[Federal Register Volume 74, Number 104 (Tuesday, June 2, 2009)]
[Proposed Rules]
[Pages 26329-26360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12594]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 09-65; FCC 09-38]
Assessment and Collection of Regulatory Fees for Fiscal Year 2009
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 an amount of $341,875,000 that Congress has required
the Commission to collect for fiscal year 2009. 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 June 4, 2009, and reply comments are due June
11, 2009.
ADDRESSES: You may submit comments, identified by MD Docket No. 09-65,
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: [email protected]. Include MD Docket No. 09-65 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: Daniel Daly, Office of Managing
Director at (202) 418-1832.
SUPPLEMENTARY INFORMATION:
Adopted: May 11, 2009; Released: May 14, 2009.
By the Commission: Acting Chairman Copps issuing a statement.
Table of Contents
Paragraph
Heading No.
I. INTRODUCTION............................................. 1
II. NOTICE OF PROPOSED RULEMAKING........................... 2
A. FY 2009 Regulatory Fee Assessment Methodology-- 2
Development of FY 2009 Regulatory Fees.................
B. Regulatory Fee Obligations for Digital Broadcasters.. 5
C. Commercial Mobile Radio Service Messaging Service.... 8
D. International Bearer Circuits........................ 9
E. Administrative and Operational Issues................ 11
1. Mandatory Use of Fee Filer....................... 12
2. Notification and Collection of Regulatory Fees... 16
a. Pre-bills.................................... 16
[[Page 26330]]
b. Future Streamlining of the Regulatory Fee 17
Assessment and Collection Process..............
III. PROCEDURAL MATTERS..................................... 18
A. Public Notices and Fact Sheets....................... 19
B. Assessment Notifications............................. 20
1. Media Services Licensees......................... 20
2. CMRS Cellular and Mobile Services Assessments.... 22
C. Streamlined Regulatory Fee Payment Process........... 25
1. Cable Television Subscribers..................... 25
2. CMRS Cellular and Mobile Providers............... 26
3. Interstate Telecommunications Service Providers 27
(``ITSP'').........................................
D. Payment of Regulatory Fees........................... 28
1. Lock Box Bank.................................... 28
2. Receiving Bank for Wire Payments................. 29
3. De Minimis Regulatory Fees....................... 30
4. Standard Fee Calculations and Payment Dates...... 31
E. Enforcement.......................................... 32
F. Final Regulatory Flexibility Certification........... 34
G. Initial Regulatory Flexibility Analysis.............. 35
H. Congressional Review Act Analysis.................... 36
I. Initial Paperwork Reduction Act Analysis............. 37
J. Ex Parte Rules....................................... 38
K. Filing Requirements.................................. 39
IV. ORDERING CLAUSES........................................ 44
Initial Regulatory Flexibility Analysis........
Proposed Letter to Submarine Cable Operators...
Sources of Payment Unit Estimates for FY 2009..
Calculation of FY 2009 Revenue Requirements and
Pro-Rata Fees..........................................
Proposed FY 2009 Schedule of Regulatory Fees...
Factors, Measurements, and Calculations That Go
Into Determining Station Signal Contours and Associated
Population Coverages...................................
FY 2008 Schedule of Regulatory Fees............
Proposed Rules for FY 2009 International Bearer
Circuit Fees...........................................
I. Introduction
1. Section 9 of the Communications Act of 1934, as amended (``the
Act''), requires the Commission to assess fees to recover the
regulatory costs associated with the Commission's enforcement, policy
and rulemaking, user information, and international activities.\1\ The
Commission is obligated to collect $341,875,000 in regulatory fees
during Fiscal Year (``FY'') 2009 to fund the Commission's
operations.\2\ In the accompanying Notice of Proposed Rulemaking
(``NPRM''), we request comment on substantive and procedural aspects of
our current regulatory fee program, including assessment of fees on
digital broadcasting television licensees after the June 12, 2009
nation-wide digital transition date.
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\1\ 47 U.S.C. 159(a)(1).
\2\ See Omnibus Appropriations Act, 2009, Public Law 111-8.
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II. Notice of Proposed Rulemaking
A. FY 2009 Regulatory Fee Assessment Methodology--Development of FY
2009 Regulatory Fees
2. In this NPRM, we seek comment on the development of FY 2009
regulatory fees collected pursuant to section 9 of the Act. For FY
2009, we propose to retain the established methods and policies that
the Commission has used to collect regulatory fees in the past except
as discussed below. For the FY 2009 regulatory fee cycle, we propose to
retain most of the administrative measures used for notification and
assessment of regulatory fees of previous years. As we have in previous
years, we seek comment on ways to improve the Commission's
administrative processes for notifying entities of their regulatory fee
obligations and collecting their payments.
3. The Commission is obligated to collect $341,875,000 in
regulatory fees during FY 2009 to fund the Commission's operations.\3\
Consistent with our established practice, we intend to collect these
fees in the August-September 2009 time frame in order to collect the
required amount by the end of the fiscal year.
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\3\ See Omnibus Appropriations Act, 2009, Public Law 111-8.
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4. For our FY 2009 regulatory fee assessment, we propose to use
essentially the same section 9 regulatory fee assessment methodology
adopted for FY 2008, except with regard to submarine cable systems or
as otherwise discussed below.\4\ Each fiscal year, the Commission
proportionally allocates to fee categories the total amount that must
be collected through our section 9
[[Page 26331]]
regulatory fees.\5\ Consistent with past practice, we propose to divide
the FY 2009 payment amount by the number of payment units in each fee
category to calculate the unit fee. For cases involving small fees, we
propose to divide the resulting unit fee by the term of the license. We
propose to round these fees consistent with the requirements of section
9(b)(2) of the Act. We seek comment on these proposals.
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\4\ We recently revised the Commission's international bearer
circuit (IBC) fee rules by adopting a new methodology for
calculating regulatory fees on both common carrier and non-common
carrier international submarine cable systems based on a per system
fee. See Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, MD Docket No. 08-65, Second Report and Order (rel. March
24, 2009) (``Submarine Cable Order''). Under section 9(b)(4)(B) of
the Act, we must notify Congress 90 days before a permitted
amendment to the regulatory fees can take effect. The 90 day period
will elapse as of July 15, 2009. For this reason, we are calculating
proposed regulatory fees for FY 2009 for this service using both the
new methodology and the old (pre-FY 2009) methodology. See Appendix
A for the proposed regulatory fees for international submarine cable
systems based on the new methodology adopted in the Submarine Cable
Order. See Appendix I for the proposed regulatory fees for
international submarine cable systems based on the current
methodology which remains in effect pending the Congressional
notification process. If the 90 day period elapses without
Congressional objection to the permitted amendment, we will use the
new methodology contained in Appendix A to calculate submarine cable
fees in our FY 2009 report and order. Terrestrial and satellite
facilities do not have cable landing licenses and will continue to
pay regulatory fees on a per 64KB circuit basis, under our historic
methodology as revised in the Submarine Cable Order. See Submarine
Cable Order at paragraph 20.
\5\ See Appendix H for the proposed FY 2009 regulatory fee
assessment methodology, including a comparison to the FY 2008
results.
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B. Regulatory Fee Obligations for Digital Broadcasters
5. The rules currently require that VHF and UHF stations pay
regulatory fees; the rules do not specify ``analog'' or ``digital.''
\6\ In our FY 2005 Report and Order, we stated that we had sought
comment on whether to establish regulatory fee obligations for digital
broadcasters but received no comments on the issue and did not
establish regulatory fee obligations for digital broadcasters at that
time.\7\ We instead maintained that the regulatory fee obligation
applied only for analog broadcaster facilities. Again in the
Commission's FY 2008 Report and Order, we sought comment on how to
assess regulatory fees after the conversion from analog to digital
broadcasting, which will be completed on June 12, 2009 for full-power
stations.\8\ We again received no comments on this issue.
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\6\ See 47 CFR 1.1153.
\7\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005, MD Docket No. 05-59, Report and Order and Order on
Reconsideration, 20 FCC Rcd 12259, 12266-67, paragraph 23 (2005)
(``FY 2005 Report and Order'').
\8\ FY 2008 Report and Order at paragraphs 44-46.
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6. Consistent with past years, we will not assess FY 2009
regulatory fees for both digital and analog licenses from a licensee in
the process of transitioning from analog to digital. Stations that were
broadcasting in both analog and digital on October 1, 2008 will be
assessed FY 2009 regulatory fees for their analog license only. Also
consistent with our past practice, stations that were broadcasting in
digital only on October 1, 2008 will not be assessed regulatory fees
for their digital license for FY 2009.
7. Beginning in FY 2010, we plan to collect regulatory fees from
digital broadcasters. We seek comment on our plan to collect regulatory
fees on full-power digital broadcast stations beginning with FY 2010,
i.e., the fiscal year after the nation-wide transition date on June 12,
2009. Our goal is to ensure that digital broadcasters will pay their
share of regulatory fees in the years after the nation-wide transition
is complete. Therefore, in FY 2010, we plan to collect regulatory fees
from digital broadcasters. During this transitional year, we seek
comment on our plan to collect regulatory fees from digital
broadcasters beginning in FY 2010, and whether an accompanying rule
change is necessary.
C. Commercial Mobile Radio Service Messaging Service
8. Commercial Mobile Radio Service (``CMRS'') Messaging Services,
which replaced the CMRS One-Way Paging fee category in FY 1997,
includes all narrowband services.\9\ We have maintained the CMRS
Messaging Service regulatory fee at the rate that was first established
in FY 2002,\10\ $0.08 per subscriber, because the subscriber base in
this industry has declined significantly.\11\ We found that maintaining
the CMRS Messaging regulatory fee rate at $0.08 per subscriber, rather
than allowing it to increase, was the appropriate level of relief to be
afforded to the messaging industry. We propose to maintain the
messaging service regulatory fee at $0.08 per subscriber. We seek
comment on this proposal.
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\9\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997, MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161,
17184-85, paragraph 60 (1997) (``FY 1997 Report and Order'').
\10\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2003, MD Docket No. 03-83, Report and Order, 18 FCC Rcd 15985,
15992, paragraph 21 (2003) (``FY 2003 Report and Order'').
\11\ The subscriber base in the paging industry declined 83
percent from 40.8 million to 6.95 million, from FY 1997 to FY 2008,
according to FY 2008 collection data as of September 30, 2008.
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D. International Bearer Circuits
9. Under our current policy, International Bearer Circuits
(``IBC'') fees are paid by facilities-based common carriers that have
active (used or leased) international bearer circuits as of December 31
of the prior year in any terrestrial or satellite transmission facility
for the provision of service to an end user or resale carrier, which
includes active circuits to themselves or to their affiliates.
Submarine cable operators pay IBC fees for common carrier and non-
common carrier circuits based on a per system fee.\12\ Initially, in
1994 when the Commission first established regulatory fees, it only
required that terrestrial, satellite and submarine cable common
carriers providing IBCs and non-common carrier submarine cable
operators providing IBCs pay the regulatory fees.\13\ Since 1997
operators of non-common carrier satellites also 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.\14\
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\12\ We recently revised our IBC fee rules to assess fees on
both common carrier and non-common carrier international subcable
systems based on a per system fee. Submarine Cable Order at
paragraph 13.
