[Federal Register Volume 75, Number 79 (Monday, April 26, 2010)]
[Proposed Rules]
[Pages 21536-21567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9553]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 10-87; FCC 10-51]
Assessment and Collection of Regulatory Fees for Fiscal Year 2010
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 $335,794,000 that Congress has required
the Commission to collect for fiscal year 2010. Section 9 of the
Communications Act of 1934, as amended, provides for the annual
assessment and collection of regulatory fees under sections 9(b)(2) and
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and
``Permitted Amendments'' to the Schedule of Regulatory Fees.
DATES: Comments are due May 4, 2010, and reply comments are due May 11,
2010.
ADDRESSES: You may submit comments, identified by MD Docket No. 10-87,
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. 10-87 in the
subject line of the message.
Mail: Commercial overnight mail (other than U.S. Postal
Service Express Mail, and Priority Mail, must be sent to 9300 East
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th
Street, SW., Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444.
SUPPLEMENTARY INFORMATION:
Adopted: April 12, 2010.
Released: April 13, 2010.
By the Commission.
Table of Contents
Paragraph
I. Introduction............................................. 1
A. FY 2010 Regulatory Fee Assessment Methodology........ 2
1. AM and FM Radio Stations......................... 4
2. Submarine Cable Methodology...................... 5
B. Regulatory Fee Obligations for Digital Full Service 7
Television Broadcasters................................
C. Regulatory Fee Obligations for Digital Low Power, 8
Class A, and TV Translators/Boosters...................
D. Commercial Mobile Radio Service Messaging Service.... 9
E. Administrative and Operational Issues................ 10
1. Mandatory Use of Fee Filer....................... 11
2. Notification and Collection of Regulatory Fees... 12
a. Pre-Bills.................................... 12
II. Procedural Matters...................................... 13
A. Public Notices and Fact Sheets....................... 14
B. Assessment Notifications............................. 15
1. Media Services Licensees......................... 15
2. CMRS Cellular and Mobile Services Assessments.... 18
C. Streamlined Regulatory Fee Payment Process........... 21
1. Cable Television Subscribers..................... 21
2. CMRS Cellular and Mobile Providers............... 22
3. Interstate Telecommunications Service Providers 23
(``ITSP'').........................................
D. Payment of Regulatory Fees........................... 24
1. Lock Box Bank.................................... 24
2. Receiving Bank for Wire Payments................. 25
3. De Minimis Regulatory Fees....................... 26
4. Standard Fee Calculations and Payment Dates...... 27
[[Page 21537]]
E. Enforcement.......................................... 28
F. Initial Regulatory Flexibility Analysis.............. 30
G. Initial Paperwork Reduction Act of 1995 Analysis..... 31
H. Congressional Review Act Analysis.................... 32
I. Ex Parte Rules....................................... 33
J. Filing Requirements.................................. 34
III. Ordering Clauses....................................... 39
Appendix A Calculation of FY 2010 Revenue Requirements and
Pro-Rata Fees
Appendix B FY 2010 Schedule of Regulatory Fees
Appendix C Sources of Payment Unit Estimates for FY 2010
Appendix D Factors, Measurements, and Calculations That Go
Into Determining Station Signal Contours and Associated
Population Coverages
Appendix E Initial Regulatory Flexibility Analysis
Appendix F FY 2009 Schedule of Regulatory Fees
I. Introduction
1. In this Notice of Proposed Rulemaking, we propose to collect
$335,794,000 in regulatory fees for Fiscal Year (``FY'') 2010, pursuant
to section 9 of the Communications Act of 1934, as amended (the
``Act''). Section 9 regulatory fees are mandated by Congress and are
collected to recover the regulatory costs associated with the
Commission's enforcement, policy and rulemaking, user information, and
international activities.\1\ The annual regulatory fee amount to be
collected is established each year in the Commission's Annual
Appropriations Act which is adopted by Congress and signed by the
President and which funds the Commission.\2\ In this annual regulatory
fee proceeding, we retain many of the established methods, policies,
and procedures for collecting section 9 regulatory fees adopted by the
Commission in prior years. Consistent with our established practice, we
intend to collect these regulatory fees during an August 2010 filing
window in order to collect the required amount by the end of our fiscal
year.
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\1\ 47 U.S.C. 159(a).
\2\ See Consolidated Appropriations Act, 2010, Public Law 111-
117 for the FY 2010 appropriations act language for the Commission
establishing the amount of $335,794,000 of offsetting collections to
be assessed and collected by the Commission pursuant to section 9 of
the Communications Act.
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A. FY 2010 Regulatory Fee Assessment Methodology
2. In our FY 2010 regulatory fee assessment, we will use the same
section 9 regulatory fee assessment methodology adopted in FY 2009.
Each fiscal year, the Commission proportionally allocates the total
amount that must be collected via section 9 regulatory fees. The
results of our FY 2010 regulatory fee assessment methodology (including
a comparison to the prior year's results) are contained in Appendix A.
To collect the $335,794,000 required by Congress, we adjust the FY 2009
amount downward by 1.8 percent and allocate this amount across the
various fee categories. Consistent with past practice, we then divide
the FY 2010 amount by the number of estimated payment units in each fee
category to determine the unit fee.\3\ As in prior years, for cases
involving small fees, e.g., licenses that are renewed over a multiyear
term, we divide the resulting unit fee by the term of the license and
then rounded these unit fees consistent with the requirements of
section 9(b)(2) of the Act.
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\3\ In many instances, the regulatory fee amount is a flat fee
per licensee or regulatee. In some instances, the fee amount
represents a per-unit fee (such as for International Bearer
Circuits), a per-unit subscriber fee (such as for Cable, Commercial
Mobile Radio Service (``CMRS'') Cellular/Mobile and CMRS Messaging),
or a fee factor per revenue dollar (Interstate Telecommunications
Service Provider (``ITSP'') fee). The payment unit is the measure
upon which the fee is based, such as a licensee, regulatee, or
subscriber fee.
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3. In calculating the FY 2010 regulatory fees listed in Appendix B,
we further adjusted the FY 2009 list of payment units (see Appendix C)
based upon licensee databases, industry and trade group projections, as
well as prior year payment information. In some instances, Commission
licensee databases were used; in other instances, actual prior year
payment records and/or industry and trade association projections were
used in determining the payment unit counts.\4\ Where appropriate, we
adjusted and rounded our final estimates to take into consideration
events that may impact the number of units for which regulatees submit
payment, such as waivers and exemptions that may be filed in FY 2010,
and fluctuations in the number of licenses or station operators due to
economic, technical, or other reasons. Our estimated FY 2010 payment
units, therefore, are based on several variable factors that are
relevant to each fee category. The fee rate also may be rounded or
adjusted slightly to account for these variables.
