[Federal Register: April 14, 2004 (Volume 69, Number 72)]
[Proposed Rules]
[Page 19779-19805]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ap04-15]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 04-73; FCC 04-66]
Assessment and Collection of Regulatory Fees for Fiscal Year 2004
AGENCY: Federal Communications Commission.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: The Commission will revise its Schedule of Regulatory Fees in
order to recover the amount of regulatory fees that Congress has
required it to collect for fiscal year 2004. Section 9 of the
Communications Act of 1934, as amended, provides for the annual
assessment and collection of regulatory fees under sections 9(b)(2) and
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and
``Permitted Amendments'' to the Schedule of Regulatory Fees.
DATES: Comments are due April 21, 2004, and reply comments are due
April 30, 2004.
ADDRESSES: Federal Communications Commission, 445 12th St. SW.,
Washington, DC 20554.
See paragraphs 30 through 33 of the SUPPLEMENTARY INFORMATION for
specific filing instructions.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444 or Rob Fream, Office of Managing Director at
(202) 418-0408.
SUPPLEMENTARY INFORMATION:
Adopted: March 17, 2004.
Released: March 29, 2004.
By the Commission:
1. Table of Contents
I. Introduction
II. Discussion
A. Development of FY 2004 Fees
1. Calculation of Revenue and Fee Requirements
2. Additional Adjustments to Payment Units
3. Local Multipoint Distribution Service (LMDS)
B. Commercial Mobile Radio Service (CMRS)
Messaging
C. Proposed Procedural Changes for Notification, Assessment and
Collection of Regulatory Fees
1. Media Services Licensees
2. Satellite Space Station Licensees
3. Interstate Telecommunications Service Providers
4. Cable Television System Operators
5. Commercial Mobile Radio Service Operators
D. Future Streamlining of the Regulatory Fee Assessment and
Collection Process
E. Procedures for Payment of Regulatory Fees
1. De Minimis Fee Payment Liability
2. Standard Fee Calculations and Payment Dates
F. Enforcement
III. Procedural Matters
A. Comment Period and Procedures
B. Ex Parte Rules
C. Initial Regulatory Flexibility Analysis
D. Authority and Further Information
Attachment A--Initial Regulatory Flexibility Analysis
Attachment B--Sources of Payment Unit Estimates for FY 2004
Attachment C--Calculation of Revenue Requirements and Pro-Rata Fees
Attachment D--FY 2004 Schedule of Regulatory Fees
Attachment E--Factors, Measurements, and Calculations That Determine
Station Contours and Population Coverages
Attachment F--FY 2003 Schedule of Regulatory Fees
I. Introduction
1. In this Notice of Proposed Rulemaking, we propose to collect
$272,958,000 in regulatory fees for Fiscal Year (FY) 2004. These fees
are mandated by Congress and are collected to recover the regulatory
costs associated with the Commission's
[[Page 19780]]
enforcement, policy and rulemaking, user information, and international
activities.\1\
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\1\ 47 U.S.C. 159(a).
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II. Discussion
A. Development of FY 2004 Fees
1. Calculation of Revenue and Fee Requirements
2. Each fiscal year, the Commission proportionally allocates the
total amount that must be collected via regulatory fees (Attachment
C).\2\ For FY 2004, this allocation was done using FY 2003 revenues as
a base. From this base, a revenue amount for each fee category was
calculated. Each fee category was then adjusted upward by 1.5 percent
to reflect the increase in regulatory fees from FY 2003 to FY 2004.
These FY 2004 amounts were then divided by the number of payment units
in each fee category to determine the unit fee.\3\ In instances of
small fees, such as licenses that are renewed over a multiyear term,
the resulting unit fee was also divided by the term of the license.
These unit fees were then rounded in accordance with 47 U.S.C.
159(b)(2).
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\2\ The costs assigned to each service category are based upon
the regulatory activities (enforcement, policy and rulemaking, user
information, and international activities) undertaken by the
Commission on behalf of units in each service category. It is
important to note that the required increase in regulatory fee
payments of aproximately 1.5 percent in FY 2004 is reflected in the
revenue that is expected to be collected from each service category.
Because this expected revenue is adjusted each year by the number of
units in a service category, the actual fee itself is sometimes
increased by a number other than 1.5 percent. For example, in
industries where the number of units is declining and the expected
revenue is increasing, the impact of the fee increase may be
greater.
\3\ In most instances, the fire amount is a flat fee per
licensee or regulatee. However, in some instances the fee amount
represents a unit subscriber fee (such as for Cable, Commercial
Mobile Radio Service (CMRS) Cellular/Mobile and CMRS Messaging), a
per unit fee (such as for International Bearer Circuits), or a fee
factor per revenue dollar (Interstate Telecommunications Service
Provider fee).
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2. Additional Adjustments to Payment Units
3. In calculating the FY 2004 regulatory fees proposed in
Attachment D, we further adjusted the FY 2003 list of payment units
(Attachment B) based upon licensee databases and industry and trade
group projections. Whenever possible, we verified these estimates from
multiple sources to ensure accuracy of these estimates. In some
instances, Commission licensee databases were used, while in other
instances, actual prior year payment records and/or industry and trade
association projections were used in determining the payment unit
counts.\4\ Where appropriate, we adjusted and/or rounded our final
estimates to take into consideration variables that may impact the
number of payment units, such as waivers and/or exemptions that may be
filed in FY 2004, and fluctuations in the number of licensees or
station operators due to economic, technical or other reasons.
Therefore, for example, when we note that our estimated FY 2004 payment
units are based on FY 2003 actual payment units, we do not necessarily
imply that our FY 2004 projection is exactly the same number as in FY
2003, but that we have either rounded the FY 2004 number or adjusted it
slightly to account for these variables.
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\4\ The databases we consulted include, but are not limited to,
the Commission's Universal Licensing System (ULS), International
Bureau Filing System (IBFS), and Consolidated Database System
(CDBS). We also consulted industry sources including but not limited
to Television & Cable Factbook by Warren Publishing, Inc. and the
Broadcasting and Cable Yearbook by Reed Elsevier, Inc., as well as
reports generated within the Commission such as the Wireline
Competition Bureau's Trends in Telephone Service and the Wireless
Telecommunications Bureau's Numbering Resource Utilization Forecast.
For additional information on source material, see Attachment B.
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4. With regards to regulatory fees for AM and FM radio stations,
additional factors are considered in determining the fees paid by these
stations. These factors are facility attributes and the population
served by the radio station. The calculation of the population served
is determined by coupling current U.S. Census Bureau data with
technical and engineering data, as detailed in Attachment E.
Consequently, the population served, as well as the class and type of
service (AM or FM), determines the regulatory fee amount to be paid.
3. Local Multipoint Distribution Service (LMDS)
5. In both 2001,\5\ and in 2002,\6\ the Commission denied requests
to move the Local Multipoint Distribution Service (LMDS) from the
Multipoint Distribution Service (MDS) fee category to the microwave fee
category. In our FY 2003 Notice of Proposed Rulemaking,\7\ we sought
comment on the appropriate fee classification of LMDS. Parties
commenting on this issue suggested that LMDS be classified in the
microwave fee category because LMDS was more similar to services in the
microwave fee category than MDS.\8\ We noted certain distinctions
between MDS and LMDS, and we declined to place LMDS in the microwave
fee category because recent technological developments and emerging
commercial applications suggested that LMDS may develop on a different
track than other microwave services.\9\ To better track the development
of LMDS, therefore, we created a separate LMDS fee category.\10\ We
note that we still have under advisement a broader proceeding that
addresses the policies and fee structures governing LMDS and other
wireless services. Therefore, we again seek comment on the appropriate
fee classification of LMDS.
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\5\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2001, Report and Order, 16 FCC Rcd 13525 (2001).
\6\ See Assessment and Collection of Regulatory Fees for Fiscal
year 2001, Memorandum Opinion and Order, 17 FCC Rcd 24920 (2002).
\7\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, Notice of Proposed Rulemaking, 18 FCC Rcd 6088-89
paragraphs 6-9 (2003) (FY 2003 Notice of Proposed Rulemaking).
\8\ The Commission recently initiated a proceeding to facilitate
the provision of high-speed mobile and fixed broadband and other
advanced wireless services and to consider the possibility of
merging MDS and the Instructional Television Fixed Service (ITFS)
into a single Broadband Communications Service. 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,
Notice of Proposed Rule Making and Memorandum Opinion and Order. 18
FCC Rcd 6722, 6797 (2003).
\9\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, Report and Order, 18 FCC Rcd 15988 paragraph 9 (2003) (FY
2003 Report and Order).
\10\ Id.
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B. Commercial Mobile Radio Service (CMRS) Messaging
6. In our FY 2003 Report & Order,\11\ we noted that there has been
a significant decline in CMRS Messaging units--from 40.8 million in FY
1997 to 19.7 million in FY 2003--a decline of 51.7 percent. In fact, in
the FY 2003 regulatory fee cycle, the number of CMRS Messaging units
that paid regulatory fees declined to less than 16 million. This is
consistent with our Eighth Annual CMRS Competition Report, which
estimates the number of paging-only subscribers at the end of 2002 to
be 14.1 million units.\12\ In addition, between the FY 2003 and FY 2004
regulatory fee cycle, there were no significant changes in the level of
regulatory oversight for this fee category. Therefore, for the reasons
outlined in our FY 2003 Report and
[[Page 19781]]
Order\13\, and because the level of regulatory oversight remained
relatively the same between FY 2003 and FY 2004, we propose to maintain
the CMRS Messaging subscriber regulatory fee rate at the FY 2003 level
to avoid further contributing to the financial hardships associated
with a declining subscriber base.
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\11\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, Report and Order, 18 FCC Rcd 15985 paragraph 21 (2003).
\12\ Implementation of Section 6002(b) of the Omnibus Budget
Reconciliation Act of 1993, Annual Report and Analysis of
Competitive Market Conditions with Respect to Commercial Mobile
Services, Eighth Report. 18 FCC Rcd 14783 paragraph 151 (2003)
(Eighth Annual CMRS Competition Report).
\13\ See FY 2003 Report and Order, 18 FCC Rcd 15985 paragraph 21
(2003).
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C. Proposed Procedural Changes for Notification, Assessment and
Collection of Regulatory Fees
7. As was the case last year, we again propose that we will not
disseminate public notices to regulatees through surface mail informing
them of when regulatory fees are due. With the widespread use of the
Internet, we believe we can better serve the public by providing the
necessary information on its Web site. To that end, we propose to
provide public notices, fact sheets and all necessary regulatory fee
payment procedure information on our Web site at http://www.fcc.gov/fees
as we have for the past several years. In the event that
regulatees do not have access to the Internet, hardcopies of public
notices and other relevant materials will be mailed upon request to
anyone who contacts the FCC Consumer Center at (888) 225-5322. We also
will continue to publish official notice of regulatory fee assessments
in the Federal Register.
8. While we propose to make general regulatory fee information
available at our Web site, rather than disseminating it to all
licensees through surface mail, we propose to disseminate fee-
assessment notifications to licensees in five categories through
surface mail. We propose to notify the following five categories of
licensees by surface mail because these licensees experienced confusion
about fees and the fee-collection process in the past, or are likely to
need to respond to changed collection practices in the future.
1. Media Services Licensees
9. In FY2003, the Commission mailed fee assessment notifications to
media services licensees for the first time.\14\ We propose to repeat
this endeavor this year in a similar fashion. At this time, we are
unsure of the exact postcard or letter format for assessment
notifications. However, regardless of format, the content of each
assessment notification would identify each licensed facility by its
facility identification number, station call sign, station type and
class, regulatory fee amount owed, licensee contact information and
licensee federal registration number.
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\14\ Fee assessments were issued for AM and FM Radio Stations,
AM and FM Construction Permits, FM Translators/Booster, VHF and UHF
Television Stations, VHF and UHF Television Construction Permits,
Satellite Television Stations, Low Power Television (LPTV) Stations,
and LPTV Translators/Boosters. We did not issue fee assessments for
broadcast auxiliary stations in FY2003, nor will we do so this year.
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10. We emphasize that media services licensees would still be
required to complete the Remittance Advice FCC Form 159 when submitting
their fee payment. Last year, many media services licensees erroneously
submitted their fee payments with an attached copy of the assessment
notification that they received, rather than a completed FCC Form 159.
Many licensees also submitted their payment to FCC Headquarters in
Washington, DC rather than to the Mellon Bank in Pittsburgh, PA. These
mistakes resulted in the delayed processing of payments and hence some
became subject to the Commission's 25 percent late-payment penalty.
