[Federal Register: May 2, 2007 (Volume 72, Number 84)]
[Proposed Rules]
[Page 24213-24238]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my07-14]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 07-81; FCC 07-55]
Assessment and Collection of Regulatory Fees For Fiscal Year 2007
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 2007. 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 May 3, 2007, and reply comments are due May 11,
2007.
ADDRESSES: You may submit comments, identified by MD Docket No. 07-81,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs.
Follow the instructions for submitting comments. E-mail: ecfs@fcc.gov. Include MD Docket No. 07-81 in the
subject line of the message.
Mail: Commercial overnight mail (other than U.S. Postal
Service Express Mail, and Priority Mail, must be sent to 9300 East
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th
Street, SW., Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444 or Rob Fream, Office of Managing Director at
(202) 418-0408.
SUPPLEMENTARY INFORMATION:
Adopted: April 16, 2007.
Released: April 18, 2007.
By the Commission:
Table of Contents
Paragraph
Heading number
I. Introduction............................................ 1
II. Discussion............................................. 2
A. FY 2007 Regulatory Fee Assessment Methodology....... 4
1. Development of FY 2007 Regulatory Fees.......... 4
[[Page 24214]]
a. Calculation of Revenue and Fee Requirements. 4
b. Additional Adjustments to Payment Units..... 5
2. Commercial Mobile Radio Service (CMRS) Messaging 7
Service...........................................
3. Broadband Radio Service (BRS)/Educational 8
Broadband Service (EBS)...........................
4. International Bearer Circuits................... 9
5. Interconnected Voice over Internet Protocol 10
Service Providers.................................
B. Administrative and Operational Issues............... 11
1. Use of Fee Filer................................ 12
2. Proposals for Notification and Collection of 13
Regulatory Fees...................................
a. Interstate Telecommunications Service 15
Providers (ITSPs).............................
b. Satellite Space Station Licensees........... 17
c. Additional Service Categories for Billing... 19
d. Media Services Licensees.................... 20
e. Commercial Mobile Radio Service (CMRS) 23
Cellular and Mobile Services Assessments......
f. Cable Television Subscribers................ 28
3. Streamlined Regulatory Fee Payment Process for 30
Commercial Mobile Radio Service (CMRS) Cellular
and Mobile Providers..............................
4. Future Streamlining of the Regulatory Fee 32
Assessment and Collection Process.................
III. Procedural Matters.................................... 33
A. Payment of Regulatory Fees.......................... 33
1. De Minimis Fee Payment Liability................ 33
2. Standard Fee Calculations and Payment Dates..... 34
B. Enforcement......................................... 35
C. Initial Regulatory Flexibility Analysis............. 37
D. Initial Paperwork Reduction Act of 1995 Analysis.... 38
E. Ex Parte Rules...................................... 39
F. Filing Requirements................................. 40
IV. Ordering Clauses....................................... 45
Attachments:
Attachment A Initial Regulatory Flexibility Analysis
Attachment B Sources of Payment Unit Estimates for FY 2007
Attachment C Calculation of Revenue Requirements and Pro-
Rata Fees
Attachment D Proposed FY 2007 Schedule of Regulatory Fees
Attachment E Factors, Measurements, and Calculations that
Determine Station Contours and Population Coverages
Attachment F FY 2006 Schedule of Regulatory Fees
I. Introduction
1. In this Notice of Proposed Rulemaking (NPRM), we propose to
collect $290,295,160 in regulatory fees for Fiscal Year (FY) 2007,
pursuant to section 9 of the Communications Act of 1934, as amended
(the Act). These fees are mandated by Congress and are collected to
recover the regulatory costs associated with the Commission's
enforcement, policy and rulemaking, user information, and international
activities.\1\
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\1\ 47 U.S.C. 159(a).
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II. Discussion
2. In this NPRM, we seek comment on the development of FY 2007
regulatory fees collected pursuant to section 9 of the Act. For FY
2007, we tentatively propose to retain the established methods and
policies that the Commission has used to collect section 9 regulatory
fees since FY 2003. In addition to seeking comment on the assessment
methodology, the Commission typically seeks comment on various
administrative and operational issues affecting the collection of
regulatory fees. For the FY 2007 regulatory fee cycle, we propose to
retain the vast majority of the administrative measures used for
notification, assessment and pre-billing of regulatory fees in previous
years, such as generating pre-completed regulatory fee assessment forms
for certain regulatees. Consistent with past practice, we seek comment
on ways to improve the Commission's administrative processes for
notifying entities of their regulatory fee obligations and collecting
their payments. Finally, we seek comment on applying the same
regulatory fee obligations applicable to interstate telecommunications
providers to providers of interconnected voice over Internet Protocol
services.
3. The Commission is obligated to collect $290,295,160 in
regulatory fees during FY 2007 to fund the Commission's operations.
Consistent with our established practice, we intend to collect these
regulatory fees in the August-September 2007 time frame in order to
collect the required amount by the end of the fiscal year.
A. FY 2007 Regulatory Fee Assessment Methodology
1. Development of FY 2007 Regulatory Fees
a. Calculation of Revenue and Fee Requirements
4. For our FY 2007 regulatory fee assessment, we propose to use
essentially the same section 9 regulatory fee assessment methodology
adopted for FY 2006. Each fiscal year, the Commission proportionally
allocates the total amount that must be collected via section 9
regulatory fees. The results of our proposed FY 2007 regulatory fee
assessment methodology (including a comparison to the prior year's
results) are contained in Appendix C. For FY 2007, we propose to use
the receipts collected through the FY 2006 regulatory fees as the basis
for calculating the amount the Commission must collect in FY 2007. To
collect the $290,295,160 required by law, we propose to adjust the FY
2006 amount downward by approximately 2.84 percent.\2\ Consistent with
past practice,
[[Page 24215]]
we propose to divide the FY 2007 amount by the number of payment units
in each fee category to determine the unit fee.\3\ As in prior years,
for cases involving small fees (e.g., licenses that are renewed over a
multiyear term), we propose to divide the resulting unit fee by the
term of the license. We propose to round these unit fees consistent
with the requirements of section 9(b)(2).
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\2\ The percentage decrease of approximately 2.84 percent is
based on the total amount of regulatory fees that was mandated by
Congress to be collected in FY 2006, which included an amount of
$288,771,000 in regulatory fees pursuant to section 9 of the
Communications Act of 1934, as amended, and an additional
$10,000,000 as required by section 3013 of the Deficit Reduction Act
(Public Law 109-171). Together, the total amount of regulatory fees
mandated by Congress to be collected in FY 2006 was $298,771,000.
Also, the decrease in regulatory fee payments of approximately 2.84
percent in FY 2007 is reflected in the revenue that is expected to
be collected from each service category. Because this expected
revenue is adjusted each year by the number of estimated payment
units in a service category, and then adjusted for rounding, the
actual fee will likely differ by an amount more or less than 2.84
percent. For example, in industries where the number of payment
units is declining, the per-unit regulatory fee amount for FY 2007
may actually be more than the amount for FY 2006.
\3\ In many instances, the regulatory fee amount is a flat fee
per licensee or regulatee. However, in some instances the fee amount
represents a per-unit fee (such as for International Bearer
Circuits), a per-unit subscriber fee (such as for Cable, Commercial
Mobile Radio Service (CMRS) Cellular/Mobile and CMRS Messaging), or
a fee factor per revenue dollar (Interstate Telecommunications
Service Provider fee). The payment unit is the measure upon which
the fee is based, such as a licensee, regulatee, subscriber fee,
etc.
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b. Additional Adjustments to Payment Units
5. In calculating the FY 2007 regulatory fees proposed in
Attachment D, we further adjusted the FY 2006 list of payment units
(Attachment B) based upon licensee databases and industry and trade
group projections. Whenever possible, we verified these estimates from
multiple sources to ensure the accuracy of these estimates. In some
instances, Commission licensee databases were used, while in other
instances, actual prior year payment records and/or industry and trade
association projections were used in determining the payment unit
counts.\4\ Where appropriate, we adjusted and/or rounded our final
estimates to take into consideration events that may impact the number
of units for which regulatees submit payment, such as waivers and/or
exemptions that may be filed in FY 2007, and fluctuations in the number
of licensees or station operators due to economic, technical, or other
reasons. Therefore, when we state that our estimated FY 2007 payment
units are based on FY 2006 actual payment units, the number may have
been rounded or adjusted 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), Consolidated Database System (CDBS) and
Cable Operations and Licensing System (COALS). We also consulted
industry sources including, but not limited to, Television & Cable
Factbook by Warren Publishing, Inc. and the Broadcasting and Cable
Yearbook by Reed Elsevier, Inc., as well as reports generated within
the Commission such as the Wireline Competition Bureau's Trends in
Telephone Service and the Wireless Telecommunications Bureau's
Numbering Resource Utilization Forecast and Annual CMRS Competition
Report. For additional information on source material, see
Attachment B.
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6. Additional factors are considered in determining regulatory fees
for AM and FM radio stations. These factors are facility attributes and
the population served by the radio station. The calculation of the
population served is determined by coupling current U.S. Census Bureau
data with technical and engineering data, as detailed in Attachment E.
Consequently, the population served, as well as the class and type of
service (AM or FM), determines the regulatory fee amount to be paid.\5\
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\5\ In addition, beginning in FY 2005, we established a
procedure by which we set regulatory fees for AM and FM radio and
VHF and UHF television Construction Permits each year at an amount
no higher than the lowest regulatory fee in that respective service
category. For example, the regulatory fee for a Construction Permit
for an AM radio station will never be more than the regulatory fee
for an AM Class C radio station serving a population of less than
25,000.
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2. Commercial Mobile Radio Service (CMRS) Messaging Service
7. Since FY 2003, the Commission has maintained the CMRS Messaging
regulatory fee at the rate that was established in FY 2002 (i.e., $0.08
per subscriber) to account for the messaging industry's declining
subscriber base.\6\ We note that between FY 1997 and FY 2006, the CMRS
Messaging subscriber base declined 79.7 percent from 40.8 million to
8.3 million, respectively.\7\ We propose to continue the same approach
for regulatory fees applicable to the messaging industry in FY 2007,
thereby maintaining the industry's regulatory fee at $0.08 per
subscriber. We seek comment on this proposal.
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\6\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, MD Docket No. 03-83, Report and Order, 18 FCC Rcd 15985,
15992, para. 21 (2003).
\7\ The 40.8 million number represents a unit estimate from
Assessment and Collection of Regulatory Fees for Fiscal Year 1997,
MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161 (1997), and
the 8.3 million figure represents the number of paid units as of
fiscal year end 2006.
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3. Broadband Radio Service (BRS)/Educational Broadband Service (EBS)
8. Recently, the Commission adopted a megahertz-based formula for
BRS licensees with tiered fees by markets, similar to but more complex
than the Commission's annual scale of regulatory fees paid by broadcast
television stations.\8\ According to this formula, annual fees will be
charged on a per-megahertz basis based upon three categories of Basic
Trading Areas (BTA) population rankings: \9\ Licensees in BTA rankings
1-60 will pay the highest fee, licensees in BTA rankings 61-200 will
pay a lesser fee, and licensees in BTA rankings 201-493 will pay the
lowest fee.\10\ Because this formula is complex, we are assessing the
impact of this methodology (using a per-megahertz formula and a BTA
populating ranking) on the manner in which regulatory fees are
calculated for this class of licensees. We seek comment on how to
devise a simple method of calculating regulatory fees that incorporates
BTA population rankings and a per-megahertz fee for future fiscal
years. We specifically seek comment on a formula for calculating
regulatory fees that not only incorporates BTAs and a per-megahertz
fee, but a formula that is also sensitive to rural operators in less
densely populated areas. We seek comment on this proposal. Due to the
complexities mentioned above and the need for detailed analysis,
however, we will not implement any such changes for FY 2007.
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\8\ 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, Order on Reconsideration and
Fifth Memorandum Opinion and Order and Third Memorandum Opinion and
Order and Second Report and Order, 21 FCC Rcd 5606, 5756-5759,
paras. 367-376 (2006) (BRS/EBS Second Report and Order).
\9\ For BRS licensees that are licensed by geographic licensed
service area (GSA), the BTA is the geographic center point of where
its GSA is located.
\10\ BRS/EBS Second Report and Order, 21 FCC Rcd 5759, para.
376. (Generally, BTAs ranked 1-60 have a population greater than 1
million, BTAs ranked 61-200 have a population 250,000 to 1 million,
and BTAs ranked 201-493 have a population of less than 250,000.)
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4. International Bearer Circuits
9. On February 6, 2006, VSNL Telecommunications (US) Inc. (VSNL)
filed a Petition for Rulemaking urging the Commission to modify the
current international bearer circuit fee rules and policies as applied
to non-common carrier (i.e., private) submarine cable operators.\11\ We
issued a Public Notice designating the proceeding as RM-11312 and
requesting comment on the
[[Page 24216]]
Petition.\12\ We continue to review the record in that proceeding.
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\11\ See Petition for Rulemaking of VSNL Telecommunications (US)
Inc., RM-11312 (filed Feb. 6, 2006) (VSNL Petition).
\12\ See Consumer and Governmental Affairs Bureau, Reference
Information Center, Public Notice, Report No. 2759 (rel. Feb. 15,
2006).
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5. Interconnected Voice Over Internet Protocol Service Providers
10. We tentatively conclude that providers of interconnected voice
over Internet Protocol (``VoIP'') service \13\ should pay regulatory
fees. During FY 2006, the Commission concluded that providers of
interconnected VoIP services should contribute to the Universal Service
Fund.\14\ Based on section 9's broad mandate that the Commission
``assess and collect regulatory fees to recover the costs'' of
regulatory activities \15\ and our analysis in the 2006 Interim
Contribution Methodology Order, we tentatively conclude that the
Commission has the legal authority to extend regulatory fee obligations
to interconnected VoIP service providers.\16\ We seek comment on
whether we should assess regulatory fees on providers of interconnected
VoIP services based on their revenue, which would be consistent with
the regulatory fee methodology used for interstate telecommunications
service providers, or whether we should assess regulatory fees using a
numbers-based approach, which would be consistent with the methodology
used for CMRS providers.
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\13\ See 47 CFR 9.3 for the definition of interconnected VoIP
service.
\14\ See Universal Service Contribution Obligations for
Providers of Interconnected Voice Over Internet Protocol (VoIP)
Service, WC Docket No. 06-122, Report and Order and Notice of
Proposed Rulemaking, 21 FCC Rcd 7518, 7541, para. 46 (2006) (2006
Interim Contribution Methodology Order).
\15\ 47 U.S.C. 159(1).
\16\ See 2006 Interim Contribution Methodology Order 21 FCC Rcd
at 7541, paras. 46-47 (finding that Title I gives the Commission
subject matter jurisdiction over interconnected VoIP services and
that imposition of a universal service contribution obligation is
reasonably ancillary to effective performance of the Commission's
obligations under section 254 of the Act). Here, the regulatory fee
obligation would be reasonably ancillary to the Commission's
obligations under section 9 of the Act.
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B. Administrative and Operational Issues
11. We seek comment on the administrative and operational processes
used to collect the annual section 9 regulatory fees. Although these
issues do not affect the amount of regulatory fees parties are
obligated to submit, the administrative and operational issues affect
the process of submitting payment. We invite comment on ways to improve
these processes.
1. Use of Fee Filer
12. We continue to encourage regulatees to use the Commission's
online electronic Fee Filer application. Using the Commission's Fee
Filer application reduces paperwork burdens on payors because it
eliminates the need to file a FCC Form 159. Regulatees submitting more
than twenty-five (25) Form 159-Cs are strongly encouraged to use Fee
Filer when sending their regulatory fee payment. We note that Fee Filer
will accept credit card payments of up to $99,999.99.