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\4\ The databases we consulted are the following: The
Commission's Universal Licensing System (``ULS''), International
Bureau Filing System (``IBFS''), Consolidated Database System
(``CDBS'') and Cable Operations and Licensing System (``COALS''). We
also consulted reports generated within the Commission such as the
Wireline Competition Bureau's Trends in Telephone Service and the
Wireless Telecommunications Bureau's Numbering Resource Utilization
Forecast and Annual CMRS Competition Report, as well as industry
sources including, but not limited to, Television & Cable Factbook
by Warren Publishing, Inc. and the Broadcasting and Cable Yearbook
by Reed Elsevier, Inc.
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1. AM and FM Radio Stations
4. As in previous years, we consider the additional factors of
facility attributes and the population served by each radio station in
determining regulatory fees for AM and FM radio stations. The
calculation of the population served is determined by coupling current
U.S. Census Bureau data with technical and engineering data, as
detailed in Appendix D. Consequently, the population served, as well as
the class and type of service (AM or FM), will continue to determine
the amount of regulatory fee to be paid.\5\
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\5\ In addition, beginning in FY 2005, we established a
procedure by which we set regulatory fees for AM and FM radio and
VHF and UHF television Construction Permits each year at an amount
no higher than the lowest regulatory fee for a licensed station in
that respective service category. For example, in FY 2009 the
regulatory fee for an AM radio station Construction Permit was no
higher than the regulatory fee for an AM Class C radio station
serving a population of less than 25,000.
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2. Submarine Cable Methodology
5. In its Second Report and Order (``Submarine Cable Order'')
released on March 24, 2009, the Commission adopted a new submarine
cable bearer circuit methodology that assessed regulatory fees on a per
cable landing license basis, with higher fees for larger submarine
cable systems and lower fees for smaller systems, without
distinguishing between common
[[Page 21538]]
carriers and non-common carriers.\6\ For all other categories of
international bearer circuits--common carrier and non-common carrier
satellite facilities and common carrier terrestrial facilities--the
Submarine Cable Order retained the existing regulatory fee methodology
of assessing fees on a per 64 kbps circuit basis.
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\6\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, Second Report and Order, 24 FCC Rcd 4208, para. 1 (March
24, 2009) (``Submarine Cable Order'').
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6. In the Submarine Cable Order and in the FY 2009 Regulatory Fees
Report and Order,\7\ the Commission allocated the total FY 2009 bearer
circuit expected revenue into two revenue components: A submarine cable
revenue component (87.6 percent) and a satellite/terrestrial revenue
component (12.4 percent) using the Consensus Proposal allocation
adopted by the Commission in the Submarine Cable Order.\8\ According to
the Consensus Proposal, this allocation of 87.6 percent (submarine
cable) and 12.4 percent (satellite/terrestrial) was calculated by
determining the revenue obligations of submarine cable systems with the
revenue obligations of the satellite and terrestrial facilities using
the FY 2008 revenue requirement as its basis.\9\ Since we do not have
any additional information that would lead us to change this allocation
percentage for FY 2010, we propose to continue to use the allocation
percentages of 87.6 percent (submarine cable) and 12.4 percent
(satellite and terrestrial) for calculating FY 2010 submarine cable
regulatory fees. Consistent with the Commission's annual process of
updating its schedule of regulatory fees with recent data, however, we
reserve the right to re-examine the allocation percentages described
above on an annual basis.
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\7\ See FY 2009 Report and Order at Appendix B.
\8\ See Submarine Cable Order at paragraphs 1 and 6.
\9\ Id. at 6.
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B. Regulatory Fee Obligations for Digital Full Service Television
Broadcasters
7. In our FY 2009 Report and Order, we stated that, beginning in FY
2010, we plan to collect regulatory fees from digital broadcasters, and
we sought comment on this 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.\10\ Since
the digital transition on June 12, 2009 has eliminated the distinction
between digital and analog full-service television stations, the
digital-only exemption will no longer apply beginning in FY 2010.
Beginning in FY 2010, we will collect annual regulatory fees from all
digital full-service television stations, and the ``digital-only''
exemption will no longer be applicable. Also, because this is the first
year following the Commission's transition to digital full service
television, it is possible that some facilities may be operating under
a Special Temporary Authority (STA) beginning on October 1, 2009 until
the digital license is issued. For FY 2010 regulatory fee purposes,
these facilities operating under an STA will be considered to be fully
operational licensed facilities and will be obligated to pay the same
regulatory fee as a licensed full-service television station.
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\10\ Id. at para. 13.
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C. Regulatory Fee Obligations for Digital Low Power, Class A, and TV
Translators/Boosters
8. Although the digital transition of full-service television
stations was completed on June 12, 2009, the digital transition for Low
Power, Class A, and TV Translators/Boosters is still voluntary, and
there is currently no set date for the completion of this transition.
Historically, the discussion of digital transition conversion with
respect to regulatory fees has applied only to full-service television
stations, and therefore, the elimination of the ``digital only''
exemption described in the above paragraph has no impact on this class
of regulatees. Because the digital transition in the Low Power, Class
A, and TV Translators/Booster facilities is voluntary and the
transition will occur over a period time, it is possible that some
facilities will convert from analog to digital more quickly than
others. During this interim transition period, licensees of Low Power,
Class A, and TV Translator/Booster facilities could be operating in
analog mode, in digital mode, or in an analog and digital simulcast
mode. For regulatory fee purposes, a fee will be assessed for each
facility operating either in an analog or digital mode. In instances in
which a licensee is operating in both an analog and digital mode as a
simulcast, a single regulatory fee will be assessed for this analog
facility that has a digital companion channel. As greater numbers of
facilities convert to digital mode, the Commission will provide revised
instructions on how regulatory fees will be assessed.
D. Commercial Mobile Radio Service Messaging Service
9. Commercial Mobile Radio Service (``CMRS'') Messaging Service,
which replaced the CMRS One-Way Paging fee category in 1997, includes
all narrowband services.\11\ Since 1997, the number of subscribers has
declined from 40.8 million to 6.5 million, and there does not appear to
be any sign of recovery to the subscriber levels of 1997-1999.
Maintaining the fee at the existing level of $.08 per subscriber is the
minimum reasonable and appropriate action to take under the prevailing
circumstances in the paging industry. We propose in FY 2010 to continue
maintaining the regulatory fee rate at $0.08 per subscriber due to the
declining subscriber base in this industry.\12\ We seek comment on this
proposal.
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\11\ 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, para. 60 (1997) (``FY 1997 Report and Order'').