Therefore, on this year's fee assessment notifications, we propose to
include a specific notice that payments submitted to the wrong address
or submitted without an FCC Form 159 will likely incur a 25 percent
late-payment penalty.
2. Satellite Space Station Licensees
11. In FY 2003, the Commission mailed regulatory fee assessment
letters for the first time to satellite space station licensees. We
propose to repeat this endeavor this year in an identical or similar
fashion. As with media services licensees, we reiterate that satellite
space station licensees are still required to complete a Remittance
Advice FCC Form 159 and submit their payment to the appropriate Mellon
Bank Pittsburgh, PA mailing address.
3. Interstate Telecommunications Service Providers
12. As in previous years, we propose to continue to generate and
mail customized Interstate Telecommunications Service Provider
Worksheets (FCC Form 159-W) to Interstate Telecommunications Service
Providers (``ITSPs''). The customized FCC Form 159-W serves as a
regulatory fee assessment for ITSPs. Recipients of the customized FCC
Form 159-W would need only sign the form and submit it along with
payment to the appropriate Mellon Bank Pittsburgh, PA mailing address,
in lieu of the FCC Form 159. Recipients who disagree with the assessed
fee amount or other information relating to the calculation of the
assessment on their customized FCC Form 159-W would complete a blank
FCC Form 159-W and complete a FCC Form 159, and then submit both of
these forms along with payment to the appropriate Mellon Bank
Pittsburgh, PA mailing address.
4. Cable Television System Operators
13. Beginning this year, we propose to modify our payment unit
assessment methodology and our fee collection procedures for the cable
industry by assessing regulatory fees for individual cable operators
based on cable subscriber counts that the operators themselves have
reported in publicly available data sources. The primary data sources
we propose to reference this year are the Broadcasting and Cable
Yearbook 2003-2004 (``Yearbook'')\15\ and industry statistics
publicized by the National Cable and Telecommunications Association
(``NCTA'').\16\
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\15\ Broadcasting and Cable Yearbook 2003-2004, by Reed
Elsevier, Inc., Newton, MA, 2003. Subscriber counts reported in
Seciton C, ``Multiple System Operators, Independent Owners and Cable
Systems,'' page C-3.
\16\ NCTA maintains an updated list of the 25 largest multiple-
system operators at its web site located at http://www.ncta.com.
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14. Under this methodology, cable operators and multiple system
operators (``MSOs'') would simply base their regulatory fee obligations
upon their respective basic subscriber counts as reported in the data
sources. Cable operators and MSOs would still be required to complete a
Remittance Advice FCC Form 159 and submit their payment to the
appropriate Mellon Bank Pittsburgh, PA mailing address; but they would
only have to report their aggregate subscriber count on a single line
entry on FCC Form 159, rather than report the counts for every
community unit identifier (``CUID'') that they serve.
15. In using the data sources, we propose that cable operators
would first refer to NCTA's list of the 25 largest multiple-system
operators (``MSOs''). Entities appearing on the list would base their
fee obligations on their subscriber counts as reported on the list.
MSOs and other cable operators not listed by NCTA next would refer to
the Yearbook and base their fee obligations upon their aggregate
system(s) basic subscriber counts as reported in the Yearbook. Any MSOs
and operators not appearing on the NCTA list or in the Yearbook would
then certify their aggregate basic subscriber counts as of December 31,
2003 on the Remittance Advice FCC Form 159 with the understanding that
we would corroborate the certified counts with other publicly available
data sources.\17\
[[Page 19782]]
Cable operators that do not have access to the Internet to obtain the
NCTA list or have access to the Yearbook would be able to contact the
FCC Consumer Center at (888) 225-5322 to obtain their publicized
subscriber count, if available in either data source.
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\17\ Sources consulted by the Commission may include but not be
limited to Cable TV Investor by Kagan World Media and Television and
Cable Factbook by Warren Communications.
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16. Under this assessment methodology, the per-subscriber
regulatory fee would be the same for all cable operators, regardless of
company or system size, as is presently the case. Beginning this year,
we would also set a de minimis payment exemption for operators serving
less than 250 basic service subscribers throughout their entire
system(s). Operators fitting into this category would not be required
to submit payment, but would still be required to submit a Remittance
Advice FCC Form 159 on which they certify their aggregate subscriber
count.
17. We also note that beginning this year we propose to mail
assessment letters to all of the MSOs and cable operators in the
Yearbook or on the NCTA list of 25 largest MSOs. Operators not
appearing in either data source would not receive an assessment;
however, they would still expected to make a fee payment based on their
certified basic cable subscriber counts.
18. Our proposed assessment methodology for the cable subscriber
service category reduces administrative burdens for cable operators and
the Commission. Each cable operator would only have to provide one
payment line on FCC Form 159 rather than the dozens or even hundreds
that currently must be provided by some of the larger MSOs when
reporting subscriber counts for each CUID that they serve. This year's
assessment model would also provide predictability for cable operators
and the Commission. The precise fee obligations of cable operators and
MSOs would be easily determined and would be known well in advance by
both the regulatees and the Commission.
19. We solicit comment on the feasibility of this assessment
proposal. Specifically, we seek comment regarding the accuracy of basic
subscriber counts as furnished by NCTA and as reported in the Yearbook
and other publicly available data sources. If the number of basic
subscribers certified to be served by operators differs considerably
with the numbers reported in publicly available data sources, we invite
comment that would provide possible explanations for any such
discrepancies. We also seek recommendations for alternative data
sources that the Commission could consult with a high degree of
reliability.
5. Commercial Mobile Radio Service Operators
20. Beginning this year, we propose to mail assessments to
Commercial Mobile Radio Services (CMRS) cellular and mobile service
providers using information provided in the Numbering Resource
Utilization Forecast (NRUF) report.\18\ Data from the NRUF report would
be used to determine the amount of each regulatory fee obligation, and
assessments would be mailed accordingly to cellular and other mobile
service providers. The providers would still be required to submit
their payment with Remittance Advice FCC Form 159 to the designated
address in Pittsburgh, PA. We solicit comment on the feasibility of
this assessment proposal. Specifically, we seek comment regarding the
use of NRUF data as it relates to the subscriber basis upon which
wireless cellular/mobile regulatory fees are calculated. We also seek
comment on other data sources that would be pertinent for us to consult
for calculating wireless cellular/mobile regulatory fees.
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\18\ Numbering Resource Utilization in the United States as of
June 30, 2003, prepared by the Industry Analysis and Technology
Division, Federal Communications Commission (December 2003).
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21. With the exception of the changes noted in the preceding
sections, we propose to retain the procedures that we have established
for the payment of regulatory fees.\19\
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\19\ See 47 U.S.C. 159(f).
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D. Future Streamlining of the Regulatory Fee Assessment and Collection
Process
22. As an agency, we are committed to reviewing, streamlining and
modernizing our statutorily required fee-assessment and collection
procedures. We welcome comments on a broad range of options in this
regard. As discussed briefly below, our areas of particular interest
include: (1) The process for notifying licensees about changes in the
annual regulatory fee schedule and how it can be improved; (2) the most
effective way to disseminate regulatory fee assessments and bills, i.e.
through surface mail, email, or some other mechanism; (3) the fee
payment process, including how the agency's electronic payment system
can be improved; and (4) the timing of fee payments, including whether
we should alter the existing fee payment ``window'' in any way.
Commenters should bear in mind that proposed improvements must comport
with the provisions of section 9 of the Communications Act of 1934, as
amended.\20\
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\20\ See id. 159.
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23. With respect to disseminating assessments or bills through
surface mail, we note that many licensees have multiple mailing
addresses on file in the Commission's licensing databases and our
Commission Registration System (CORES). We seek comment regarding to
which address licensees would prefer to have bills or assessments
mailed.
24. With respect to the fee payment process, we seek comment on
migrating licensees to the Commission's electronic payment process
known as Fee Filer, particularly in instances by which slow mail
delivery may result in receiving the payment beyond the fee due date,
thereby resulting in a 25 percent late-payment penalty. Should the
Commission make use of Fee Filer mandatory for fees over a certain
monetary level, or for licensees holding a certain number of licenses?
For licensees who choose to continue to submit fee payments through
surface mail to Mellon Bank in Pittsburgh, PA, we seek comment on ways
to streamline the Remittance Advice Form 159. We also seek comment on
ways in which we could employ information technology on the fee
assessments or bills that we generate so as to enable licensees to
submit their fee payments with a copy of their fee assessment or bill,
in lieu of a Remittance Advice Form 159.
25. With respect to the current filing-fee window, we seek comment
on whether the current time period for filing regulatory fee payments
provides licensees with sufficient time to submit their filings to the
Commission. In particular, we seek comment on the public benefits that
might accrue from lengthening the time period for filing fee payments.
E. Procedures for Payment of Regulatory Fees
1. De Minimis Fee Payment Liability
26. As in the past, we propose that regulatees whose total
regulatory fee liability, including all categories of fees for which
payment is due by an entity, amounts to less than $10 will be exempted
from fee payment in FY 2003. Also, per the terms of the revised cable
subscriber fee assessment methodology proposed above, cable television
operators serving in the aggregate less than 250 basic service
subscribers would be exempted from fee payment in the cable subscriber
service category.
[[Page 19783]]
2. Standard Fee Calculations and Payment Dates
27. Consistent with past practice, the specific time for payment of
standard fees will be announced in the Report and Order terminating
this proceeding and will be published in the Federal Register.
Licensees are reminded that, under our current rules, the
responsibility for payment of fees by service category is as follows:
(a) Media Services: The responsibility for the payment of
regulatory fees rests with the holder of the permit or license on
October 1, 2003. However, in instances where a license or permit is
transferred or assigned after October 1, 2003, responsibility for
payment rests with the holder of the license or permit at the time
payment is due.
(b) Wireline (Common Carrier) Services: Fees are not based on a
subscriber, unit, or circuit count. Fees must be paid for any
authorization issued on or before October 1, 2003.
(c) Wireless Services: Commercial Mobile Radio Service (CMRS)
cellular, mobile, and messaging services (fees based upon a subscriber,
unit or circuit count): The number of subscribers, units or circuits on
December 31, 2003 will be used as the basis from which to calculate the
fee payment. For small multi-year wireless services, the regulatory fee
will be due at the time of authorization or renewal of the license,
which is generally for a period of five or ten-years and paid
throughout the year.
(d) Cable Services (fees based upon a subscriber count): To
coincide with this year's proposed assessment methodology, the basic
subscriber counts in NCTA's list of Top 25 MSO or in the Broadcasting
and Cable Yearbook 2003-2004 will be used as the basis from which to
calculate the fee payment. For operators not on the NCTA list and not
appearing in the Yearbook, the number of subscribers, units or circuits
on December 31, 2003 will be used as the basis from which to calculate
the fee payment.\21\ CARS licensees: Fees must be paid for any
authorization issued on or before October 1, 2003.
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\21\ Cable system operators and MSOs that are not listed in any
of the data sources indicated in this item are to compute their
subscribers as follows: Number of single family dwellings + number
of individual households in multiple dwelling unit (apartments,
condominiums, mobile home parks, etc.) paying at the basic
subscriber rate + bulk rate customers + courtesy and free service.
Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by
basic annual subscription rate for individual households. Operators
may base their count on ``a typical day in the last full week'' of
December 2003, rather than on a count as of December 31, 2003.
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(e) International Services: Earth stations, geostationary orbit
space stations, international public fixed radio services and
international broadcast stations: Payment is calculated per operational
station. Non-geostationary orbit satellite systems: Payment is
calculated per operational system. The responsibility for the payment
of regulatory fees rests with the holder of the permit or license on
October 1, 2003. However, in instances where a license or permit is
transferred or assigned after October 1, 2003, responsibility for
payment rests with the holder of the license or permit at the time
payment is due. International bearer circuits: Payment is calculated
per active circuit as of December 31, 2003.
28. We strongly recommend that entities submitting more than
twenty-five (25) Form 159-Cs use the electronic-fee-filer program when
submitting their regulatory fee payment. We will accept fee payments
made in advance of the normal formal window for the payment of
regulatory fees for the convenience of payers.