2. Proposals for Notification and Collection of Regulatory Fees
13. In this section, we seek comment on the administrative
processes that the Commission uses to notify regulatees and collect
regulatory fees. Each year, we generate public notices and fact sheets
that notify regulatees of the fee payment due date and provide
additional information regarding regulatory fee payment procedures.
Consistent with our established practice, we propose to provide public
notices, fact sheets and all other relevant material on our Web site at
http://www.fcc.gov/fees/regfees.html for the FY 2007 regulatory fee
cycle. Regulatees are then expected to pay their yearly regulatory fees
by filing FCC Form 159 or by accessing the Commission's Fee Filer web
application. As a general practice, we will not send regulatory fee
material to regulatees via surface mail. However, in the event that
regulatees do not have access to the Internet, we will mail public
notices and other relevant material upon request. Regulatees and the
general public may request such information by contacting the FCC
Financial Operations HelpDesk at (877) 480-3201, Option 4. We seek
comment on ways to improve our administrative processes.
14. As discussed above, we do not send public notices and fact
sheets to regulatees en masse. We propose, however, to continue to send
specific regulatory fee pre-bills or assessment notifications via
surface mail to the select fee categories discussed below.\17\ Pre-
bills are hardcopy billing statements that the Commission mails to
certain regulatees. Currently, the Commission only sends pre-bills to
interstate telecommunications service providers (ITSPs) and satellite
space station licensees. The remaining regulatees do not receive pre-
bills. We are pursuing our pre-billing initiatives as part of our
effort to modernize our financial practices. These initiatives also
provide licensees with notification of upcoming regulatory fees. We
seek comment on expanding our pre-billing initiatives to include other
regulatory fee service categories.
a. Interstate Telecommunications Service Providers (ITSPs)
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\17\ An assessment is a proposed statement of the amount of
regulatory fees owed by an entity to the Commission (or proposed
subscriber count to be ascribed for purposes of setting the entity's
regulatory fee) but it is not entered into the Commission's
accounting system as a current debt. A pre-bill is considered an
account receivable in the Commission's accounting system. Pre-bills
reflect the amount owed and have a payment due date of the last day
of the regulatory fee payment window. Consequently, if a pre-bill is
not paid by the due date, it becomes delinquent and is subject to
our debt collection procedures. See also 47 CFR 1.1161(c),
1.1164(f)(5), and 1.1910.
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15. In FY 2001, we began mailing pre-completed FCC Form 159-W
assessments to carriers in an effort to assist them in paying their
Interstate Telecommunications Service Provider (ITSP) regulatory fee.
The fee amount on FCC Form 159-W was calculated from the FCC Form 499-A
worksheet. Beginning in FY 2004, we mailed the completed FCC Form 159-W
as a pre-bill, rather than as an assessment of amount due. Other than
the manner in which Form 159-W payments were entered into our financial
system, carriers experienced no procedural changes regarding the use of
the FCC Form 159-W when submitting payment of their ITSP regulatory
fees. We seek comment on continuing this pre-billing process in FY
2007.
16. We also propose to round lines 14 (total subject revenues) and
16 (total regulatory fee owed) on FCC Form 159-W to the nearest dollar.
Line 14 must be rounded to a whole dollar amount because this data
field is linked to the FCC Form 159 Remittance Advice Block 25A
(quantity), which can only accept whole numbers. It logically follows
that if line 14 must be rounded, then the form's final line that
calculates the total fee owed (line 16) should be rounded to the
nearest dollar, as well. Also, rounding lines 14 and 16 will nominally
ease the filing and payment burdens of our Form 159-W filers. We seek
comment on these proposals and on other ways that we could improve our
pre-billing initiative for ITSPs.
b. Satellite Space Station Licensees
17. Beginning in FY 2004, we mailed regulatory fee pre-bills via
surface mail to licensees in our two satellite space station service
categories. Specifically, geostationary orbit space station (GSO)
licensees receive bills requesting regulatory fee payment for
satellites that (1) were licensed by the Commission and operational on
or before October 1
[[Page 24217]]
of the respective fiscal year; and (2) were not co-located with and
technically identical to another operational satellite on that date
(i.e., were not functioning as a spare satellite). Non-geostationary
orbit space station (NGSO) licensees received pre-bills requesting
regulatory fee payment for systems that were licensed by the Commission
and operational on or before October 1 of the respective fiscal year.
18. For FY 2007, we propose to continue mailing pre-bills for our
GSO and NGSO satellite space station categories. We seek comment on
this proposal. We emphasize that the pre-bills that we propose to
generate for our GSO and NGSO licensees will only be for the satellite
or system aspects of their respective operations. GSO and NGSO
licensees typically have regulatory fee obligations in other service
categories (such as earth stations, broadcast facilities, etc.), and we
expect satellite operators to meet their full fee payment obligation
for all of their FCC holdings. We seek comment on our proposal to
generate regulatory fee pre-bills for our two satellite space station
service categories.
c. Additional Service Categories for Billing
19. We propose to expand our section 9 regulatory fee pre-billing
initiative to include the service categories for Earth Stations and
Cable Television Relay Service (CARS) Stations, beginning in FY 2007.
Pre-billing can be accomplished for these categories because they are
comprised of relatively few payment units (relative to many other
categories in our Schedule of Regulatory Fees), and because the
Commission maintains licensing databases for both categories. We seek
comment on our proposal to send regulatory fee pre-bills via surface
mail to licensees of Earth Stations and CARS.
d. Media Services Licensees
20. Beginning in FY 2003, we sent fee assessment notifications via
surface mail to media services entities on a per-facility basis. The
notifications provided the assessed fee amount for the facility in
question, as well as the data attributes that determined the fee
amount. We have since refined this initiative with improved
results.\18\ We propose to continue our assessment initiative for media
services licensees this year.\19\ We seek comment on this proposal.
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\18\ Some of those refinements have been to provide licensees
with a Commission-authorized web site to update or correct any
information concerning their facilities, and to amend their fee-
exempt status, if need be. Also, our notifications now provide
licensees with a telephone number to call in the event that they
need customer assistance. The notifications themselves have been
refined so that licensees of fewer than four facilities receive
individual fee assessment postcards for their facilities; whereas
licensees of four or more facilities now receive a single assessment
letter that lists all of their facilities and the associated
regulatory fee obligation for each facility.
\19\ Fee assessments are proposed again to be issued for AM and
FM Radio Stations, AM and FM Construction Permits, FM Translators/
Boosters, VHF and UHF Television Stations, VHF and UHF Television
Construction Permits, Satellite Television Stations, Low Power
Television (LPTV) Stations and LPTV Translators/Boosters, to the
extent that applicants, permittees and licensees of such facilities
do not qualify as government entities or non-profit entities. Fee
assessments have not been issued for broadcast auxiliary stations in
prior years, nor will they be issued in FY 2007.
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21. Consistent with procedures used last year, we propose to mail
assessment notifications to licensees to their primary record of
contact populated in CDBS (Consolidated Database System) and to their
secondary record of contact, if available. We will continue to make the
Commission-authorized web site available to licensees to update or
correct any information concerning their facilities and to amend their
fee-exempt status, if need be.\20\ We seek comment on this proposal.
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\20\ The Commission-authorized web site for media services
licensees is http://www.fccfees.com.
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22. Under our proposal, licensees must still submit a completed FCC
Form 159 Remittance Advice with their fee payments. The assessment
notifications cannot be used as a substitute for a completed Form 159.
e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile Services
Assessments
23. As we have done in prior years, we propose to mail an
assessment letter to Commercial Mobile Radio Service (CMRS) providers
using data that is based on the Numbering Resource Utilization Forecast
(NRUF) form, which includes a list of the carrier's Operating Company
Numbers (OCNs) upon which the assessment is based.\21\ Consistent with
existing practice, the letters will not include OCNs with their
respective assigned number counts, but rather, an aggregate total of
assigned numbers for each carrier. We also propose to continue our
procedure of giving entities an opportunity to amend their subscriber
counts by sending two rounds of assessment letters--an initial
assessment and a final assessment letter. We seek comment on this
proposal.
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\21\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005 and Assessment and Collection of Regulatory Fees for
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paras. 38-44
(2005) (FY 2005 R&O and Order on Recon).
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24. If the number of subscribers on the initial assessment letter
differs from the subscriber count the service provider provided on its
NRUF form, the carrier can correct its subscriber count by returning
the assessment letter or by contacting the Commission and stating a
reason for the change, such as the purchase or the sale of a
subsidiary, including the date of the transaction, and any other
information that will help to justify a reason for the change.
25. If we receive no response or correction to our initial
assessment letter, we will expect the fee payment to be based on the
number of subscribers listed on the initial assessment. We will review
all responses to initial assessment letters and determine whether a
change in the number of subscribers is warranted. We will then generate
and mail a final assessment letter. The final assessment letter will
inform carriers as to whether or not we accept the changed number of
subscribers. As in previous years, operators will certify their
subscriber counts in Block 30 of the FCC Form 159 Remittance Advice
when making their regulatory fee payments. We seek comment on our
current procedures of assessing CMRS subscriber counts (for NRUF
filers), and other ways to improve the process.
26. Although an initial and a final assessment letter will be
mailed to carriers that have filed an NRUF form, some carriers may not
be sent a letter of assessment because they did not file the NRUF form.
We propose that these carriers compute their fee payment using the
standard methodology \22\ that is currently in place for CMRS Wireless
services (e.g., compute their subscriber counts as of December 31,
2006), and submit their payment accordingly on FCC Form 159. However,
regardless of whether a carrier receives an assessment letter or
computes the subscriber count itself, the Commission may audit the
number of subscribers for which regulatory fees are paid. In the event
that the Commission determines that the number of subscribers is
inaccurate or that an insufficient reason is given for making a
correction on the initial assessment letter, the Commission will assess
the carrier for the difference between what was paid and what should
have been paid.
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\22\ Federal Communications Commission, Regulatory Fees Fact
Sheet: What You Owe--Commercial Wireless Services for FY 2005 at 1
(rel. Jul. 2005).
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27. We, therefore, propose to (1) derive the subscriber count from
NRUF
[[Page 24218]]
data based on ``assigned'' number counts that have been adjusted for
porting to net Type 0 ports (``in'' and ``out''); (2) provide carriers
with an opportunity to revise their subscriber counts at the time when
the initial assessment letter is mailed; and (3) require carriers to
confirm their subscriber counts at the aggregate level using data in
the NRUF report. We seek comment on these proposals.
f. Cable Television Subscribers
28. We propose to continue to permit cable television operators to
base their regulatory fee payment on their company's aggregate year-end
subscriber count, rather than requiring them to sub-report subscriber
counts on a per community unit identifier (CUID) basis on the FCC Form
159 Remittance Advice. We seek comment on this proposal. Operators,
after providing their company's aggregate subscriber count in Block 25A
of the FCC Form 159, will still be required to certify the accuracy of
the subscriber count in Block 30. This practice has worked well for the
Commission the past three fiscal years and has eased administrative
burdens for the cable television industry.
29. Last year, for the first time, we sent a message to e-mail
addresses populated in the Media Bureau's Cable Operations and
Licensing System (COALS) to notify recipients of the FY 2006 regulatory
fee payment due date and the fee amount for basic cable television
subscribers. We propose to continue this effort for FY 2007. We also
propose to discontinue our practice of sending fee assessment letters
via surface mail to cable television operators who are on file as
having paid regulatory fees the previous fiscal year. We seek comment
on our proposals.
3. Streamlined Regulatory Fee Payment Process for Commercial Mobile
Radio Service (CMRS) Cellular and Mobile Providers
30. In FY 2006, we streamlined the CMRS payment process by
eliminating the requirement for CMRS providers to identify their
individual call signs when making their regulatory fee payment,
requiring instead for CMRS providers to pay their regulatory fees only
at the aggregate subscriber level without having to identify their
various call signs.\23\ We propose to continue this practice in FY
2007. We seek comment on this proposal. As an additional measure to
reduce the administrative burden on CMRS licensees, we propose to
consolidate the CMRS cellular and CMRS mobile fee categories into one
fee category, thereby eliminating the requirement for CMRS providers to
separate their subscriber counts into CMRS cellular and CMRS mobile fee
categories during the regulatory fee payment process. We seek comment
on this proposal.
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\23\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092,
8105, para. 48 (2006).
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31. In our FY 1998 Report and Order, the Commission classified
Wireless Communications Service (WCS), which included Personal
Communications Services (Part 24), as a CMRS Mobile Service, stating
that the Commercial Mobile Radio Service (CMRS) is ``an `umbrella'
descriptive term attributed to various existing broadband services
authorized to provide interconnected mobile radio services.'' \24\
However, beginning in FY 1998, a separate fee code was provided for
Personal Communications Service (PCS) to monitor the number of units in
this category of service. In recent years, the need to track the number
of units for CMRS cellular and CMRS mobile separately has become
unnecessary, especially for regulatory fee purposes. Therefore,
beginning in FY 2007, we propose to consolidate the CMRS cellular and
CMRS mobile fee categories into one CMRS fee category. To illustrate,
in FY 2007 the CMRS cellular fee category of ``0711'' and the CMRS
mobile fee category of ``0712'' would be consolidated into the fee
category of ``0711.'' Licensees paying regulatory fees for CMRS
cellular and CMRS mobile will need only to identify their aggregate
subscriber unit totals under the fee code of ``0711.'' We seek comment
on this proposal.
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\24\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1998, MD Docket No. 98-36, Report and Order, 63 FR 35847, para.
49, and in Attachment H, Detailed Guidance on Who Must Pay
Regulatory Fees, para. 14 (1998).
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4. Future Streamlining of the Regulatory Fee Assessment and Collection
Process
32. We continue to welcome comments concerning our commitment to
reviewing, streamlining, and modernizing our statutorily required fee
assessment and collection procedures. Our areas of particular interest
include: (1) The process for notifying licensees about changes in the
annual Schedule of Regulatory Fees and how it can be improved; (2) the
most effective way to disseminate regulatory fee assessments and bills,
e.g., through surface mail, e-mail, online Web site, or some other
mechanism; (3) the fee payment process, including how the agency's
online regulatory fee filing system (Fee Filer) can be enhanced; (4)
the timing of fee payments, including whether we should alter the
existing section 9 regulatory fee payment window in any way; and (5)
the timing of fee assessments and pre-bills.
III. Procedural Matters
A. Payment of Regulatory Fees
1. De Minimis Fee Payment Liability
33. Consistent with past practice, regulatees whose total FY 2006
regulatory fee liability, including all categories of fees for which
payment is due, amounts to less than $10 will be exempted from payment
of FY 2007 regulatory fees.
2. Standard Fee Calculations and Payment Dates
34. The Commission will, for the convenience of payers, accept fee
payments made in advance of the window for the payment of regulatory
fees. Licensees are reminded that, under our current rules, the
responsibility for payment of fees by service category is as follows:
(a) Media Services: Regulatory fees must be paid for initial
construction permits that were granted on or before October 1, 2006 for
AM/FM radio stations, VHF/UHF television stations and satellite
television stations. Regulatory fees must be paid for all broadcast
facility licenses granted on or before October 1, 2006. In instances
where a permit or license is transferred or assigned after October 1,
2006, responsibility for payment rests with the holder of the permit or
license as of the fee due date.
(b) Wireline (Common Carrier) Services: Regulatory fees must be
paid for authorizations that were granted on or before October 1, 2006.
In instances where a permit or license is transferred or assigned after
October 1, 2006, responsibility for payment rests with the holder of
the permit or license as of the fee due date.