\13\ See Implementation of Section 9 of the Communications Act;
Assessment and Collection of Regulatory Fees for the 1994 Fiscal
Year, Report and Order, MD Docket No. 94-19, FCC 94-140, 9 FCC Rcd
5333, 5367, paragraph 98 (1994).
\14\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997 (1997 Regulatory Fees Order), Report and Order, MD Docket
No. 96-186, FCC 97-215, 12 FCC Rcd 17161 (1997) aff'd Panamsat
Corporation v. FCC, 198 F.3d 890, 898 (D.C. Cir 1998). When
including non-common carrier satellite operators providing
international communications among the payors of regulatory fees for
international bearer circuits, the Commission stated that ``although
we have not in the past required these providers to pay the
international bearer circuit regulatory fees, we conclude that it is
now appropriate to impose the fee, due to these satellite providers
extensive participation in services once reserved to the common
carriers and [non-common carrier] undersea cable operators and, in
particular, to the important role they now play in the provision of
international bearer circuits.'' 12 FCC Rcd at 17189, at paragraph
71 (1997).
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10. We propose to collect IBC regulatory fees in FY 2009 consistent
with our current policy.\15\ In the FY 2008 Report and Order, the
Commission initiated a Further NPRM to review its regulatory fee
methodology and explore ways to ``comprehensively make the Commission's
regulatory fee process more equitable.'' \16\ We note that our review
is continuing. On March 17, 2009, we adopted the Submarine Cable Order,
which made the methodology for calculating regulatory fees more
equitable among international submarine cable operators, without
distinguishing between common carriers and non-common carriers.\17\
That decision did not, however, substantively address the IBC fees for
terrestrial operators.\18\ As part of our comprehensive effort to
review our regulatory fees process for possible ways to make the
process more equitable, we
[[Page 26332]]
now seek comment on whether, beginning in FY 2010, carriers providing
international service over terrestrial circuits also should pay IBC
fees on non-common carrier circuits.\19\ Carriers primarily provide
terrestrial international services through microwave and fiber links
across the U.S.-Canada and U.S.-Mexico borders.\20\ Non-common carrier
terrestrial circuits play an important role in the provision of
international services on the U.S.-Canada and U.S.-Mexico routes. Due
to their proximity to the United States, these two border countries are
among the largest telecommunications routes, and the Commission
regularly engages with counterparts in Canada and Mexico on a wide
range of issues related to cross-border communications.\21\ If carriers
were to pay regulatory fees for their non-common carrier terrestrial
circuits, we note that this would not increase the total amount of IBC
fees that need to be collected each year.
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\15\ On March 17, 2009, the Commission adopted the Submarine
Cable Order, which changed the methodology for calculating
regulatory fees for international submarine cable operators. After a
pending 90-day congressional notification period, this new
methodology will be incorporated into the FY 2009 regulatory fee
Report and Order and will become effective in fiscal year 2009.
\16\ See FY 2008 Report and Order at paragraph 2. The Further
NPRM, however, did not seek comment on any issues specifically
related to IBC fees. See id. at paragraph 25-58.
\17\ See Submarine Cable Order at paragraph 2.
\18\ Id., at paragraph 20 n.48 (encouraging terrestrial IBC
providers, among others, to propose any changes to the regulatory
fee methodology that would better serve their interests).
\19\ A carrier may have both common carrier and non-common
carrier circuits.
\20\ Terrestrial facilities, particularly microwave, may also be
used on other short range international routes such as the U.S.
Virgin Islands-British Virgin Islands and the American Samoa-Samoa
routes.
\21\ See 2006 International Telecommunications Data, Strategic
Analysis and Negotiations Division, Multilateral Negotiations and
Industry Analysis Branch, International Bureau (August 2008);
International Bureau Report: 2007 Section 43.61 Circuit Status
Report, Policy Division (March 2009). These reports, and reports
from previous years, are available on the International Bureau Web
site at http://www.fcc.gov/ib/.
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E. Administrative and Operational Issues
11. We seek comment on the administrative and operational processes
used to collect the annual section 9 regulatory fees. These issues do
not affect the amount of regulatory fees parties are obligated to
submit; however, the administrative and operational issues affect the
process of submitting payment. We invite comment on ways to improve
these processes.
1. Mandatory Use of Fee Filer
12. In the past we have strongly encouraged regulatees to
electronically file their regulatory fee payments via Fee Filer,
instead of submitting payment with a completed hardcopy Form 159, Form
159-B, or Form 159-W.\22\ Although we have strongly urged the use of
Fee Filer, we have not required it. This year, we seek comment on
whether the Commission should require all regulatees to enter critical
information in Fee Filer, even if they do not pay through Fee Filer. By
entering the Fee Filer system, even if the regulatee does not pay
electronically, certain information will be entered into our system by
the regulatee, such as the FRN, a correct address, and key electronic
data attributes such as a call sign, payment amount, fee code, and
quantity of subscribers. By instituting a mandatory filing requirement
(but not a mandatory electronic payment requirement), we believe this
will reduce errors resulting from illegible handwriting on hardcopy
Form 159's as well as create an electronic record of licensees who have
paid regulatory fees. For those licensees who use the Commission's
electronic payment system (also known as ``Fee Filer''), but who choose
to mail in their payments using the Form 159-E voucher generated by Fee
Filer, the Commission will have an electronic record of licensee
payment attributes that are more easily traced than those payments that
are simply mailed in with a hardcopy Form 159. Those who file and pay
through Fee Filer are also certifying to the accuracy of their payment,
their subscriber count, and their revenue amount.
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\22\ Fee Filer can be accessed at http://www.fcc.gov/fees/feefiler.html.
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13. Although we do not propose at this time to require payment
through Fee Filer, we strongly encourage regulatees to do so. There are
many benefits: (1) Expeditious submission of payment; (2) no postage or
courier costs; (3) fewer errors caused by illegible handwriting or
payments submitted without an FRN number or the appropriate data
attributes (e.g., payers will avoid false delinquencies due to payment
submission errors); (4) improved recordkeeping and payment
reconciliation; (5) reduced administrative burden on both licensees and
on Commission staff trying to process regulatory fee payments; (6) less
expensive than a wire transfer; and (7) a significant reduction in the
use of payment remittance forms such as Form 159-C's submitted in
support of a regulatory fee payment. These benefits will not only
reduce the paper burden on licensees, but the administrative burden of
preparing and mailing such documents.
14. For regulatees who choose not to pay online, such as those
licensees whose credit card transactions exceed $99,999.99, Fee Filer
also provides an opportunity to make a payment using your bank account,
also known as an Automated Clearing House (``ACH'') payment, or
generating an electronic remittance voucher form (Form 159-E) that can
be printed directly from Fee Filer and mailed in with a check. ACH
payments do not have restrictions on the amount remitted.
15. For the reasons given in paragraphs 18 through 20, we
tentatively conclude that we should require regulatees to file key
information into Fee Filer, even if they do not use Fee Filer to make
their payment. In instances where payment cannot be made using Fee
Filer, which include credit card transactions exceeding $99,999.99,
wire transfers, and licensees wishing to pay using a check, we propose
that those licensees still enter the Fee Filer system in order to
generate a Form 159-E remittance voucher to accompany their payment. We
seek comment on this proposal. Commenters opposing the mandatory Fee
Filer requirement should provide the reasons for their argument, and
should provide supporting facts and other data, particularly with
respect to any claimed burdens of this approach.
2. Notification and Collection of Regulatory Fees
a. Pre-Bills
16. In prior years, the Commission mailed pre-bills to licensees in
select regulatory fee categories via surface mail--to interstate
telecommunications service providers (``ITSPs''), Geostationary
(``GSO'') and Non-Geostationary (``NGSO'') satellite space station
licensees,\23\ to holders of Cable Television Relay Service (``CARS'')
licenses, and earth station licensees.\24\ The remaining regulatees do
not receive pre-bills. Consistent with the Commission's proposal to
require mandatory use of Fee Filer above, pre-bill information would be
loaded into Fee Filer for viewing, but would not be mailed directly to
the licensee via surface mail. We seek comment on the impact of our
proposal not to mail pre-bills to ITSP providers, GSO and NGSO
[[Page 26333]]
licensees, CARS licensees, and earth station licensees.
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\23\ Geostationary orbit space station (``GSO'') licensees
received regulatory fee pre-bills for satellites that (1) were
licensed by the Commission and operational on or before October 1 of
the respective fiscal year; and (2) were not co-located with and
technically identical to another operational satellite on that date
(i.e., were not functioning as a spare satellite). Non-geostationary
orbit space station (``NGSO'') licensees received regulatory fee
pre-bills for systems that were licensed by the Commission and
operational on or before October 1 of the respective fiscal year.
\24\ 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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b. Future Streamlining of the Regulatory Fee Assessment and Collection
Process
17. 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, list server using Listserv, 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
notifications.
III. Procedural Matters
18. Below are our current payment and collection procedures that we
have revised over the past several years to expedite the processing of
regulatory fee payments. We include these procedures here as a useful
way to remind regulatory fee payers and the public about these aspects
of the annual regulatory fee collection process.
A. Public Notices and Fact Sheets
19. Each year we post public notices and fact sheets pertaining to
regulatory fees on our Web site. These documents contain information
about the payment due date and the regulatory fee payment procedures.
We will continue to post this information on http://www.fcc.gov/fees/regfees.html, but will not send out public notices and fact sheets to
regulatees en masse.
B. Assessment Notifications
1. 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.\25\
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.\26\ Consistent with procedures used last year, we will
continue our notification assessment initiative in FY 2009 and mail
media assessment notifications to licensees at their primary record of
contact populated in our Consolidated Database System (``CDBS''), and
to a secondary record of contact, if available.\27\ We will also
continue to make the Commission-authorized Web site available to
licensees so that they can update or correct any information regarding
their facilities and their fee-exempt status.\28\
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\25\ 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.
\26\ 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.
\27\ We again propose to issue fee assessments 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 2009.
\28\ If there is a change of address for the facility, it is the
licensee's responsibility to make the address change in the Media
Bureau's CDBS system, as well as in the Commission's Registration
System (``CORES''). The Commission-authorized web site for media
services licensees is http://www.fccfees.com.
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21. Although the Commission will continue to mail media assessment
notifications, there is a proposal in this Notice of Proposed
Rulemaking to institute a mandatory use of the Commission's online
payment system (``Fee Filer''), which if adopted, will require all
media service licensees to use Fee Filer as the first step to paying
their regulatory fee obligations. The notification assessments are
primarily intended to provide licensees with media data attributes, and
are not intended to be used as a substitute for a remittance voucher
when making a payment. Licensees wishing to pay by check or money order
must first log onto the Commission's Fee Filer system and generate a
Form 159-E directly from Fee Filer before mailing in their payment
along with their Form 159-E.