F. Enforcement
29. Finally, as a reminder to all licensees, section 159(c) of the
Communications Act requires us to impose an additional charge as a
penalty for late payment of any regulatory fee. As in years past, a
late payment penalty of 25 percent of the amount of the required
regulatory fee will be assessed on the first day following the deadline
date for filing of these fees. Failure to pay regulatory fees and/or
any late penalty will subject regulatees to sanctions, including the
provisions set forth in the Debt Collection Improvement Act of 1996
(``DCIA''). We also assess administrative processing charges on
delinquent debts to recover additional costs incurred in processing and
handling the related debt pursuant to the DCIA and section 1.1940(d) of
the Commission's rules. These administrative processing charges will be
assessed on any delinquent regulatory fee, in addition to the 25
percent late charge penalty. Partial underpayments of regulatory fees
are treated in the following manner. The licensee will be given credit
for the amount paid, but if it is later determined that the fee paid is
incorrect or was submitted after the deadline date, the 25 percent late
charge penalty will be assessed on the portion that is submitted after
the filing window. Failure to pay regulatory fees can result in the
initiation of a proceeding to revoke any and all authorizations held by
the delinquent payer.\22\
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\22\ See 47 CFR 1.1164.
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III. Procedural Matters
A. Comment Period and Procedures
30. Pursuant to 47 CFR 1.415, 1.419, interested parties may file
comments on or before April 21, 2004, and reply comments on or before
April 30, 2004. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS) or by filing paper copies.\23\
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\23\ See Electronic Filing of Documents in Rulemaking
Proceedings, 63 FR 24121, May 1, 1998, available at http://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf
.
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31. Comments filed through the ECFS are sent as an electronic file
via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally,
only one copy of an electronic submission must be filed. If multiple
docket or rulemaking numbers appear in the caption of this proceeding,
however, commenters must submit one electronic copy of the comments to
each docket or rulemaking number referenced in the caption. In
completing the transmittal screen, commenters should include their full
name, U.S. Postal Service mailing address, and the applicable docket or
rulemaking number. Parties may also submit an electronic comment by
Internet e-mail. To receive filing instructions for e-mail comments,
commenters should send an e-mail to ecfs@fcc.gov, and should include
the following words in the body of the message, ``get form '' A sample form and directions will be sent in
reply.
32. 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 appear in the caption of this proceeding, commenters must submit
two additional copies for each additional docket or rulemaking number.
Filings can be hand delivered or by messenger delivery, sent by
commercial overnight courier, or mailed by first-class mail through the
U.S. Postal Service (please note that the Commission continues to
experience delays in receiving U.S. Postal Service mail). The
Commission's contractor, Natek, Inc., will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building. Commercial
[[Page 19784]]
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 mail, Express Mail,
and Priority Mail should be addressed to 445 12th Street, SW.,
Washington, DC 20554. All filings must be addressed to the Commission's
Secretary, Marlene H. Dortch, Office of the Secretary, Federal
Communications Commission.
33. Parties who choose to file by paper must also submit their
comments on diskette. Two copies of the diskettes must be submitted.
One copy is to be sent to Qualex International, 445 12th Street, SW.,
Room CY-B402, Washington, DC 20554. The other copy is to be sent to
Office of Managing Director, Federal Communications Commission, 445
12th Street, SW., 1-C848, Washington, DC 20554. These submissions must
be in a Microsoft WindowsTM-compatible format on a 3.5''
floppy diskette. The diskette should be clearly labeled with the
commenter's name, proceeding (including the lead docket number MD
Docket No. 04-73), type of pleading (comment or reply comment), date of
submission, and the name of the electronic file on the diskette. The
label should also include the following phrase ``Copy--Not an
Original.'' Each diskette should contain only one party's pleadings,
preferably in a single electronic file.
34. The public may view the documents filed in this proceeding
during regular business hours in the FCC Reference Center, Federal
Communications Commission, Room CY-A257, 445 12th Street, SW.,
Washington, DC 20554, and through the Commission's Electronic Comment
Filing System (ECFS) http://www.gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi.
Those seeking materials in alternative formats (computer
diskette, large print, audio recording, and Braille) should contact
Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY, or
bmillin@fcc.gov.
B. Ex Parte Rules
35. This is a permit-but-disclose notice and comment rulemaking
proceeding. Ex Parte presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed pursuant to the
Commission's rules.\24\
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\24\ 47 CFR 1.1203 and 1.1206(b).
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C. Initial Regulatory Flexibility Analysis
36. As required by the Regulatory Flexibility Act,\25\ we have
prepared an Initial Regulatory Flexibility Analysis (IRFA) of the
possible impact on small entities of the proposals suggested in this
document. The IRFA is set forth as Attachment A. Written public
comments are requested with respect to the IRFA. These comments must be
filed in accordance with the same filing deadlines for comments on the
rest of the NPRM, and must have a separate and distinct heading,
designating the comments as responses to the IRFA. The Consumer
Information Bureau, Reference Information Center, shall send a copy of
this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration, in accordance with the Regulatory
Flexibility Act.
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\25\ See 5 U.S.C. 603.
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D. Authority and Further Information
37. Authority for this proceeding is contained in section 4(i) and
(j), 8, 9, and 303(r) of the Communications Act of 1934, as amended. It
is ordered that this NPRM is adopted.\26\ It is further ordered that
the Commission's Consumer Information Bureau, Reference Information
Center, shall send a copy of this NPRM, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration. Further information about this
proceeding may be obtained by contacting the FCC Consumer Center at
(888) 225-5322.
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\26\ 47 U.S.C. 154(i)-(j), 159, and 303(r).
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Attachment A--Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act (RFA),\27\ the
Commission prepared an Initial Regulatory Flexibility Analysis (IRFA)
of the possible significant economic impact on small entities by the
policies and rules in the present Notice of Proposed Rulemaking, In the
Matter of Assessment and Collection of Regulatory Fees for Fiscal Year
2004. Written public comments are requested on this IRFA. Comments must
be identified as responses to the IRFA and must be filed by the
deadlines for comments on the IRFA provided in paragraph 30. The
Commission will send a copy of the NPRM, including the IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration.\28\ In
addition, the NPRM and IRFA (or summaries thereof) will be published in
the Federal Register.\29\
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\27\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by
the Contract With America Advancement Act of 1996, Pub. L. 104-121,
110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
\28\ 5 U.S.C. 603(a).
\29\ Id.
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I. Need for, and Objectives of, the Proposed Rules
2. This rulemaking proceeding is initiated to obtain comments
concerning the Commission's proposed amendment of its Schedule of
Regulatory Fees in the amount of $272,958,000, the amount that Congress
has required the Commission to recover. The Commission seeks to collect
the necessary amount through its proposed Schedule of Regulatory Fees
in the most efficient manner possible and without undue public burden.
II. Legal Basis
3. 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.\30\
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\30\ 47 U.S.C 154(i) and (j), 159, and 303(r).
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III. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
4. 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, if adopted.\31\ The RFA defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.''\32\ In addition, the term ``small business'' has the
same meaning as the term ``small business concern'' under the Small
Business Act.\33\ 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
Small Business Administration (SBA).\34\ Nationwide, there are
approximately 22.4 million small organizations.\35\ In addition, a
small organization is generally ``any not-for-profit enterprise which
is independently owned and operated and
[[Page 19785]]
is not dominant in its field.''\36\ Nationwide, as of 1992, there were
approximately 275,801 small organizations.\37\ The term ``small
governmental jurisdiction'' is defined as ``governments of cities,
towns, townships, villages, school districts, or special districts,
with a population of less than fifty thousand.''\38\ As of 1997, there
were about 87,453 governmental jurisdictions in the United States.\39\
This number includes 39,044 county governments, municipalities, and
townships, of which 37,546 (approximately 96.2%) have populations of
fewer than 50,000, and of which 1,498 have populations of 50,000 or
more. Thus, we estimate the number of small governmental jurisdictions
overall to be 84,098 or fewer.
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\31\ 5 U.S.C. 603(b)(3).
\32\ U.S.C. 601(6).
\33\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the
RFA, 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.'' 5 U.S.C. 601(3).
\34\ Small Business Act, 15 U.S.C. 632 (1996).
\35\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028,
at page 40 (July 2002).
\36\ 5 U.S.C. 601(4).
\37\ U.S. Bureau of the Census, 1992 Economic Census, Table 6
(special tabulation of data under contract to Office of Advocacy of
the U.S. Small Business Administration).
\38\ 5 U.S.C. 601(5).
\39\ U.S. Census Bureau, Statistical Abstract of the United
States: 2000, section 9, pages 299-300, Tables 490 and 492.
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Cable Services or Systems
5. Cable and Other Program Distribution. The SBA has developed a
small business size standard for cable and other program distribution
services, which includes all such companies generating $12.5 million or
less in revenue annually.\40\ This category includes, among others,
cable operators, direct broadcast satellite (``DBS'') services, home
satellite dish (``HSD'') services, multipoint distribution services
(``MDS''), multichannel multipoint distribution service (``MMDS''),
Instructional Television Fixed Service (``ITFS''), local multipoint
distribution service (``LMDS''), satellite master antenna television
(``SMATV'') systems, and open video systems (``OVS''). According to the
Census Bureau data, there are 1,311 total cable and other pay
television service firms that operate throughout the year of which
1,180 have less than $10 million in revenue.\41\ We address below each
service individually to provide a more precise estimate of small
entities.
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\40\ 13 CFR 121.201, NAICS code 517510 (formerly 513220). This
NAICS code applies to all services listed in this paragraph.
\41\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1997 Economic Census, Subject Series--
Establishment and Firm Size, Information Sector 51, Table 4 at 50
(2000). The amount of $10 million was used to estimate the number of
small business firms because the relevant Census categories stopped
at $9,999,999 and began at $10,000,000. No category for $12.5
million existed. Thus, the number is as accurate as it is possible
to calculate with the available information.
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6. Cable Operators. The Commission has developed, with SBA's
approval, our own definition of a small cable system operator for the
purposes of rate regulation. Under the Commission's rules, a ``small
cable company'' is one serving fewer than 400,000 subscribers
nationwide.\42\ We last estimated that there were 1,439 cable operators
that qualified as small cable companies.\43\ Since then, some of those
companies may have grown to serve over 400,000 subscribers, and others
may have been involved in transactions that caused them to be combined
with other cable operators. Consequently, we estimate that there are
fewer than 1,439 small entity cable system operators that may be
affected by our action.
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\42\ 47 CFR 76.901(e). The Commission developed this definition
based on its determinations that a small cable system operator is
one with annual revenues of $100 million or less. Sixth Report and
Order and Eleventh Order on Reconsideration, 10 FCC Rcd. 7393
(1995).
\43\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29,
1996 (based on figures for Dec. 30, 1995).
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7. The Communications Act, as amended, also contains a size
standard for a small cable system operator, which is ``a cable operator
that, directly or through an affiliate, serves in the aggregate fewer
than 1% of all subscribers in the United States and is not affiliated
with any entity or entities whose gross annual revenues in the
aggregate exceed $250,000,000.''\44\ The Commission has determined that
there are 65,000,000 subscribers in the United States. Therefore, an
operator serving fewer than 650,000 subscribers shall be deemed a small
operator if its annual revenues, when combined with the total annual
revenues of all of its affiliates, do not exceed $250 million in the
aggregate.\45\ Based on available data, we find that the number of
cable operators serving 650,000 subscribers or less totals
approximately 1,450.\46\ Although it seems certain that some of these
cable system operators are affiliated with entities whose gross annual
revenues exceed $250,000,000, we are unable at this time to estimate
with greater precision the number of cable system operators that would
qualify as small cable operators under the definition in the
Communications Act.
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\44\ 47 U.S.C. 543(m)(2).
\45\ 47 CFR 76.1403(b).
\46\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29,
1996 (based on figures for Dec. 30, 1995).
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8. Direct Broadcast Satellite (``DBS'') Service. Because DBS
provides subscription services, DBS falls within the SBA-recognized
definition of cable and other program distribution services.\47\ This
definition provides that a small entity is one with $12.5 million or
less in annual receipts.\48\ There are four licensees of DBS services
under part 100 of the Commission's rules. Three of those licensees are
currently operational. Two of the licensees that are operational have
annual revenues that may be in excess of the threshold for a small
business.\49\ The Commission, however, does not collect annual revenue
data for DBS and, therefore, is unable to ascertain the number of small
DBS licensees that could be impacted by these proposed rules. DBS
service requires a great investment of capital for operation, and we
acknowledge, despite the absence of specific data on this point, that
there are entrants in this field that may not yet have generated $12.5
million in annual receipts, and therefore may be categorized as a small
business, if independently owned and operated.