\12\ Between FY 1997 and FY 2009, the subscriber base in the
paging industry declined 84 percent from 40.8 million to 6.5 million
subscribers, according to FY 2009 collections data as of September
30, 2009.
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E. Administrative and Operational Issues
10. In FY 2009, the Commission implemented several changes in
procedures which simplified the payment and reconciliation processes of
FY 2009 regulatory fees. These changes proved to be very helpful to
both licensees and to the Commission, and we propose in the following
paragraphs to expand upon these improvements. In FY 2010, the
Commission will promote greater use of technology (and less use of
paper) to improve the regulatory fee notification and collection
process. We seek general comment on ways to promote greater use of
technology in collecting regulatory fees.
1. Mandatory Use of Fee Filer
11. In FY 2009, we instituted a mandatory filing requirement using
the Commission's electronic filing and payment system (also known as
``Fee Filer'').\13\ Licensees filing their annual regulatory fee
payments were required to begin the process by entering the
Commission's Fee Filer system with a valid FRN and password. This
change was beneficial to both licensees and to the Commission. For
example, for licensees, the mandatory use of Fee Filer eliminated the
need to manually complete and submit a hardcopy Form 159, and for the
Commission, the data in electronic format made it much easier to
process payments more efficiently and effectively. Because of the
success of this process change, we propose to continue to make the use
of Fee Filer for filing annual regulatory fees mandatory. We seek
comment on this proposal. As
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in FY 2009, the mandatory use of Fee Filer does not mean that licensees
are expected to pay only through Fee Filer--it is only mandatory for
licensees to begin the process of filing their annual regulatory fees
using Fee Filer. This is one reason it is very important for licensees
to have a current and valid FRN address on file in the Commission's
Registration System (CORES). Going forward, only Form 159-E documents
generated from Fee Filer will be permitted when sending in a regulatory
fee payment to U.S. Bank. These Form 159-E's not only will reduce
errors resulting from illegible handwriting on hardcopy Form 159's,
but, because they are generated from Fee Filer, these forms also will
create an electronic record of licensee payment attributes that are
more easily tracked and searched than hardcopy Form 159's that are
completed manually and mailed to the Commission.
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\13\ FY 2009 Report and Order at paragraphs 20 and 21.
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2. Notification and Collection of Regulatory Fees
a. Pre-bills
12. In prior years, the Commission mailed pre-bills via surface
mail to licensees in select regulatory fee categories: Interstate
telecommunications service providers (``ITSPs''), Geostationary
(``GSO'') and Non-Geostationary (``NGSO'') satellite space station
licensees,\14\ holders of Cable Television Relay Service (``CARS'')
licenses, and Earth Station licensees.\15\ The remaining regulatees did
not receive pre-bills. In our FY 2009 Report and Order, the Commission
decided to have the attributes of these pre-bills viewed in Fee Filer,
rather than mailing pre-bills out to licensees via surface mail.\16\
Although the overall response to this procedural change was positive,
it was apparent that a greater effort should have been made to inform
licensees that they would not be receiving a hardcopy regulatory fee
bill in the mail. In FY 2010, the Commission will continue to reduce
its use of hardcopy documents by not mailing out annual regulatory fee
bills, but the Commission is seeking to increase its efforts in
notifying licensees that hardcopy regulatory fee bills will not be
mailed out. We seek comment on how to most efficiently and effectively
notify licensees that hardcopy regulatory fee bills will not be mailed
out, but that, instead, the amount and attributes of the bills will be
available in Fee Filer for review.
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\14\ 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.
\15\ 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.
\16\ See FY 2009 Report and Order at paragraphs 24, 26.
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II. Procedural Matters
13. Included below are procedural items as well as our current
payment and collection methods, which we have revised over the past
several years to expedite the processing of regulatory fee payments. We
include these payments and collection procedures here as a useful way
of reminding regulatory fee payers and the public about these aspects
of the annual regulatory fee collection process.
A. Public Notices and Fact Sheets
14. 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 as in previous years we will not send out public
notices and fact sheets to regulatees en masse.
B. Assessment Notifications
1. Media Services Licensees
15. Beginning in FY 2003, we sent fee assessment notifications via
surface mail to media services entities on a per-facility basis.\17\
The notifications provided the assessed fee amount for the facility in
question, as well as the data attributes that determined the fee
amount. We have since refined this initiative with improved
results.\18\ Consistent with procedures used last year, we will mail
out media assessment notifications to licensees in FY 2010 at their
primary record of contact populated in our Consolidated Database System
(``CDBS''), and to a secondary record of contact, if available.\19\
However, after FY 2010, as part of the Commission's initiative to
emphasize electronic filing and reduce paper usage, the Commission will
stop mailing out media notification assessments to media licensees.
Instead the Commission will rely more on its various Web sites,
including the Commission-authorized Web site at http://www.fccfees.com,
to notify licensees of pending annual regulatory fees and to update or
correct any information regarding their facilities and their fee-exempt
status.\20\ We seek comment on our proposal to discontinue sending out
media notification letters after the FY 2010 regulatory fee season.
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\17\ As stated previously at footnote 41, 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.
\18\ Some of those refinements have been to provide licensees
with a Commission-authorized Web site to update or correct any
information concerning their facilities, and to amend their fee-
exempt status, if need be. Also, our notifications now provide
licensees with a telephone number to call in the event that they
need customer assistance. The notifications themselves have been
refined so that licensees of fewer than four facilities receive
individual fee assessment postcards for their facilities; whereas
licensees of four or more facilities now receive a single assessment
letter that lists all of their facilities and the associated
regulatory fee obligation for each facility.
\19\ We will 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. As in prior
years, fee assessments will not be issued for broadcast auxiliary
stations.
\20\ 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''). There is also a Commission-authorized Web site
that media services licensees can use to view and update their
exempt status (http://www.fccfees.com).
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16. The decision to discontinue mailing media notifications
beginning in FY 2011 is consistent with the Commission's effort to
become more electronic and less paper-oriented. However, the Commission
understands that not all media licensees are able to access the
Commission's various electronic Web sites once the hardcopy
notification letters are discontinued in FY 2011. Therefore, to be
receptive to the needs of these licensees, the Commission will leave
the comment and reply comment period open until September 30, 2010 on
the specific issue of whether the media notification letters should be
discontinued in FY 2011. Because this decision does not impact FY 2010
regulatory fees, we will be addressing this issue in the Commission's
FY 2011 Notice of Proposed Rulemaking after we have had the chance to
review the various
[[Page 21540]]
comments and reply comments that have been submitted. In addition to
raising this issue in this document, the Commission will also remind
media licensees of this proposed change in notification procedures when
it sends out letters to media licensees later in the fiscal year
regarding their FY 2010 regulatory fee obligations. To ensure that the
comments of all potentially affected persons are properly included in
the record, media licensees should submit their comments and reply
comments on this issue as follows:
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/or the Federal eRulemaking Portal: http://www.regulations.gov.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Effective December 28, 2009, all hand-delivered or
messenger-delivered paper filings for the Commission's Secretary must
be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325,
Washington, DC 20554. 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 must be addressed to 445 12th Street, SW., Washington, DC 20554.