2. CMRS Cellular and Mobile Services Assessments
22. As we have done in prior years, we will continue to mail an
assessment letter to CMRS providers using data from the Numbering
Resource Utilization Forecast (``NRUF'') report that is based on
``assigned'' number counts that have been adjusted for porting to net
Type 0 ports (``in'' and ``out'').\29\ This letter will include a
listing of the carrier's Operating Company Numbers (``OCNs'') upon
which the assessment is based.\30\ The letters will not include OCNs
with their respective assigned number counts, but rather, an aggregate
total of assigned numbers for each carrier.
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\29\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005 and Assessment and Collection of Regulatory Fees for
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paragraphs
38-44 (2005).
\30\ Id.
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23. We will also continue our procedure of giving entities an
opportunity to revise their subscriber counts by sending an initial and
a final assessment letter. If the carrier does not agree with the
number of subscribers listed on the initial assessment letter, the
carrier can correct its subscriber count by returning the initial
assessment letter or by contacting the Commission and stating a reason
for the change (e.g., a purchase or sale of a subsidiary), the date of
the transaction, and any other pertinent information that will help to
justify a reason for the change. 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 the initial assessment
letters and determine whether a change in the number of subscribers is
warranted. The final assessment letter will inform carriers as to
whether we have accepted their revision in the number of subscribers.
24. Because some carriers do not file the NRUF report, they may not
receive a letter of assessment. In these instances, the carriers should
compute their fee payment using the standard methodology \31\ that is
currently in place for CMRS Wireless services (e.g., compute their
subscriber counts as of December 31, 2008), and submit their fee
payment accordingly. Whether a carrier receives an assessment letter or
not, the Commission reserves the right to audit the number of
subscribers for which regulatory fees are paid. In the event that the
Commission determines that the number of subscribers is inaccurate or
that an insufficient reason is given for making a correction on the
[[Page 26334]]
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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\31\ See, e.g., Federal Communications Commission, Regulatory
Fees Fact Sheet: What You Owe--Commercial Wireless Services for FY
2008 at 1 (rel. Aug. 2008).
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C. Streamlined Regulatory Fee Payment Process
1. Cable Television Subscribers
25. We will continue to permit cable television operators to base
their regulatory fee payment on their company's aggregate year-end
subscriber count, rather than requiring them to sub-report subscriber
counts on a per community unit identifier (``CUID'') basis.
2. CMRS Cellular and Mobile Providers
26. In FY 2006, we streamlined the CMRS payment process by
eliminating the requirement for CMRS providers to identify their
individual calls 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.\32\ We will continue this practice in FY 2009. In
FY 2007, we consolidated the CMRS cellular and CMRS mobile fee
categories into one fee category and as one fee code, thereby
eliminating the requirement for CMRS providers to separate their
subscriber counts into CMRS cellular and CMRS mobile fee categories
during the regulatory fee payment process. This consolidation of fee
categories enabled the Commission to process payments more quickly and
accurately. For FY 2009, we will continue this practice of combining
the CMRS cellular and CMRS mobile fee categories into one regulatory
fee category.
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\32\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092,
8105, paragraph 48 (2006).
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3. Interstate Telecommunications Service Providers (``ITSP'')
27. In FY 2007, we adopted a proposal to round lines 14 (total
subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W
to the nearest dollar. This revision enabled the Commission to process
the ITSP regulatory fee payments more quickly because rounding was no
longer a hindrance that slowed the processing of payments. In FY 2008,
we continued to round lines 14 and 16 on FCC Form 159-W to the nearest
dollar. We will continue rounding lines 14 and 16 when calculating the
FY 2009 ITSP fee obligation.
D. Payment of Regulatory Fees
1. Lock Box Bank
28. All lock box payments to the Commission for FY 2009 will be
processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC.
For all regulatory fees, the address is: Federal Communications
Commission, Regulatory Fees, P.O. Box 979084, St. Louis, MO 63197-9000.
2. Receiving Bank for Wire Payments
29. The receiving bank for all wire payments is the Federal Reserve
Bank, New York, New York (TREAS NYC). When making a wire transfer,
regulatees must fax a copy of their completed remittance instrument to
U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour
before initiating the wire transfer (but on the same business day), so
as to not delay crediting their account. Wire transfers initiated after
6:00 p.m. (EDT) will be credited the next business day. Complete
instructions for making wire payments are posted at http://www.fcc.gov/fees/wiretran.html.
3. De Minimis Regulatory Fees
30. Regulatees whose total FY 2009 regulatory fee liability,
including all categories of fees for which payment is due, is less than
$10 are exempted from payment of FY 2009 regulatory fees.
4. Standard Fee Calculations and Payment Dates
31. The Commission will accept fee payments made in advance of the
window for the payment of regulatory fees. The responsibility for
payment of fees by service category is as follows:
Media Services: Regulatory fees must be paid for initial
construction permits that were granted on or before October 1, 2008 for
AM/FM radio stations, analog VHF/UHF full service television stations
(including full service digital-only stations that were licensed as of
October 1, 2008), and satellite television stations. Regulatory fees
must be paid for all broadcast facility licenses granted on or before
October 1, 2008. In instances where a permit or license is transferred
or assigned after October 1, 2008, responsibility for payment rests
with the holder of the permit or license as of the fee due date.
Wireline (Common Carrier) Services: Regulatory fees must
be paid for authorizations that were granted on or before October 1,
2008. In instances where a permit or license is transferred or assigned
after October 1, 2008, responsibility for payment rests with the holder
of the permit or license as of the fee due date. We note that audio
bridging service providers are included in this category.\33\
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\33\ Audio bridging services are toll teleconferencing services,
and audio bridging service providers are required to contribute
directly to the universal service fund based on revenues from these
services. On June 30, 2008, the Commission released the InterCall
Order, in which the Commission stated that InterCall, Inc. and all
similarly situated audio bridging service providers are required to
contribute directly to the universal service fund. See Request for
Review by InterCall, Inc. of Decision of Universal Service
Administrator, CC Docket No. 96-45, Order, 23 FCC Rcd 10731 (2008)
(``InterCall Order'').
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Wireless Services: CMRS cellular, mobile, and messaging
services (fees based on number of subscribers or telephone number
count): Regulatory fees must be paid for authorizations that were
granted on or before October 1, 2008. The number of subscribers, units,
or telephone numbers on December 31, 2008 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 pay ``small multi-year wireless regulatory fees.''
Entities pay these regulatory fees in advance for the entire amount of
their five-year or ten-year term of initial license, and only pay
regulatory fees again when the license is renewed or a new license is
obtained. We include these fee categories in our Schedule of Regulatory
Fees to publicize our estimates of the number of ``small multi-year
wireless'' licenses that will be renewed or newly obtained in FY 2009.
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,
2008.\34\ Regulatory fees also must be paid for CARS licenses that were
granted on or before October 1, 2008. In instances where a CARS license
is transferred or assigned after October 1, 2008, responsibility for
payment rests with the holder of the license as of the fee due date.
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\34\ Cable television system operators should compute their
basic subscribers as follows: Number of single family dwellings +
number of individual households in multiple dwelling units
(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 2008, rather than on a count as of December 31,
2008.
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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
[[Page 26335]]
before October 1, 2008. In instances where a license is transferred or
assigned after October 1, 2008, responsibility for payment rests with
the holder of the license as of the fee due date. Regulatory fees will
be paid for international bearer circuits under our newly adopted
methodology pending a 90-day Congressional notification for this
permitted amendment; \35\ if for any reason the methodology change is
not instituted in FY 2009, the pre-FY 2009 methodology will be used to
calculate FY 2009 bearer circuit regulatory fees.
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\35\ See Submarine Cable Order.
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E. Enforcement
32. Regulatory fee payment must be received and stamped at the
lockbox bank by the last day of the regulatory fee filing window to be
considered timely. Section 9(c) of the Act requires us to impose an
additional charge as a penalty for late payment of any regulatory
fee.\36\ A late payment penalty of 25 percent of the amount of the
required regulatory fee will be assessed on the first day following the
deadline date for filing of these fees. Failure to pay regulatory fees
and/or any late penalty will subject regulatees to sanctions, including
the Commission's Red Light Rule \37\ and the provisions set forth in
the Debt Collection Improvement Act of 1996 (``DCIA'').\38\ We also
assess administrative processing charges on delinquent debts to recover
additional costs incurred in processing and handling the related debt
pursuant to the DCIA and section 1.1940(d) of the Commission's
rules.\39\ 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.
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\36\ 47 U.S.C. 159(c).
\37\ See 47 CFR 1.1910.
\38\ Delinquent debt owed to the Commission triggers application
of the ``red light rule'' which requires offsets or holds on pending
disbursements. 47 CFR 1.1910. In 2004, the Commission adopted rules
implementing the requirements of the DCIA. See Amendment of Parts 0
and 1 of the Commission's Rules, MD Docket No. 02-339, Report and
Order, 19 FCC Rcd 6540 (2004); 47 CFR Part 1, Subpart O, Collection
of Claims Owed the United States.
\39\ 47 CFR 1.1940(d).
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33. 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.\40\ 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).
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\40\ See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.
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F. Final Regulatory Flexibility Certification
34. A final regulatory flexibility certification for the changes
adopted in the Order herein is contained in this document. The
Commission will send a copy of the Order, including the final
regulatory flexibility certification, to the Chief Counsel for Advocacy
of the Small Business Administration.
G. Initial Regulatory Flexibility Analysis
35. An initial regulatory flexibility analysis (``IRFA'') is
contained in this document. Comments to the IRFA must be identified as
responses to the IRFA and filed by the deadlines for comments on this
NPRM. The Commission will send a copy of this NPRM, including the IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
H. Congressional Review Act Analysis
36. The Commission will send a copy of this Notice of Proposed
Rulemaking and Order to Congress and the Government Accountability
Office pursuant to the Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
I. Initial Paperwork Reduction Act Analysis
37. This Report and Order contains modified information collection
requirements subject to the Paperwork Reduction Act of 1995 (``PRA''),
Public Law 104-13. It will be submitted to the Office of Management and
Budget (``OMB'') for review under section 3507(d) of the PRA.\41\ Our
proposed new form for submarine cable operators is contained in this
document. OMB, the general public, and other Federal agencies are
invited to comment on the new or modified information collection
requirements contained in this proceeding. In addition, we note that
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law
107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific
comment on how the Commission might ``further reduce the information
collection burden for small business concerns with fewer than 25
employees.''
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\41\ 44 U.S.C. 3507(d).
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J. Ex Parte Rules
38. This is as a ``permit-but-disclose'' proceeding subject to the
requirements under section 1.1206(b) of the Commission's rules.\42\ 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 required.\43\ Additional rules pertaining to
oral and written presentations are set forth in section 1.1206(b).
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\42\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
\43\ See 47 CFR 1.1206(b)(2).