---------------------------------------------------------------------------
\47\ 13 CFR 121.201, NAICS code 517510 (formerly 513220).
\48\ Id.
\49\ Id.
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9. Home Satellite Dish (``HSD'') Service. Because HSD provides
subscription services, HSD falls within the SBA-recognized definition
of cable and other program distribution services.\50\ This definition
provides that a small entity is one with $12.5 million or less in
annual receipts.\51\ The market for HSD service is difficult to
quantify.\52\ Indeed, the service itself bears little resemblance to
other MVPDs. HSD owners have access to more than 265 channels of
programming placed on C-band satellites by programmers for receipt and
distribution by MVPDs, of which 115 channels are scrambled and
approximately 150 are unscrambled.\53\ HSD owners can watch unscrambled
channels without paying a subscription fee. To receive scrambled
channels, however, an HSD owner must purchase an integrated receiver-
decoder from an equipment dealer and pay a subscription fee to an HSD
programming package. Thus, HSD users include: (1) Viewers who subscribe
to a packaged programming service, which affords them access to most of
the same programming provided to subscribers of other MVPDs; (2)
viewers who receive only non-subscription programming; and (3) viewers
who receive satellite programming services illegally without
subscribing. Because scrambled packages of programming are most
specifically intended for retail
[[Page 19786]]
consumers, these are the services most relevant to this discussion.\54\
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\50\ 13 CFR 121.201, NAICS code 517510 (formerly 513220).
\51\ Id.
\52\ See, however, the census data for Cable and Other Program
Distribution, supra.
\53\ Annual Assessment of the Status of Competition in Markets
for the Delivery of Video Programming, 12 FCC Rcd 4358, 4385 (1996)
(``Third Annual Report'').
\54\ Id. at 4385.
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10. Satellite Master Antenna Television (``SMATV'') Systems. The
SBA definition of small entities for cable and other program
distribution services includes SMATV services and, thus, small entities
are defined as all such companies generating $12.5 million or less in
annual receipts.\55\ Industry sources estimate that approximately 5,200
SMATV operators were providing service as of December 1995.\56\56 Other
estimates indicate that SMATV operators serve approximately 1.5 million
residential subscribers as of July 2001.\57\ The best available
estimates indicate that the largest SMATV operators serve between
15,000 and 55,000 subscribers each. Most SMATV operators serve
approximately 3,000-4,000 customers. Because these operators are not
rate regulated, they are not required to file financial data with the
Commission. Furthermore, we are not aware of any privately published
financial information regarding these operators. Based on the estimated
number of operators and the estimated number of units served by the
largest ten SMATVs, we believe that a substantial number of SMATV
operators qualify as small entities.
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\55\ 13 CFR 121.201, NAICS code 517510 (formerly 513220).
\56\ See Third Annual Report, 12 FCC Rcd at 4403-4.
\57\ See Annual Assessment of the Status of Competition in
Markets for the Delivery of Video Programming, 17 FCC Rcd 1244, 1281
(2001) (``Eighth Annual Report'').
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11. Open Video Systems (``OVS''). Because OVS operators provide
subscription services,\58\ OVS falls within the SBA-recognized
definition of cable and other program distribution services.\59\ This
definition provides that a small entity is one with $12.5 million or
less in annual receipts.\60\ The Commission has certified 25 OVS
operators with some now providing service. Affiliates of Residential
Communications Network, Inc. (``RCN'') received approval to operate OVS
systems in New York City, Boston, Washington, DC and other areas. RCN
has sufficient revenues to assure us that they do not qualify as small
business entities. Little financial information is available for the
other entities authorized to provide OVS that are not yet operational.
Given that other entities have been authorized to provide OVS service
but have not yet begun to generate revenues, we conclude that at least
some of the OVS operators qualify as small entities.
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\58\ 58 See 47 U.S.C. 573.
\59\ 59 13 CFR 121.201, NAICS code 517510 (formerly 513220).
\60\ Id.
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12. Electronics Equipment Manufacturers. Rules adopted in this
proceeding could apply to manufacturers of DTV receiving equipment and
other types of consumer electronics equipment. The SBA has developed
definitions of small entity for manufacturers of audio and video
equipment \61\ as well as radio and television broadcasting and
wireless communications equipment.\62\ These categories both include
all such companies employing 750 or fewer employees. The Commission has
not developed a definition of small entities applicable to
manufacturers of electronic equipment used by consumers, as compared to
industrial use by television licensees and related businesses.
Therefore, we will utilize the SBA definitions applicable to
manufacturers of audio and visual equipment and radio and television
broadcasting and wireless communications equipment, since these are the
two closest NAICS Codes applicable to the consumer electronics
equipment manufacturing industry. However, these NAICS categories are
broad and specific figures are not available as to how many of these
establishments manufacture consumer equipment. According to the SBA's
regulations, an audio and visual equipment manufacturer must have 750
or fewer employees in order to qualify as a small business concern.\63\
Census Bureau data indicates that there are 554 U.S. establishments
that manufacture audio and visual equipment, and that 542 of these
establishments have fewer than 500 employees and would be classified as
small entities.\64\ The remaining 12 establishments have 500 or more
employees; however, we are unable to determine how many of those have
fewer than 750 employees and therefore, also qualify as small entities
under the SBA definition. Under the SBA's regulations, a radio and
television broadcasting and wireless communications equipment
manufacturer must also have 750 or fewer employees in order to qualify
as a small business concern.\65\ Census Bureau data indicates that
there 1,215 U.S. establishments that manufacture radio and television
broadcasting and wireless communications equipment, and that 1,150 of
these establishments have fewer than 500 employees and would be
classified as small entities.\66\ The remaining 65 establishments have
500 or more employees; however, we are unable to determine how many of
those have fewer than 750 employees and therefore, also qualify as
small entities under the SBA definition. We therefore conclude that
there are no more than 542 small manufacturers of audio and visual
electronics equipment and no more than 1,150 small manufacturers of
radio and television broadcasting and wireless communications equipment
for consumer/household use.
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\61\ 13 CFR 121.201, NAICS code 334310.
\62\ 13 CFR 121.201, NAICS code 334220.
\63\ 13 CFR 121.201, NAICS code 334310.
\64\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1997 Economic Census, Industry Series--
Manufacturing, Audio and Video Equipment Manufacturing, Table 4 at 9
(1999). The amount of 500 employees was used to estimate the number
of small business firms because the relevant Census categories
stopped at 499 employees and began at 500 employees. No category for
750 employees existed. Thus, the number is as accurate as it is
possible to calculate with the available information.
\65\ 13 CFR 121.201, NAICS code 334220.
\66\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1997 Economic Census, Industry Series--
Manufacturing, Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing, Table 4 at 9 (1999). The
amount of 500 employees was used to estimate the number of small
business firms because the relevant Census categories stopped at 499
employees and began at 500 employees. No category for 750 employees
existed. Thus, the number is as accurate as it is possible to
calculate with the available information.
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Wireline Competition Services and Related Entities
13. In this section, we further describe and estimate the number of
small entity licensees and regulatees that may be affected by rules
adopted herein. The most reliable source of information regarding the
total number of certain common carriers and related providers
nationwide, as well as the number of commercial wireless entities,
appears to be the data that the Commission publishes in its Trends in
Telephone Service report.\67\ The SBA has developed small business size
standards for wireline and wireless small businesses with three
commercial census categories of Wired Telecommunications Carriers,\68\
Paging,\69\ and Cellular and Other Wireless Telecommunications.\70\
Under these categories, a business is small if it has 1,500 or fewer
employees. Below, using the above size standards and others, we discuss
the total estimate
[[Page 19787]]
numbers of small businesses that might be affected by our actions.
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\67\ FCC, Wireline Competition Bureau, Industry Analysis and
Technology Division, Trends in Telephone Service, Table 5.3 (August
2003) (hereinafter Telephone Trends Report).
\68\ 13 CFR 121.201, North American Industry Classification
System (NAICS) code 513310 (changed to 517110 in October of 2002).
\69\ 13 CFR 121.201, NAICS code 513321 (changed to 517211 in
October of 2002).
\70\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
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14. We have included small incumbent local exchange carriers (LECs)
in this present RFA analysis. As noted above, a ``small business''
under the RFA is one that, inter alia, meets the pertinent small
business size standard (e.g., a telephone communications business
having 1,500 or fewer employees), and ``is not dominant in its field of
operation.'' \71\ The SBA's Office of Advocacy contends that, for RFA
purposes, small incumbent LECs are not dominant in their field of
operation because any such dominance is not ``national'' in scope.\72\
We have therefore included small incumbent LECs in this present RFA
analysis, although we emphasize that this RFA action has no effect on
the Commission's analyses and determinations in other, non-RFA
contexts.
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\71\ 5 U.S.C. 601(3).
\72\ See Letter from Jere W. Glover, Chief Counsel for Advocacy,
SBA, to Chairman William E. Kennard, FCC (May 27, 1999). The Small
Business Act contains a definition of ``small business concern,''
which the RFA incorporates into its own definition of ``small
business.'' See 5 U.S.C. 632(a) (Small Business Act); 5 U.S.C.
601(3) (RFA). SBA regulations interpret ``small business concern''
to include the concept of dominance on a national basis. 13 CFR
121.102(b).
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15. 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.\73\ According to Census Bureau data for 1997, there were
2,225 firms in this category, total, that operated for the entire
year.\74\ Of this total, 2,201 firms had employment of 999 or fewer
employees, and an additional 24 firms had employment of 1,000 employees
or more.\75\ Thus, under this size standard, the majority of firms can
be considered small.
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\73\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October 2002).
\74\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 513310 (issued October 2000).
\75\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
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16. Incumbent Local Exchange Carriers (ILECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to incumbent local exchange
services. The closest applicable size standard under the SBA rules is
for Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees.\76\ According to
Commission data, 1,337 carriers reported that they were engaged in the
provision of local exchange services.\77\ Of these 1,337 carriers, an
estimated 1,032 have 1,500 or fewer employees and 305 have more than
1,500 employees.\78\ Consequently, the Commission estimates that most
providers of local exchange service are small businesses that may be
affected by the rules and policies adopted herein.
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\76\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\77\ Telephone Trends Report at Table 5.3.
\78\ Id.
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17. Competitive Local Exchange Carriers (CLECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to providers of competitive local
exchange services or to competitive access providers or to ``Other
Local Exchange Carriers,'' all of which are discrete categories under
which Telecommunications Relay Service (TRS) data are collected. 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.\79\ According to
Commission data,\80\ 609 companies reported that they were engaged in
the provision of either competitive access provider services or
competitive local exchange carrier services. Of these 609 companies, an
estimated 458 have 1,500 or fewer employees and 151 have more than
1,500 employees.\81\ In addition, 51 carriers reported that they were
``Other Local Exchange Carriers.'' Of the 51 ``Other Local Exchange
Carriers,'' an estimated 50 have 1,500 or fewer employees and one has
more than 1.500 employees.\82\ Consequently, the Commission estimates
that most providers of competitive local exchange service, competitive
access providers, and ``Other Local Exchange Carriers'' are small
entities that may be affected by the rules and policies adopted herein.
---------------------------------------------------------------------------
\79\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\80\ Telephone Trends Report at Table 5.3.
\81\ Id.
\82\ Id.
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18. Local Resellers. The SBA has developed a size standard for
small businesses within the category of Telecommunications Resellers.
Under that SBA size standard, such a business is small if it has 1,500
or fewer employees.\83\ According to Commission data, 133 companies
reported that they were engaged in the provision of local resale
services.\84\ Of these 133 companies, an estimated 127 have 1,500 or
fewer employees and six, alone or in combination with affiliates, have
more than 1,500 employees.\85\ Consequently, the Commission estimates
that there are 127 or fewer local resellers that are small entities
that may be affected by the rules and policies proposed herein.
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\83\ 13 CFR 121.201, NAICS code 513330 (changed to 517310 in
October of 2002).
\84\ Telephone Trends Report at Table 5.3.
\85\ Id.
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19. Toll Resellers. The SBA has developed a size standard for small
businesses within the category of Telecommunications Resellers. Under
that SBA size standard, such a business is small if it has 1,500 or
fewer employees.\86\ According to Commission data, 625 companies
reported that they were engaged in the provision of toll resale
services.\87\ Of these 625 companies, an estimated 590 have 1,500 or
fewer employees and 35, alone or in combination with affiliates, have
more than 1,500 employees.\88\ Consequently, the Commission estimates
that there are 590 or fewer toll resellers that are small entities that
may be affected by the rules and policies proposed herein.