(c) Wireless Services: Commercial Mobile Radio Service (CMRS)
cellular, mobile, and messaging services (fees based upon a subscriber,
unit or circuit count): Regulatory fees must be paid for authorizations
that were granted on or before October 1, 2006. The number of
subscribers, units or circuits on December 31, 2006 will be used as the
basis from which to calculate the fee payment.
The first eleven regulatory fee categories in our Schedule of
Regulatory Fees (see Attachment D) pay what we refer to as ``small
multi-year wireless regulatory fees.'' Entities pay these regulatory
fees in advance for the entire amount of their 5-year or 10-year term
[[Page 24219]]
of initial license, and only pay regulatory fees again for the license
at the time of its next renewal. So while we include these eleven
categories in our Schedule of Regulatory Fees to publicize the fee
amounts, we do not actually collect these fees on an annual basis.
(d) Multichannel Video Programming Distributor Services (cable
television operators and CARS licensees): Regulatory fees must be paid
for the number of basic cable television subscribers as of December 31,
2006.\25\ Regulatory fees also must be paid for CARS licenses that were
granted on or before October 1, 2006. In instances where a CARS license
is transferred or assigned after October 1, 2006, responsibility for
payment rests with the holder of the license as of the fee due date.
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\25\ Cable television system operators should compute their
basic subscribers as follows: Number of single family dwellings +
number of individual households in multiple dwelling unit
(apartments, condominiums, mobile home parks, etc.) paying at the
basic subscriber rate + bulk rate customers + courtesy and free
service. Note: Bulk-Rate Customers = Total annual bulk-rate charge
divided by basic annual subscription rate for individual households.
Operators may base their count on ``a typical day in the last full
week'' of December 2006, rather than on a count as of December 31,
2006.
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(e) International Services: Regulatory fees must be paid for earth
stations, geostationary orbit space stations and non-geostationary
orbit satellite systems that were licensed and operational on or before
October 1, 2006. In instances where a license is transferred or
assigned after October 1, 2006, responsibility for payment rests with
the holder of the license as of the fee due date. Regulatory fees must
be paid for international bearer circuits, the payments of which are
determined by the number of active circuits as of December 31,
2006.\26\
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\26\ Regulatory fees for International Bearer Circuits are to be
paid by facilities-based common carriers that have active
international bearer circuits in any transmission facility for the
provision of service to an end user or resale carrier, which
includes active circuits to themselves or to their affiliates. In
addition, non-common carrier satellite operators must pay a fee for
each circuit sold or leased to any customer, including themselves or
their affiliates, other than an international common carrier
authorized by the Commission to provide U.S. international common
carrier services. Non-common carrier submarine cable operators are
also to pay fees for any and all international bearer circuits sold
on an indefeasible right of use (IRU) basis or leased to any
customer, including themselves or their affiliates, other than an
international common carrier authorized by the Commission to provide
U.S. international common carrier services. See Assessment and
Collection of Regulatory Fees for Fiscal Year 2001, MD Docket No.
01-76, Report and Order, 16 FCC Rcd 13525, 13593 (2001); Regulatory
Fees Fact Sheet: What You Owe--International and Satellite Services
Licensees for FY 2004 at 3 (rel. July 2004) (the fact sheet is
available on the FCC web-site at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249904A4.pdf
). On February 6, 2006, VSNL
Telecommunications (US) Inc. filed a Petition for Rulemaking urging
the Commission to reform the current International Bearer Circuit
Fee rules and policies as applied to non-common carrier submarine
cable operators. See Petition for Rulemaking of VSNL
Telecommunications (US) Inc., RM-11312 (filed February 6, 2006).
This Petition remains pending before the Commission, which has
issued a Public Notice requesting comment on the petition. See
Consumer and Governmental Affairs Bureau, Reference Information
Center, Public Notice, Report No. 2759 (released February 15, 2006).
The Commission intends to resolve the complex issues presented by
this Petition separately, and any comments on these issues filed in
the instant proceeding will be incorporated into, and addressed,
with those filed on the Petition for Rulemaking.
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B. Enforcement
35. As a reminder to all licensees, section 159(c) of the
Communications Act requires us to impose an additional charge as a
penalty for late payment of any regulatory fee. As in years past, a
late payment penalty of 25 percent of the amount of the required
regulatory fee will be assessed on the first day following the deadline
date for filing of these fees. Regulatory fee payment must be received
and stamped at the lockbox bank by the last day of the regulatory fee
filing window, and not merely postmarked by the last day of the window.
Failure to pay regulatory fees and/or any late penalty will subject
regulatees to sanctions, including the Commission's Red Light Rule (see
47 CFR 1.1910) and the provisions set forth in the Debt Collection
Improvement Act of 1996 (DCIA). We also assess administrative
processing charges on delinquent debts to recover additional costs
incurred in processing and handling the related debt pursuant to the
DCIA and 47 CFR 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. In
case of partial payments (underpayments) of regulatory fees, the
licensee will be given credit for the amount paid, but if it is later
determined that the fee paid is incorrect or not timely paid, then the
25 percent late charge penalty (and other charges and/or sanctions, as
appropriate) will be assessed on the portion that is not paid in a
timely manner.
36. Furthermore, our regulatory fee rules provide that we will
withhold action on any applications or other requests for benefits
filed by anyone who is delinquent in any non-tax debts owed to the
Commission (including regulatory fees) and will ultimately dismiss
those applications or other requests if payment of the delinquent debt
or other satisfactory arrangement for payment is not made. See 47 CFR
1.1161(c), 1.1164(f)(5), and 1.1910. Failure to pay regulatory fees can
also result in the initiation of a proceeding to revoke any and all
authorizations held by the entity responsible for paying the delinquent
fee(s).
C. Initial Regulatory Flexibility Analysis
37. With respect to this NPRM, an Initial Regulatory Flexibility
Analysis (IRFA), is contained in Attachment A of the Appendix.\27\
Comments must be identified as responses to the IRFA and must be filed
by the deadlines for comments on the NPRM specified infra. The
Commission will send a copy of the NPRM, including the IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration.
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\27\ See 5 U.S.C. 603. In addition, the NPRM and the IRFA (or
summaries thereof) will be published in the Federal Register.
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D. Initial Paperwork Reduction Act of 1995 Analysis
38. This NPRM does not contain proposed or modified information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. In addition, therefore, it does not contain any new
or modified ``information collection burden for small business concerns
with fewer than 25 employees,'' pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4). Completion of the 159 family of forms required by the
Commission's regulatory fee payment process is already approved by the
Office of Management and Budget under information collections 3060-0589
and 3060-0949.
E. Ex Parte Rules
39. Permit-But-Disclose. This proceeding will be treated as a
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's
rules.\28\ Ex parte presentations are permissible if disclosed in
accordance with Commission rules, except during the Sunshine Agenda
period when presentations, ex parte or otherwise, are generally
prohibited. Persons making oral ex parte presentations are reminded
that a memorandum summarizing a presentation must contain a summary of
the substance of the presentation and not merely a listing of the
subjects discussed. More than a one- or two-sentence description of the
views and arguments presented is generally
[[Page 24220]]
required.\29\ Additional rules pertaining to oral and written
presentations are set forth in section 1.1206(b).
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\28\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
\29\ See 47 CFR 1.1206(b)(2).
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F. Filing Requirements
40. Comments and Replies. Pursuant to sections 1.415 and 1.419 of
the Commission's rules,\30\ interested parties may file comments on or
before the dates indicated on the first page of this document. Comments
may be filed using: (1) the Commission's Electronic Comment Filing
System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3)
procedures for filing paper copies.\31\
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\30\ See id. 1.415, 1419.
\31\ Electronic Filing of Documents in Rulemaking Proceedings,
13 FCC Rcd 11322 (1998).
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41. Electronic Filers: Comments may be filed electronically using
the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs or the Federal eRulemaking Portal: http://www.regulations.gov. Filers should
follow the instructions provided on the Web site for submitting
comments. For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to ecfs@fcc.gov, and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
42. Paper Filers: Parties who choose to file by paper must file an
original and four copies of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
43. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street, SW., CY-A257, Washington,
DC, 20554. These documents will also be available free online, via
ECFS. Documents will be available electronically in ASCII, Word 97,
and/or Adobe Acrobat.
44. Accessibility Information. To request information in accessible
formats (computer diskettes, large print, audio recording, and
Braille), send an e-mail to fcc504@fcc.gov or call the FCC's Consumer
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable
Document Format (PDF) at: http://www.fcc.gov.
IV. Ordering Clauses
45. Accordingly, it is ordered that, pursuant to sections 4(i) and
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed
Rulemaking is hereby adopted.
46. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Attachment A--Initial Regulatory Flexibility Analysis
47. As required by the Regulatory Flexibility Act (RFA),\32\ the
Commission has prepared this Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on small entities by
the policies and rules in the present NPRM. Written public comments are
requested on this IRFA. Comments must be identified as responses to the
IRFA and must be filed on or before the dates indicated on the first
page of this NPRM. The Commission will send a copy of the NPRM,
including the IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration.\33\ In addition, the NPRM and IRFA (or
summaries thereof) will be published in the Federal Register.\34\
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\32\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
\33\ 5 U.S.C. 603(a).
\34\ Id.
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I. Need for, and Objectives of, the Proposed Rules
48. This rulemaking proceeding is initiated to obtain comments
concerning the Commission's proposed amendment of its Schedule of
Regulatory Fees in the amount of $290,295,160, 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
49. 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.\35\
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\35\ 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
50. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and policies, if adopted.\36\ The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \37\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\38\ A ``small business
[[Page 24221]]
concern'' is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA.\39\
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\36\ 5 U.S.C. 603(b)(3).
\37\ 5 U.S.C. 601(6).
\38\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\39\ 15 U.S.C. 632.
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51. Small Businesses. Nationwide, there are a total of 22.4 million
small businesses, according to SBA data.\40\
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\40\ SBA, Programs and Services, SBA Pamphlet No. CO-0028, at
page 40 (July 2002).
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52. Small Organizations. Nationwide, there are approximately 1.6
million small organizations.\41\
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\41\ Independent Sector, The New Nonprofit Almanac & Desk
Reference (2002).
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53. Small Governmental Jurisdictions. The term ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' \42\ Census Bureau data for
2002 indicate that there were 87,525 local governmental jurisdictions
in the United States.\43\ We estimate that, of this total, 84,377
entities were ``small governmental jurisdictions.'' \44\ Thus, we
estimate that most governmental jurisdictions are small.
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\42\ 5 U.S.C. 601(5).
\43\ U.S. Census Bureau, Statistical Abstract of the United
States: 2006, Section 8, page 272, Table 415.
\44\ We assume that the villages, school districts, and special
districts are small, and total 48,558. U.S. Census Bureau,
Statistical Abstract of the United States: 2006, section 8, page
273, Table 417. For 2002, Census Bureau data indicate that the total
number of county, municipal, and township governments nationwide was
38,967, of which 35,819 were small. Id.
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54. We have included small incumbent local exchange carriers in
this present RFA analysis. As noted above, a ``small business'' under
the RFA is one that, inter alia, meets the pertinent small business
size standard (e.g., a telephone communications business having 1,500
or fewer employees), and ``is not dominant in its field of operation.''
\45\ The SBA's Office of Advocacy contends that, for RFA purposes,
small incumbent local exchange carriers are not dominant in their field
of operation because any such dominance is not ``national'' in
scope.\46\ We have therefore included small incumbent local exchange
carriers in this RFA analysis, although we emphasize that this RFA
action has no effect on Commission analyses and determinations in
other, non-RFA contexts.
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\45\ 15 U.S. C. 632.
\46\ Letter from Jere W. Glover, Chief Counsel for Advocacy,
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small
Business Act contains a definition of ``small-business concern,''
which the RFA incorporates into its own definition of ``small
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C.
601(3) (RFA). SBA regulations interpret ``small business concern''
to include the concept of dominance on a national basis. See 13 CFR
121.102(b).
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55. Incumbent Local Exchange Carriers (ILECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees.\47\ According to
Commission data,\48\ 1,303 carriers have reported that they are engaged
in the provision of incumbent local exchange services. Of these 1,303
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by our proposed action.
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\47\ 13 CFR 121.201, North American Industry Classification
System (NAICS) code 517110.
\48\ FCC, Wireline Competition Bureau, Industry Analysis and
Technology Division, ``Trends in Telephone Service'' at Table 5.3,
Page 5-5 (June 2005) (hereinafter ``Trends in Telephone Service'').
This source uses data that are current as of October 1, 2004.
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56. Competitive Local Exchange Carriers (CLECs), Competitive Access
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other
Local Service Providers.'' Neither the Commission nor the SBA has
developed a small business size standard specifically for these service
providers. The appropriate size standard under SBA rules is for the
category Wired Telecommunications Carriers. Under that size standard,
such a business is small if it has 1,500 or fewer employees.\49\
According to Commission data,\50\ 769 carriers have reported that they
are engaged in the provision of either competitive access provider
services or competitive local exchange carrier services. Of these 769
carriers, an estimated 676 have 1,500 or fewer employees and 94 have
more than 1,500 employees. In addition, 12 carriers have reported that
they are ``Shared-Tenant Service Providers,'' and all 12 are estimated
to have 1.500 or fewer employees. In addition, 39 carriers have
reported that they are ``Other Local Service Providers.'' Of the 39, an
estimated 38 have 1,500 or fewer employees and one has more than 1,500
employees. Consequently, the Commission estimates that most providers
of competitive local exchange service, competitive access providers,
``Shared-Tenant Service Providers,'' and ``Other Local Service
Providers'' are small entities that may be affected by our proposed
action.
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\49\ 13 CFR 121.201, NAICS code 517110.
\50\ ``Trends in Telephone Service'' at Table 5.3.
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57. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\51\ According to Commission data,\52\ 143 carriers have
reported that they are engaged in the provision of local resale
services. Of these, an estimated 141 have 1,500 or fewer employees and
two have more than 1,500 employees. Consequently, the Commission
estimates that the majority of local resellers are small entities that
may be affected by our proposed action.
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\51\ 13 CFR 121.201, NAICS code 517310.
\52\ ``Trends in Telephone Service'' at Table 5.3.
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58. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\53\ According to Commission data,\54\ 770 carriers have
reported that they are engaged in the provision of toll resale
services. Of these, an estimated 747 have 1,500 or fewer employees and
23 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of toll resellers are small entities that
may be affected by our proposed action.
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\53\ 13 CFR 121.201, NAICS code 517310.
\54\ ``Trends in Telephone Service'' at Table 5.3.
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59. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
payphone services providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\55\ According to Commission data,\56\ 654 carriers have
reported that they are engaged in the provision of payphone services.
Of these, an estimated 652 have 1,500 or fewer employees and two have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of payphone service providers are small entities that may
be affected by our proposed action.
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\55\ 3 CFR 121.201, NAICS code 517110.
\56\ ``Trends in Telephone Service'' at Table 5.3.
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60. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA
[[Page 24222]]
has developed a small business size standard specifically for providers
of interexchange services. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\57\ According to Commission data,\58\ 316 carriers have
reported that they are engaged in the provision of interexchange
service. Of these, an estimated 292 have 1,500 or fewer employees and
24 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of IXCs are small entities that may be
affected by our proposed action.
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\57\ 13 CFR 121.201, NAICS code 517110.
\58\ ``Trends in Telephone Service'' at Table 5.3.
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61. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\59\ According to Commission data,\60\ 23 carriers have
reported that they are engaged in the provision of operator services.
Of these, an estimated 20 have 1,500 or fewer employees and three have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of OSPs are small entities that may be affected by our
proposed action.
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\59\ 13 CFR 121.201, NAICS code 517110.