17. Although the Commission will mail media assessment
notifications to licensees in FY 2010, all licensees (including media
services) will be required to use Fee Filer as the first step in paying
their regulatory fee obligations. The notification assessments provide
licensees with the same media data attributes found on Fee Filer;
however, receiving this information in FY 2010 via mail notification
does not obviate, nor should it be considered a substitute for, using
Fee Filer as the first step in filing and paying annual regulatory
fees. As explained previously, licensees must first log onto the
Commission's Fee Filer system to begin the process of filing and paying
their regulatory fees, but once in Fee Filer, licensees may pay by
check or money order, credit card, or wire transfer. A Form 159-E
generated from Fee Filer is required, even when mailing in the annual
regulatory fee payment.
2. CMRS Cellular and Mobile Services Assessments
18. As we have done in prior years, we will mail an initial
assessment letter to Commercial Mobile Radio Service (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'').\21\ The
letter will include a listing of the carrier's Operating Company
Numbers (``OCNs'') upon which the assessment is based.\22\ 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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\21\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005 and Assessment and Collection of Regulatory Fees for
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paragraphs
38-44 (2005).
\22\ Id.
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19. If the carrier does not agree with the number of subscribers
listed on the initial assessment letter, providers will have an
opportunity within a specific timeframe to revise their subscriber
counts by submitting supporting documentation to substantiate the
change. However, instead of mailing the revised figures, providers will
be asked to access Fee Filer and follow the instructions provided in
order to submit their revised subscriber count along with any
supporting documentation.\23\ The Commission will then review the
revised count and supporting documentation and either approve or
disapprove the submission in Fee Filer. The provider will be able to
review the decision online in Fee Filer. If the submission is
disapproved, the Commission will also attempt to contact the provider
so that the provider will have an opportunity to discuss its revised
subscriber count and/or provide additional supporting documentation. If
we receive no response or correction to the initial assessment letter,
or we do not reverse the disapproval of the provider's revised count
submission, we will expect the fee payment to be based on the number of
subscribers listed on the initial assessment. Once the timeframe for
revision has passed, the subscriber counts will be finalized. These
subscriber counts will then be the basis upon which CMRS regulatory
fees will be expected. Providers will be able to view their final
subscriber counts online in Fee Filer. A final CMRS assessment letter
will not be mailed out.
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\23\ In the supporting documentation, the provider will need to
state a reason for the change, such as 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.
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20. Because some carriers do not file the NRUF report, they may not
receive an initial letter of assessment. In these instances, the
carriers should compute their fee payment using the standard
methodology \24\ that is currently in place for CMRS Wireless services
(e.g., compute their subscriber counts as of December 31, 2009), 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
paid is inaccurate, the Commission will bill the carrier for the
difference between what was paid and what should have been paid.
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\24\ See, e.g., Federal Communications Commission, Regulatory
Fees Fact Sheet: What You Owe--Commercial Wireless Services for FY
2009 at 1 (rel. September 2009).
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C. Streamlined Regulatory Fee Payment Process
1. Cable Television Subscribers
21. 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
22. In FY 2006, we streamlined the CMRS payment process by
eliminating the requirement for CMRS providers to identify their
individual call signs when making their regulatory fee payment, instead
allowing CMRS providers to pay their regulatory fees only at the
aggregate subscriber level without having to identify their various
call signs.\25\ We will continue this practice in FY 2010. In FY 2007,
we consolidated the CMRS cellular and CMRS mobile fee categories into
one fee category with a single 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
2010, we will continue this practice of combining the CMRS cellular and
[[Page 21541]]
CMRS mobile fee categories into one regulatory fee category.
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\25\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092,
8105, para. 48 (2006).
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3. Interstate Telecommunications Service Providers (``ITSP'')
23. 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
performed in a consistent manner and eliminated processing issues that
occurred in prior years. In FY 2010, we will continue rounding lines 14
and 16 when calculating the FY 2010 ITSP fee obligation. In addition,
as in FY 2009, we will continue the practice of not mailing out Form
159-W via surface mail.
D. Payment of Regulatory Fees
1. Lock Box Bank
24. All lock box payments to the Commission for FY 2010 will be
processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC.
During the regulatory fee season, for those licensees paying by check,
money order, or by credit card using Form 159-E remittance advice, the
fee payment and Form 159-E remittance advice should be mailed to the
following address: Federal Communications Commission, Regulatory Fees,
P.O. Box 979084, St. Louis, MO 63197-9000. Additional payment options
and instructions are posted at http://www.fcc.gov/fees/regfees.html.
2. Receiving Bank for Wire Payments
25. 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 Fee Filer generated Form 159-E 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. Regulatees should discuss
arrangements (including bank closing schedules) with their bankers
several days before they plan to make the wire transfer to allow
sufficient time for the transfer to be initiated and completed before
the deadline. Complete instructions for making wire payments are posted
at http://www.fcc.gov/fees/wiretran.html.
3. De Minimis Regulatory Fees
26. Regulatees whose total FY 2010 regulatory fee liability,
including all categories of fees for which payment is due, is less than
$10 are exempted from payment of FY 2010 regulatory fees.
4. Standard Fee Calculations and Payment Dates
27. 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 (including construction permits for digital
television stations) that were granted on or before October 1, 2009 for
AM/FM radio stations, analog VHF/UHF full service television stations,
and satellite television stations. Regulatory fees must be paid for all
broadcast facility licenses granted on or before October 1, 2009. In
instances where a permit or license is transferred or assigned after
October 1, 2009, 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,
2009. In instances where a permit or license is transferred or assigned
after October 1, 2009, 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.\26\
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\26\ 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, 2009. The number of subscribers, units,
or telephone numbers on December 31, 2009 will be used as the basis
from which to calculate the fee payment. In instances where a permit or
license is transferred or assigned after October 1, 2009,
responsibility for payment rests with the holder of the permit or
license as of the fee due date.
The first eleven regulatory fee categories in our Schedule
of Regulatory Fees (see Appendix B) 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 2010.
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,
2009.\27\ Regulatory fees also must be paid for CARS licenses that were
granted on or before October 1, 2009. In instances where a permit or
license is transferred or assigned after October 1, 2009,
responsibility for payment rests with the holder of the permit or
license as of the fee due date.