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\86\ 13 CFR 121.201, NAICS code 513330 (changed to 517310 in
October of 2002).
\87\ Telephone Trends Report at Table 5.3.
\88\ Id.
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20. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to interexchange services. The closest applicable size
standard under the SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\89\ According to Commission data, 261 companies
reported that their primary telecommunications service activity was the
provision of interexchange services.\90\ Of these 261 companies, an
estimated 223 have 1,500 or fewer employees and 38 have more than 1,500
employees.\91\ Consequently, the Commission estimates that the majority
of interexchange carriers are small entities that may be affected by
the rules and policies adopted herein.
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\89\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\90\ Telephone Trends Report at Table 5.3.
\91\ Id.
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21. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a size standard for small businesses specifically
applicable to payphone service providers. The closest applicable size
standard under the SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer
[[Page 19788]]
employees.\92\ According to Commission data, 761 companies reported
that they were engaged in the provision of payphone services.\93\ Of
these 761 payphone service providers, an estimated 757 have 1,500 or
fewer employees and four have more than 1,500 employees.\94\
Consequently, the Commission estimates that the majority of payphone
service providers are small entities that may be affected by the rules
and policies adopted herein.
---------------------------------------------------------------------------
\92\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\93\ Telephone Trends Report at Table 5.3.
\94\ Id.
---------------------------------------------------------------------------
22. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a size standard for small businesses specifically
applicable to operator service providers. The closest applicable size
standard under the SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\95\ According to Commission data, 23 companies
reported that they were engaged in the provision of operator
services.\96\ Of these 23 companies, an estimated 22 have 1,500 or
fewer employees and one has more than 1,500 employees.\97\
Consequently, the Commission estimates that the majority of operator
service providers are small entities that may be affected by the rules
and policies adopted herein.
---------------------------------------------------------------------------
\95\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\96\ Telephone Trends Report at Table 5.3.
\97\ Id.
---------------------------------------------------------------------------
23. Prepaid Calling Card Providers. The SBA has developed a size
standard for a small business within the category of Telecommunications
Resellers. Under that SBA size standard, such a business is small if it
has 1,500 or fewer employees.\98\ According to Commission data, 37
companies reported that they were engaged in the provision of prepaid
calling cards.\99\ Of these 37 companies, an estimated 36 have 1,500 or
fewer employees and one had more than 1,500 employees.\100\
Consequently, the Commission estimates that the majority of prepaid
calling card providers are small entities that may be affected by the
rules and policies adopted herein.
---------------------------------------------------------------------------
\98\ 13 CFR 121.201, NAICS code 513330 (changed to 517310 in
October of 2002).
\99\ Telephone Trends Report at Table 5.3.
\100\ Id.
---------------------------------------------------------------------------
24. Satellite Service Carriers. The SBA has developed a size
standard for small businesses within the category of Satellite
Telecommunications. Under that SBA size standard, such a business is
small if it has 1,500 or fewer employees.\101\ According to Commission
data, 34 carriers reported that they were engaged in the provision of
satellite services.\102\ Of these 34 carriers, an estimated 29 have
1,500 or fewer employees and five, alone or in combination with
affiliates, have more than 1,500 employees.\103\ Consequently, the
Commission estimates that there are 34 or fewer satellite service
carriers which are small businesses that may be affected by the rules
and policies proposed herein.
---------------------------------------------------------------------------
\101\ CFR 121.201, NAICS code 513340 (changed to 517410 in
October of 2002).
\102\ Telephone Trends Report at Table 5.3.
\103\ Id.
---------------------------------------------------------------------------
25. 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
the SBA rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer
employees.\104\ According to Commission data, 92 companies reported
that their primary telecommunications service activity was the
provision of ``Other Toll Services.''\105\ Of these 92 companies, an
estimated 82 have 1,500 or fewer employees and two have more than 1,500
employees.\106\ Consequently, the Commission estimates that most
``Other Toll Carriers'' are small entities that may be affected by the
rules and policies adopted herein.
---------------------------------------------------------------------------
\104\ 13 CFR 121.201, NAICS code 513310 (changed to 517110 in
October of 2002).
\105\ Telephone Trends Report at Table 5.3.
\106\ Id.
---------------------------------------------------------------------------
International Services
26. The Commission has not developed a definition of small entities
applicable to licensees in the international services. Therefore, the
applicable definition of small entity is generally the definition under
the SBA rules applicable to Communications Services, Not Elsewhere
Classified (NEC).\107\ This definition provides that a small entity is
expressed as one with $11.0 million or less in annual receipts.\108\
According to the Census Bureau, there were a total of 848
communications services providers, NEC, in operation in 1992, and a
total of 775 had annual receipts of less than $10.0 million.\109\ The
Census report does not provide more precise data.
---------------------------------------------------------------------------
\107\ An exception is the Direct Broadcast Satellite (DBS)
Service, infra.
\108\ 13 CFR 121.201, NAICS codes 48531, 513322, 51334, and
51339.
\109\ 1992 Economic Census Industry and Enterprise Receipts Size
Report, Table 2D, NAICS codes 48531, 513322, 51334, and 513391 (U.S.
Bureau of the Census data under contract to the Office of Advocacy
of the U.S. Small Business Administration).
---------------------------------------------------------------------------
27. International Broadcast Stations. Commission records show that
there are approximately 19 international high frequency broadcast
station authorizations. We do not request nor collect annual revenue
information, and are unable to estimate the number of international
high frequency broadcast stations that would constitute a small
business under the SBA definition. However, the Commission estimates
that only six international high frequency broadcast stations are
subject to regulatory fee payments.
28. International Public Fixed Radio (Public and Control Stations).
There is one licensee in this service subject to payment of regulatory
fees, and the licensee does not constitute a small business under the
SBA definition.
29. Fixed Satellite Transmit/Receive Earth Stations. There are
approximately 3,400 earth station authorizations, a portion of which
are Fixed Satellite Transmit/Receive Earth Stations. We do not request
nor collect annual revenue information, and are unable to estimate the
number of the earth stations that would constitute a small business
under the SBA definition.
30. Fixed Satellite Small Transmit/Receive Earth Stations. There
are approximately 3,400 earth station authorizations, a portion of
which are Fixed Satellite Small Transmit/Receive Earth Stations. We do
not request nor collect annual revenue information, and are unable to
estimate the number of fixed small satellite transmit/receive earth
stations that would constitute a small business under the SBA
definition.
31. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems.
These stations operate on a primary basis, and frequency coordination
with terrestrial microwave systems is not required. Thus, a single
``blanket'' application may be filed for a specified number of small
antennas and one or more hub stations. There are 485 current VSAT
System authorizations. We do not request nor collect annual revenue
information, and are unable to estimate the number of VSAT systems that
would constitute a small business under the SBA definition.
32. Mobile Satellite Earth Stations. There are 21 licensees. We do
not
[[Page 19789]]
request nor collect annual revenue information, and are unable to
estimate the number of mobile satellite earth stations that would
constitute a small business under the SBA definition.
33. Radio Determination Satellite Earth Stations. There are four
licensees. We do not request nor collect annual revenue information,
and are unable to estimate the number of radio determination satellite
earth stations that would constitute a small business under the SBA
definition.
34. Space Stations (Geostationary). There are presently an
estimated 77 Geostationary Space Station authorizations. We do not
request nor collect annual revenue information, and are unable to
estimate the number of geostationary space stations that would
constitute a small business under the SBA definition.
35. Space Stations (Non-Geostationary). There are presently five
Non-Geostationary Space Station authorizations. We do not request nor
collect annual revenue information, and are unable to estimate the
number of non-geostationary space stations that would constitute a
small business under the SBA definition.
36. Direct Broadcast Satellites. Because DBS provides subscription
services, DBS falls within the SBA-recognized definition of ``Cable and
Other Pay Television Services.'' \110\ This definition provides that a
small entity is one with $11.0 million or less in annual receipts.\111\
Currently, there are nine DBS authorizations, though there are only two
DBS companies in operation at this time. We do not request nor collect
annual revenue information for DBS services, and are unable to
determine the number of DBS operators that would constitute a small
business under the SBA definition.
---------------------------------------------------------------------------
\110\ 13 CFR 121.201, NAICS codes 51321 and 51322.
\111\ Id.
---------------------------------------------------------------------------
Media Services
37. Television Broadcasting. The Small Business Administration
defines a television broadcasting station that has no more than $12
million in annual receipts as a small business.\112\ Business concerns
included in this industry are those ``primarily engaged in broadcasting
images together with sound.'' \113\ According to Commission staff
review of the BIA Publications, Inc. Master Access Television Analyzer
Database as of May 16, 2003, about 814 of the 1,220 commercial
television stations in the United States have revenues of $12 million
or less. We note, however, that, in assessing whether a business
concern qualifies as small under the above definition, business
(control) affiliations \114\ must be included. Our estimate, therefore,
likely overstates the number of small entities that might be affected
by our action, because the revenue figure on which it is based does not
include or aggregate revenues from affiliated companies. There are also
2,127 low power television stations (LPTV).\115\ Given the nature of
this service, we will presume that all LPTV licensees qualify as small
entities under the SBA definition.
---------------------------------------------------------------------------
\112\ See OMB, North American Industry Classification System:
United States, 1997 at 509 (1997) (NAICS code 513120, which was
changed to code 515120 in October 2002).
\113\ OMB, North American Industry Classification System: United
States, 1997, at 509 (1997) (NAICS code 513120, which was changed to
code 51520 in October 2002). This category description continues,
``These establishments operate television broadcasting studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in
turn broadcast the programs to the public on a predetermined
schedule. Programming may originate in their own studios, from an
affiliated network, or from external sources.'' Separate census
categories pertain to businesses primarily engaged in producing
programming. See id. at 502-05, NAICS code 51210. Motion Picture and
Video Production: code 512120, Motion Picture and Video
Distribution, code 512191, Teleproduction and Other Post-Production
Services, and code 512199, Other Motion Picture and Video
Industries.
\114\ ``Concerns are affiliates of each other when one concern
controls or has the power to control the other or a third party or
parties controls or has the power to control both.'' 13 CFR
121.103(a)(1).
\115\ FCC News Release, ``Broadcast Station Totals as of
September 30, 2002.''
---------------------------------------------------------------------------
38. In addition, an element of the definition of ``small business''
is that the entity not be dominant in its field of operation. We are
unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its
field of operation. Accordingly, the estimate of small businesses to
which rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also as noted, an additional element of the
definition of ``small business'' is that the entity must be
independently owned and operated. We note that it is difficult at times
to assess these criteria in the context of media entities and our
estimates of small businesses to which they apply may be over-inclusive
to this extent.
39. Radio Broadcasting. The SBA defines a radio broadcast entity
that has $6 million or less in annual receipts as a small
business.\116\ Business concerns included in this industry are those
``primarily engaged in broadcasting aural programs by radio to the
public.\117\ According to Commission staff review of the BIA
Publications, Inc., Master Access Radio Analyzer Database, as of May
16, 2003, about 10,427 of the 10,945 commercial radio stations in the
United States have revenue of $6 million or less. We note, however,
that many radio stations are affiliated with much larger corporations
with much higher revenue, and that in assessing whether a business
concern qualifies as small under the above definition, such business
(control) affiliations \118\ are included.\119\ Our estimate, therefore
likely overstates the number of small businesses that might be affected
by our action.
---------------------------------------------------------------------------
\116\ See OMB, North American Industry Classification System:
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code
513111, which was changed to code 515112 in October 2002).
\117\ Id.
\118\ ``Concerns are affiliates of each other when one concern
controls or has the power to control the other, or a third party or
parties controls or has the power to control both.'' 13 CFR
121.103(a)(1).
\119\ ``SBA counts the receipts or employees of the concern
whose size is at issue and those of all its domestic and foreign
affiliates, regardless of whether the affiliates are organized for
profit, in determining the concern's size.'' 13 CFR 121(a)(4).
---------------------------------------------------------------------------
40. Auxiliary, Special Broadcast and Other Program Distribution
Services. This service involves a variety of transmitters, generally
used to relay broadcast programming to the public (through translator
and booster stations) or within the program distribution chain (from a
remote news gathering unit back to the station). The Commission has not
developed a definition of small entities applicable to broadcast
auxiliary licensees. The applicable definitions of small entities are
those, noted previously, under the SBA rules applicable to radio
broadcasting stations and television broadcasting stations.\120\
---------------------------------------------------------------------------
\120\ 13 CFR 121.201, NAICS codes 513111 and 513112.