\60\ ``Trends in Telephone Service'' at Table 5.3.
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62. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer
employees.\61\ According to Commission data,\62\ 89 carriers have
reported that they are engaged in the provision of prepaid calling
cards. Of these, an estimated 88 have 1,500 or fewer employees and one
has more than 1,500 employees. Consequently, the Commission estimates
that the majority of prepaid calling card providers are small entities
that may be affected by our proposed action.
---------------------------------------------------------------------------
\61\ 13 CFR 121.201, NAICS code 517310.
\62\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
63. 800 and 800-Like Service Subscribers.\63\ Neither the
Commission nor the SBA has developed a small business size standard
specifically for 800 and 800-like service (``toll free'') subscribers.
The appropriate size standard under SBA rules is for the category
Telecommunications Resellers. Under that size standard, such a business
is small if it has 1,500 or fewer employees.\64\ The most reliable
source of information regarding the number of these service subscribers
appears to be data the Commission receives from Database Service
Management on the 800, 866, 877, and 888 numbers in use.\65\ According
to our data, at the end of December 2004, the number of 800 numbers
assigned was 7,540,453; the number of 888 numbers assigned was
5,947,789; the number of 877 numbers assigned was 4,805,568; and the
number of 866 numbers assigned was 5,011,291. We do not have data
specifying the number of these subscribers that are independently owned
and operated or have 1,500 or fewer employees, and thus are unable at
this time to estimate with greater precision the number of toll free
subscribers that would qualify as small businesses under the SBA size
standard. Consequently, we estimate that there are 7,540,453 or fewer
small entity 800 subscribers; 5,947,789 or fewer small entity 888
subscribers; 4,805,568 or fewer small entity 877 subscribers, and
5,011,291 or fewer entity 866 subscribers.
---------------------------------------------------------------------------
\63\ We include all toll-free number subscribers in this
category, including those for 888 numbers.
\64\ 13 CFR 121.201, NAICS code 517310.
\65\ ``Trends in Telephone Service'' at Tables 18.4, 18.5, 18.6,
and 18.7.
---------------------------------------------------------------------------
64. International Service Providers. There is no small business
size standard developed specifically for providers of international
service. The appropriate size standards under SBA rules are for the two
broad census categories of ``Satellite Telecommunications'' and ``Other
Telecommunications.'' Under both categories, such a business is small
if it has $13.5 million or less in average annual receipts.\66\
---------------------------------------------------------------------------
\66\ 13 CFR 121.201, NAICS codes 517410 and 517910.
---------------------------------------------------------------------------
65. The first category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing point-to-point
telecommunications services to other establishments in the
telecommunications and broadcasting industries by forwarding and
receiving communications signals via a system of satellites or
reselling satellite telecommunications.'' \67\ For this category,
Census Bureau data for 2002 show that there were a total of 371 firms
that operated for the entire year.\68\ Of this total, 307 firms had
annual receipts of under $10 million, and 26 firms had receipts of $10
million to $24,999,999.\69\ Consequently, we estimate that the majority
of Satellite Telecommunications firms are small entities that might be
affected by our action.
---------------------------------------------------------------------------
\67\ U.S. Census Bureau, 2002 NAICS Definitions, ``517410
Satellite Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.
\68\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517410 (issued Nov. 2005).
\69\ Id. An additional 38 firms had annual receipts of $25
million or more.
---------------------------------------------------------------------------
66. The second category of Other Telecommunications ``comprises
establishments primarily engaged in (1) providing specialized
telecommunications applications, such as satellite tracking,
communications telemetry, and radar station operations; or (2)
providing satellite terminal stations and associated facilities
operationally connected with one or more terrestrial communications
systems and capable of transmitting telecommunications to or receiving
telecommunications from satellite systems.''\70\ For this category,
Census Bureau data for 2002 show that there were a total of 332 firms
that operated for the entire year.\71\ Of this total, 259 firms had
annual receipts of under $10 million and 15 firms had annual receipts
of $10 million to $24,999,999.\72\ Consequently, we estimate that the
majority of Other Telecommunications firms are small entities that
might be affected by our action.
---------------------------------------------------------------------------
\70\ U.S. Census Bureau, 2002 NAICS Definitions, ``517910 Other
Telecommunications'' http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.
\71\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517910 (issued Nov. 2005).
\72\ Id. An additional 14 firms had annual receipts of $25
million or more.
---------------------------------------------------------------------------
67. Wireless Service Providers. The SBA has developed a small
business size standard for wireless firms within the two broad economic
census categories of ``Paging'' \73\ and ``Cellular and Other Wireless
Telecommunications.'' \74\ Under both categories, the SBA deems a
wireless business to be small if it has 1,500 or fewer employees. For
the census category of Paging, Census Bureau data for 2002 show that
there were 807 firms in this category that operated for the entire
year.\75\ Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.\76\ Thus, under
[[Page 24223]]
this category and associated small business size standard, the majority
of firms can be considered small. For the census category of Cellular
and Other Wireless Telecommunications, Census Bureau data for 2002 show
that there were 1,397 firms in this category that operated for the
entire year.\77\ Of this total, 1,378 firms had employment of 999 or
fewer employees, and 19 firms had employment of 1,000 employees or
more.\78\ Thus, under this second category and size standard, the
majority of firms can, again, be considered small.
---------------------------------------------------------------------------
\73\ 13 CFR 121.201, NAICS code 517211.
\74\ 13 CFR 121.201, NAICS code 517212.
\75\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 517211 (issued Nov. 2005).
\76\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
\77\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 517212 (issued Nov. 2005).
\78\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
---------------------------------------------------------------------------
68. Internet Service Providers. The SBA has developed a small
business size standard for Internet Service Providers. This category
comprises establishments ``primarily engaged in providing direct access
through telecommunications networks to computer-held information
compiled or published by others.'' \79\ Under the SBA size standard,
such a business is small if it has average annual receipts of $21
million or less.\80\ According to Census Bureau data for 1997, there
were 2,751 firms in this category that operated for the entire
year.\81\ Of these, 2,659 firms had annual receipts of under $10
million, and an additional 67 firms had receipts of between $10 million
and $24,999,999.\82\ Thus, under this size standard, the great majority
of firms can be considered small entities.
---------------------------------------------------------------------------
\79\ Office of Management and Budget, North American Industry
Classification System, page 515 (1997). NAICS code 518111, ``On-Line
Information Services.''
\80\ 13 CFR 121.201, NAICS code 518111.
\81\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
``Information,'' Table 4, Receipts Size of Firms Subject to Federal
Income Tax: 1997, NAICS code 514191 (issued October 2000).
\82\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
``Information,'' Table 4, Receipts Size of Firms Subject to Federal
Income Tax: 1997, NAICS code 514191 (issued October 2000).
---------------------------------------------------------------------------
69. Cellular Licensees. The SBA has developed a small business size
standard for wireless firms within the two broad economic census
categories of ``Paging'' \83\ and ``Cellular and Other Wireless
Telecommunications.'' \84\ Under both categories, the SBA deems a
wireless business to be small if it has 1,500 or fewer employees. For
the census category of Paging, Census Bureau data for 2002 show that
there were 807 firms in this category that operated for the entire
year.\85\ Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.\86\ Thus, under this category and associated small business size
standard, the majority of firms can be considered small. For the census
category of Cellular and Other Wireless Telecommunications, Census
Bureau data for 2002 show that there were 1,397 firms in this category
that operated for the entire year.\87\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\88\ Thus, under this second category and size
standard, the majority of firms can, again, be considered small.
---------------------------------------------------------------------------
\83\ 13 CFR 121.201, NAICS code 517211.
\84\ 13 CFR 121.201, NAICS code 517212.
\85\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 517211 (issued Nov. 2005).
\86\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
\87\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 517212 (issued Nov. 2005).
\88\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
---------------------------------------------------------------------------
70. Common Carrier Paging. As noted, the SBA has developed a small
business size standard for wireless firms within the broad economic
census categories of ``Cellular and Other Wireless
Telecommunications.'' \89\ Under this SBA category, a wireless business
is small if it has 1,500 or fewer employees. For the census category of
Paging, U.S. Census Bureau data for 1997 show that there were 1,320
firms in this category, total, that operated for the entire year.\90\
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.\91\ Thus, under this category and associated small business size
standard, the great majority of firms can be considered small.
---------------------------------------------------------------------------
\89\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in
October 2002).
\90\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
``Information,'' Table 5, Employment Size of Firms Subject to
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
\91\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
``Information,'' Table 5, Employment Size of Firms Subject to
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
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 1000 employees or more.''
---------------------------------------------------------------------------
71. In addition, in the Paging Second Report and Order, the
Commission adopted a size standard for ``small businesses'' for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments.\92\ 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.\93\ The SBA has approved this definition.\94\ An auction
of Metropolitan Economic Area (MEA) licenses commenced on February 24,
2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985
were sold.\95\ Fifty-seven companies claiming small business status won
440 licenses.\96\ An auction of MEA and Economic Area (EA) licenses
commenced on October 30, 2001, and closed on December 5, 2001. Of the
15,514 licenses auctioned, 5,323 were sold.\97\ One hundred thirty-two
companies claiming small business status purchased 3,724 licenses. A
third auction, consisting of 8,874 licenses in each of 175 EAs and
1,328 licenses in all but three of the 51 MEAs commenced on May 13,
2003, and closed on May 28, 2003. Seventy-seven bidders claiming small
or very small business status won 2,093 licenses.\98\ Currently, there
are approximately 74,000 Common Carrier Paging licenses. According to
the most recent ``Trends in Telephone Service'', 408 private and common
carriers reported that they were engaged in the provision of either
paging or ``other mobile'' services.\99\ Of these, we estimate that 589
are small, under the SBA-approved small business size standard.\100\ We
estimate that the majority of common carrier paging
[[Page 24224]]
providers would qualify as small entities under the SBA definition.
---------------------------------------------------------------------------
\92\ Revision of Part 22 and Part 90 of the Commission's Rules
to Facilitate Future Development of Paging Systems, Second Report
and Order, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (Paging Second
Report and Order); see also Revision of Part 22 and Part 90 of the
Commission's Rules to Facilitate Future Development of Paging
Systems, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd
10030, 10085-10088, paras. 98-107 (1999).
\93\ Paging Second Report and Order, 12 FCC Rcd at 2811, para.
179.
\94\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, from Aida
Alvarez, Administrator, Small Business Administration, dated Dec. 2,
1998.
\95\ See ``929 and 931 MHz Paging Auction Closes,'' Public
Notice, 15 FCC Rcd 4858 (WTB 2000).
\96\ See ``929 and 931 MHz Paging Auction Closes,'' Public
Notice, 15 FCC Rcd 4858 (WTB 2000).
\97\ See ``Lower and Upper Paging Band Auction Closes,'' Public
Notice, 16 FCC Rcd 21821 (WTB 2002).
\98\ See ``Lower and Upper Paging Bands Auction Closes,'' Public
Notice, 18 FCC Rcd 11154 (WTB 2003).
\99\ ``Trends in Telephone Service'' at Table 5.3.
\100\ 13 CFR 121.201, NAICS code 517211.
---------------------------------------------------------------------------
72. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission defined ``small business'' for the wireless
communications services (WCS) auction as an entity with average gross
revenues of $40 million for each of the three preceding years, and a
``very small business'' as an entity with average gross revenues of $15
million for each of the three preceding years.\101\ The SBA has
approved these definitions.\102\ The Commission auctioned geographic
area licenses in the WCS service. In the auction, which commenced on
April 15, 1997 and closed on April 25, 1997, there were seven bidders
that won 31 licenses that qualified as very small business entities,
and one bidder that won one license that qualified as a small business
entity. An auction for one license in the 1670-1674 MHz band commenced
on April 30, 2003 and closed the same day. One license was awarded. The
winning bidder was not a small entity.
---------------------------------------------------------------------------
\101\ Amendment of the Commission's Rules to Establish Part 27,
the Wireless Communications Service (WCS), Report and Order, 12 FCC
Rcd 10785, 10879, para. 194 (1997).
\102\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, FCC, from
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
---------------------------------------------------------------------------
73. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. The SBA has developed a small business size
standard for ``Cellular and Other Wireless Telecommunications''
services.\103\ Under the SBA small business size standard, a business
is small if it has 1,500 or fewer employees.\104\ According to ``Trends
in Telephone Service'' data, 437 carriers reported that they were
engaged in wireless telephony.\105\ We have estimated that 260 of these
are small under the SBA small business size standard.
---------------------------------------------------------------------------
\103\ 13 CFR 121.201, NAICS code 517212.
\104\ 13 CFR 121.201, NAICS code 517212.
\105\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
74. Broadband Personal Communications Service. The broadband
personal communications services (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission has created a small business
size standard for Blocks C and F as an entity that has average gross
revenues of less than $40 million in the three previous calendar
years.\106\ For Block F, an additional small business size standard for
``very small business'' was added and is defined as an entity that,
together with its affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years.\107\ These
small business size standards, in the context of broadband PCS
auctions, have been approved by the SBA.\108\ No small businesses
within the SBA-approved small business size standards bid successfully
for licenses in Blocks A and B. There were 90 winning bidders that
qualified as small entities in the Block C auctions. A total of 93
``small'' and ``very small'' business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F.\109\ On March 23,
1999, the Commission reauctioned 155 C, D, E, and F Block licenses;
there were 113 small business winning bidders.\110\
---------------------------------------------------------------------------
\106\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7850-
7852, paras. 57-60 (1996); see also 47 CFR Sec. 24.720(b).
\107\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7852,
para. 60.
\108\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, FCC, from
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
\109\ FCC News, ``Broadband PCS, D, E and F Block Auction
Closes,'' No. 71744 (rel. Jan. 14, 1997).
\110\ See ``C, D, E, and F Block Broadband PCS Auction Closes,''
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------
75. 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.\111\ Subsequent events, concerning Auction 35, including
judicial and agency determinations, resulted in a total of 163 C and F
Block licenses being available for grant. On February 15, 2005, the
Commission completed an auction of 188 C block licenses and 21 F block
licenses in Auction No. 58. There were 24 winning bidders for 217
licenses.\112\ Of the 24 winning bidders, 16 claimed small business
status and won 156 licenses.
---------------------------------------------------------------------------
\111\ See ``C and F Block Broadband PCS Auction Closes; Winning
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
\112\ See ``Broadband PCS Spectrum Auction Closes; Winning
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd
3703 (2005).
---------------------------------------------------------------------------
76. Narrowband Personal Communications Services. The Commission
held an auction for Narrowband PCS licenses that commenced on July 25,
1994, and closed on July 29, 1994. A second auction commenced on
October 26, 1994 and closed on November 8, 1994. For purposes of the
first two Narrowband PCS auctions, ``small businesses'' were entities
with average gross revenues for the prior three calendar years of $40
million or less.\113\ Through these auctions, the Commission awarded a
total of 41 licenses, 11 of which were obtained by four small
businesses.\114\ To ensure meaningful participation by small business
entities in future auctions, the Commission adopted a two-tiered small
business size standard in the Narrowband PCS Second Report and
Order.\115\ A ``small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $40 million.\116\ A ``very
small business'' is an entity that, together with affiliates and
controlling interests, has average gross revenues for the three
preceding years of not more than $15 million.\117\ The SBA has approved
these small business size standards.\118\ A third auction commenced on
October 3, 2001 and closed on October 16, 2001. Here, five bidders won
317 (Metropolitan Trading Areas and nationwide) licenses.\119\ Three of
these claimed status as a small or very small entity and won 311
licenses.
---------------------------------------------------------------------------
\113\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding Narrowband PCS, Third Memorandum Opinion
and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175,
196, para. 46 (1994).