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\27\ Cable television system operators should compute their
basic subscribers as follows: Number of single family dwellings +
number of individual households in multiple dwelling unit
(apartments, condominiums, mobile home parks, etc.) paying at the
basic subscriber rate + bulk rate customers + courtesy and free
service. Note: Bulk-Rate Customers = Total annual bulk-rate charge
divided by basic annual subscription rate for individual households.
Operators may base their count on ``a typical day in the last full
week'' of December 2009, rather than on a count as of December 31,
2009.
---------------------------------------------------------------------------
International Services: Regulatory fees must be paid for
earth stations, geostationary orbit space stations and non-
geostationary orbit satellite systems that were licensed and
operational on or before October 1, 2009. In instances where a permit
or license is transferred or assigned after October 1, 2009,
responsibility for payment rests with the holder of the permit or
license as of the fee due date.
International Services: Submarine Cable Systems:
Regulatory fees for submarine cable systems are to be paid on a per
cable landing license basis based on circuit capacity as of December
31, 2009. In instances where a license is transferred or assigned after
October 1, 2009, responsibility for payment rests with the holder of
the license as of the fee due date.
International Services: Terestrial and Satellite Services:
Finally, 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, 2009 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
[[Page 21542]]
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 as of December 31, 2009. Whether circuits
are used specifically for voice or data is not relevant for these
purposes in determining that they are active circuits. In instances
where a permit or license is transferred or assigned after October 1,
2009, responsibility for payment rests with the holder of the permit or
license as of the fee due date.
E. Enforcement
28. To be considered timely, regulatory fee payments must be
received and stamped at the lockbox bank by the last day of the
regulatory fee filing window. Section 9(c) of the Act requires us to
impose an additional charge as a penalty for late payment of any
regulatory fee.\28\ A late payment penalty of 25 percent of the unpaid
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 those set forth in section 1.1910 of the
Commission's rules \29\ and in the Debt Collection Improvement Act of
1996 (``DCIA'').\30\ 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.\31\ 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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\28\ 47 U.S.C. 159(c).
\29\ See 47 CFR 1.1910.
\30\ 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.
\31\ 47 CFR 1.1940(d).
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29. 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.\32\ 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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\32\ See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.
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F. Initial Regulatory Flexibility Analysis
30. An initial regulatory flexibility analysis (``IRFA'') is
contained in Appendix E. Comments to the IRFA must be identified as
responses to the IRFA and filed by the deadlines for comments on the
Notice. The Commission will send a copy of the Notice, including the
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration.
G. Initial Paperwork Reduction Act of 1995 Analysis
31. This Notice of Proposed Rulemaking does not contain proposed
information collection requirements subject to the Paperwork Reduction
Act of 1995 (``PRA''), Public Law 104-13. In addition, therefore, it
does not contain any new or modified information collection burden for
small business concerns with fewer than 25 employees, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506 (c) (4). Completion of the 159 family of forms required by
the Commission's regulatory fee payment process is already approved by
the Office of Management and Budget under information collections 3060-
0589 and 3060-0949.
H. Congressional Review Act Analysis
32. The Commission will send a copy of this Notice of Proposed
Rulemaking to Congress and the Government Accountability Office
pursuant to the Congressional Review Act.\33\
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\33\ See 5 U.S.C. 801(a)(1)(A). The Congressional Review Act is
contained in Title II, 251, of the CWAAA; see Public Law 104-121,
Title II, 251, 110 Stat. 868.
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I. Ex Parte Rules
33. This is as a ``permit-but-disclose'' proceeding subject to the
requirements under section 1.1206(b) of the Commission's rules.\34\ 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.\35\ Additional rules pertaining to
oral and written presentations are set forth in section 1.1206(b).
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\34\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
\35\ See 47 CFR 1.1206(b)(2).
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J. Filing Requirements
34. Comments and Replies. Pursuant to sections 1.415 and 1.419 of
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may
file comments and reply comments on or before the dates indicated on
the first page of this document. Comments may be filed using: (1) The
Commission's Electronic Comment Filing System (ECFS), (2) the Federal
Government's eRulemaking Portal, or (3) by filing paper copies. See
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(1998).
35. Electronic Filers: Comments may be filed electronically using
the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/or
the Federal eRulemaking Portal: http://www.regulations.gov.
36. 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.
Effective December 28, 2009, all hand-delivered or
messenger-delivered paper filings for the Commission's Secretary must
be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325,
Washington, DC 20554. 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 must be
[[Page 21543]]
addressed to 445 12th Street, SW., Washington, DC 20554.
People With Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
37. 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.
38. 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.
III. Ordering Clauses
39. Accordingly, it is ordered that, pursuant to sections 4(i) and
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed
Rulemaking is hereby adopted.
40. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis in Appendix E, to the Chief Counsel for
Advocacy of the U.S. Small Business Administration.
Marlene H. Dortch,
Secretary, Federal Communications Commission.
BILLING CODE 6712-01-P
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BILLING CODE 6712-01-C?>
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Appendix C
Sources of Payment Unit Estimates for FY 2010
In order to calculate individual service fees for FY 2010, we
adjusted FY 2009 payment units for each service to more accurately
reflect expected FY 2010 payment liabilities. We obtained our
updated estimates through a variety of means. For example, we used
Commission licensee data bases, actual prior year payment records
and industry and trade association projections when available. The
databases we consulted include our Universal Licensing System
(``ULS''), International Bureau Filing System (``IBFS''),
Consolidated Database System (``CDBS'') and Cable Operations and
Licensing System (``COALS''), as well as reports generated within
the Commission such as the Wireline Competition Bureau's Trends in
Telephone Service and the Wireless Telecommunications Bureau's
Numbering Resource Utilization Forecast.
We sought verification for these estimates from multiple sources
and, in all cases we compared FY 2010 estimates with actual FY 2009
payment units to ensure that our revised estimates were reasonable.
Where appropriate, we adjusted and/or rounded our final estimates to
take into consideration the fact that certain variables that impact
on the number of payment units cannot yet be estimated with
sufficient accuracy. These include an unknown number of waivers and/
or exemptions that may occur in FY 2010 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 2010
payment units are based on FY 2009 actual payment units, it does not
necessarily mean that our FY 2010 projection is exactly the same
number as FY 2009. We have either rounded the FY 2010 number or
adjusted it slightly to account for these variables.