---------------------------------------------------------------------------
41. The Commission estimates that there are approximately 3,790
translators and boosters. The Commission does not collect financial
information on any broadcast facility, and the Department of Commerce
does not collect financial information on these auxiliary broadcast
facilities. We believe that most, if not all, of these auxiliary
facilities could be classified as small businesses by themselves. We
also recognize that most commercial translators and boosters are owned
by a parent station which, in some cases, would be covered by the
revenue definition of small business entity discussed above. These
stations would likely have annual revenues that exceed the SBA maximum
to be designated as a small business ($5 million for a radio
[[Page 19790]]
station or $10.5 million for a TV station). Furthermore, they do not
meet the Small Business Act's definition of a ``small business
concern'' because they are not independently owned and operated.\121\
---------------------------------------------------------------------------
\121\ 15 U.S.C. 632.
---------------------------------------------------------------------------
Wireless and Commercial Mobile Services
42. Wireless Service Providers. The SBA has developed a small
business size standard for wireless firms within the two broad economic
census categories of Paging \122\ or Cellular and Other Wireless
Telecommunications.\123\ Under both of those SBA size standards, such a
business is small if it has 1,500 or fewer employees.\124\ For the
census category of Paging, Census Bureau data for 1997 show that there
were 1,320 firms in this category, total, that operated for the entire
year.\125\ Of this total, 1,303 firms had employment of 999 or fewer
employees, and an additional 17 firms had employment of 1,000 employees
or more.\126\ Thus, under this category and associated small business
size standard, the great majority of firms can be considered small. For
the census category of Cellular and Other Wireless Telecommunications
firms, Census Bureau data for 1997 show that there were 977 firms in
this category, total, that operated for the entire year.\127\ Of this
total, 965 firms had employment of 999 or fewer employees, and an
additional 12 firms had employment of 1,000 employees or more.\128\
Thus, under this second category and size standard, the great majority
of firms can, again, be considered small.
---------------------------------------------------------------------------
\122\ 13 CFR 121.201, NAICS code 513321 (changed to 517211 in
October of 2002).
\122\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
\124\ Id.
\125\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Employment Size of Firms Subject to Federal Income
Tax: 1997,'' Table 5, NAICS code 513321 (issued Oct. 2000).
\126\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
\127\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Employment Size of Firms Subject to Federal Income
Tax: 1997,'' Table 5, NAICS code 513322 (issued Oct. 2000).
\128\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
---------------------------------------------------------------------------
43. Broadband Personal Communications Service. The Broadband
Personal Communications Service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years.\129\ For Block F,
an additional classification for ``very small business'' was added and
is defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years.\130\ These standards defining ``small entity'' in the
context of broadband PCS auctions have been approved by the SBA.\131\
No small businesses within the SBA-approved small business size
standard bid successfully for licenses in Blocks A and B. There were 90
winning bidders that qualified as small entities in the Block C
auctions. A total of 93 small and very small business bidders won
approximately 40 percent of the 1,479 licenses for Blocks D, E, and
F.\132\ On March 23, 1999, the Commission re-auctioned 347 C, D, E, and
F Block licenses. There were 48 small business winning bidders. On
January 26, 2001, the Commission completed the auction of 422 C and F
Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in
this auction, 29 qualified as ``small'' or ``very small'' businesses.
Based on this information, the Commission concludes that the number of
small broadband PCS licensees will include the 90 winning C Block
bidders, the 93 qualifying bidders in the D, E, and F Block auctions,
the 48 winning bidders in the 1999 re-auction, and the 29 winning
bidders in the 2001 re-auction, for a total of 260 small entity
broadband PCS providers, as defined by the SBA small business size
standards and the Commission's auction rules. Consequently, the
Commission estimates that 260 broadband PCS providers are small
entities that may be affected by the rules and policies adopted herein.
---------------------------------------------------------------------------
\129\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap, WT Docket No. 96-59, Report and Order,
11 FCC Rcd 7824 paragraphs 57-60 (1996); See also 47 CFR 24.720(b).
\130\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap, WT Docket No. 96-59, Report and Order,
11 FCC Rcd 7824 paragraphs 57-60 (1996).
\131\ See, e.g., Implementation of Section 309(j) of the
Communications Act--Competitive Bidding, PP Docket No. 93-253, Fifth
Report and Order, 9 FCC Rcd 5532, 5581-84 paragraphs 115-17 (1994),
59 FR 37566 (July 22, 1994).
\132\ FCC News, Broadband PCS, D, E and F Block Auction Closes,
No. 71744 (rel. Jan. 14, 1997). See also Amendment of the
Commission's Rules Regarding Installment Payment Financing for
Personal Communications Services (PCS) Licenses, WT Docket No. 97-
82, Second Report and Order, 12 FCC Rcd 16436 (1997), 62 FR 55348
(Oct. 24,1997).
---------------------------------------------------------------------------
44. Narrowband Personal Communications Services. To date, five
auctions of narrowband personal communications services (PCS) licenses
have been conducted. The first two auctions, Auction No. 1
(``Nationwide Narrowband PCS Auction'') and Auction No. 3 (``Regional
Narrowband PCS Auction''), were held in 1994 and had only a one-tiered
small business size standard. ``Small businesses'' were entities with
average gross revenues for the prior three calendar years of $40
million or less. Through these first two auctions, the Commission
awarded 40 licenses,\133\ of which 11 were obtained by small
businesses. To ensure meaningful participation of small business
entities in future auctions, the Commission adopted a two-tiered small
business size standard in the Narrowband PCS Second Report and
Order.\134\ A ``small business'' is an entity that, together with
affiliates and controlling interests, has average annual gross revenues
for the three preceding years of not more than $40 million. A ``very
small business'' is an entity that, together with affiliates and
controlling interests, has average annual gross revenues for the three
preceding years of not more than $15 million. In 1998, the SBA approved
these small business size standards.\135\ In October of 2001, the
Commission held a narrowband PCS auction, Auction No. 41, and in
September of 2003, the Commission held two narrowband PCS auctions,
Auction No. 50 and Auction No. 51. Through these three auctions, 370
licenses were won, of which 364 were won by very small businesses.
Twelve of the 25 winning bidders in the five auctions were either small
or very small businesses (four of the fifteen winning bidders in the
two narrowband PCS auctions held in 1994 were small businesses, and
eight of the ten winning bidders in the three narrowband PCS auctions
held after 1998 were very small
[[Page 19791]]
businesses, as those terms were defined under the Commission's Rules).
---------------------------------------------------------------------------
\133\ An additional nationwide narrowband PCS license was
awarded pursuant to the Commission's pioneer's preference program,
which has expired. See In re Application of Nationwide Wireless
Network Corporation, 13 FCC Rcd 12914 (1998); In re Application of
Nationwide Wireless Network Corp., Memorandum Opinion and Order, 9
FCC Rcd 3635 (1994).
\134\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Docket No. ET 92-
100, Docket No. PP 93-253, Second Report and Order and Second
Further Notice of Proposed Rulemaking, 15 FCC RCD 10456 (2000), 65
FR 35875 (June 6, 2000).
\135\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, FCC, from
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
---------------------------------------------------------------------------
45. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, we apply the small business
size standard under the SBA rules applicable to ``Cellular and Other
Wireless Telecommunications'' companies. This standard provides that
such a company is small if it employs no more than 1,500 persons.\136\
According to Census Bureau data for 1997, there were 977 firms in this
category, total, that operated for the entire year.\137\ Of this total,
965 firms had employment of 999 or fewer employees, and an additional
12 firms had employment of 1,000 employees or more.\138\ If this
general ratio continues in the context of Phase I 220 MHz licensees,
the Commission estimates that nearly all such licensees are small
businesses under the SBA's small business size standard.
---------------------------------------------------------------------------
\136\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
\137\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Employment Size of Firms Subject to Federal Income
Tax: 1997,'' Table 5, NAICS code 513322 (issued Oct. 2000).
\138\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
---------------------------------------------------------------------------
46. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service, and is subject to spectrum auctions. In the 220 MHz
Third Report and Order, we adopted a small business size standard for
``small'' and ``very small'' businesses for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments.\139\ This small business size standard indicates
that a ``small business'' is an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $15 million for the preceding three years.\140\ A ``very
small business'' is an entity that, together with its affiliates and
controlling principals, has average gross revenues that do not exceed
$3 million for the preceding three years. The SBA has approved these
small business size standards.\141\ Auctions of Phase II licenses
commenced on September 15, 1998, and closed on October 22, 1998.\142\
In the first auction, 908 licenses were auctioned in three different-
sized geographic areas: Three nationwide licenses, 30 Regional Economic
Area Group (EAG) licenses, and 875 Economic Area (EA) licenses. Of the
908 licenses auctioned, 693 were sold. Thirty-nine small businesses won
licenses in the first 220 MHz auction. The second auction included 225
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies
claiming small business status won 158 licenses.\143\
---------------------------------------------------------------------------
\139\ 220 MHz Third Report and Order, 12 FCC Rcd 10943, 11068-
70, at paragraphs 291-295 (1997), 62 FR 16004 (Apr. 3, 1997).
\140\ Id., 12 FCC Rcd 10943, 11068-70, at paragraphs 291.
\141\ See letter to D. Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA (Jan. 6, 1998).
\142\ See generally Public Notice, ``220 MHz Service Auction
Closes,'' 14 FCC Rcd 605 (1998).
\143\ Public Notice, ``Phase II 220 MHz Service Spectrum Auction
Closes,'' 14 FCC Red 11218 (1999).
---------------------------------------------------------------------------
47. 800 MHz and 900 MHz Specialized Mobile Radio Licensees. The
Commission awards ``small entity'' and ``very small entity'' bidding
credits in auctions for Specialized Mobile Radio (SMR) geographic area
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of
no more than $15 million in each of the three previous calendar years,
or that had revenues of no more than $3 million in each of the previous
calendar years, respectively.\144\ These bidding credits apply to SMR
providers in the 800 MHz and 900 MHz bands that either hold geographic
area licenses or have obtained extended implementation authorizations.
The Commission does not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues.
The Commission assumes, for purposes here, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that term is defined by the SBA. The Commission has held
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR
bands. There were 60 winning bidders that qualified as small or very
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won
in the 900 MHz auction, bidders qualifying as small or very small
entities won 263 licenses. In the 800 MHz auction, 38 of the 524
licenses won were won by small and very small entities. Consequently,
the Commission estimates that there are 301 or fewer small entity SMR
licensees in the 800 MHz and 900 MHz bands that may be affected by the
rules and policies adopted.
---------------------------------------------------------------------------
\144\ 47 CFR 90.814(b)(1).
---------------------------------------------------------------------------
48. Common Carrier Paging. In the Paging Third Report and Order, we
developed a small business size standard for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments.\145\ A ``small business'' is an entity that, together with
its affiliates and controlling principals, has average gross revenues
not exceeding $15 million for the preceding three years. Additionally,
a ``very small business'' is an entity that, together with its
affiliates and controlling principals, has average gross revenues that
are not more than $3 million for the preceding three years. An auction
of Metropolitan Economic Area licenses commenced on February 24, 2000,
and closed on March 2, 2000.\146\ Of the 985 licenses auctioned, 440
were sold. Fifty-seven companies claiming small business status won. At
present, there are approximately 24,000 Private-Paging site-specific
licenses and 74,000 Common Carrier Paging licenses. According to
Commission data, 433 carriers reported that they were engaged in the
provision of either paging and messaging services or other mobile
services.\147\ Of those, the Commission estimates that 423 are small,
under the SBA business size standard specifying that firms are small if
they have 1,500 or fewer employees.\148\
---------------------------------------------------------------------------
\145\ 220 MHz Third Report and Order, 12 FCC Rcd 10943, 11068-
70, at paragraphs 291-295 (1997).
\146\ Revision of Part 22 and Part 90 of the Commission's Rules
to Facilitate Future Development of Paging Systems, WT Docket No.
96-18, Memorandum Opinion and Order on Reconsideration and Third
Report and Order, 14 FCC Rcd 10030, at paragraphs 98 (1999).
\147\ Trends in Telephone Service at Table 5.3.
\148\ Id. The SBA size standard is that of Paging, 13 CFR
121.201, NAICS code 517211.