\114\ See ``Announcing the High Bidders in the Auction of ten
Nationwide Narrowband PCS Licenses, Winning Bids Total
$617,006,674,'' Public Notice, PNWL 94-004 (rel. Aug. 2, 1994);
``Announcing the High Bidders in the Auction of 30 Regional
Narrowband PCS Licenses; Winning Bids Total $490,901,787,'' Public
Notice, PNWL 94-27 (rel. Nov. 9, 1994).
\115\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Second Report and
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd
10456, 10476, para. 40 (2000).
\116\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Second Report and
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd
10456, 10476, para. 40 (2000).
\117\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Second Report and
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd
10456, 10476, para. 40 (2000).
\118\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, Federal
Communications Commission, from Aida Alvarez, Administrator, Small
Business Administration, dated Dec. 2, 1998.
\119\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------
[[Page 24225]]
77. Lower 700 MHz Band Licenses. We adopted criteria for defining
three groups of small businesses for purposes of determining their
eligibility for special provisions such as bidding credits.\120\ We
have defined a ``small business'' as an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $40 million for the preceding three years.\121\ A ``very
small business'' is defined as an entity that, together with its
affiliates and controlling principals, has average gross revenues that
are not more than $15 million for the preceding three years.\122\
Additionally, the lower 700 MHz Service has a third category of small
business status that may be claimed for Metropolitan/Rural Service Area
(MSA/RSA) licenses. The third category is ``entrepreneur,'' which is
defined as an entity that, together with its affiliates and controlling
principals, has average gross revenues that are not more than $3
million for the preceding three years.\123\ The SBA has approved these
small size standards.\124\ An auction of 740 licenses (one license in
each of the 734 MSAs/RSAs and one license in each of the six Economic
Area Groupings (EAGs)) commenced on August 27, 2002, and closed on
September 18, 2002. Of the 740 licenses available for auction, 484
licenses were sold to 102 winning bidders. Seventy-two of the winning
bidders claimed small business, very small business or entrepreneur
status and won a total of 329 licenses.\125\ A second auction commenced
on May 28, 2003, and closed on June 13, 2003, and included 256
licenses: 5 EAG licenses and 476 Cellular Market Area licenses.\126\
Seventeen winning bidders claimed small or very small business status
and won 60 licenses, and nine winning bidders claimed entrepreneur
status and won 154 licenses.\127\ On July 26, 2005, the Commission
completed an auction of 5 licenses in the Lower 700 MHz band (Auction
No. 60). There were three winning bidders for five licenses. All three
winning bidders claimed small business status.
---------------------------------------------------------------------------
\120\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022 (2002).
\121\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022, 1087-88, para. 172 (2002).
\122\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022, 1087-88, para. 172 (2002).
\123\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022, 1088, para. 173 (2002).
\124\ See Letter to Thomas Sugrue, Chief, Wireless
Telecommunications Bureau, Federal Communications Commission, from
Aida Alvarez, Administrator, Small Business Administration, dated
Aug. 10, 1999.
\125\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
17 FCC Rcd 17272 (WTB 2002).
\126\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
18 FCC Rcd 11873 (WTB 2003).
\127\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
18 FCC Rcd 11873 (WTB 2003).
---------------------------------------------------------------------------
78. Upper 700 MHz Band Licenses. The Commission released a Report
and Order, authorizing service in the upper 700 MHz band.\128\ This
auction, previously scheduled for January 13, 2003, has been
postponed.\129\
---------------------------------------------------------------------------
\128\ Service Rules for the 746-764 and 776-794 MHz Bands, and
Revisions to Part 27 of the Commission's Rules, Second Memorandum
Opinion and Order, 16 FCC Rcd 1239 (2001).
\129\ See ``Auction of Licenses for 747-762 and 777-792 MHz
Bands (Auction No. 31) Is Rescheduled,'' Public Notice, 16 FCC Rcd
13079 (WTB 2003).
---------------------------------------------------------------------------
79. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
we adopted size standards for ``small businesses'' and ``very small
businesses'' for purposes of determining their eligibility for special
provisions such as bidding credits and installment payments.\130\ A
small business in this service is an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $40 million for the preceding three years.\131\ Additionally,
a very small business is an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not
more than $15 million for the preceding three years.\132\ SBA approval
of these definitions is not required.\133\ An auction of 52 Major
Economic Area (MEA) licenses commenced on September 6, 2000, and closed
on September 21, 2000.\134\ 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.\135\
---------------------------------------------------------------------------
\130\ See Service Rules for the 746-764 MHz Bands, and Revisions
to Part 27 of the Commission's Rules, Second Report and Order, 15
FCC Rcd 5299 (2000).
\131\ See Service Rules for the 746-764 MHz Bands, and Revisions
to Part 27 of the Commission's Rules, Second Report and Order, 15
FCC Rcd 5299, 5343, para. 108 (2000).
\132\ See Service Rules for the 746-764 MHz Bands, and Revisions
to Part 27 of the Commission's Rules, Second Report and Order, 15
FCC Rcd 5299, 5343, para. 108 (2000).
\133\ See Service Rules for the 746-764 MHz Bands, and Revisions
to Part 27 of the Commission's Rules, Second Report and Order, 15
FCC Rcd 5299, 5343, para. 108 n.246 (for the 746-764 MHz and 776-794
MHz bands, the Commission is exempt from 15 U.S.C. 632, which
requires Federal agencies to obtain SBA approval before adopting
small business size standards).
\134\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
\135\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------
80. Specialized Mobile Radio. The Commission awards ``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.\136\ The Commission awards ``very small entity''
bidding credits to firms that had revenues of no more than $3 million
in each of the three previous calendar years.\137\ The SBA has approved
these small business size standards for the 900 MHz Service.\138\ The
Commission has held auctions for geographic area licenses in the 800
MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5,
1995, and closed on April 15, 1996. Sixty bidders claiming that they
qualified as small businesses under the $15 million size standard won
263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR
auction for the upper 200 channels began on October 28, 1997, and was
completed on December 8, 1997. Ten bidders claiming that they qualified
as small businesses under the $15 million size standard won 38
geographic area licenses for the upper 200 channels in the 800 MHz SMR
band.\139\ A second auction for the 800 MHz band was held on January
10, 2002 and closed on January 17, 2002 and included 23 BEA licenses.
One bidder claiming small business status won five licenses.\140\
---------------------------------------------------------------------------
\136\ 47 CFR 90.814(b)(1).
\137\ 47 CFR 90.814(b)(1).
\138\ See Letter to Thomas Sugrue, Chief, Wireless
Telecommunications Bureau, Federal Communications Commission, from
Aida Alvarez, Administrator, Small Business Administration, dated
Aug. 10, 1999. We note that, although a request was also sent to the
SBA requesting approval for the small business size standard for 800
MHz, approval is still pending.
\139\ See ``Correction to Public Notice DA 96-586 `FCC Announces
Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB
1996).
\140\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------
81. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels began on August 16, 2000, and was
completed on September 1, 2000. Eleven bidders won 108 geographic area
licenses for the General Category channels in the 800
[[Page 24226]]
MHz SMR band qualified as small businesses under the $15 million size
standard.\141\ In an auction completed on December 5, 2000, a total of
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz
SMR service were sold.\142\ Of the 22 winning bidders, 19 claimed small
business status and won 129 licenses. Thus, combining all three
auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR
band claimed status as small business.
---------------------------------------------------------------------------
\141\ See ``800 MHz Specialized Mobile Radio (SMR) Service
General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction
Closes; Winning Bidders Announced,'' Public Notice, 15 FCC Rcd 17162
(2000).
\142\ See ``800 MHz SMR Service Lower 80 Channels Auction
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736
(2000).
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82. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues. We
assume, for purposes of this analysis, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that small business size standard is approved by the SBA.
83. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
definition of small entities specifically applicable to such incumbent
220 MHz Phase I licensees. To estimate the number of such licensees
that are small businesses, we apply the small business size standard
under the SBA rules applicable to ``Cellular and Other Wireless
Telecommunications'' companies. This category provides that a small
business is a wireless company employing no more than 1,500
persons.\143\ The Commission estimates that most such licensees are
small businesses under the SBA's small business standard. For census
data on these entities, see paragraph 65, supra.
---------------------------------------------------------------------------
\143\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
84. 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
defining ``small'' and ``very small'' businesses for purposes of
determining their eligibility for special provisions such as bidding
credits and installment payments.\144\ This small business standard
indicates that a ``small business'' is an entity that, together with
its affiliates and controlling principals, has average gross revenues
not exceeding $15 million for the preceding three years.\145\ A ``very
small business'' is defined as an entity that, together with its
affiliates and controlling principals, has average gross revenues that
do not exceed $3 million for the preceding three years.\146\ The SBA
has approved these small size standards.\147\ Auctions of Phase II
licenses commenced on September 15, 1998, and closed on October 22,
1998.\148\ 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.\149\ Thirty-
nine small businesses won 373 licenses in the first 220 MHz auction. A
second auction included 225 licenses: 216 EA licenses and 9 EAG
licenses. Fourteen companies claiming small business status won 158
licenses.\150\ A third auction included four licenses: 2 BEA licenses
and 2 EAG licenses in the 220 MHz Service. No small or very small
business won any of these licenses.\151\
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\144\ Amendment of Part 90 of the Commission's Rules to Provide
For the Use of the 220-222 MHz Band by the Private Land Mobile Radio
Service, Third Report and Order, 12 FCC Rcd 10943, 11068-70, paras.
291-295 (1997).
\145\ Id. at 11068, paras. 291.
\146\ Id.
\147\ See Letter to Daniel Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA, (Jan. 6, 1998).
\148\ See generally ``220 MHz Service Auction Closes,'' Public
Notice, 14 FCC Rcd 605 (1998).
\149\ See ``FCC Announces It is Prepared to Grant 654 Phase II
220 MHz Licenses After Final Payment is Made,'' Public Notice, 14
FCC Rcd 1085 (1999).
\150\ See ``Phase II 220 MHz Service Spectrum Auction Closes,''
Public Notice, 14 FCC Rcd 11218 (1999).
\151\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (2002).
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85. Private Land Mobile Radio (PLMR). PLMR systems serve an
essential role in a range of industrial, business, land transportation,
and public safety activities. These radios are used by companies of all
sizes operating in all U.S. business categories, and are often used in
support of the licensee's primary (non-telecommunications) business
operations. For the purpose of determining whether a licensee of a PLMR
system is a small business as defined by the SBA, we use the broad
census category, ``Cellular and Other Wireless Telecommunications.''
This definition provides that a small entity is any such entity
employing no more than 1,500 persons.\152\ The Commission does not
require PLMR licensees to disclose information about number of
employees, so the Commission does not have information that could be
used to determine how many PLMR licensees constitute small entities
under this definition. We note that PLMR licensees generally use the
licensed facilities in support of other business activities, and
therefore, it would also be helpful to assess PLMR licensees under the
standards applied to the particular industry subsector to which the
licensee belongs.\153\
---------------------------------------------------------------------------
\152\ See 13 CFR 121.201, NAICS code 517212.
\153\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------
86. The Commission's 1994 Annual Report on PLMRs \154\ indicates
that at the end of fiscal year 1994, there were 1,087,267 licensees
operating 12,481,989 transmitters in the PLMR bands below 512 MHz. We
note that any entity engaged in a commercial activity is eligible to
hold a PLMR license, and that the revised rules in this context could
therefore potentially impact small entities covering a great variety of
industries.
---------------------------------------------------------------------------
\154\ Federal Communications Commission, 60th Annual Report,
Fiscal Year 1994, at para. 116.
---------------------------------------------------------------------------
87. Fixed Microwave Services. Fixed microwave services include
common carrier,\155\ private operational-fixed,\156\ and broadcast
auxiliary radio services.\157\ At present, there are approximately
22,015 common carrier fixed licensees and 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in
[[Page 24227]]
the microwave services. The Commission has not created a size standard
for a small business specifically with respect to fixed microwave
services. For purposes of this analysis, the Commission uses the SBA
small business size standard for the category ``Cellular and Other
Telecommunications,'' which is 1,500 or fewer employees.\158\ The
Commission does not have data specifying the number of these licensees
that have no more than 1,500 employees, and thus are unable at this
time to estimate with greater precision the number of fixed microwave
service licensees that would qualify as small business concerns under
the SBA's small business size standard. Consequently, the Commission
estimates that there are 22,015 or fewer common carrier fixed licensees
and 61,670 or fewer private operational-fixed licensees and broadcast
auxiliary radio licensees in the microwave services that may be small
and may be affected by the rules and policies proposed herein. We note,
however, that the common carrier microwave fixed licensee category
includes some large entities.
---------------------------------------------------------------------------
\155\ See 47 CFR 101 et seq. (formerly, Part 21 of the
Commission's Rules) for common carrier fixed microwave services
(except Multipoint Distribution Service).
\156\ 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.
\157\ Auxiliary Microwave Service is governed by Part 74 of
Title 47 of the Commission's Rules. See 47 CFR Part 74. This service
is available to licensees of broadcast stations and to broadcast and
cable network entities. Broadcast auxiliary microwave stations are
used for relaying broadcast television signals from the studio to
the transmitter, or between two points such as a main studio and an
auxiliary studio. The service also includes mobile television
pickups, which relay signals from a remote location back to the
studio.
\158\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
88. 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.\159\ 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.\160\
The SBA has approved these small business size standards.\161\ 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.
---------------------------------------------------------------------------
\159\ 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).
\160\ Id.
\161\ 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); See Letter to
Margaret Wiener, Chief, Auctions and Industry Analysis Division,
Wireless Telecommunications Bureau, FCC, from Hector Barreto,
Administrator, SBA, (Jan. 18, 2002).
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89. 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.\162\ The auction of the 986 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.\163\ 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.\164\ The SBA has approved these small
business size standards in the context of LMDS auctions.\165\ 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 32 small
and very small business winning that won 119 licenses.
---------------------------------------------------------------------------
\162\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order on
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC
Rcd 12545, 12689-90, para. 348 (1997).
\163\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order on
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC
Rcd 12545, 12689-90, para. 348 (1997).
\164\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order on
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC
Rcd 12545, 12689-90, para. 348 (1997).
\165\ See Letter to Dan Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA (Jan. 6, 1998).
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90. 218-219 MHz Service. The first auction of 218-219 MHz
(previously referred to as the Interactive and Video Data Service or
IVDS) spectrum resulted in 178 entities winning licenses for 594
Metropolitan Statistical Areas (MSAs).\166\ Of the 594 licenses, 567
were won by 167 entities qualifying as a small business. For that
auction, we defined a small business as an entity that, together with
its affiliates, has no more than a $6 million net worth and, after
federal income taxes (excluding any carry over losses), has no more
than $2 million in annual profits each year for the previous two
years.\167\ In the 218-219 MHz Report and Order and Memorandum Opinion
and Order, we defined a small business as an entity that, together with
its affiliates and persons or entities that hold interests in such an
entity and their affiliates, has average annual gross revenues not
exceeding $15 million for the preceding three years.\168\ A very small
business is defined as an entity that, together with its affiliates and
persons or entities that hold interests in such an entity and its
affiliates, has average annual gross revenues not exceeding $3 million
for the preceding three years.\169\ The SBA has approved of these
definitions.\170\ A subsequent auction is not yet scheduled. Given the
success of small businesses in the previous auction, and the prevalence
of small businesses in the subscription television services and message
communications industries, we assume for purposes of this analysis that
in future auctions, many, and perhaps most, of the licenses may be
awarded to small businesses.
---------------------------------------------------------------------------
\166\ See ``Interactive Video and Data Service (IVDS)
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227
(1994).
\167\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330
(1994).