------------------------------------------------------------------------
Fee category Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, Based on Wireless Telecommunications
218-219 MHz, Marine (Ship & Bureau (``WTB'') projections of new
Coast), Aviation (Aircraft & applications and renewals taking into
Ground), GMRS, Amateur consideration existing Commission
Vanity Call Signs, Domestic licensee data bases. Aviation (Aircraft)
Public Fixed. and Marine (Ship) estimates have been
adjusted to take into consideration the
licensing of portions of these services
on a voluntary basis.
CMRS Cellular/Mobile Services Based on WTB projection reports, and FY
09 payment data.
CMRS Messaging Services...... Based on WTB reports, and FY 09 payment
data.
AM/FM Radio Stations......... Based on CDBS data, adjusted for
exemptions, and actual FY 2009 payment
units.
UHF/VHF Television Stations.. Based on CDBS data, adjusted for
exemptions, and actual FY 2009 payment
units.
AM/FM/TV Construction Permits Based on CDBS data, adjusted for
exemptions, and actual FY 2009 payment
units.
LPTV, Translators and Based on CDBS data, adjusted for
Boosters, Class A Television. exemptions, and actual FY 2009 payment
units.
Broadcast Auxiliaries........ Based on actual FY 2009 payment units.
BRS (formerly MDS/MMDS)...... Based on WTB reports and actual FY 2009
payment units.
LMDS......................... Based on WTB reports and actual FY 2009
payment units.
Cable Television Relay Based on data from Media Bureau's COALS
Service (``CARS'') Stations. data base and actual FY 2009 payment
units.
Cable Television System Based on publicly available data sources
Subscribers. for estimated subscriber counts and
actual FY 2009 payment units.
Interstate Telecommunication Based on FCC Form 499-Q data for the four
Service Providers. quarters of calendar year 2009, the
Wireline Competition Bureau projected
the amount of calendar year 2009 revenue
that will be reported on 2010 FCC Form
499-A worksheets in April 2010.
Earth Stations............... Based on International Bureau (``IB'')
licensing data and actual FY 2009
payment units.
Space Stations (GSOs & NGSOs) Based on IB data reports and actual FY
2009 payment units.
International Bearer Circuits Based on IB reports and submissions by
licensees.
Submarine Cable Licenses..... Based on IB license information.
------------------------------------------------------------------------
Appendix D
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 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 2,000 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 the
Field Strength (50-50) propagation curves specified in 47 CFR 73.313
of the Commission's rules to predict the distance to the principal
community (70 dBu (decibel above 1 microVolt per meter) or 3.17 mV/
m) contour for each of the 360 radials.\3\ The resulting distance to
principal community contours were used to form a geographical
polygon. Population counting was accomplished by determining which
2,000 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.
[[Page 21551]]
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Appendix E
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act (``RFA''),\36\
the Commission prepared this Initial Regulatory Flexibility Analysis
(``IRFA'') of the possible significant economic impact on small
entities by the policies and rules proposed in this Notice of
Proposed Rulemaking. 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
Notice. The Commission will send a copy of the Notice, including the
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration.\37\ In addition, the Notice and IRFA (or summaries
thereof) will be published in the Federal Register.\38\
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\36\ 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'').
\37\ 5 U.S.C. 603(a).
\38\ Id.
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I. Need for, and Objectives of, the Notice
2. This rulemaking proceeding is initiated for the Commission to
obtain comments regarding its proposed amendment to its Schedule of
Regulatory Fees in the amount of $335,794,000, which is the amount
that Congress has required the Commission to recover. The Commission
seeks to collect the necessary amount through its revised Schedule
of Regulatory Fees in the most efficient manner possible and without
undue public burden.
II. Legal Basis
3. This action, including publication of proposed rules, is
authorized under sections (4)(i) and (j), 9, and 303(r) of the
Communications Act of 1934, as amended.\39\
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\39\ 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 Rules Will Apply
4. The RFA directs agencies to provide a description of, and
where feasible, an estimate of the number of small entities that may
be affected by the proposed rules and policies, if adopted.\40\ The
RFA generally defines the term ``small entity'' as having the same
meaning as the terms ``small business,'' ``small organization,'' and
``small governmental jurisdiction.'' \41\ In addition, the term
``small business'' has the same meaning as the term ``small business
concern'' under the Small Business Act.\42\ 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.\43\
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\40\ 5 U.S.C. 603(b)(3).
\41\ 5 U.S.C. 601(6).
\42\ 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.''
\43\ 15 U.S.C. 632.
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5. Small Businesses. Nationwide, there are a total of
approximately 29.6 million small businesses, according to the
SBA.\44\
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\44\ See SBA, Office of Advocacy, ``Frequently Asked
Questions,'' http://web.sba.gov/faqs (accessed Jan. 2009).
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6. Small Organizations. Nationwide, as of 2002, there are
approximately 1.6 million small organizations.\45\ A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
\46\
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\45\ Independent Sector, The New Nonprofit Almanac & Desk
Reference (2002).
\46\ 5 U.S.C. 601(4).
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7. 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.'' \47\
Census Bureau data for 2002 indicate that there were 87,525 local
governmental jurisdictions in the United States.\48\ We estimate
that, of this total, 84,377 entities were ``small governmental
jurisdictions.'' \49\ Thus, we estimate that most governmental
jurisdictions are small.
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\47\ 5 U.S.C. 601(5).
\48\ U.S. Census Bureau, Statistical Abstract of the United
States: 2006, section 8, p. 272, Table 415.
\49\ 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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8. 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.'' \50\ 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.\51\ 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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\50\ 15 U.S.C. 632.
\51\ 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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9. 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.\52\ According
to Commission data,\53\ 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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\52\ 13 CFR 121.201, North American Industry Classification
System (NAICS) code 517110.
\53\ 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''). This source
uses data that are current as of November 1, 2006.
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10. 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.\54\ According to Commission data,\55\ 1005 carriers
have reported that they are engaged in the provision of either
competitive access provider services or competitive local exchange
carrier services. Of these 1005 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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\54\ 13 CFR 121.201, NAICS code 517110.
\55\ ``Trends in Telephone Service'' at Table 5.3.
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11. 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.\56\ According to Commission data,\57\ 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.
---------------------------------------------------------------------------
\56\ 13 CFR 121.201, NAICS code 517310.
\57\ ``Trends in Telephone Service'' at Table 5.3.
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12. 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
[[Page 21552]]
small if it has 1,500 or fewer employees.\58\ According to
Commission data,\59\ 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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\58\ 13 CFR 121.201, NAICS code 517310.
\59\ ``Trends in Telephone Service'' at Table 5.3.
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13. 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.\60\ According
to Commission data,\61\ 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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\60\ 3 CFR 121.201, NAICS code 517110.
\61\ ``Trends in Telephone Service'' at Table 5.3.