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K. Filing Requirements
39. Comments and Replies. Pursuant to sections 1.415 and 1.419 of
the Commission's rules,\44\ interested parties may file comments under
MD Docket No. 09-65 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.\45\
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\44\ See 47 CFR 1.415, 1.419.
\45\ See Electronic Filing of Documents in Rulemaking
Proceedings, 13 FCC Rcd 11322 (1998).
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40. 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 [email protected], and include the
[[Page 26336]]
following words in the body of the message, ``get form.'' A sample form
and directions will be sent in response.
41. 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 8:00 a.m. to 7:00 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.
42. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street, SW., CY-A257, Washington,
DC 20554. These documents will also be available free online, via ECFS.
Documents will be available electronically in ASCII, Word, and/or Adobe
Acrobat.
43. Accessibility Information. To request information in accessible
formats (computer diskettes, large print, audio recording, and
Braille), send an e-mail to [email protected] or call the Commission's
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice),
(202) 418-0432 (TTY). This document can also be downloaded in Word and
Portable Document Format (``PDF'') at: http://www.fcc.gov.
IV. Ordering Clauses
44. 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 and Order is hereby adopted.
45. It is further ordered that Part 1 of the Commission's Rules are
amended as set forth herein, and these rules shall become effective 90
days after Congressional notification.
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 and Order, including the
Final Regulatory Flexibility Certification and Initial Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the U.S.
Small Business Administration.
Initial Regulatory Flexibility Analysis
47. As required by the Regulatory Flexibility Act (``RFA''),\46\
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 this NPRM, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration.\47\ In addition, the
NPRM and IRFA (or summaries thereof) will be published in the Federal
Register.\48\
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\46\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the CWAAA is the
Small Business Regulatory Enforcement Fairness Act of 1996
(``SBREFA'').
\47\ 5 U.S.C. 603(a).
\48\ Id.
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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 $341,875,000, the amount that Congress
has required the Commission to recover. The Commission seeks to collect
the necessary amount through its proposed Schedule of Regulatory Fees
in the most efficient manner possible and without undue public burden.
II. Legal Basis
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.\49\
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\49\ 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.\50\ The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \51\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\52\ A ``small business concern'' is one
which: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the SBA.\53\
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\50\ 5 U.S.C. 603(b)(3).
\51\ 5 U.S.C. 601(6).
\52\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\53\ 15 U.S.C. 632.
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51. Small Businesses. Nationwide, there are a total of 22.4 million
small businesses, according to SBA data.\54\
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\54\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028,
at p. 40 (July 2002).
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52. Small Organizations. Nationwide, there are approximately 1.6
million small organizations.\55\
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\55\ 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.'' \56\ Census Bureau data for
2002 indicate that there were 87,525 local governmental jurisdictions
in the United States.\57\ We estimate that, of this total, 84,377
entities were ``small governmental jurisdictions.'' \58\ Thus, we
estimate that
[[Page 26337]]
most governmental jurisdictions are small.
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\56\ 5 U.S.C. 601(5).
\57\ U.S. Census Bureau, Statistical Abstract of the United
States: 2006, Section 8, p. 272, Table 415.
\58\ We assume that the villages, school districts, and special
districts are small, and total 48,558. See U.S. Census Bureau,
Statistical Abstract of the United States: 2006, Section 8, p. 273,
Table 417. For 2002, Census Bureau data indicate that the total
number of county, municipal, and township governments nationwide was
38,967, of which 35,819 were small. Id.
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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.''
\59\ 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.\60\ 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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\59\ 15 U.S.C. 632.
\60\ 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.\61\ According to
Commission data,\62\ 1,311 carriers have reported that they are engaged
in the provision of incumbent local exchange services. Of these 1,311
carriers, an estimated 1,024 have 1,500 or fewer employees and 287 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by our proposed action.
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\61\ 13 CFR 121.201, North American Industry Classification
System (NAICS) code 517110.
\62\ FCC, Wireline Competition Bureau, Industry Analysis and
Technology Division, ``Trends in Telephone Service'' at Table 5.3,
Page 5-5 (Aug. 2008) (``Trends in Telephone Service'').
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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.\63\ According to Commission data,\64\ 1,005 carriers have
reported that they are engaged in the provision of either competitive
access provider services or competitive local exchange carrier
services. Of these 1,005 carriers, an estimated 918 have 1,500 or fewer
employees and 87 have more than 1,500 employees. In addition, 16
carriers have reported that they are ``Shared-Tenant Service
Providers,'' and all 16 are estimated to have 1,500 or fewer employees.
In addition, 89 carriers have reported that they are ``Other Local
Service Providers.'' Of the 89, all have 1,500 or fewer employees.
Consequently, the Commission estimates that most providers of
competitive local exchange service, competitive access providers,
``Shared-Tenant Service Providers,'' and ``Other Local Service
Providers'' are small entities that may be affected by our proposed
action.
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\63\ 13 CFR 121.201, NAICS code 517110.
\64\ ``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.\65\ According to Commission data,\66\ 151 carriers have
reported that they are engaged in the provision of local resale
services. Of these, an estimated 149 have 1,500 or fewer employees and
two have more than 1,500 employees. Consequently, the Commission
estimates that the majority of local resellers are small entities that
may be affected by our proposed action.
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\65\ 13 CFR 121.201, NAICS code 517310.
\66\ ``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.\67\ According to Commission data,\68\ 815 carriers have
reported that they are engaged in the provision of toll resale
services. Of these, an estimated 787 have 1,500 or fewer employees and
28 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of toll resellers are small entities that
may be affected by our proposed action.
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\67\ 13 CFR 121.201, NAICS code 517310.
\68\ ``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.\69\ According to Commission data,\70\ 526 carriers have
reported that they are engaged in the provision of payphone services.
Of these, an estimated 524 have 1,500 or fewer employees and two have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of payphone service providers are small entities that may
be affected by our proposed action.
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\69\ 3 CFR 121.201, NAICS code 517110.
\70\ ``Trends in Telephone Service'' at Table 5.3.
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60. Interexchange Carriers (``IXCs''). Neither the Commission nor
the SBA has developed a small business size standard specifically for
providers of interexchange services. The appropriate size standard
under SBA rules is for the category Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\71\ According to Commission data,\72\ 300 carriers
have reported that they are engaged in the provision of interexchange
services. Of these, an estimated 268 have 1,500 or fewer employees and
32 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of IXCs are small entities that may be
affected by our proposed action.
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\71\ 13 CFR 121.201, NAICS code 517110.
\72\ ``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.\73\ According to Commission data,\74\ 28 carriers have
reported that they are engaged in the provision of operator services.
Of these, an estimated 27 have 1,500 or fewer employees and one has
more than 1,500 employees. Consequently, the Commission estimates that
the majority of OSPs are small entities that may be affected by our
proposed action.
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\73\ 13 CFR 121.201, NAICS code 517110.
\74\ ``Trends in Telephone Service'' at Table 5.3.
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62. Prepaid Calling Card Providers. Neither the Commission nor the
SBA
[[Page 26338]]
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.\75\ According to Commission data,\76\ 88 carriers have
reported that they are engaged in the provision of prepaid calling
cards. Of these, an estimated 85 have 1,500 or fewer employees and
three have more than 1,500 employees. Consequently, the Commission
estimates that the majority of prepaid calling card providers are small
entities that may be affected by our proposed action.
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\75\ 13 CFR 121.201, NAICS code 517310.
\76\ ``Trends in Telephone Service'' at Table 5.3.
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63. 800 and 800-Like Service Subscribers.\77\ 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.\78\ 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.\79\ According
to our data, at the end of December 2007, the number of 800 numbers
assigned was 7,860,000; the number of 888 numbers assigned was
5,210,184; the number of 877 numbers assigned was 4,388,682; and the
number of 866 numbers assigned was 7,029,116. We do not have data
specifying the number of these subscribers that are independently owned
and operated or have 1,500 or fewer employees, and thus are unable at
this time to estimate with greater precision the number of toll free
subscribers that would qualify as small businesses under the SBA size
standard. Consequently, we estimate that there are 7,860,000 or fewer
small entity 800 subscribers; 5,210,184 or fewer small entity 888
subscribers; 4,388,682 or fewer small entity 877 subscribers, and
7,029,116 or fewer entity 866 subscribers.
---------------------------------------------------------------------------
\77\ We include all toll-free number subscribers in this
category.
\78\ 13 CFR 121.201, NAICS code 517310.
\79\ ``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.\80\
---------------------------------------------------------------------------
\80\ 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.'' \81\ For this category,
Census Bureau data for 2002 show that there were a total of 371 firms
that operated for the entire year.\82\ Of this total, 307 firms had
annual receipts of under $10 million, and 26 firms had receipts of $10
million to $24,999,999.\83\ Consequently, we estimate that the majority
of Satellite Telecommunications firms are small entities that might be
affected by our action.
---------------------------------------------------------------------------
\81\ U.S. Census Bureau, 2002 NAICS Definitions, ``517410
Satellite Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\82\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517410.
\83\ 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.'' \84\ For this category,
Census Bureau data for 2002 show that there were a total of 332 firms
that operated for the entire year.\85\ 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.\86\ Consequently, we estimate that the
majority of Other Telecommunications firms are small entities that
might be affected by our action.
---------------------------------------------------------------------------
\84\ U.S. Census Bureau, 2002 NAICS Definitions, ``517910 Other
Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\85\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517910.
\86\ 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'' \87\ and ``Cellular and Other Wireless
Telecommunications.'' \88\ 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.\89\ Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.\90\ 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.\91\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\92\ Thus, under this second category and size
standard, the majority of firms can, again, be considered small.
---------------------------------------------------------------------------
\87\ 13 CFR 121.201, NAICS code 517211.
\88\ 13 CFR 121.201, NAICS code 517212.
\89\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211.
\90\ 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.''
\91\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 5, NAICS code 517212.
\92\ 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.'' \93\ Under the SBA size standard,
such a business is small if it has average annual receipts of $21
million or less.\94\ According to Census Bureau data for 1997, there
were 2,751 firms in this category that operated for
[[Page 26339]]
the entire year.\95\ 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.\96\ Thus, under this size standard, the great
majority of firms can be considered small entities.
---------------------------------------------------------------------------
\93\ Office of Management and Budget, North American Industry
Classification System, p. 515 (1997). NAICS code 518111, ``On-Line
Information Services.''
\94\ 13 CFR 121.201, NAICS code 518111.
\95\ 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.
\96\ 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.
---------------------------------------------------------------------------
69. Cellular Licensees. The SBA has developed a small business size
standard for wireless firms within the two broad economic census
categories of ``Paging'' \97\ and ``Cellular and Other Wireless
Telecommunications.'' \98\ 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.\99\ Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.\100\ 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.\101\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\102\ Thus, under this second category and size
standard, the majority of firms can, again, be considered small.
---------------------------------------------------------------------------
\97\ 13 CFR 121.201, NAICS code 517211.
\98\ 13 CFR 121.201, NAICS code 517212.
\99\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211.
\100\ 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.''
\101\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517212.