\168\ Amendment of Part 95 of the Commission's Rules to Provide
Regulatory Flexibility in the 218-219 MHz Service, Report and Order
and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).
\169\ Id.
\170\ See Letter to Daniel Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA, (Jan. 6, 1998).
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91. Location and Monitoring Service (LMS). Multilateration LMS
systems use non-voice radio techniques to determine the location and
status of mobile radio units. For purposes of auctioning LMS licenses,
the Commission has defined ``small business'' as an entity that,
together with controlling interests and affiliates, has average annual
gross revenues for the preceding three years not exceeding $15
million.\171\ A ``very small business'' is defined as an entity that,
together with controlling interests and affiliates, has average annual
gross revenues for the preceding three years not exceeding $3
million.\172\ These definitions have been approved by the SBA.\173\ An
auction for LMS licenses commenced on February 23, 1999, and closed on
March 5, 1999. Of the 528
[[Page 24228]]
licenses auctioned, 289 licenses were sold to four small businesses.
---------------------------------------------------------------------------
\171\ Amendment of Part 90 of the Commission's Rules to Adopt
Regulations for Automatic Vehicle Monitoring Systems, Second Report
and Order, 13 FCC Rcd 15182, 15192 para. 20 (1998); see also 47 CFR
90.1103.
\172\ Amendment of Part 90 of the Commission's Rules to Adopt
Regulations for Automatic Vehicle Monitoring Systems, Second Report
and Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
\173\ See Letter to Thomas Sugrue, Chief, Wireless
Telecommunications Bureau, Federal Communications Commission, from
Aida Alvarez, Administrator, Small Business Administration, dated
Feb. 22, 1999.
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92. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service.\174\ A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio System (BETRS).\175\ In the
present context, we will use the SBA's small business size standard
applicable to ``Cellular and Other Wireless Telecommunications,'' i.e.,
an entity employing no more than 1,500 persons.\176\ There are
approximately 1,000 licensees in the Rural Radiotelephone Service, and
the Commission estimates that there are 1,000 or fewer small entity
licensees in the Rural Radiotelephone Service that may be affected by
the rules and policies proposed herein.
---------------------------------------------------------------------------
\174\ The service is defined in section 22.99 of the
Commission's Rules, 47 CFR 22.99.
\175\ BETRS is defined in sections 22.757 and 22.759 of the
Commission's Rules, 47 CFR 22.757 and 22.759.
\176\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
93. Air-Ground Radiotelephone Service.\177\ We have previously used
the SBA's small business definition applicable to ``Cellular and Other
Wireless Telecommunications,'' i.e., an entity employing no more than
1,500 persons.\178\ There are approximately 100 licensees in the Air-
Ground Radiotelephone Service, and under that definition, we estimate
that almost all of them qualify as small entities under the SBA
definition. For purpose of assigning Air-Ground Radiotelephone Service
licenses through competitive bidding, the Commission has defined
``small business'' as an entity that, together with controlling
interests and affiliates, has average annual gross revenues for the
preceding three years not exceeding $40 million.\179\ A ``very small
business'' is defined as an entity that, together with controlling
interests and affiliates, has average annual gross revenues for the
preceding three years not exceeding $15 million.\180\ These definitions
were approved by the SBA.\181\ In May 2006, the Commission completed an
auction of nationwide commercial Air-Ground Radiotelephone Service
licenses in the 800 MHz band (Auction No. 65). On June 2, 2006, the
auction closed with two winning bidders winning two Air-Ground
Radiotelephone Service licenses. Neither of the winning bidders claimed
small business status.
---------------------------------------------------------------------------
\177\ The service is defined in 22.99 of the Commission's Rules,
47 CFR 22.99.
\178\ 13 CFR 121.201, NAICS codes 517212.
\179\ Amendment of Part 22 of the Commission's Rules to Benefit
the Consumers of Air-Ground Telecommunications Services, Biennial
Regulatory Review--Amendment of Parts 1, 22, and 90 of the
Commission's Rules, Amendment of Parts 1 and 22 of the Commission's
Rules to Adopt Competitive Bidding Rules for Commercial and General
Aviation Air-Ground Radiotelephone Service, WT Docket Nos. 03-103
and 05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd
19663, paras. 28-42 (2005).
\180\ Id.
\181\ See Letter from Hector V. Barreto, Administrator, U.S.
Small Business Administration, to Gary D. Michaels, Deputy Chief,
Auctions and Spectrum Access Division, Wireless Telecommunications
Bureau, Federal Communications Commission, dated September 19, 2005.
---------------------------------------------------------------------------
94. 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, we will use the SBA small business size
standard for the category ``Cellular and Other Telecommunications,''
which is 1,500 or fewer employees.\182\ 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.\183\ 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.
---------------------------------------------------------------------------
\182\ 13 CFR 121.201, NAICS code 517212.
\183\ 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).
---------------------------------------------------------------------------
95. Offshore Radiotelephone Service. This service operates on
several ultra high frequencies (UHF) television broadcast channels that
are not used for television broadcasting in the coastal areas of states
bordering the Gulf of Mexico.\184\ There are presently approximately 55
licensees in this service. We are unable to estimate at this time the
number of licensees that would qualify as small under the SBA's small
business size standard for ``Cellular and Other Wireless
Telecommunications'' services.\185\ Under that SBA small business size
standard, a business is small if it has 1,500 or fewer employees.\186\
---------------------------------------------------------------------------
\184\ This service is governed by Subpart I of Part 22 of the
Commission's Rules. See 47 CFR 22.1001-22.1037.
\185\ 13 CFR 121.201, NAICS code 517212.
\186\ Id.
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96. Multiple Address Systems (MAS). Entities using MAS spectrum, in
general, fall into two categories: (1) Those using the spectrum for
profit-based uses, and (2) those using the spectrum for private
internal uses. With respect to the first category, the Commission
defines ``small entity'' for MAS licenses as an entity that has average
gross revenues of less than $15 million in the three previous calendar
years.\187\ ``Very small business'' is defined as an entity that,
together with its affiliates, has average gross revenues of not more
than $3 million for the preceding three calendar years.\188\ The SBA
has approved of these definitions.\189\ The majority of these entities
will most likely be licensed in bands where the Commission has
implemented a geographic area licensing approach that would require the
use of competitive bidding procedures to resolve mutually exclusive
applications. The Commission's licensing database indicates that, as of
January 20, 1999, there were a total of 8,670 MAS station
authorizations. Of these, 260 authorizations were associated with
common carrier service. In addition, an auction for 5,104 MAS licenses
in 176 EAs began November 14, 2001, and closed on November 27,
2001.\190\ Seven winning bidders claimed status as small or very small
businesses and won 611
[[Page 24229]]
licenses. On May 18, 2005, the Commission completed an auction (Auction
No. 59) of 4,226 Multiple Address Systems (MAS) licenses in the Fixed
Microwave Services from the 928/959 and 932/941 MHz bands. Twenty-six
winning bidders won a total of 2,323 licenses. Of the 26 winning
bidders in this auction, five claimed small business status and won
1,891 licenses.
---------------------------------------------------------------------------
\187\ See Amendment of the Commission's Rules Regarding Multiple
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para.
123 (2000).
\188\ Id.
\189\ See Letter to Thomas Sugrue, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator,
SBA, (June 4, 1999).
\190\ See ``Multiple Address Systems Spectrum Auction Closes,''
Public Notice, 16 FCC Rcd 21011 (2001).
---------------------------------------------------------------------------
97. With respect to the second category, which consists of entities
that use, or seek to use, MAS spectrum to accommodate internal
communications needs, we note that MAS serves an essential role in a
range of industrial, safety, business, and land transportation
activities. MAS radios are used by companies of all sizes, operating in
virtually all U.S. business categories, and by all types of public
safety entities. For the majority of private internal users, the small
business size standard developed by the SBA would be more appropriate.
The applicable size standard in this instance appears to be that of
``Cellular and Other Wireless Telecommunications''. This definition
provides that a small entity is any such entity employing no more than
1,500 persons.\191\ The Commission's licensing database indicates that,
as of January 20, 1999, of the 8,670 total MAS station authorizations,
8,410 authorizations were for private radio service, and of these,
1,433 were for private land mobile radio service.
---------------------------------------------------------------------------
\191\ See 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
98. Incumbent 24 GHz Licensees. This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band,
and applicants who wish to provide services in the 24 GHz band. The
applicable SBA small business size standard is that of ``Cellular and
Other Wireless Telecommunications'' companies. This category provides
that such a company is small if it employs no more than 1,500
persons.\192\ For the census category of Paging, Census Bureau data for
2002 show that there were 807 firms in this category that operated for
the entire year.\193\ Of this total, 804 firms had employment of 999 or
fewer employees, and three firms had employment of 1,000 employees or
more.\194\ Thus, under this category and associated small business size
standard, the majority of firms can be considered small. For the census
category of Cellular and Other Wireless Telecommunications, Census
Bureau data for 2002 show that there were 1,397 firms in this category
that operated for the entire year.\195\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\196\ Thus, under this second category and size
standard, the majority of firms can, again, 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 \197\ and TRW, Inc. It is our understanding that Teligent and
its related companies have fewer than 1,500 employees, though this may
change in the future. TRW is not a small entity. Thus, only one
incumbent licensee in the 24 GHz band is a small business entity.
---------------------------------------------------------------------------
\192\ 13 CFR 121.201, NAICS code 517212.
\193\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211 (issued Nov. 2005).
\194\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
\195\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517212 (issued Nov. 2005).
\196\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
\197\ 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.
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99. Future 24 GHz Licensees. With respect to new applicants in the
24 GHz band, we have defined ``small business'' as an entity that,
together with controlling interests and affiliates, has average annual
gross revenues for the three preceding years not exceeding $15
million.\198\ ``Very small business'' in the 24 GHz band is defined as
an entity that, together with controlling interests and affiliates, has
average gross revenues not exceeding $3 million for the preceding three
years.\199\ The SBA has approved these definitions.\200\ The Commission
will not know how many licensees will be small or very small businesses
until the auction, if required, is held.
---------------------------------------------------------------------------
\198\ Amendments to Parts 1, 2, 87 and 101 of the Commission's
Rules To License Fixed Services at 24 GHz, Report and Order, 15 FCC
Rcd 16934, 16967, para. 77 (2000) (24 GHz Report and Order); see
also 47 CFR 101.538(a)(2).
\199\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77;
see also 47 CFR 101.538(a)(1).
\200\ 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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100. Multipoint Distribution Service, Multichannel Multipoint
Distribution Service, and Instructional Television Fixed Service.
Multichannel Multipoint Distribution Service (MMDS) 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).\201\ In connection with the 1996 MDS auction, the Commission
defined ``small business'' as an entity that, together with its
affiliates, has average gross annual revenues that are not more than
$40 million for the preceding three calendar years.\202\ The SBA has
approved of this standard.\203\ The MDS auction resulted in 67
successful bidders obtaining licensing opportunities for 493 Basic
Trading Areas (BTAs).\204\ Of the 67 auction winners, 61 claimed status
as a small business. At this time, we estimate that of the 61 small
business MDS auction winners, 48 remain small business licensees. In
addition to the 48 small businesses that hold BTA authorizations, there
are approximately 392 incumbent MDS licensees that have gross revenues
that are not more than $40 million and are thus considered small
entities. In addition, hundreds of ``pre-auction stations'' were
licensed to incumbent MDS licensees prior to implementation of 309(j)
of the Commissions Act of 1934, 47 U.S.C. 309(j).
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\201\ 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, Report and Order, 10 FCC Rcd 9589, 9593, para.
7 (1995) (MDS Auction R&O).
\202\ 47 CFR 21.961(b)(1).
\203\ See Letter to Margaret Wiener, Chief, Auctions and
Industry Analysis Division, Wireless Telecommunications Bureau, FCC,
from Gary Jackson, Assistant Administrator for Size Standards, SBA,
(March 20, 2003) (noting approval of $40 million size standard for
MDS auction).
\204\ Basic Trading Areas (BTAs) were designed by Rand McNally
and are the geographic areas by which MDS was auctioned and
authorized. See MDS Auction R&O, 10 FCC Rcd at 9608, para. 34
(1995).
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101. In addition, the SBA has developed a small business size
standard for Cable and Other Program Distribution,\205\ which includes
all such companies generating $12.5 million or less in annual
receipts.\206\ The Census Bureau defines this category as follows:
``This industry comprises establishments primarily engaged as third-
party distribution systems for broadcast programming. The
establishments of this industry deliver visual, aural, or textual
programming received from cable networks, local television stations, or
radio networks to
[[Page 24230]]
consumers via cable or direct-to-home satellite systems on a
subscription or fee basis. These establishments do not generally
originate programming material.'' \207\ The SBA has developed a small
business size standard for Cable and Other Program Distribution, which
is: All such firms having $13.5 million or less in annual
receipts.\208\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\209\ Of this total, 1,087 firms had annual receipts of under $10
million, and 43 firms had receipts of $10 million or more but less than
$25 million.\210\ Thus, under this size standard, the majority of firms
can be considered small.
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\205\ 13 CFR 121.201, NAICS code 517510.
\206\ Id.
\207\ U.S. Census Bureau, 2002 NAICS Definitions, ``517510 Cable
and Other Program Distribution''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.
\208\ 13 CFR 121.201, NAICS code 517510.
\209\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\210\ Id. An additional 61 firms had annual receipts of $25
million or more.
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102. Finally, concerning ITFS, we note that educational
institutions are included in this analysis as small entities.\211\
There are currently 2,032 ITFS licensees, and all but 100 of these
licenses are held by educational institutions. Thus, we tentatively
conclude that at least 1,932 ITFS licensees are small businesses.
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\211\ In addition, the term ``small entity'' under 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.
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103. Television Broadcasting. The Census Bureau defines this
category as follows: ``This industry comprises establishments primarily
engaged in broadcasting images together with sound. These
establishments operate television broadcasting studios and facilities
for the programming and transmission of programs to the public.''\212\
The SBA has created a small business size standard for Television
Broadcasting entities, which is: Such firms having $13 million or less
in annual receipts.\213\ 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 had revenues of $12 (twelve) million or less. We
note, however, that in assessing whether a business concern qualifies
as small under the above definition, business (control) affiliations
\214\ 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.
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\212\ U.S. Census Bureau, 2002 NAICS Definitions, ``515120
Television Broadcasting'' (partial definition); http://www.census.gov/epcd/naics02/def/NDEF515.HTM
.
\213\ 13 CFR 121.201, NAICS code 515120.
\214\ ``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 to power to control both.'' 13 CFR
21.103(a)(1).
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104. 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.
105. There are also 2,117 low power television stations
(LPTV).\215\ Given the nature of this service, we will presume that all
LPTV licensees qualify as small entities under the above SBA small
business size standard.
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\215\ FCC News Release, ``Broadcast Station Totals as of
September 30, 2005.''
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106. Radio Broadcasting. The SBA defines a radio broadcast entity
that has $6 million or less in annual receipts as a small
business.\216\ Business concerns included in this industry are those
``primarily engaged in broadcasting aural programs by radio to the
public.''\217\ 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 \218\ are included.\219\ Our estimate, therefore
likely overstates the number of small businesses that might be affected
by our action.
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\216\ See OMB, North American Industry Classification System:
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code
515112).
\217\ Id.
\218\ ``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).
\219\ ``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).
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107. 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.\220\
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\220\ 13 CFR 121.201, NAICS codes 513111 and 513112.
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108. The Commission estimates that there are approximately 3,868 FM
translators and boosters.\221\ 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 ($6.5 million for a
radio station or $13.0 million for a TV station). Furthermore, they do
not meet the Small Business Act's definition of a ``small business
concern'' because they are not independently owned and operated.\222\
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\221\ FCC News Release, ``Broadcast Station Totals as of
September 30, 2004.''