---------------------------------------------------------------------------
49. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
we adopted a small business size standard for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments.\149\ A ``small business'' is an
[[Page 19792]]
entity that, together with its affiliates and controlling principals,
has average gross revenues not exceeding $15 million for the preceding
three years. Additionally, a ``very small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $3 million for the preceding
three years. An auction of 52 Major Economic Area (MEA) licenses
commenced on September 6, 2000, and closed on September 21, 2000.\150\
Of the 104 licenses auctioned, 96 licenses were sold to nine bidders.
Five of these bidders were small businesses that won a total of 26
licenses. A second auction of 700 MHz Guard Band licenses commenced on
February 13, 2001 and closed on February 21, 2001. All eight of the
licenses auctioned were sold to three bidders. One of these bidders was
a small business that won a total of two licenses.\151\
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\149\ See Service Rules for the 746-764 MHz Bands, and Revisions
to part 27 of the Commission's rules, WT Docket No. 99-168, Second
Report and Order, 15 FCC Rcd 5299 (2000), 65 FR 17599, April 4,
2000.
\150\ See generally Public Notice, ``220 MHz Service Auction
Closes,'' Report No. WT 98-36 (Wireless Telecommunications Bureau,
Oct. 23, 1998).
\151\ Public Notice, ``700 MHz Guard Band Auction Closes,'' DA
01-478 (released Feb. 22, 2001).
---------------------------------------------------------------------------
50. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small entities specific to the Rural Radiotelephone
Service.\152\ A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio Systems (BETRS).\153\ The
Commission uses the SBA's size standard applicable to ``Cellular and
Other Wireless Telecommunications,'' i.e., an entity employing no more
than 1,500 persons.\154\ There are approximately 1,000 licensees in the
Rural Radiotelephone Service, and the Commission estimates that almost
all of them qualify as small entities under the SBA's size standard.
Consequently, we estimate that there are 1,000 or fewer small entity
licensees in the Rural Radiotelephone Service that may be affected by
the rules and policies adopted herein.
---------------------------------------------------------------------------
\152\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\153\ BETRS is defined at 47 CFR 22.757, 22.759.
\154\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
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51. Air-Ground Radiotelephone Service. The Commission has not
adopted a small business size standard specific to the Air-Ground
Radiotelephone Service.\155\ We will use SBA's small business size
standard applicable to ``Cellular and Other Wireless
Telecommunications,'' i.e., an entity employing no more than 1,500
persons.\156\ There are approximately 100 licensees in the Air-Ground
Radiotelephone Service, and we estimate that almost all of them qualify
as small under the SBA small business size standard.
---------------------------------------------------------------------------
\155\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\156\ 13 CFR 121.201, NAICS codes 513322 (changed to 517212 in
October of 2002).
---------------------------------------------------------------------------
52. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category ``Cellular and Other
Telecommunications,'' which is 1,500 or fewer employees.\157\ Most
applicants for recreational licenses are individuals. Approximately
581,000 ship station licensees and 131,000 aircraft station licensees
operate domestically and are not subject to the radio carriage
requirements of any statute or treaty. For purposes of our evaluations
in this analysis, we estimate that there are up to approximately
712,000 licensees that are small businesses (or individuals) under the
SBA standard. In addition, between December 3, 1998 and December 14,
1998, the Commission held an auction of 42 VHF Public Coast licenses in
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz
(coast transmit) bands. For purposes of the auction, the Commission
defined a ``small'' business as an entity that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $15 million dollars. In
addition, a ``very small'' business is one that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $3 million dollars.\158\ There
are approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as ``small''
businesses under the above special small business size standards.
---------------------------------------------------------------------------
\157\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
\158\ Amendment of the Commission's rules Concerning Maritime
Communications, PR Docket No. 92-257, Third Report and Order and
Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).
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53. Fixed Microwave Services. Microwave services include common
carrier,\159\ private-operational fixed,\160\ and broadcast auxiliary
radio services.\161\ At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the SBA size standard for the
category ``Cellular and Other Telecommunications,'' which is 1,500 or
fewer employees.\162\ The Commission does not have data specifying the
number of these licensees that have more than 1,500 employees, and thus
is unable at this time to estimate with greater precision the number of
fixed microwave service licensees that would qualify as small business
concerns under the SBA's small business size standard. Consequently,
the Commission estimates that there are up to 22,015 common carrier
fixed microwave licensees and up to 61,670 private operational-fixed
microwave licensees and broadcast auxiliary radio licensees in the
microwave services that may be small and may be affected by the rules
and policies adopted herein. We note, however, that the common carrier
microwave fixed licensee category includes some large entities.
---------------------------------------------------------------------------
\159\ See 47 CFR 101, et seq. (formerly Part 21 of the
Commission's Rules) for common carrier fixed microwave services
(except Multipoint Distribution Service).
\160\ Persons eligible under parts 80 and 90 of the Commission's
rules can use Private Operational-Fixed Microwave services. See 47
CFR parts 80 and 90. Stations in this service are called
operational-fixed to distinguish them from common carrier and public
fixed stations. Only the licensee may use the operational-fixed
station, and only for communications related to the licensee's
commercial, industrial, or safety operations.
\161\ Auxiliary Microwave Service is governed by 47 CFR part 74.
This service is available to licensees of broadcast stations and to
broadcast and cable network entities. Broadcast auxiliary microwave
stations are used for relaying broadcast television signals from the
studio to the transmitter, or between two points such as a main
studio and an auxiliary studio. The service also includes mobile
television pickups, which relay signals from a remote location back
to the studio.
\162\ 13 CFR 121.201, NAICS codes 513322 (changed to 517212 in
October of 2002).
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54. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico.\163\ There are presently approximately 55 licensees in
this service. We are unable to estimate at this time the number of
licensees that
[[Page 19793]]
would qualify as small under the SBA's small business size standard for
``Cellular and Other Wireless Telecommunications'' services.\164\ Under
that SBA small business size standard, a business is small if it has
1,500 or fewer employees.\165\
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\163\ This service is governed by 47 CFR 22.1001-22.1037.
\164\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
\165\ Id.
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55. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission established small business size standards for the
wireless communications services (WCS) auction. A ``small business'' is
an entity with average gross revenues of $40 million for each of the
three preceding years, and a ``very small business'' is an entity with
average gross revenues of $15 million for each of the three preceding
years. The SBA has approved these small business size standards.\166\
---------------------------------------------------------------------------
\166\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, FCC, from
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
---------------------------------------------------------------------------
The Commission auctioned geographic area licenses in the WCS
service. In the auction, there were seven winning bidders that
qualified as ``very small business'' entities, and one that qualified
as a ``small business'' entity. We conclude that the number of
geographic area WCS licensees affected by this analysis includes these
eight entities.
56. 39 GHz Service. The Commission created a special small business
size standard for 39 GHz licenses--an entity that has average gross
revenues of $40 million or less in the three previous calendar
years.\167\ An additional size standard for ``very small business'' is:
An entity that, together with affiliates, has average gross revenues of
not more than $15 million for the preceding three calendar years.\168\
The SBA has approved these small business size standards.\169\ The
auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed
on May 8, 2000. The 18 bidders who claimed small business status won
849 licenses. Consequently, the Commission estimates that 18 or fewer
39 GHz licensees are small entities that may be affected by the rules
and polices adopted herein.
---------------------------------------------------------------------------
\167\ See Amendment of the Commission's Rules Regarding the
37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report
and Order, 12 FCC Rcd 18600 (1997).
\168\ Id.
\169\ See Letter to Kathleen O'Brien Ham, Chief, Auctions and
Industry Analysis Division, Wireless Telecommunications Bureau, FCC,
from Aida Alvarez, Administrator, SBA (Feb. 4, 1998).
---------------------------------------------------------------------------
57. Multipoint Distribution Service and Instructional Television
Fixed Service. Multipoint Distribution Service (MDS) systems, often
referred to as ``wireless cable,'' transmit video programming to
subscribers using the microwave frequencies of the Multipoint
Distribution Service (MDS) and Instructional Television Fixed Service
(ITFS).\170\ In connection with the 1996 MDS auction, the Commission
established a small business size standard as an entity that had annual
average gross revenues of less than $40 million in the previous three
calendar years.\171\ The MDS auctions resulted in 67 successful bidders
obtaining licensing opportunities for 493 Basic Trading Areas (BTAs).
Of the 67 auction winners, 61 met the definition of a small business.
MDS also includes licensees of stations authorized prior to the
auction. In addition, the SBA has developed a small business size
standard for Cable and Other Program Distribution, which includes all
such companies generating $12.5 million or less in annual
receipts.\172\ According to Census Bureau data for 1997, there were a
total of 1,311 firms in this category, total, that had operated for the
entire year.\173\ Of this total, 1,180 firms had annual receipts of
under $10 million and an additional 52 firms had receipts of $10
million or more but less than $25 million. Consequently, we estimate
that the majority of providers in this service category are small
businesses that may be affected by the rules and policies adopted
herein. This SBA small business size standard also appears applicable
to ITFS. There are presently 2,032 ITFS licensees. All but 100 of these
licenses are held by educational institutions. Educational institutions
are included in this analysis as small entities.\174\ Thus, we
tentatively conclude that at least 1,932 licensees are small
businesses.
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\170\ Amendment of parts 21 and 74 of the Commission's Rules
with Regard to Filing Procedures in the Multipoint Distribution
Service and in the Instructional Television Fixed Service and
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, MM Docket No. 94-131 and PP Docket No. 93-253,
Report and Order, 10 FCC Rcd 9589, 9593 paragraph 7 (1995).
\171\ 47 CFR 21.961(b)(1).
\172\ 13 CFR 121.201, NAICS code 513220 (changed to 517510 in
October of 2002).
\173\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization)'', Table 4, NAICS code 513220 (issued October 2000).
\174\ In addition, the term ``small entity'' within SBREFA
applies to small organizations (nonprofits) and to small
governmental jurisdictions (cities, counties, towns, townships,
villages, school districts, and special districts with populations
of less than 50,000). 5 U.S.C. 601(4)-(6). We do not collect annual
revenue data on ITFS licensees.
---------------------------------------------------------------------------
58. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video
telecommunications.\175\ The auction of the 1,030 Local Multipoint
Distribution Service (LMDS) licenses began on February 18, 1998 and
closed on March 25, 1998. The Commission established a small business
size standard for LMDS licenses as an entity that has average gross
revenues of less than $40 million in the three previous calendar
years.\176\ An additional small business size standard for ``very small
business'' was added as an entity that, together with its affiliates,
has average gross revenues of not more than $15 million for the
preceding three calendar years.\177\ The SBA has approved these small
business size standards in the context of LMDS auctions.\178\ There
were 93 winning bidders that qualified as small entities in the LMDS
auctions. A total of 93 small and very small business bidders won
approximately 277 A Block licenses and 387 B Block licenses. On March
27, 1999, the Commission re-auctioned 161 licenses; there were 40
winning bidders. Based on this information, we conclude that the number
of small LMDS licenses consists of the 93 winning bidders in the first
auction and the 40 winning bidders in the re-auction, for a total of
133 small entity LMDS providers.
---------------------------------------------------------------------------
\175\ See Local Multipoint Distribution Service, Second Report
and Order, 12 FCC Rcd 12545 (1997).
\176\ Id.
\177\ Id.
\178\ See Letter to Dan Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA (Jan. 6, 1998).
---------------------------------------------------------------------------
59. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years.\179\ In
the 218-219 MHz Report and Order and Memorandum Opinion and Order, we
established a small business size standard for a ``small business'' as
an entity that, together with its affiliates
[[Page 19794]]
and persons or entities that hold interests in such an entity and their
affiliates, has average annual gross revenues not to exceed $15 million
for the preceding three years.\180\ A ``very small business'' is
defined as an entity that, together with its affiliates and persons or
entities that hold interests in such an entity and its affiliates, has
average annual gross revenues not to exceed $3 million for the
preceding three years.\181\ We cannot estimate, however, the number of
licenses that will be won by entities qualifying as small or very small
businesses under our rules in future auctions of 218-219 MHz spectrum.
---------------------------------------------------------------------------
\179\ Implementation of section 309(j) of the Communications
Act--Competitive Bidding, PP Docket No. 93-253, Fourth Report and
Order, 9 FCC Rcd 2330 (1994), 59 FR 24947 (May 13, 1994).
\180\ Amendment of part 95 of the Commission's rules to Provide
Regulatory Flexibility in the 218-219 MHz Service, WT Docket No. 98-
169, Report and Order and Memorandum Opinion and Order, 15 FCC Rcd
1497 (1999), 64 FR 59656 (Nov. 3, 1999).
\181\ Id.