\102\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
---------------------------------------------------------------------------
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.'' \103\ 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.\104\ 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.\105\ Thus, under this category and associated small business
size standard, the great majority of firms can be considered small.
---------------------------------------------------------------------------
\103\ 13 CFR 121.201, NAICS code 517212.
\104\ 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.
\105\ 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. 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.\106\ 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.\107\ The SBA has approved this
definition.\108\ 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.\109\ Fifty-seven
companies claiming small business status won 440 licenses.\110\ 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.\111\ 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.\112\
---------------------------------------------------------------------------
\106\ 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, paragraphs 98-107 (1999).
\107\ Paging Second Report and Order, 12 FCC Rcd at 2811,
paragraph 179.
\108\ See Letter from Aida Alvarez, Administrator, SBA, to Amy
Zoslov, Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau (``WTB''), FCC (Dec. 2, 1998) (``Alvarez
Letter 1998'').
\109\ See ``929 and 931 MHz Paging Auction Closes,'' Public
Notice, 15 FCC Rcd 4858 (WTB 2000).
\110\ See id.
\111\ See ``Lower and Upper Paging Band Auction Closes,'' Public
Notice, 16 FCC Rcd 21821 (WTB 2002).
\112\ See ``Lower and Upper Paging Bands Auction Closes,''
Public Notice, 18 FCC Rcd 11154 (WTB 2003).
---------------------------------------------------------------------------
72. Currently, there are approximately 74,000 Common Carrier Paging
licenses. According to the most recent Trends in Telephone Service, 281
carriers reported that they were engaged in the provision of ``paging
and messaging'' services.\113\ Of these, an estimated 279 have 1,500 or
fewer employees and two have more than 1,500 employees.\114\ We
estimate that the majority of common carrier paging providers would
qualify as small entities under the SBA definition.
---------------------------------------------------------------------------
\113\ ``Trends in Telephone Service'' at Table 5.3.
\114\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
73. 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.\115\ The SBA has
approved these definitions.\116\ 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.
---------------------------------------------------------------------------
\115\ 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).
\116\ See Alvarez Letter 1998.
---------------------------------------------------------------------------
74. 1670-1675 MHz Services. An auction for one license in the 1670-
1675 MHz band commenced on April 30, 2003 and closed the same day. One
license was awarded. The winning bidder was not a small entity.
75. 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
[[Page 26340]]
Other Wireless Telecommunications'' services.\117\ Under the SBA small
business size standard, a business is small if it has 1,500 or fewer
employees.\118\ According to Trends in Telephone Service data, 434
carriers reported that they were engaged in wireless telephony.\119\ Of
these, an estimated 222 have 1,500 or fewer employees and 212 have more
than 1,500 employees.\120\ We have estimated that 222 of these are
small under the SBA small business size standard.
---------------------------------------------------------------------------
\117\ 13 CFR 121.201, NAICS code 517212.
\118\ 13 CFR 121.201, NAICS code 517212.
\119\ ``Trends in Telephone Service'' at Table 5.3.
\120\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
76. 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.\121\ 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.\122\ These
small business size standards, in the context of broadband PCS
auctions, have been approved by the SBA.\123\ 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.\124\ On March 23,
1999, the Commission reauctioned 155 C, D, E, and F Block licenses;
there were 113 small business winning bidders.\125\
---------------------------------------------------------------------------
\121\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7850-
7852, paras. 57-60 (1996) (``PCS Report and Order''); see also 47
CFR 24.720(b).
\122\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
\123\ See Alvarez Letter 1998.
\124\ FCC News, ``Broadband PCS, D, E and F Block Auction
Closes,'' No. 71744 (rel. Jan. 14, 1997).
\125\ See ``C, D, E, and F Block Broadband PCS Auction Closes,''
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------
77. 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.\126\ 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.\127\ Of the 24 winning bidders, 16 claimed small business
status and won 156 licenses. On May 21, 2007, the Commission completed
an auction of 33 licenses in the A, C, and F Blocks in Auction No.
71.\128\ Of the 14 winning bidders, six were designated entities.\129\
---------------------------------------------------------------------------
\126\ See ``C and F Block Broadband PCS Auction Closes; Winning
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
\127\ See ``Broadband PCS Spectrum Auction Closes; Winning
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd
3703 (2005).
\128\ See ``Auction of Broadband PCS Spectrum Licenses Closes;
Winning Bidders Announced for Auction No. 71,'' Public Notice, 22
FCC Rcd 9247 (2007).
\129\ Id.
---------------------------------------------------------------------------
78. 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.\130\ Through these auctions, the Commission awarded a
total of 41 licenses, 11 of which were obtained by four small
businesses.\131\ 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.\132\ 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.\133\ 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.\134\ The SBA has approved
these small business size standards.\135\ 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.\136\ Three of
these claimed status as a small or very small entity and won 311
licenses.
---------------------------------------------------------------------------
\130\ 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).
\131\ 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).
\132\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Second Report and
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd
10456, 10476, para. 40 (2000) (``Narrowband PCS Second Report and
Order'').
\133\ Narrowband PCS Second Report and Order, 15 FCC Rcd at
10476, para. 40.
\134\ Id.
\135\ See Alvarez Letter 1998.
\136\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------
79. Lower 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits.\137\ The Commission defined a ``small business'' as an entity
that, together with its affiliates and controlling principals, has
average gross revenues not exceeding $40 million for the preceding
three years.\138\ 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.\139\ Additionally, the lower 700 MHz Service had
a third category of small business status for Metropolitan/Rural
Service Area (``MSA/RSA'') licenses. The third category is
``entrepreneur,'' which is defined as an entity that, together with its
affiliates and controlling principals, has average gross revenues that
are not more than $3 million for the preceding three years.\140\ The
SBA approved these small size standards.\141\ 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
[[Page 26341]]
bidders claimed small business, very small business or entrepreneur
status and won a total of 329 licenses.\142\ 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.\143\
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.\144\ 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.
---------------------------------------------------------------------------
\137\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022 (2002) (``Channels 52-59 Report and Order'').
\138\ See Channels 52-59 Report and Order, 17 FCC Rcd at 1087-
88, paragraph 172.
\139\ See id.
\140\ See id, 17 FCC Rcd at 1088, paragraph 173.
\141\ See Letter from Aida Alvarez, Administrator, SBA, to
Thomas Sugrue, Chief, WTB, FCC (Aug. 10, 1999) (``Alvarez Letter
1999'').
\142\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
17 FCC Rcd 17272 (WTB 2002).
\143\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
18 FCC Rcd 11873 (WTB 2003).
\144\ See id.
---------------------------------------------------------------------------
80. The Commission recently reexamined its rules governing the 700
MHz band in the 700 MHz Second Report and Order.\145\ An auction of 700
MHz licenses commenced January 24, 2008. For the Lower 700 MHz band,
176 licenses over Economic Areas in the A Block, 734 licenses over
Cellular Market Areas in the B Block, and 176 licenses over EAs in the
E Block are available for licensing.\146\ Winning bidders may be
eligible for small business status (those with attributable average
annual gross revenues that exceed $15 million and do not exceed $40
million for the preceding three years), or very small business status
(those with attributable average annual gross revenues that do not
exceed $15 million for the preceding three years).
---------------------------------------------------------------------------
\145\ Service Rules for the 698-746, 747-762 and 777-792 MHz
Bands, WT Docket No. 06-150, Revision of the Commission's Rules to
Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC
Docket No. 94-102, Section 68.4(a) of the Commission's Rules
Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309,
Biennial Regulatory Review--Amendment of Parts 1, 22, 24, 27, and 90
to Streamline and Harmonize Various Rules Affecting Wireless Radio
Services, WT Docket 03-264, Former Nextel Communications, Inc. Upper
700 MHz Guard Band Licenses and Revisions to Part 27 of the
Commission's Rules, WT Docket No. 06-169, Implementing a Nationwide,
Broadband, Interoperable Public Safety Network in the 700 MHz Band,
PS Docket No. 06-229, Development of Operational, Technical and
Spectrum Requirements for Meeting Federal, State and Local Public
Safety Communications Requirements Through the Year 2010, WT Docket
No. 96-86, Second Report and Order, FCC 07-132 (2007) (``700 MHz
Second Report and Order'').
\146\ See ``Auction of 700 MHz Band Licenses Scheduled for
January 16, 2008; Comment Sought on Competitive Bidding Procedures
For Auction 73,'' Public Notice, FCC Rcd 15004 (WTB 2007).
---------------------------------------------------------------------------
81. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and
Order, the Commission revised its rules regarding Upper 700 MHz
licenses. On January 24, 2008, the Commission commenced Auction 73 in
which several licenses in the Upper 700 MHz band are available for
licensing: 12 licenses over Regional Economic Area Groupings
(``REAGs'') in the C Block, and one nationwide license in the D
Block.\147\ Winning bidders may be eligible for small business status
(those with attributable average annual gross revenues that exceed $15
million and do not exceed $40 million for the preceding three years),
or very small business status (those with attributable average annual
gross revenues that do not exceed $15 million for the preceding three
years).
---------------------------------------------------------------------------
\147\ See id.
---------------------------------------------------------------------------
82. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
the Commission adopted size standards for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments.\148\ 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.\149\ 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.\150\ SBA approval of these definitions is not
required.\151\ An auction of 52 Major Economic Area (``MEA'') licenses
commenced on September 6, 2000, and closed on September 21, 2000.\152\
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.\153\
---------------------------------------------------------------------------
\148\ See Service Rules for the 746-764 MHz Bands, and Revisions
to Part 27 of the Commission's Rules, Second Report and Order, 15
FCC Rcd 5299 (2000) (``746-764 MHz Band Second Report and Order'').
\149\ See 746-764 MHz Band Second Report and Order, 15 FCC Rcd
at 5343, para. 108.
\150\ See id.
\151\ See id., 15 FCC Rcd 5299, 5343, para. 108 n.246 (for the
746-764 MHz and 776-794 MHz bands, the Commission is exempt from 15
U.S.C. 632, which requires Federal agencies to obtain SBA approval
before adopting small business size standards).
\152\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
\153\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------
83. 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.\154\ 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.\155\ The SBA has approved
these small business size standards for the 900 MHz Service.\156\ 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.\157\ 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.\158\
---------------------------------------------------------------------------
\154\ 47 CFR 90.814(b)(1).
\155\ 47 CFR 90.814(b)(1).
\156\ See Alvarez Letter 1999.
\157\ 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).
\158\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------
84. 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 MHz SMR band
qualified as small businesses under the $15 million size standard.\159\
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
awarded.\160\ Of the 22 winning
[[Page 26342]]
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.
---------------------------------------------------------------------------
\159\ 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).
\160\ See, ``800 MHz SMR Service Lower 80 Channels Auction
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736
(2000).
---------------------------------------------------------------------------
85. 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.
86. 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.\161\ The Commission estimates that most such licensees are
small businesses under the SBA's small business standard.