\222\ 15 U.S.C. 632.
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109. Cable and Other Program Distribution. The Census Bureau
defines this category as follows: ``This industry comprises
establishments primarily engaged as third-party distribution systems
for broadcast programming. The establishments of this industry deliver
visual, aural, or textual programming received from cable networks,
local television stations, or radio networks to
[[Page 24231]]
consumers via cable or direct-to-home satellite systems on a
subscription or fee basis. These establishments do not generally
originate programming material.''\223\ The SBA has developed a small
business size standard for Cable and Other Program Distribution, which
is: All such firms having $13.5 million or less in annual
receipts.\224\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\225\ Of this total, 1,087 firms had annual receipts of under $10
million, and 43 firms had receipts of $10 million or more but less than
$25 million.\226\ Thus, under this size standard, the majority of firms
can be considered small.
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\223\ U.S. Census Bureau, 2002 NAICS Definitions, ``517510 Cable
and Other Program Distribution''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.
\224\ 13 CFR 121.201, NAICS code 517510.
\225\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\226\ Id. An additional 61 firms had annual receipts of $25
million or more.
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110. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide.\227\ Industry
data indicate that, of 1,076 cable operators nationwide, all but eleven
are small under this size standard.\228\ In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers.\229\ Industry data indicate that, of 7,208
systems nationwide, 6,139 systems have under 10,000 subscribers, and an
additional 379 systems have 10,000-19,999 subscribers.\230\ Thus, under
this second size standard, most cable systems are small.
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\227\ 47 CFR 76.901(e). The Commission determined that this size
standard equates approximately to a size standard of $100 million or
less in annual revenues. Implementation of Sections of the 1992
Cable Act: Rate Regulation, Sixth Report and Order and Eleventh
Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
\228\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
& C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\229\ 47 CFR 76.901(c).
\230\ Warren Communications News, Television & Cable Factbook
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data
current as of Oct. 2005). The data do not include 718 systems for
which classifying data were not available.
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111. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.''\231\ The Commission has determined that an operator
serving fewer than 677,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all its affiliates, do not exceed $250 million in the
aggregate.\232\ Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard.\233\ We
note that the Commission neither requests nor collects information on
whether cable system operators are affiliated with entities whose gross
annual revenues exceed $250 million,\234\ and therefore we are unable
to estimate more accurately the number of cable system operators that
would qualify as small under this size standard.
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\231\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
\232\ 47 CFR 76.901(f); see Public Notice, FCC Announces New
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001)
\233\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
& C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\234\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's
finding that the operator does not qualify as a small cable operator
pursuant to Sec. 76.901(f) of the Commission's rules. See 47 CFR
76.909(b).
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112. Open Video Services. Open Video Service (OVS) systems provide
subscription services.\235\ The SBA has created a small business size
standard for Cable and Other Program Distribution.\236\ This standard
provides that a small entity is one with $13.5 million or less in
annual receipts. The Commission has certified approximately 25 OVS
operators to serve 75 areas, and some of these are currently providing
service.\237\ Affiliates of Residential Communications Network, Inc.
(RCN) received approval to operate OVS systems in New York City,
Boston, Washington, D.C., and other areas. RCN has sufficient revenues
to assure that they do not qualify as a small business entity. Little
financial information is available for the other entities that are
authorized to provide OVS and are not yet operational. Given that some
entities authorized to provide OVS service have not yet begun to
generate revenues, the Commission concludes that up to 24 OVS operators
(those remaining) might qualify as small businesses that may be
affected by the rules and policies proposed herein.
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\235\ See 47 U.S.C. 573.
\236\ 13 CFR 121.201, NAICS code 517510.
\237\ See http://www.fcc.gov/csb/ovs/csovscer.html (current as
of March 2002).
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113. Cable Television Relay Service. This service includes
transmitters generally used to relay cable programming within cable
television system distribution systems. The SBA has developed a small
business size standard for Cable and Other Program Distribution, which
is: All such firms having $13.5 million or less in annual
receipts.\238\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\239\ Of this total, 1,087 firms had annual receipts of under $10
million, and 43 firms had receipts of $10 million or more but less than
$25 million.\240\ Thus, under this size standard, the majority of firms
can be considered small.
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\238\ 13 CFR 121.201, NAICS code 517510.
\239\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\240\ Id. An additional 61 firms had annual receipts of $25
million or more.
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114. Multichannel Video Distribution and Data Service. MVDDS is a
terrestrial fixed microwave service operating in the 12.2-12.7 GHz
band. The Commission adopted criteria for defining three groups of
small businesses for purposes of determining their eligibility for
special provisions such as bidding credits. It defined a very small
business as an entity with average annual gross revenues not exceeding
$3 million for the preceding three years; a small business as an entity
with average annual gross revenues not exceeding $15 million for the
preceding three years; and an entrepreneur as an entity with average
annual gross revenues not exceeding $40 million for the preceding three
years.\241\ These definitions were approved by the SBA.\242\ On January
27,
[[Page 24232]]
2004, the Commission completed an auction of 214 MVDDS licenses
(Auction No. 53). In this auction, ten winning bidders won a total of
192 MVDDS licenses.\243\ Eight of the ten winning bidders claimed small
business status and won 144 of the licenses. The Commission also held
an auction of MVDDS licenses on December 7, 2005 (Auction 63). Of the
three winning bidders who won 22 licenses, two winning bidders, winning
21 of the licenses, claimed small business status.\244\
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\241\ Amendment of Parts 2 and 25 of the Commission's Rules to
Permit Operation of NGSO FSS Systems Co-Frequency with GSO and
Terrestrial Systems in the Ku-Band Frequency Range; Amendment of the
Commission's Rules to Authorize Subsidiary Terrestrial Use of the
12.2-12.7 GHz Band by Direct Boradcast Satellite Licenses and their
Affiliates; and Applications of Broadwave USA, PDC Broadband
Corporation, and Satellite Receivers, Ltd. to provide A Fixed
Service in the 12.2-12.7 GHz Band, ET Docket No. 98-206, Memorandum
Opinion and Order and Second Report and Order, 17 FCC Rcd 9614, 9711
para. 252 (2002).
\242\ See Letter from Hector V. Barreto, Administrator, U.S.
Small Business Administration, to Margaret W. Wiener, Chief,
Auctions and Industry Analysis Division, Wireless Telecommunications
Bureau, Federal Communications Commission, dated February 13, 2002.
\243\ See ``Multichannel Video Distribution and Data Service
Auction Closes,'' Public Notice, 19 FCC Rcd 1834 (2004).
\244\ See ``Auction of Multichannel Video Distribution and Data
Service Licenses Closes; Winning Bidders Announced for Auction No.
63,'' Public Notice, 20 FCC Rcd 19807 (2005).
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115. Amateur Radio Service. These licensees are held by individuals
in a noncommercial capacity; these licensees are not small entities.
116. Aviation and Marine Services. Small businesses in the aviation
and marine radio services use a very high frequency (VHF) marine or
aircraft radio and, as appropriate, an emergency position-indicating
radio beacon (and/or radar) or an emergency locator transmitter. The
Commission has not developed a small business size standard
specifically applicable to these small businesses. For purposes of this
analysis, the Commission uses the SBA small business size standard for
the category ``Cellular and Other Telecommunications,'' which is 1,500
or fewer employees.\245\ 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.\246\
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.
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\245\ 13 CFR 121.201, NAICS code 517212.
\246\ Amendment of the Commission's Rules Concerning Maritime
Communications, Third Report and Order and Memorandum Opinion and
Order, 13 FCC Rcd 19853 (1998).
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117. Personal Radio Services. Personal radio services provide
short-range, low power radio for personal communications, radio
signaling, and business communications not provided for in other
services. The Personal Radio Services include spectrum licensed under
Part 95 of our rules.\247\ These services include Citizen Band Radio
Service (CB), General Mobile Radio Service (GMRS), Radio Control Radio
Service (R/C), Family Radio Service (FRS), Wireless Medical Telemetry
Service (WMTS), Medical Implant Communications Service (MICS), Low
Power Radio Service (LPRS), and Multi-Use Radio Service (MURS).\248\
There are a variety of methods used to license the spectrum in these
rule parts, from licensing by rule, to conditioning operation on
successful completion of a required test, to site-based licensing, to
geographic area licensing. Under the RFA, the Commission is required to
make a determination of which small entities are directly affected by
the rules being proposed. Since all such entities are wireless, we
apply the definition of cellular and other wireless telecommunications,
pursuant to which a small entity is defined as employing 1,500 or fewer
persons.\249\ Many of the licensees in these services are individuals,
and thus are not small entities. In addition, due to the mostly
unlicensed and shared nature of the spectrum utilized in many of these
services, the Commission lacks direct information upon which to base an
estimation of the number of small entities under an SBA definition that
might be directly affected by the proposed rules.
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\247\ 47 CFR Part 90.
\248\ The Citizens Band Radio Service, General Mobile Radio
Service, Radio Control Radio Service, Family Radio Service, Wireless
Medical Telemetry Service, Medical Implant Communications Service,
Low Power Radio Service, and Multi-Use Radio Service are governed by
Subpart D, Subpart A, Subpart C, Subpart B, Subpart H, Subpart I,
Subpart G, and Subpart J, respectively, of Part 95 of the
Commission's rules. See generally 47 CFR Part 95.
\249\ 13 CFR 121.201, NAICS Code 517212.
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118. Public Safety Radio Services. Public Safety radio services
include police, fire, local government, forestry conservation, highway
maintenance, and emergency medical services.\250\ There are a total of
approximately 127,540 licensees in these services. Governmental
entities \251\ as well as private businesses comprise the licensees for
these services. All governmental entities with populations of less than
50,000 fall within the definition of a small entity.\252\
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\250\ With the exception of the special emergency service, these
services are governed by Subpart B of part 90 of the Commission's
Rules, 47 CFR 90.15-90.27. The police service includes approximately
27,000 licensees that serve state, county, and municipal enforcement
through telephony (voice), telegraphy (code) and teletype and
facsimile (printed material). The fire radio service includes
approximately 23,000 licensees comprised of private volunteer or
professional fire companies as well as units under governmental
control. The local government service that is presently comprised of
approximately 41,000 licensees that are state, county, or municipal
entities that use the radio for official purposes not covered by
other public safety services. There are approximately 7,000
licensees within the forestry service which is comprised of
licensees from state departments of conservation and private forest
organizations who set up communications networks among fire lookout
towers and ground crews. The approximately 9,000 state and local
governments are licensed to highway maintenance service provide
emergency and routine communications to aid other public safety
services to keep main roads safe for vehicular traffic. The
approximately 1,000 licensees in the Emergency Medical Radio Service
(EMRS) use the 39 channels allocated to this service for emergency
medical service communications related to the delivery of emergency
medical treatment. 47 CFR 90.15-90.27. The approximately 20,000
licensees in the special emergency service include medical services,
rescue organizations, veterinarians, handicapped persons, disaster
relief organizations, school buses, beach patrols, establishments in
isolated areas, communications standby facilities, and emergency
repair of public communications facilities. 47 CFR 90.33-90.55.
\251\ 47 CFR 1.1162.
\252\ 5 U.S.C. 601(5).
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IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
119. With certain exceptions, the Commission's Schedule of
Regulatory Fees applies to all Commission licensees and regulatees.
Most licensees will be required to count the number of licenses or call
signs authorized, complete and submit an FCC Form 159 Remittance
Advice, and pay a regulatory fee based on the number of licenses or
call signs.\253\ Interstate telephone
[[Page 24233]]
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.
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\253\ 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.
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120. 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.
121. Licensees and regulatees are advised that failure to submit
the required regulatory fee in a timely manner will subject the
licensee or regulatee to a late payment penalty of 25 percent in
addition to the required fee.\254\ If payment is not received, new or
pending applications may be dismissed, and existing authorizations may
be subject to rescission.\255\ Further, in accordance with the Debt
Collection Improvement Act of 1996 (DCIA), Public Law 194-134, 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.\256\ Nonpayment of
regulatory fees is a debt owed the United States pursuant to 31 U.S.C.
3711 et seq., and the DCIA. Appropriate enforcement measures as well as
administrative and judicial remedies, may be exercised by the
Commission. Debts owed to the Commission may result in a person or
entity being denied a federal loan or loan guarantee pending before
another federal agency until such obligations are paid.\257\
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\254\ 47 CFR 1.1164.
\255\ 47 CFR 1.1164(c).
\256\ Public Law 104-134, 110 Stat. 1321 (1996).
\257\ 31 U.S.C. 7701(c)(2)(B).
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122. The Commission's rules currently provide for relief in
exceptional circumstances. Persons or entities may request a waiver,
reduction or deferment of payment of the regulatory fee.\258\ 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.
---------------------------------------------------------------------------
\258\ 47 CFR 1.1166.
---------------------------------------------------------------------------
V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
123. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its 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.\259\ In the NPRM, we have sought comment on alternatives that
might simplify our fee procedures or otherwise benefit filers,
including small entities, while remaining consistent with our statutory
responsibilities in this proceeding.
---------------------------------------------------------------------------
\259\ 5 U.S.C. 603.
---------------------------------------------------------------------------
124. The Omnibus Appropriations Act for FY 2007, Public Law 109-
383, 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) 2007.\260\ 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.
---------------------------------------------------------------------------
\260\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------
125. Several categories of licensees and regulatees are exempt from
payment of regulatory fees. See, e.g., footnote 253, supra. Also,
waiver procedures provide regulatees, including small entity
regulatees, relief in exceptional circumstances. See Section IV, supra.
VI. Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rules
126. None.
Attachment B--Sources of Payment Unit Estimates for FY 2007
In order to calculate individual service fees for FY 2007, we
adjusted FY 2006 payment units for each service to more accurately
reflect expected FY 2007 payment liabilities. We obtained our updated
estimates through a variety of means. For example, we used Commission
licensee data bases, actual prior year payment records and industry and
trade association projections when available. The databases we
consulted include our Universal Licensing System (ULS), International
Bureau Filing System (IBFS), Consolidated Database System (CDBS) and
Cable Operations and Licensing System (COALS), as well as reports
generated within the Commission such as the Wireline Competition
Bureau's Trends in Telephone Service and the Wireless
Telecommunications Bureau's Numbering Resource Utilization Forecast.
We tried to obtain verification for these estimates from multiple
sources and, in all cases; we compared FY 2007 estimates with actual FY
2006 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 2007 and the fact that, in many services, the
number of actual licensees or station operators fluctuates from time to
time due to
[[Page 24234]]
economic, technical or other reasons. Therefore, when we note, for
example, that our estimated FY 2007 payment units are based on FY 2006
actual payment units, it does not necessarily mean that our FY 2007
projection is exactly the same number as FY 2006. It means that we have
either rounded the FY 2007 number or adjusted it slightly to account
for these variables.
------------------------------------------------------------------------
Fee category Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, 218-219 Based on Wireless
MHz, Marine (Ship & Coast), Aviation Telecommunications Bureau (WTB)
(Aircraft & Ground), GMRS, Amateur projections of new applications
Vanity Call Signs, Domestic Public and renewals taking into
Fixed. consideration existing
Commission licensee databases.
Aviation (Aircraft) and Marine
(Ship) estimates have been
adjusted to take into
consideration the licensing of
portions of these services on a
voluntary basis.
CMRS Mobile Services................. Based on Wireless
Telecommunications Bureau
reports.
CMRS Messaging Services.............. Based on Wireless
Telecommunications Bureau
Competition Report findings.
AM/FM Radio Stations................. Based on CDBS data, adjusted for
exemptions, and actual FY 2006
payment units.