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60. 24 GHz--Incumbent Licensees. This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band,
and applicants who wish to provide services in the 24 GHz band. The
applicable SBA small business size standard is that of ``Cellular and
Other Wireless Telecommunications'' companies. This category provides
that such a company is small if it employs no more than 1,500
persons.\182\ According to Census Bureau data for 1997, there were 977
firms in this category, total, that operated for the entire year.\183\
Of this total, 965 firms had employment of 999 or fewer employees, and
an additional 12 firms had employment of 1,000 employees or more.\184\
Thus, under this size standard, the great majority of firms can be
considered small. These broader census data notwithstanding, we believe
that there are only two licensees in the 24 GHz band that were
relocated from the 18 GHz band, Teligent \185\ and TRW, Inc. It is our
understanding that Teligent and its related companies have less than
1,500 employees, though this may change in the future. TRW is not a
small entity. Thus, only one incumbent licensee in the 24 GHz band is a
small business entity.
---------------------------------------------------------------------------
\182\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October of 2002).
\183\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Employment Size of Firms Subject to Federal Income
Tax: 1997,'' Table 5, NAICS code 513322 (issued Oct. 2000).
\184\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
\185\ Teligent acquired the DEMS licenses of FirstMark, the only
licensee other than TRW in the 24 GHz band whose license has been
modified to require relocation to the 24 GHz band.
---------------------------------------------------------------------------
61. 24 GHz--Future Licensees. With respect to new applicants in the
24 GHz band, the small business size standard for ``small business'' is
an entity that, together with controlling interests and affiliates, has
average annual gross revenues for the three preceding years not in
excess of $15 million.\186\ ``Very small business'' in the 24 GHz band
is an entity that, together with controlling interests and affiliates,
has average gross revenues not exceeding $3 million for the preceding
three years.\187\ The SBA has approved these small business size
standards.\188\ These size standards will apply to the future auction,
if held.
---------------------------------------------------------------------------
\186\ Amendments to parts 1, 2, 87 and 1001 of the Commission's
rules to License Fixed Services at 24 GHz, Report and Order, 15 FCC
Rcd 16934, 16967 (2000), 65 FR 59350 (Oct. 5, 2000); see also 47 CFR
101.538(a)(2).
\187\ Id.
\188\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions
and Industry Analysis Division, Wireless Telecommunications Bureau,
FCC, from Gary M. Jackson, Assistant Administrator, SBA (July 28,
2000).
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62. Internet Service Providers. While internet service providers
(ISPs) are only indirectly affected by our present actions, and ISPs
are therefore not formally included within this present RFA, we have
addressed them informally to create a fuller record and to recognize
their participation in this proceeding. The SBA has developed a small
business size standard for Online Information Services, which consists
of all such companies having $21 million or less in annual
receipts.\189\ According to Census Bureau data for 1997, there were
2,751 firms in this category, total, that operated for the entire
year.\190\ Of this total, 2,659 firms had annual receipts of $9,999,999
or less, and an additional 67 had receipts of $10 million to
$24,999,999.\191\ Thus, under this size standard, the great majority of
firms can be considered small.
---------------------------------------------------------------------------
\189\ 13 CFR 121.201, NAICS code 514191 (changed to 518111 in
October of 2002).
\190\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Receipts Size of Firms Subject to Federal Income Tax:
1997,'' Table 4, NAICS code 514191 (issued October 2000).
\191\ Id.
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IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
63. With certain exceptions, the Commission's Schedule of
Regulatory Fees applies to all Commission licensees and regulatees.
Most licensees will be required to count the number of licenses or call
signs authorized, complete and submit an FCC Form 159 (``FCC Remittance
Advice''), and pay a regulatory fee based on the number of licenses or
call signs.\192\ Interstate telephone service providers must compute
their annual regulatory fee based on their interstate and international
end-user revenue using information they already supply to the
Commission in compliance with the Form 499-A, Telecommunications
Reporting Worksheet, and they must complete and submit the FCC Form
159. Compliance with the fee schedule will require some licensees to
tabulate the number of units (e.g., cellular telephones, pagers, cable
TV subscribers) they have in service, and complete and submit an FCC
Form 159. Licensees ordinarily will keep a list of the number of units
they have in service as part of their normal business practices. No
additional outside professional skills are required to complete the FCC
Form 159, and it can be completed by the employees responsible for an
entity's business records.
---------------------------------------------------------------------------
\192\ The following categories are exempt from the Commission's
Schedule of Regulatory Fees: Amateur radio licensees (except
applicants for vanity call signs) and operators in other non-
licensed services (e.g., Personal Radio, part 15, ship and
aircraft). Governments and non-profit (exempt under section 501(c)
of the Internal Revenue Code) entities are exempt from payment of
regulatory fees and need not submit payment. Non-commercial
educational broadcast licensees are exempt from regulatory fees as
are licensees of auxiliary broadcast services such as low power
auxiliary stations, television auxiliary service stations, remote
pickup stations and aural broadcast auxiliary stations where such
licenses are used in conjunction with commonly owned non-commercial
educational stations. Emergency Alert System licenses for auxiliary
service facilities are also exempt as are instructional television
fixed service licensees. Regulatory fees are automatically waived
for the licensee of any translator station that: (1) Is not licensed
to, in whole or in part, and does not have common ownership with,
the licensee of a commercial broadcast station; (2) does not derive
income from advertising; and (3) is dependent on subscriptions or
contributions from members of the community served for support.
Receive only earth station permittees are exempt from payment of
regulatory fees. A regulatee will be relieved of its fee payment
requirement if its total fee due, including all categories of fees
for which payment is due by the entity, amounts to less than $10.
---------------------------------------------------------------------------
64. Each licensee must submit the FCC Form 159 to the Commission's
lockbox bank after computing the number of units subject to the fee.
Licensees may also file electronically to minimize the burden of
submitting multiple copies of the FCC Form 159. Applicants who pay
small fees in advance and provide fee information as part of their
application must use FCC Form 159.
65. Licensees and regulatees are advised that failure to submit the
required regulatory fee in a timely manner will subject the licensee or
regulatee to a late payment penalty of 25
[[Page 19795]]
percent in addition to the required fee.\193\ If payment is not
received, new or pending applications may be dismissed, and existing
authorizations may be subject to rescission.\194\ Further, in
accordance with the Debt Collection Improvement Act of 1996, federal
agencies may bar a person or entity from obtaining a federal loan or
loan insurance guarantee if that person or entity fails to pay a
delinquent debt owed to any federal agency.\195\ Nonpayment of
regulatory fees is a debt owed the United States pursuant to 31 U.S.C.
3711 et seq., and the Debt Collection Improvement Act of 1996, Public
Law 194-134. Appropriate enforcement measures as well as administrative
and judicial remedies, may be exercised by the Commission. Debts owed
to the Commission may result in a person or entity being denied a
federal loan or loan guarantee pending before another federal agency
until such obligations are paid.\196\
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\193\ 47 CFR 1.1164.
\194\ 47 CFR 1.1164(c).
\195\ Public Law 104-134, 110 Stat. 1321 (1996).
\196\ 31 U.S.C. 7701(c)(2)(B).
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66. The Commission's rules currently provide for relief in
exceptional circumstances. Persons or entities may request a waiver,
reduction or deferment of payment of the regulatory fee.\197\ However,
timely submission of the required regulatory fee must accompany
requests for waivers or reductions. This will avoid any late payment
penalty if the request is denied. The fee will be refunded if the
request is granted. In exceptional and compelling instances (where
payment of the regulatory fee along with the waiver or reduction
request could result in reduction of service to a community or other
financial hardship to the licensee), the Commission will defer payment
in response to a request filed with the appropriate supporting
documentation.
---------------------------------------------------------------------------
\197\ 47 CFR 1.1166.
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V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
67. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives: (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. As described in Section III of this FRFA, supra, we have
created procedures in which all fee-filing licensees and regulatees use
a single form, FCC Form 159, and have described in plain language the
general filing requirements. We have sought comment on other
alternatives that might simplify our fee procedures or otherwise
benefit small entities, while remaining consistent with our statutory
responsibilities in this proceeding.
68. The Omnibus Appropriations Act for FY 2003, Public Law 108-7,
requires the Commission to revise its Schedule of Regulatory Fees in
order to recover the amount of regulatory fees that Congress, pursuant
to section 9(a) of the Communications Act, as amended, has required the
Commission to collect for Fiscal Year (FY) 2004.\198\ As noted, we seek
comment on the proposed methodology for implementing these statutory
requirements and any other potential impact of these proposals on small
entities.
---------------------------------------------------------------------------
\198\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------
69. We have previously used cost accounting data for computation of
regulatory fees, but found that some fees which were very small in
previous years would have increased dramatically and would have a
disproportionate impact on smaller entities. The methodology we are
proposing in this Notice of Proposed Rulemaking minimizes this impact
by limiting the amount of increase and shifting costs to other services
which, for the most part, are larger entities.
70. Several categories of licensees and regulatees are exempt from
payment of regulatory fees. See, e.g., footnote 199, supra.
VI. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
71. None.
Attachment B--Sources of Payment Unit Estimates for FY 2004
In order to calculate individual service fees for FY 2004, we
adjusted FY 2003 payment units for each service to more accurately
reflect expected FY 2004 payment liabilities. We obtained our updated
estimates through a variety of means. For example, we used Commission
licensee data bases, actual prior year payment records and industry and
trade association projections when available. The databases we
consulted include the Commission's Universal Licensing System (ULS),
International Bureau Filing System (IBFS), and Consolidated Database
System. The industry sources we consulted include, but are not limited
to, Television & Cable Factbook by Warren Publishing, Inc. and the
Broadcasting and Cable Yearbook by Reed Elsevier, Inc, as well as
reports generated within the Commission such as the Wireline
Competition Bureau's Trends in Telephone Service and the Wireless
Telecommunications Bureau's Numbering Resource Utilization Forecast.
We tried to obtain verification for these estimates from multiple
sources and, in all cases; we compared FY 2004 estimates with actual FY
2003 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
exactly. These include an unknown number of waivers and/or exemptions
that may occur in FY 2004 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. Therefore, when we
note, for example, that our estimated FY 2004 payment units are based
on FY 2003 actual payment units, it does not necessarily mean that our
FY 2004 projection is exactly the same number as FY 2003. It means that
we have either rounded the FY 2004 number or adjusted it slightly to
account for these variables.
BILLING CODE 6712-04-P
[[Page 19796]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.000
[[Page 19797]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.001
[[Page 19798]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.002
[[Page 19799]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.003
[[Page 19800]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.004
[[Page 19801]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.005
[[Page 19802]]
[GRAPHIC] [TIFF OMITTED] TP14AP04.006
Attachment E--Factors, Measurements and Calculations That Go Into
Determining Station Signal Contours and Associated Population Coverages
AM Stations
For stations with nondirectional daytime antennas, the theoretical
radiation was used at all azimuths. For stations with directional
daytime antennas, specific information on each day tower, including
field ratio, phasing, spacing and orientation was retrieved, as well as
the theoretical pattern root-mean-square of the radiation in all
directions in the horizontal plane (RMS) figure milliVolt per meter
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.\199\ 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.\200\ Using the
calculated horizontal radiation values, and the retrieved soil
conductivity data, the distance to the city grade (5 mV/m) contour was
predicted for each of the 360 radials. The resulting distance to city
grade contours were used to form a geographical polygon. Population
counting was accomplished by determining which 2000 block centroids
were contained in the polygon. (A block centroid is the center point of
a small area containing population as computed by the U.S. Census
Bureau.) The sum of the population figures for all enclosed blocks
represents the total population for the predicted city grade coverage
area.
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\199\ 47 CFR 73.150 and 73.152.
\200\ See Map of Estimated Effective Ground Conductivity in the
United States, 47 CFR 73.190 Figure R3.
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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 city grade (70 dBu (decibel above 1 microVolt per
meter) or 3.17 mV/m) contour for each of the 360 radials.\201\ The
resulting distance to city grade contours were used to form a
geographical polygon. Population counting was accomplished by
determining which 2000 block centroids were contained in the polygon.
The sum of the population figures for all enclosed blocks represents
the total population for the predicted city grade coverage area.
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\201\ 47 CFR 73.313.
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Attachment F--FY 2003 Schedule of Regulatory Fees
[[Page 19803]]
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[[Page 19804]]
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[[Page 19805]]
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[FR Doc. 04-8260 Filed 4-13-04; 8:45 am]
BILLING CODE 6712-04-C