---------------------------------------------------------------------------
\161\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
87. 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, the Commission adopted a small business size
standard for defining ``small'' and ``very small'' businesses for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments.\162\ 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.\163\ 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.\164\ The SBA has approved these small size standards.\165\
Auctions of Phase II licenses commenced on September 15, 1998, and
closed on October 22, 1998.\166\ 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.\167\ 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.\168\ 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.\169\ The Commission conducted a fourth auction in 2007 with
three of the five winning bidders claiming small or very small business
status.\170\
---------------------------------------------------------------------------
\162\ 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).
\163\ Id. at 11068, para. 291.
\164\ Id.
\165\ See Letter from Aida Alvarez, Administrator, SBA, to
Daniel Phythyon, Chief, WTB, FCC (Jan. 6, 1998) (``Alvarez to
Phythyon Letter 1998'').
\166\ \\ See generally ``220 MHz Service Auction Closes,''
Public Notice, 14 FCC Rcd 605 (1998).
\167\ 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).
\168\ See ``Phase II 220 MHz Service Spectrum Auction Closes,''
Public Notice, 14 FCC Rcd 11218 (1999).
\169\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (2002).
\170\ See ``Auction of Phase II 220 MHz Service Spectrum
Licenses Closes,'' Public Notice, 22 FCC Rcd 11573 (WTB 2007).
---------------------------------------------------------------------------
88. 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.\171\ 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.\172\
---------------------------------------------------------------------------
\171\ See 13 CFR 121.201, NAICS code 517212.
\172\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------
89. The Commission's 1994 Annual Report on PLMRs \173\ 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.
---------------------------------------------------------------------------
\173\ Federal Communications Commission, 60th Annual Report,
Fiscal Year 1994, at paragraph 116.
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90. Fixed Microwave Services. Fixed microwave services include
common carrier,\174\ private operational-fixed,\175\ and broadcast
auxiliary radio services.\176\ At present, there are approximately
22,015 common carrier fixed licensees and 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the
microwave services. The Commission has not created a size standard for
a small business specifically with respect to fixed microwave services.
For purposes of this analysis, the Commission uses the SBA small
business size standard for the
[[Page 26343]]
category ``Cellular and Other Telecommunications,'' which is 1,500 or
fewer employees.\177\ 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.
---------------------------------------------------------------------------
\174\ See 47 CFR 101 et seq. for common carrier fixed microwave
services (except Multipoint Distribution Service).
\175\ 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.
\176\ 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.
\177\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
91. 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.\178\ 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.\179\
The SBA has approved these small business size standards.\180\ 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.
---------------------------------------------------------------------------
\178\ 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).
\179\ Id.
\180\ See Letter from Aida Alvarez, Administrator, SBA, to
Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis
Division, WTB, FCC (Feb. 4, 1998); See Letter from Hector Barreto,
Administrator, SBA, to Margaret Wiener, Chief, Auctions and Industry
Analysis Division, WTB, FCC (Jan. 18, 2002).
---------------------------------------------------------------------------
92. 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.\181\ The auction of the 986 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.\182\ 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.\183\ The SBA
has approved these small business size standards in the context of LMDS
auctions.\184\ 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 businesses winning that won 119
licenses.
---------------------------------------------------------------------------
\181\ 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, paragraph 348 (1997) (``LMDS Second Report and
Order'').
\182\ See LMDS Second Report and Order, 12 FCC Rcd at 12689-90,
paragraph 348.
\183\ See id.
\184\ See Alvarez to Phythyon Letter 1998.
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93. 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'').\185\ Of the 594 licenses,
567 were won by 167 entities qualifying as a small business. For that
auction, the Commission defined a small business as an entity that,
together with its affiliates, has no more than a $6 million net worth
and, after Federal income taxes (excluding any carry over losses), has
no more than $2 million in annual profits each year for the previous
two years.\186\ 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.\187\ 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.\188\ The SBA has approved of these definitions.\189\ 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.
---------------------------------------------------------------------------
\185\ See ``Interactive Video and Data Service (IVDS)
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227
(1994).
\186\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330
(1994).
\187\ 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).
\188\ Id.
\189\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------
94. 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.\190\ 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.\191\ These definitions have been approved by the SBA.\192\ An
auction for LMS licenses commenced on February 23, 1999, and closed on
March 5, 1999. Of the 528 licenses auctioned, 289 licenses were sold to
four small businesses.
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\190\ 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, paragraph 20 (1998) (``Automatic
Vehicle Monitoring Systems Second Report and Order''); see also 47
CFR 90.1103.
\191\ Automatic Vehicle Monitoring Systems Second Report and
Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
\192\ See Alvarez Letter 1998.
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95. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service.\193\ A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio System (``BETRS'').\194\ 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.\195\ 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
[[Page 26344]]
may be affected by the rules and policies proposed herein.
---------------------------------------------------------------------------
\193\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\194\ BETRS is defined in section 22.757 and 22.759 of the
Commission's rules, 47 CFR 22.757 and 22.759.
\195\ 13 CFR 121.201, NAICS code 517212.
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96. Air-Ground Radiotelephone Service.\196\ The Commission has
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.\197\ There are approximately 100
licensees in the Air-Ground Radiotelephone Service, and under that
definition, we estimate that almost all of them qualify as small
entities under the SBA definition. For purposes of assigning Air-Ground
Radiotelephone Service licenses through competitive bidding, the
Commission has defined ``small business'' as an entity that, together
with controlling interests and affiliates, has average annual gross
revenues for the preceding three years not exceeding $40 million.\198\
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.\199\ These
definitions were approved by the SBA.\200\ 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 Services licenses. Neither of the winning bidders
claimed small business status.
---------------------------------------------------------------------------
\196\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\197\ 13 CFR 121.201, NAICS codes 517212.
\198\ 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, paragraphs 28-42 (2005).
\199\ Id.
\200\ See Letter from Hector V. Barreto, Administrator, SBA, to
Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access
Division, WTB, FCC (Sept. 19, 2005).
---------------------------------------------------------------------------
97. Aviation and Marine Radio Services. There are approximately
26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast)
licensees.\201\ The Commission has not developed a small business size
standard specifically applicable to all licensees. For purposes of this
analysis, we will use the SBA small business size standard for the
category ``Cellular and Other Telecommunications,'' which is 1,500 or
fewer employees.\202\ We are unable to determine how many of those
licensed fall under this standard. For purposes of our evaluations in
this analysis, we estimate that there are up to approximately 62,969
licensees that are small businesses under the SBA standard.\203\ In
December 1998, the Commission held an auction of 42 VHF Public Coast
licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-
162.0125 MHz (coast transmit) bands. For this auction, the Commission
defined a ``small'' business as an entity that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $15 million dollars. In
addition, a ``very small'' business is one that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $3 million dollars.\204\
Further, the Commission made available Automated Maritime
Telecommunications System (``AMTS'') licenses in Auctions 57 and
61.\205\ Winning bidders could claim status as a very small business or
a very small business. A very small business for this service is
defined as an entity with attributed average annual gross revenues that
do not exceed $3 million for the preceding three years, and a small
business is defined as an entity with attributed average annual gross
revenues of more than $3 million but less than $15 million for the
preceding three years.\206\ Three of the winning bidders in Auction 57
qualified as small or very small businesses, while three winning
entities in Auction 61 qualified as very small businesses.
---------------------------------------------------------------------------
\201\ Vessels that are not required by law to carry a radio and
do not make international voyages or communications are not required
to obtain an individual license. See Amendment of Parts 80 and 87 of
the Commission's rules to Permit Operation of Certain Domestic Ship
and Aircraft Radio Stations Without Individual Licenses, Report and
Order, WT Docket No. 96-82, 11 FCC Rcd 14849 (1996).
\202\ 13 CFR 121.201, NAICS code 517212.
\203\ A licensee may have a license in more than one category.
\204\ 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).
\205\ See ``Automated Maritime Telecommunications System
Spectrum Auction Scheduled for September 15, 2004, Notice and Filing
Requirements, Minimum Opening Bids, Upfront Payments and Other
Auction Procedures,'' Public Notice, 19 FCC Rcd 9518 (WTB 2004);
``Auction of Automated Maritime Telecommunications System Licenses
Scheduled for August 3, 2005, Notice and Filing Requirements,
Minimum Opening Bids, Upfront Payments and Other Auction Procedures
for Auction No. 61,'' Public Notice, 20 FCC Rcd 7811 (WTB 2005).
\206\ 47 CFR 80.1252.
---------------------------------------------------------------------------
98. 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.\207\ There is presently 1 licensee
in this service. We do not have information whether that licensee would
qualify as small under the SBA's small business size standard for
``Cellular and Other Wireless Telecommunications'' services.\208\ Under
that SBA small business size standard, a business is small if it has
1,500 or fewer employees.\209\
---------------------------------------------------------------------------
\207\ This service is governed by Subpart I of Part 22 of the
Commission's Rules. See 47 CFR 22.1001-22.1037.
\208\ 13 CFR 121.201, NAICS code 517212.
\209\ Id.
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99. 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.\210\ ``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.\211\ The SBA has approved of these definitions.\212\ 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.\213\ Seven winning bidders claimed status as small or very small
businesses and won 611 licenses. On May 18, 2005, the Commission
completed an auction (Auction No. 59) of 4,226 MAS licenses in the
Fixed Microwave Services from the 928/959 and 932/941 MHz bands.
Twenty-six winning bidders won a total
[[Page 26345]]
of 2,323 licenses. Of the 26 winning bidders in this auction, five
claimed small business status and won 1,891 licenses.
---------------------------------------------------------------------------
\210\ See Amendment of the Commission's Rules Regarding Multiple
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008,
paragraph 123 (2000).
\211\ Id.
\212\ See Alvarez Letter 1999.
\213\ See ``Multiple Address Systems Spectrum Auction Closes,''
Public Notice, 16 FCC Rcd 21011 (2001).
---------------------------------------------------------------------------
100. 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.\214\ 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.
---------------------------------------------------------------------------
\214\ See 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------
101. 1.4 GHz Band Licensees. The Commission conducted an auction of
64 1.4 GHz band licenses, beginning on February 7, 2007,\215\ and
closing on March 8, 2007.\216\ In that auction, the Commission defined
``small business'' as an entity that, together with its affiliates and
controlling interests, had average gross revenues that exceed $15
million but do not exceed $40 million for the preceding three years,
and a ``very small business'' as an entity that, together with its
affiliates and controlling interests, has had average annual gross
revenues not exceeding $15 million for the preceding three years.\217\
Neither of the two winning bidders sought designated entity
status.\218\
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\215\ See ``Auction of 1.4 GHz Bands Licenses Scheduled for
February 7, 2007,'' Public Notice, 21 FCC Rcd 12393 (WTB 2006).
\216\ See ``Auction of 1.4 GHz Band Licenses Closes; Winning
Bidders Announced for Auction No. 69,'' Public Notice, 22 FCC Rcd
4714 (2007) (``Auction No. 69 Closing PN'').
\217\ Auction No. 69 Closing PN, Attachment C.