UHF/VHF Television Stations.......... Based on CDBS data, adjusted for
exemptions, and actual FY 2006
payment units.
AM/FM/TV Construction Permits........ Based on CDBS data, adjusted for
exemptions, and actual FY 2006
payment units.
LPTV, Translators and Boosters, Class Based on CDBS data, adjusted for
A Television. exemptions, and actual FY 2006
payment units.
Broadcast Auxiliaries................ Based on actual FY 2006 payment
units.
BRS (formerly MDS/MMDS).............. Based on Wireless
Telecommunications Bureau
reports and actual FY 2006
payment units.
Cable Television Relay Service (CARS) Based on data from Media Bureau's
Stations. COALS database and actual FY
2006 payment units.
Cable Television System Subscribers.. Based on publicly available data
sources for estimated subscriber
counts and actual FY 2006
payment units.
Interstate Telecommunication Service Based on actual FY 2006
Providers. interstate revenues reported on
Telecommunications Reporting
Worksheet, adjusted for FY 2007
revenue growth/decline for
industry, and projections by the
Wireline Competition Bureau.
Earth Stations....................... Based on International Bureau
reports and actual FY 2006
payment units.
Space Stations (GSOs & NGSOs)........ Based on International Bureau
reports and actual FY 2006
payment units.
International Bearer Circuits........ Based on International Bureau
reports and actual FY 2006
payment units.
International HF Broadcast Stations, Based on International Bureau
International Public Fixed Radio reports and actual FY 2006
Service. payment units.
------------------------------------------------------------------------
Attachment C--Calculation of FY 2007 Revenue Requirements and Pro-Rata Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pro-rated FY
FY 2007 payment FY 2006 2007 revenue Computed new Rounded new FY Expected FY
Fee category units Years revenue requirement FY 2007 2007 2007 revenue
estimate \261\ regulatory fee regulatory fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use)...................... 1,250 10 440,000 426,300 34 35 437,500
PLMRS (Shared use)......................... 15,500 10 2,500,000 2,422,162 16 15 2,325,000
Microwave.................................. 4,350 10 1,700,000 1,647,070 38 40 1,740,000
218-219 MHz (Formerly IVDS)................ 3 10 1,650 1,599 53 55 1,650
Marine (Ship).............................. 8,000 10 800,000 775,092 10 10 800,000
GMRS....................................... 16,000 5 425,000 411,768 5 5 400,000
Aviation (Aircraft)........................ 8,800 10 300,000 290,659 3 5 440,000
Marine (Coast)............................. 360 10 120,000 116,264 32 30 108,000
Aviation (Ground).......................... 1,650 10 150,000 145,330 9 10 165,000
Amateur Vanity Call Signs.................. 14,700 10 177,116 171,601 1.17 1.17 171,990
AM Class A................................. 68 1 217,350 210,428 3,095 3,100 210,800
AM Class B................................. 1,567 1 2,619,500 2,534,141 1,617 1,625 2,546,375
AM Class C................................. 937 1 921,500 890,541 950 950 890,150
AM Class D................................. 1,705 1 3,095,750 2,994,982 1,757 1,750 2,983,750
FM Classes A, B1 & C3...................... 3,027 1 6,519,500 6,311,615 2,085 2,075 6,281,025
FM Classes B, C, C0, C1 & C2............... 3,002 1 7,924,300 7,675,996 2,557 2,550 7,655,100
AM Construction Permits.................... 65 1 37,525 26,003 400 400 26,000
FM Construction Permits \262\.............. 205 1 115,000 117,898 575 575 117,875
Satellite TV............................... 125 1 141,450 137,046 1,096 1,100 137,500
Satellite TV Construction Permit........... 3 1 1,710 1,657 552 550 1,650
VHF Markets 1-10........................... 43 1 2,850,100 2,765,285 64,309 64,300 2,764,900
VHF Markets 11-25.......................... 61 1 2,914,275 2,827,462 46,352 46,350 2,827,350
VHF Markets 26-50.......................... 77 1 2,465,625 2,392,781 31,075 31,075 2,392,775
VHF Markets 51-100......................... 115 1 2,372,200 2,300,839 20,007 20,000 2,300,000
VHF Remaining Markets...................... 198 1 1,045,200 1,012,657 5,114 5,125 1,014,750
VHF Construction Permits................... 3 1 30,600 15,377 5,126 5,125 15,375
UHF Markets 1-10........................... 91 1 1,846,750 1,787,645 19,644 19,650 1,788,150
UHF Markets 11-25.......................... 76 1 1,528,000 1,478,819 19,458 19,450 1,478,200
UHF Markets 26-50.......................... 115 1 1,284,075 1,242,489 10,804 10,800 1,242,000
UHF Markets 51-100......................... 168 1 1,092,000 1,056,977 6,292 6,300 1,058,400
UHF Remaining Markets...................... 183 1 331,925 321,590 1,757 1,750 320,250
[[Page 24235]]
UHF Construction Permits \1\............... 22 1 33,725 38,517 1,751 1,750 38,500
Broadcast Auxiliaries...................... 27,000 1 240,000 232,528 9 10 270,000
LPTV/Trans-lators/Boosters/Class A TV...... 3,400 1 1,218,000 1,180,077 347 345 1,173,000
CARS Stations.............................. 780 1 148,750 144,119 185 185 144,300
Cable TV Systems........................... 64,500,000 1 49,770,000 48,220,399 0.74760 0.75 48,375,000
Interstate Tele-communication Service 51,000,000,000 1 140,184,000 135,819,336 0.00266312 0.00266 135,660,000
Providers.................................
CMRS Mobile Services (Cellular/Public 229,000,000 1 42,000,000 40,596,052 0.177 0.18 41,220,000
Mobile)...................................
CMRS Messaging Services.................... 7,500,000 1 520,000 600,077 0.08 0.08 600,000
BRS........................................ 1,300 1 485,925 425,139 327 325 422,500
LMDS....................................... 410 1 90,750 134,077 327 325 133,250
International Bearer Circuits.............. 6,500,000 1 7,791,000 7,548,425 1.16 1.16 7,540,000
International Public Fixed................. 1 1 1,925 1,865 1,865 1,875 1,875
Earth Stations............................. 3,900 1 752,500 729,071 187 185 721,500
International HF Broadcast................. 5 1 4,100 3,972 794 795 3,975
Space Stations (Geostationary)............. 86 1 9,693,975 9,392,151 109,211 109,200 9,391,200
Space Stations (Non-Geostationary.......... 6 1 721,350 698,891 116,482 116,475 698,850
****** Total Estimated Revenue to be ................ ......... 299,624,101 290,274,768 .............. .............. 291,035,465
Collected.................................
****** Total Revenue Requirement........... ................ ......... 298,771,000 290,295,160 .............. .............. 290,295,160
Difference................................. ................ ......... 853,101 (20,392) .............. .............. 740,305
--------------------------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\261\ -0.028369018 factor applied based on the amount Congress
designated for recovery through regulatory fees (Pub. L. 109-108 and
47 U.S.C. 159(a)(2)).
\262\ The AM and FM Construction Permit revenues and the VHF and
UHF Construction Permit revenues were adjusted to set the regulatory
fee to an amount no higher than the lowest licensed fee for that
class of service.
Attachment D--Proposed FY 2007 Schedule of Regulatory Fees
------------------------------------------------------------------------
Annual
Fee category regulatory fee
(U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).... 35
Microwave (per license) (47 CFR part 101)............... 40
218-219 MHz (Formerly Interactive Video Data Service) 55
(per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............ 10
Marine (Coast) (per license) (47 CFR part 80)........... 30
General Mobile Radio Service (per license) (47 CFR part 5
95)....................................................
Rural Radio (47 CFR part 22) (previously listed under 15
the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90)....... 15
Aviation (Aircraft) (per station) (47 CFR part 87)...... 5
Aviation (Ground) (per license) (47 CFR part 87)........ 10
Amateur Vanity Call Signs (per call sign) (47 CFR part 1.17
97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts .18
20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22, .08
24 and 90).............................................
Broadband Radio Service (formerly MMDS/ MDS) (per 325
license) (47 CFR part 21)..............................
Local Multipoint Distribution Service (per call sign) 325
(47 CFR, part 101).....................................
AM Radio Construction Permits........................... 400
FM Radio Construction Permits........................... 575
TV (47 CFR part 73) VHF Commercial:
Markets 1-10........................................ 64,300
Markets 11-25....................................... 46,350
Markets 26-50....................................... 31,075
Markets 51-100...................................... 20,000
[[Page 24236]]
Remaining Markets................................... 5,125
Construction Permits................................ 5,125
TV (47 CFR part 73) UHF Commercial:
Markets 1-10........................................ 19,650
Markets 11-25....................................... 19,450
Markets 26-50....................................... 10,800
Markets 51-100...................................... 6,300
Remaining Markets................................... 1,750
Construction Permits................................ 1,750
Satellite Television Stations (All Markets)............. 1,100
Construction Permits--Satellite Television Stations..... 550
Low Power TV, Class A TV, TV/FM Translators & Boosters 345
(47 CFR part 74).......................................
Broadcast Auxiliaries (47 CFR part 74).................. 10
CARS (47 CFR part 78)................................... 185
Cable Television Systems (per subscriber) (47 CFR part .75
76)....................................................
Interstate Telecommunication Service Providers (per .00266
revenue dollar)........................................
Earth Stations (47 CFR part 25)......................... 185
Space Stations (per operational station in geostationary 109,200
orbit) (47 CFR part 25) also includes DBS Service (per
operational station) (47 CFR part 100).................
Space Stations (per operational system in non- 116,475
geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit). 1.16
International Public Fixed (per call sign) (47 CFR part 1,875
23)....................................................
International (HF) Broadcast (47 CFR part 73)........... 795
------------------------------------------------------------------------
FY 2007 Schedule of Regulatory Fees (continued)
FY 2007 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
FM Classes
Population Served AM Class A AM Class B AM Class C AM Class D FM Classes B, C, C0,
A, B1 & C3 C1 & C2
----------------------------------------------------------------------------------------------------------------
< =25,000.......................... 625 475 400 475 575 725
25,001--75,000.................... 1,225 925 600 725 1,150 1,250
75,001--150,000................... 1,825 1,150 800 1,200 1,600 2,300
150,001--500,000.................. 2,750 1,950 1,200 1,425 2,475 3,000
500,001--1,200,000................ 3,950 2,975 2,000 2,375 3,900 4,400
1,200,001--3,000,00............... 6,075 4,575 3,000 3,800 6,350 7,025
>3,000,000........................ 7,275 5,475 3,800 4,750 8,075 9,125
----------------------------------------------------------------------------------------------------------------
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 Sec. Sec. 73.150
and 73.152 of the Commission's rules.\263\ 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 \264\. Using the
calculated horizontal radiation values, and the retrieved soil
conductivity data, the distance to the principal community (5 mV/m)
contour was predicted for each of the 360 radials. The resulting
distance to principal community contours were used to form a
geographical polygon. Population counting was accomplished by
determining which 2000 block centroids were contained in the polygon.
(A block centroid is the center point of a small area containing
population as computed by the U.S. Census Bureau.) The sum of the
population figures for all enclosed blocks represents the total
population for the predicted principal community coverage area.
---------------------------------------------------------------------------
\263\ 47 CFR 73.150 and 73.152.
\264\ See Map of Estimated Effective Ground Conductivity in the
United States, 47 CFR 73.190 Figure R3.
---------------------------------------------------------------------------
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
[[Page 24237]]
the Field Strength (50-50) propagation curves specified in 47 CFR
73.313 of the Commission's rules to predict the distance to the
principal community (70 dBu (decibel above 1 microVolt per meter) or
3.17 mV/m) contour for each of the 360 radials.\265\ The resulting
distance to principal community contours were used to form a
geographical polygon. Population counting was accomplished by
determining which 2000 block centroids were contained in the polygon.
The sum of the population figures for all enclosed blocks represents
the total population for the predicted principal community coverage
area.
---------------------------------------------------------------------------
\265\ 47 CFR 73.313.
---------------------------------------------------------------------------
Attachment F--FY 2006 Schedule of Regulatory Fees
------------------------------------------------------------------------
Annual
Fee category regulatory fee
(U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).... 20
Microwave (per license) (47 CFR part 101)............... 85
218-219 MHz (Formerly Interactive Video Data Service) 55
(per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............ 10
Marine (Coast) (per license) (47 CFR part 80)........... 20
General Mobile Radio Service (per license) (47 CFR part 5
95)....................................................
Rural Radio (47 CFR part 22) (previously listed under 10
the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90)....... 10
Aviation (Aircraft) (per station) (47 CFR part 87)...... 5
Aviation (Ground) (per license) (47 CFR part 87)........ 10
Amateur Vanity Call Signs (per call sign) (47 CFR part 2.08
97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts .20
20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22, .08
24 and 90).............................................
Multipoint Distribution Services (MMDS/MDS) (per license 275
sign) (47 CFR part 21).................................
Local Multipoint Distribution Service (per call sign) 275
(47 CFR, part 101).....................................
AM Radio Construction Permits........................... 395
FM Radio Construction Permits........................... 575
TV (47 CFR part 73) VHF Commercial:
Markets 1-10........................................ 64,775
Markets 11-25....................................... 47,775
Markets 26-50....................................... 32,875
Markets 51-100...................................... 20,450
Remaining Markets................................... 5,025
Construction Permits................................ 3,400
TV (47 CFR part 73) UHF Commercial:
Markets 1-10........................................ 20,750
Markets 11-25....................................... 19,100
Markets 26-50....................................... 10,975
Markets 51-100...................................... 6,500
Remaining Markets................................... 1,775
Construction Permits................................ 1,775
Satellite Television Stations (All Markets)............. 1,150
Construction Permits--Satellite Television Stations..... 570
Low Power TV, TV/FM Translators & Boosters (47 CFR part 420
74)....................................................
Broadcast Auxiliary (47 CFR part 74).................... 10
CARS (47 CFR part 78)................................... 175
Cable Television Systems (per subscriber) (47 CFR part .79
76)....................................................
Interstate Telecommunication Service Providers (per .00264
revenue dollar)........................................
Earth Stations (47 CFR part 25)......................... 215
Space Stations (per operational station in geostationary 111,425
orbit) (47 CFR part 25) also includes Direct Broadcast
Satellite Service (per operational station) (47 CFR
part 100)..............................................
Space Stations (per operational system in non- 120,225
geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit). 1.47
International Public Fixed (per call sign) (47 CFR part 1,925
23)....................................................
International (HF) Broadcast (47 CFR part 73)........... 820
------------------------------------------------------------------------
FY 2006 Schedule of Regulatory Fees (continued)
FY 2006 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
FM Classes
Population served AM Class A AM Class B AM Class C AM Class D FM Classes B, C, C0,
A, B1 & C3 C1 & C2
----------------------------------------------------------------------------------------------------------------
< =25,000.......................... 625 500 400 475 575 750
25,001-75,000..................... 1,225 950 600 725 1,150 1,325
75,001-150,000.................... 1,850 1,200 800 1,200 1,575 2,450
150,001-500,000................... 2,775 2,025 1,200 1,425 2,450 3,200
[[Page 24238]]
500,001-1,200,000................. 4,000 3,100 2,000 2,375 3,875 4,700
1,200,001-3,000,00................ 6,150 4,750 3,000 3,800 6,325 7,500
>3,000,000........................ 7,375 5,700 3,800 4,750 8,050 9,750
----------------------------------------------------------------------------------------------------------------
[FR Doc. E7-8366 Filed 5-1-07; 8:45 am]
BILLING CODE 6712-01-P