of this point is
warranted. Moreover, the public interest would not be served by
disrupting the current fee process, which has been completed by
numerous entities, pending resolution of this matter, particularly
given that many of Bennet's arguments were raised for the first time on
reconsideration.
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\2\ Assessment of Regulatory Fees for Fiscal Year 2001, 16 FCC
Rcd 13525, 13532 para. 22 (2001).
\3\ Rulemaking to Amend Parts 1, 2, 21, and 25 of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules
and Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, 15 FCC Rcd 11857, 11868 para. 25 (2000).
\4\ For example, the Commission has authorized MMDS providers,
like LMDS licensees, to offer two-way communications. Amendments of
Parts 21 and 74 to Enable Multipoint Distribution Service and
Instructional Television Fixed Service Licensees to Engage in Fixed
Two-Way Transmissions, MM Docket No. 97-217, 13 FCC Rcd 19112
(1998), recon. 14 FCC Rcd 12764 (1999), further recon., 15 FCC Rcd
14566 (2000). Moreover, as a result of the Commission's
reorganization, MMDS matters, like LMDS matters, now are handled by
the Wireless Telecommunications Bureau. Wireless Bureau to Assume
All Regulatory Duties Associated with ITFS and MDS/MMDS Services,
Public Notice (Mar. 18, 2002).
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6. While an insufficient record exists to lead us to modify our
decision with respect to LMDS services in FY 2001, we plan to develop a
more complete record on these issues in the next regulatory fee
proceeding. In addition, in light of continuing technological
convergence, innovation, and evolving service offerings in the
marketplace, we will provide parties in an upcoming wireless bureau
proceeding the opportunity to address our existing fixed wireless
regulatory fee assessments and their application to similarly situated
service providers. The development of a comprehensive record on these
issues will enable us to review our existing classifications for
certain services and identify the need, if any, for modifications in
the regulatory fee amounts assessed for particular service categories.
7. Accordingly, it is ordered, that the petition for
reconsideration of Bennet & Bennet, PLLC on behalf of its LMDS clients,
filed August 10, 2001, is denied.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-31711 Filed 12-16-02; 8:45 am]
BILLING CODE 6712-01-P