\218\ See Auction No. 69 Closing PN.
---------------------------------------------------------------------------
102. 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.\219\ 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.\220\ Of this total, 804 firms had employment of 999 or
fewer employees, and three firms had employment of 1,000 employees or
more.\221\ 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.\222\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\223\ 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 \224\ and TRW, Inc. It is our understanding that Teligent and
its related companies have fewer than 1,500 employees, though this may
change in the future. TRW is not a small entity. There are
approximately 122 licensees in the Rural Radiotelephone Service, and
the Commission estimates that there are 122 or fewer small entity
licensees in the Rural Radiotelephone Service that may be affected by
the rules and policies proposed herein.
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\219\ 13 CFR 121.201, NAICS code 517212.
\220\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211.
\221\ 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.''
\222\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517212.
\223\ 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.''
\224\ 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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103. 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.\225\ ``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.\226\ The SBA has approved these definitions.\227\ The Commission
will not know how many licensees will be small or very small businesses
until the auction, if required, is held.
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\225\ 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, paragraph 77 (2000) (``24 GHz Report and Order'');
see also 47 CFR 101.538(a)(2).
\226\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77;
see also 47 CFR 101.538(a)(1).
\227\ See Letter from Gary M. Jackson, Assistant Administrator,
SBA, to Margaret W. Wiener, Deputy Chief, Auctions and Industry
Analysis Division, WTB, FCC (July 28, 2000).
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104. Broadband Radio Service. Broadband Radio Service systems,
previously referred to as Multipoint Distribution Service (``MDS'') and
Multichannel Multipoint Distribution Service (``MMDS'') systems, and
``wireless cable,'' transmit video programming to subscribers and
provide two-way high speed data operations using the microwave
frequencies of the Broadband Radio Service (``BRS'') and Educational
Broadband Service (``EBS'') (previously referred to as the
Instructional Television Fixed Service (``ITFS'')).\228\ In connection
with the 1996 BRS auction, the Commission established a small business
size standard as an entity that had annual average gross revenues of no
more than $40 million in the previous three calendar years.\229\ The
BRS auctions resulted in 67 successful bidders obtaining licensing
opportunities for 493 Basic Trading Areas (``BTAs''). Of the 67 auction
winners, 61 met the definition of a small business. BRS also includes
licensees of stations authorized prior to the auction. At this time, we
estimate that of the 61 small business BRS auction winners, 48 remain
small business licensees. In addition to the 48 small businesses that
hold BTA authorizations, there are approximately 392 incumbent BRS
licensees that are considered small entities.\230\ After
[[Page 26346]]
adding the number of small business auction licensees to the number of
incumbent licensees not already counted, we find that there are
currently approximately 440 BRS licensees that are defined as small
businesses under either the SBA or the Commission's rules.
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\228\ Amendment of Parts 21 and 74 of the Commission's Rules
with Regard to Filing Procedures in the Multipoint Distribution
Service and in the Instructional Television Fixed Service and
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, MM Docket No. 94-131 and PP Docket No. 93-253,
Report and Order, 10 FCC Rcd 9589, 9593, paragraph 7 (1995) (``MDS
Auction R&O'').
\229\ 47 CFR 21.961(b)(1).
\230\ 47 U.S.C. 309(j). Hundreds of stations were licensed to
incumbent MDS licensees prior to implementation of Section 309(j) of
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-
auction licenses, the applicable standard is SBA's small business
size standard.
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105. In addition, the SBA has developed a small business size
standard for Cable and Other Program Distribution, which includes all
such companies generating $13.5 million or less in annual
receipts.\231\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\232\ 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.\233\ Consequently, we estimate that the majority of
providers in this service category are small businesses that may be
affected by the rules and policies adopted herein. This SBA small
business size standard is applicable to EBS. There are presently 2,032
EBS licensees. All but 100 of these licenses are held by educational
institutions. Educational institutions are included in this analysis as
small entities.\234\ Thus, we estimate that at least 1,932 licensees
are small businesses.
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\231\ 13 CFR 121.201, NAICS code 517510.
\232\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510.
\233\ Id. An additional 61 firms had annual receipts of $25
million or more.
\234\ The term ``small entity'' within SBREFA applies to small
organizations (nonprofits) and to small governmental jurisdictions
(cities, counties, towns, townships, villages, school districts, and
special districts with populations of less than 50,000). 5 U.S.C.
601(4)-(6). We do not collect annual revenue data on EBS licensees.
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106. 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.'' \235\
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.\236\ According to Commission staff review of the
BIA Financial Network, Inc., Media Access Pro Television Database as of
December 7, 2007, about 825 (66 percent) of the 1,250 commercial
television stations in the United States have revenues of $13 million
or less. However, in assessing whether a business entity qualifies as
small under the above definition, business control affiliations \237\
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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\235\ U.S. Census Bureau, 2002 NAICS Definitions, ``515120
Television Broadcasting'' (partial definition); http://www.census.gov/epcd/naics02/def/NDEF515.HTM.
\236\ 13 CFR 121.201, NAICS code 515120.
\237\ ``Concerns are affiliates of each other when one concern
controls or has the power to control the other or a third party or
parties controls or has the power to control both.'' 13 CFR
21.103(a)(1).
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107. 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.
108. There are also 2,117 low power television stations
(``LPTV'').\238\ 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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\238\ FCC News Release, ``Broadcast Station Totals as of
September 30, 2007.''
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109. Radio Broadcasting. The SBA defines a radio broadcast entity
that has $6 million or less in annual receipts as a small
business.\239\ Business concerns included in this industry are those
``primarily engaged in broadcasting aural programs by radio to the
public.\240\ 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 \241\ are included.\242\ Our estimate, therefore
likely overstates the number of small businesses that might be affected
by our action.
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\239\ See OMB, North American Industry Classification System:
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code
515112).
\240\ Id.
\241\ ``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).
\242\ ``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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110. 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.\243\
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\243\ 13 CFR 121.201, NAICS codes 513111 and 513112.
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111. The Commission estimates that there are approximately 5,618 FM
translators and boosters.\244\ 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.\245\
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\244\ See supra note 242.
\245\ 15 U.S.C. 632.
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112. 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 26347]]
consumers via cable or direct-to-home satellite systems on a
subscription or fee basis. These establishments do not generally
originate programming material.'' \246\ 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.\247\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\248\ 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.\249\ Thus, under this size standard, the majority of firms
can be considered small.
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\246\ U.S. Census Bureau, 2002 NAICS Definitions, ``517510 Cable
and Other Program Distribution''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\247\ 13 CFR 121.201, NAICS code 517510.
\248\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510.
\249\ Id. An additional 61 firms had annual receipts of $25
million or more.
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113. 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.\250\ Industry
data indicate that, of 1,076 cable operators nationwide, all but eleven
are small under this size standard.\251\ In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers.\252\ 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.\253\ Thus, under
this second size standard, most cable systems are small.
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\250\ 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).
\251\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
& C-2; Warren Communications News, Television & Cable Factbook 2006,
``Ownership of Cable Systems in the United States,'' pages D-1805 to
D-1857.
\252\ 47 CFR 76.901(c).
\253\ Warren Communications News, Television & Cable Factbook
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2. The data
do not include 718 systems for which classifying data were not
available.
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114. 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.'' \254\ 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.\255\ Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard.\256\ 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,\257\ 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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\254\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
\255\ 47 CFR 76.901(f); see ``FCC Announces New Subscriber Count
for the Definition of Small Cable Operator,'' Public Notice, 16 FCC
Rcd 2225 (Cable Services Bureau, 2001).
\256\ 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.
\257\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's
finding that the operator does not qualify as a small cable operator
pursuant to section 76.901(f) of the Commission's rules. See 47 CFR
76.909(b).
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115. Open Video Services. Open Video Service (``OVS'') systems
provide subscription services.\258\ The SBA has created a small
business size standard for Cable and Other Program Distribution.\259\
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.\260\ 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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\258\ See 47 U.S.C. 573.
\259\ 13 CFR 121.201, NAICS code 517510.
\260\ \\ See http://www.fcc.gov/csb/ovs/csovscer.html.
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116. 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.\261\ According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.\262\ 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.\263\ Thus, under this size standard, the majority of firms
can be considered small.
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\261\ 13 CFR 121.201, NAICS code 517510.
\262\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510.
\263\ Id. An additional 61 firms had annual receipts of $25
million or more.
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117. 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.\264\ These definitions were approved by the SBA.\265\ On January
27,
[[Page 26348]]
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.\266\ 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.\267\
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\264\ Amendment of Parts 2 and 25 of the Commission's Rules to
Permit Operation of NGSO FSS Systems Co-Frequency with GSO and
Terrestrial Systems in the Ku-Band Frequency Range; Amendment of the
Commission's Rules to Authorize Subsidiary Terrestrial Use of the
12.2-12.7 GHz Band by Direct Broadcast Satellite Licenses and their
Affiliates; and Applications of Broadwave USA, PDC Broadband
Corporation, and Satellite Receivers, Ltd. to provide A Fixed
Service in the 12.2-12.7 GHz Band, ET Docket No. 98-206, Memorandum
Opinion and Order and Second Report and Order, 17 FCC Rcd 9614,
9711, paragraph 252 (2002).
\265\ See Letter from Hector V. Barreto, Administrator, U.S.
Small Business Administration, to Margaret W. Wiener, Chief,
Auctions and Industry Analysis Division, WTB, FCC (Feb.13, 2002).
\266\ See ``Multichannel Video Distribution and Data Service
Auction Closes,'' Public Notice, 19 FCC Rcd 1834 (2004).
\267\ 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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118. Amateur Radio Service. These licensees are held by individuals
in a noncommercial capacity; these licensees are not small entities.
119. 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.\268\ 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. 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.\269\ 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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\268\ 13 CFR 121.201, NAICS code 517212.
\269\ \\ 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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120. 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.\270\ 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'').\271\ 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.\272\ 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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\270\ 47 CFR Part 90.
\271\ 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.
\272\ 13 CFR 121.201, NAICS Code 517212.
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121. Public Safety Radio Services. Public Safety radio services
include police, fire, local government, forestry conservation, highway
maintenance, and emergency medical services.\273\ There are a total of
approximately 127,540 licensees in these services. Governmental
entities \274\ 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.\275\
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\273\ 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.
\274\ 47 CFR 1.1162.
\275\ 5 U.S.C. 601(5).
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IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
122. 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.\276\ Interstate telephone
[[Page 26349]]
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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\276\ See 47 CFR 1.1162 for the general exemptions from
regulatory fees. E.g., Amateur radio licensees (except applicants
for vanity call signs) and operators in other non-licensed services
(e.g., Personal Radio, part 15, ship and aircraft). Governments and
non-profit (exempt under section 501(c) of the Internal Revenue
Code) entities are exempt from payment of regulatory fees and need
not submit payment. Non-commercial educational broadcast licensees
are exempt from regulatory fees as are licensees of auxiliary
broadcast services such as low power auxiliary stations, television
auxiliary service stations, remote pickup stations and aural
broadcast auxiliary stations where such licenses are used in
conjunction with commonly owned 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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123. 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.