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14. 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.\62\ According
to Commission data,\63\ 300 carriers have reported that they are
engaged in the provision of interexchange service. 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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\62\ 13 CFR 121.201, NAICS code 517110.
\63\ ``Trends in Telephone Service'' at Table 5.3.
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15. 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.\64\ According
to Commission data,\65\ 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.
---------------------------------------------------------------------------
\64\ 13 CFR 121.201, NAICS code 517110.
\65\ ``Trends in Telephone Service'' at Table 5.3.
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16. Prepaid Calling Card Providers. Neither the Commission nor
the SBA has developed a small business size standard specifically
for prepaid calling card providers. The appropriate size standard
under SBA rules is for the category Telecommunications Resellers.
Under that size standard, such a business is small if it has 1,500
or fewer employees.\66\ According to Commission data,\67\ 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.
---------------------------------------------------------------------------
\66\ 13 CFR 121.201, NAICS code 517310.
\67\ ``Trends in Telephone Service'' at Table 5.3.
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17. 800 and 800-Like Service Subscribers.\68\ 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.\69\ 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.\70\ 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.
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\68\ We include all toll-free number subscribers in this
category.
\69\ 13 CFR 121.201, NAICS code 517310.
\70\ ``Trends in Telephone Service'' at Tables 18.4, 18.5, 18.6,
and 18.7.
---------------------------------------------------------------------------
18. Satellite Telecommunications and All Other
Telecommunications. These two economic census categories address the
satellite industry. The first category has a small business size
standard of $15 million or less in average annual receipts, under
SBA rules.\71\ The second has a size standard of $25 million or less
in annual receipts.\72\ The most current Census Bureau data in this
context, however, are from the (last) economic census of 2002, and
we will use those figures to gauge the prevalence of small
businesses in these categories.\73\
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\71\ 13 CFR 121.201, NAICS code 517410.
\72\ 13 CFR 121.201, NAICS code 517919.
\73\ 13 CFR 121.201, NAICS codes 517410 and 517910 (2002).
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19. The category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing 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.'' \74\ For this category, Census Bureau data for
2002 show that there were a total of 371 firms that operated for the
entire year.\75\ Of this total, 307 firms had annual receipts of
under $10 million, and 26 firms had receipts of $10 million to
$24,999,999.\76\ Consequently, we estimate that the majority of
Satellite Telecommunications firms are small entities that might be
affected by our action.
---------------------------------------------------------------------------
\74\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410
Satellite Telecommunications''; http://www.census.gov/naics/2007/def/ND517410.HTM.
\75\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517410 (issued Nov. 2005).
\76\ Id. An additional 38 firms had annual receipts of $25
million or more.
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20. The second category of All Other Telecommunications
comprises, inter alia, ``establishments primarily engaged in
providing specialized telecommunications services, such as satellite
tracking, communications telemetry, and radar station operation.
This industry also includes establishments primarily engaged in
providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems.'' \77\ For this category, Census Bureau
data for 2002 show that there were a total of 332 firms that
operated for the entire year.\78\ Of this total, 303 firms had
annual receipts of under $10 million and 15 firms had annual
receipts of $10 million to $24,999,999.\79\ Consequently, we
estimate that the majority of All Other Telecommunications firms are
small entities that might be affected by our action.
---------------------------------------------------------------------------
\77\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
\78\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517910 (issued Nov. 2005).
\79\ Id. An additional 14 firms had annual receipts of $25
million or more.
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21. Wireless Telecommunications Carriers (except Satellite).
Since 2007, the Census Bureau has placed wireless firms within this
new, broad, economic census category.\80\ Prior to that time, such
firms were within the now-superseded categories of ``Paging'' and
``Cellular and Other Wireless Telecommunications.'' \81\ Under the
present and prior categories, the SBA has deemed a wireless business
to be small if it has 1,500
[[Page 21553]]
or fewer employees.\82\ Because Census Bureau data are not yet
available for the new category, we will estimate small business
prevalence using the prior categories and associated data. For the
category of Paging, data for 2002 show that there were 807 firms
that operated for the entire year.\83\ Of this total, 804 firms had
employment of 999 or fewer employees, and three firms had employment
of 1,000 employees or more.\84\ For the category of Cellular and
Other Wireless Telecommunications, data for 2002 show that there
were 1,397 firms that operated for the entire year.\85\ Of this
total, 1,378 firms had employment of 999 or fewer employees, and 19
firms had employment of 1,000 employees or more.\86\ Thus, we
estimate that the majority of wireless firms are small.
---------------------------------------------------------------------------
\80\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
\81\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S.
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\82\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 C.F.R. citations were 13 CFR 121.201, NAICS
codes 517211 and 517212 (referring to the 2002 NAICS).
\83\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211 (issued Nov. 2005).
\84\ 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.''
\85\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517212 (issued Nov. 2005).
\86\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
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22. Common Carrier Paging. As noted, the SBA has developed a
small business size standard for Wireless Telecommunications
Carriers (except Satellite) firms within the broad economic census
categories of ``Cellular and Other Wireless Telecommunications.''
\87\ Since 2007, the Census Bureau has placed wireless firms within
this new, broad, economic census category.\88\ Prior to that time,
such firms were within the now-superseded categories of ``Paging''
and ``Cellular and Other Wireless Telecommunications.'' \89\ Under
the present and prior categories, the SBA has deemed a wireless
business to be small if it has 1,500 or fewer employees.\90\ Because
Census Bureau data are not yet available for the new category, we
will estimate small business prevalence using the prior categories
and associated data. For the category of Paging, data for 2002 show
that there were 807 firms that operated for the entire year.\91\ Of
this total, 804 firms had employment of 999 or fewer employees, and
three firms had employment of 1,000 employees or more.\92\ For the
category of Cellular and Other Wireless Telecommunications, data for
2002 show that there were 1,397 firms that operated for the entire
year.\93\ Of this total, 1,378 firms had employment of 999 or fewer
employees, and 19 firms had employment of 1,000 employees or
more.\94\ Thus, we estimate that the majority of wireless firms are
small.
---------------------------------------------------------------------------
\87\ 13 CFR 121.201, NAICS code 517212.
\88\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
\89\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S.
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\90\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
\91\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517211 (issued Nov. 2005).
\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.''
\93\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization,'' Table 5, NAICS code 517212 (issued Nov. 2005).
\94\ 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.''