124. 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.\277\ If payment is not received, new or
pending applications may be dismissed, and existing authorizations may
be subject to rescission.\278\ Further, in accordance with the DCIA,
Federal agencies may bar a person or entity from obtaining a Federal
loan or loan insurance guarantee if that person or entity fails to pay
a delinquent debt owed to any Federal agency.\279\ 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.\280\
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\277\ 47 CFR 1.1164.
\278\ 47 CFR 1.1164(c).
\279\ Public Law 104-134, 110 Stat. 1321 (1996).
\280\ 31 U.S.C. 7701(c)(2)(B).
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125. 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.\281\ 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.
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\281\ 47 CFR 1.1166.
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V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
126. 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.\282\ 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.
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\282\ 5 U.S.C. 603.
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127. Several categories of licensees and regulatees are exempt from
payment of regulatory fees. Also, waiver procedures provide regulatees,
including small entity regulatees, relief in exceptional circumstances.
VI. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
None.
Proposed Letter to Submarine Cable Operators
[insert address of submarine cable operator]
Re: Regulatory Fees for Fiscal Year [insert year]
Our annual regulatory fee assessment for submarine cable operators
is based on the total capacity for the submarine cable system. For this
reason, we require submarine cable operators to advise us of the
appropriate category for determining regulatory fees. Please indicate
below the correct category and return this letter to us by February 15,
20--.
------------------------------------------------------------------------
Please
check the
Submarine Cable Systems (capacity as of December 31) appropriate
category
------------------------------------------------------------------------
< 2.5 Gbps ...........
2.5 Gbps or greater, but less than 5 Gbps ...........
5 Gbps or greater, but less than 10 Gbps ...........
10 Gbps or greater, but less than 20 Gbps ...........
20 Gbps or greater ...........
------------------------------------------------------------------------
Thank you for your assistance in this matter.
CERTIFICATION STATEMENT
I ------------------------certify under penalty of perjury that the
foregoing and supporting information is true and correct to the best of
my knowledge, information and belief.
SIGNATURE--------------------------------------------------------------
DATE-------------------------------------------------------------------
Sources of Payment Unit Estimates for FY 2009
In order to calculate individual service fees for FY 2009, we
adjusted FY 2008 payment units for each service to more accurately
reflect expected FY 2009 payment liabilities. We obtained our updated
estimates through a variety of means. For example, we used Commission
licensee databases, actual prior year payment records and industry and
trade association projections when available. The databases we
consulted include our Universal Licensing System (``ULS''),
International Bureau Filing System (``IBFS''), Consolidated Database
System (``CDBS'') and Cable Operations and Licensing System
(``COALS''), as well as reports generated within the Commission such as
the Wireline
[[Page 26350]]
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 2009 estimates with actual FY
2008 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 2009 and the fact that, in many services, the
number of actual licensees or station operators fluctuates from time to
time due to economic, technical, or other reasons. When we note, for
example, that our estimated FY 2009 payment units are based on FY 2008
actual payment units, it does not necessarily mean that our FY 2009
projection is exactly the same number as FY 2008. We have either
rounded the FY 2009 number or adjusted it slightly to account for these
variables.
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Factors, Measurements, and Calculations That Go Into Determining
Station Signal Contours and Associated Population Coverages
AM Stations
For stations with nondirectional daytime antennas, the theoretical
radiation was used at all azimuths. For stations with directional
daytime antennas, specific information on each day tower, including
field ratio, phasing, spacing and orientation was retrieved, as well as
the theoretical pattern root-mean-square of the radiation in all
directions in the horizontal plane (``RMS'') figure milliVolt per meter
(mV/m) @ 1 km) for the antenna system. The standard, or modified
standard if pertinent, horizontal plane radiation pattern was
calculated using techniques and methods specified in sections 73.150
and 73.152 of the Commission's rules.\1\ Radiation values were
calculated for each of 360 radials around the transmitter site. Next,
estimated soil conductivity data was retrieved from a database
representing the information in FCC Figure R3.\2\ Using the calculated
horizontal radiation values, and the retrieved soil conductivity data,
the distance to the principal community (5 mV/m) contour was predicted
for each of the 360 radials. The resulting distance to principal
community contours were used to form a geographical polygon. Population
counting was accomplished by determining which 2000 block centroids
were contained in the polygon. (A block centroid is the center point of
a small area containing population as computed by the U.S. Census
Bureau.) The sum of the population figures for all enclosed blocks
represents the total population for the predicted principal community
coverage area.
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\1\ 47 CFR 73.150 and 73.152.
\2\ See Map of Estimated Effective Ground Conductivity in the
United States, 47 CFR 73.190 Figure R3.
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FM Stations
The greater of the horizontal or vertical effective radiated power
(``ERP'') (kW) and respective height above average terrain (``HAAT'')
(m) combination was used. Where the antenna height above mean sea level
(``HAMSL'') was available, it was used in lieu of the average HAAT
figure to calculate specific HAAT figures for each of 360 radials under
study. Any available directional pattern information was applied as
well, to produce a radial-specific ERP figure. The HAAT and ERP figures
were used in conjunction with
[[Page 26357]]
the Field Strength (50-50) propagation curves specified in 47 CFR
section 73.313 of the Commission's rules to predict the distance to the
principal community (70 dBu (decibel above 1 microVolt per meter) or
3.17 mV/m) contour for each of the 360 radials.\3\ The resulting
distance to principal community contours were used to form a
geographical polygon. Population counting was accomplished by
determining which 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.
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\3\ 47 CFR 73.313.
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BILLING CODE 6712-01-C
[[Page 26359]]
Statement of Acting Chairman Michael J. Copps
Re: Assessment and Collection of Regulatory Fees for Fiscal Year 2009,
MD Docket No. 09-65, Assessment and Collection of Regulatory Fees for
Fiscal Year 2008, MD Docket No. 08-65.
This item begins the process of assessing regulatory fees for this
fiscal year (FY 2009) pursuant to Section 9 of the Communications Act.
Section 9 requires that the Commission collect fees each year to
recover the regulatory costs that are associated with its enforcement,
policy and rulemaking, user information, and international activities.
I am particularly pleased that the Notice of Proposed Rulemaking
includes the new methodology for calculating regulatory fees for
submarine cable operators finally adopted by the Commission in March.
Implementing this new methodology, however, is only a precursor of our
completion of a long overdue, comprehensive review of the Commission's
regulatory fee framework, a project that my colleague Jonathan
Adelstein and I have been pushing for years and that was finally
launched by the Commission last August. As I have said before, it is
hard to believe that we are still generally assessing fees based on the
communications marketplace as it existed in 1994. To be frank, we are
not yet able to say what a modernized fee structure will look like. But
I do intend to press the Commission for action on this before we issue
next year's Notice of Proposed Rulemaking for FY 2010. I look forward
to working with my fellow Commissioners and interested stakeholders to
update our rules to accurately and equitably reflect today's regulatory
practices.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Proposed Rules for FY 2009 International Bearer Circuit Fees \283\
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\283\ As discussed previously herein, we recently revised the
Commission's IBC fee rules by adopting a new methodology for
calculating regulatory fees on both common carrier and non-common
carrier international submarine cable systems based on a per system
fee. See Submarine Cable Order. Under section 9(b)(4)(B) of the Act,
we must notify Congress 90 days before a permitted amendment to the
regulatory fees can take effect. The 90 day period will elapse as of
July 15, 2009. For this reason, we are calculating proposed
regulatory fees for FY 2009 for this service using both the new
methodology and the old (pre-FY 2009) methodology. Appendix A
contains the proposed regulatory fees for international based on the
new methodology adopted in the Submarine Cable Order. See Appendix I
for the proposed regulatory fees for international submarine cable
systems based on the current methodology which remains in effect
pending the Congressional notification process. If the 90 day period
elapses without Congressional objection to the permitted amendment,
we will use the new methodology contained in Appendix A to calculate
submarine cable fees in our FY 2009 report and order. Terrestrial
and satellite facilities do not have cable landing licenses and will
continue to pay regulatory fees on a per 64KB circuit basis, under
our historic methodology as revised in the Submarine Cable Order.
See Submarine Cable Order at paragraph 20.
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List of Subjects in 47 CFR Part 1
Administrative practice and procedure, Claims, Communications
common carriers, Penalties, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 1 as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for Part 1 continues to read as follows:
Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303, 309.
2. The FCC proposes to further amend the final rule published at 74
FR 22110, May 12, 2009, and effective July 13, 2009, in Sec. 1.1156,
by revising paragraphs (b) and (c) to read as follows:
Sec. 1.1156 Schedule of regulatory fees and filing locations for
international services
* * * * *
(b) International Terrestrial and Satellite. Regulatory fees for
International Bearer Circuits are to be paid by facilities-based common
carriers that have active (used or leased) international bearer
circuits as of December 31, of the prior year in any terrestrial or
satellite transmission facility for the provision of service to an end
user or resale carrier, which includes active circuits to themselves or
to their affiliates.
In addition, 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. ``Active circuits'' for these purposes include backup
and redundant circuits. In addition, whether circuits are used
specifically for voice or data is not relevant in determining that they
are active circuits.
Note to paragraph (b): The fee amount, per active 64 KB circuit
or equivalent will be determined for each fiscal year. Payment, if
mailed, shall be sent to: FCC, International, P.O. Box 979084, St.
Louis, MO 63197-9000.
------------------------------------------------------------------------
International Terrestrial
and Satellite (capacity as Fee amount Address
of December 31, 2008)
------------------------------------------------------------------------
Terrestrial Common Carrier.. $0.75 per 64 KB FCC, International,
Satellite Common Carrier.... Circuit. P.O. Box 979084,
Satellite Non-Common Carrier St. Louis, MO 63197-
9000.
------------------------------------------------------------------------
(c) Submarine cable: Regulatory fees for submarine cable systems
will be paid annually, per cable landing license, for all submarine
cable systems operating as of December 31 of the prior year. The fee
amount will be determined by the Commission for each fiscal year.
Payment, if mailed, shall be sent to: FCC, International, P.O. Box
979084, St. Louis, MO 63197-9000.
------------------------------------------------------------------------
Submarine Cable Systems
(capacity as of December 31) Fee amount Address
------------------------------------------------------------------------
< 2.5 Gbps..................... $14,189 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
2.5 Gbps or greater, but less 28,379 FCC, International,
than 5 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
5 Gbps or greater, but less 56,757 FCC, International,
than 10 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
[[Page 26360]]
10 Gbps or greater, but less 113,514 FCC, International,
than 20 Gbps. P.O. Box 979084, St.
Louis, MO 63197-9000.
20 Gbps or greater............. 227,029 FCC, International,
P.O. Box 979084, St.
Louis, MO 63197-9000.
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[FR Doc. E9-12594 Filed 6-1-09; 8:45 am]
BILLING CODE 6712-01-P