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23. 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.\95\ 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.\96\ The SBA has approved this
definition.\97\ An initial auction of Metropolitan Economic Area
(``MEA'') licenses was conducted in the year 2000. Of the 2,499
licenses auctioned, 985 were sold.\98\ Fifty-seven companies
claiming small business status won 440 licenses.\99\ A subsequent
auction of MEA and Economic Area (``EA'') licenses was held in the
year 2001. Of the 15,514 licenses auctioned, 5,323 were sold.\100\
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, was held in 2003. Seventy-seven bidders claiming small
or very small business status won 2,093 licenses.\101\
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\95\ Revision of Part 22 and Part 90 of the Commission's Rules
to Facilitate Future Development of Paging Systems, Second Report
and Order, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (``Paging
Second Report and Order''); see also Revision of Part 22 and Part 90
of the Commission's Rules to Facilitate Future Development of Paging
Systems, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd
10030, 10085-10088, paras. 98-107 (1999).
\96\ Paging Second Report and Order, 12 FCC Rcd at 2811, para.
179.
\97\ 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'').
\98\ See ``929 and 931 MHz Paging Auction Closes,'' Public
Notice, 15 FCC Rcd 4858 (WTB 2000).
\99\ See id.
\100\ See ``Lower and Upper Paging Band Auction Closes,'' Public
Notice, 16 FCC Rcd 21821 (WTB 2002).
\101\ See ``Lower and Upper Paging Bands Auction Closes,''
Public Notice, 18 FCC Rcd 11154 (WTB 2003). The current number of
small or very small business entities that hold wireless licenses
may differ significantly from the number of such entities that won
in spectrum auctions due to assignments and transfers of licenses in
the secondary market over time. In addition, some of the same small
business entities may have won licenses in more than one auction.
---------------------------------------------------------------------------
24. 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.\102\ Of these, an
estimated 279 have 1,500 or fewer employees and two have more than
1,500 employees.\103\ We estimate that the majority of common
carrier paging providers would qualify as small entities under the
SBA definition.
---------------------------------------------------------------------------
\102\ ``Trends in Telephone Service'' at Table 5.3.
\103\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
25. 2.3 GHz 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.\104\ The SBA has approved these
definitions.\105\ The Commission auctioned geographic area licenses
in the WCS service. In the auction, which was conducted in 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.
---------------------------------------------------------------------------
\104\ 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).
\105\ See Alvarez Letter 1998.
---------------------------------------------------------------------------
26. 1670-1675 MHz Services. An auction for one license in the
1670-1675 MHz band was conducted in 2003. One license was awarded.
The winning bidder was not a small entity.
27. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite).\106\ Under the SBA small business size standard, a
business is small if it has 1,500 or fewer employees.\107\ According
to Trends in Telephone Service data, 434 carriers reported that they
were engaged in wireless telephony.\108\ Of these, an estimated 222
have 1,500 or fewer employees and 212 have more than 1,500
employees.\109\ We have estimated that 222 of these are small under
the SBA small business size standard.
---------------------------------------------------------------------------
\106\ 13 CFR 121.201, NAICS code 517210.
\107\ Id.
\108\ ``Trends in Telephone Service'' at Table 5.3.
\109\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
28. Broadband Personal Communications Service. The broadband
personal
[[Page 21554]]
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.\110\ 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.\111\ These small business size standards, in the context of
broadband PCS auctions, have been approved by the SBA.\112\ 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.\113\ In 1999, the Commission reauctioned 155 C, D, E, and F Block
licenses; there were 113 small business winning bidders.\114\
---------------------------------------------------------------------------
\110\ 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).
\111\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
\112\ See Alvarez Letter 1998.
\113\ FCC News, ``Broadband PCS, D, E and F Block Auction
Closes,'' No. 71744 (rel. Jan. 14, 1997).
\114\ See ``C, D, E, and F Block Broadband PCS Auction Closes,''
public notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------
29. In 2001, the Commission completed the auction of 422 C and F
Broadband PCS licenses in Auction 35. Of the 35 winning bidders in
this auction, 29 qualified as ``small'' or ``very small''
businesses.\115\ 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. In 2005, the Commission
completed an auction of 188 C block licenses and 21 F block licenses
in Auction 58. There were 24 winning bidders for 217 licenses.\116\
Of the 24 winning bidders, 16 claimed small business status and won
156 licenses. In 2007, the Commission completed an auction of 33
licenses in the A, C, and F Blocks in Auction 71.\117\ Of the 14
winning bidders, six were designated entities.\118\ In 2008, the
Commission completed an auction of 20 Broadband PCS licenses in the
C, D, E and F block licenses in Auction 78.\119\
---------------------------------------------------------------------------
\115\ See ``C and F Block Broadband PCS Auction Closes; Winning
Bidders Announced,'' public notice, 16 FCC Rcd 2339 (2001).
\116\ See ``Broadband PCS Spectrum Auction Closes; Winning
Bidders Announced for Auction No. 58,'' public notice, 20 FCC Rcd
3703 (2005).
\117\ See ``Auction of Broadband PCS Spectrum Licenses Closes;
Winning Bidders Announced for Auction No. 71,'' public notice, 22
FCC Rcd 9247 (2007).
\118\ Id.
\119\ See Auction of AWS-1 and Broadband PCS Licenses
Rescheduled for August 13, 2008, Notice of Filing Requirements,
Minimum Opening Bids, Upfront Payments and Other Procedures For
Auction 78, public notice, 23 FCC Rcd 7496 (2008) (``AWS-1 and
Broadband PCS Procedures Public Notice'').
---------------------------------------------------------------------------
30. Advanced Wireless Services. In 2008, the Commission
conducted the auction of Advanced Wireless Services (``AWS'')
licenses.\120\ This auction, which as designated as Auction 78,
offered 35 licenses in the AWS 1710-1755 MHz and 2110-2155 MHz bands
(``AWS-1''). The AWS-1 licenses were licenses for which there were
no winning bids in Auction 66. That same year, the Commission
completed Auction 78. A bidder with attributed average annual gross
revenues that exceeded $15 million and did not exceed $40 million
for the preceding three years (``small business'') received a 15
percent discount on its winning bid. A bidder with attributed
average annual gross revenues that did not exceed $15 million for
the preceding three years (``very small business'') received a 25
percent discount on its winning bid. A bidder that had combined
total assets of less than $500 million and combined gross revenues
of less than $125 million in each of the last two years qualified
for entrepreneur status.\121\ Four winning bidders that identified
themselves as very small businesses won 17 licenses.\122\ Three of
the winning bidders that identified themselves as a small business
won five licenses. Additionally, one other winning bidder that
qualified for entrepreneur status won 2 licenses.
---------------------------------------------------------------------------
\120\ See AWS-1 and Broadband PCS Procedures Public Notice, 23
FCC Rcd 7496. Auction 78 also included an auction of Broadband PCS
licenses.
\121\ Id. at 23 FCC Rcd at 7521-22.
\122\ See ``Auction of AWS-1 and Broadband PCS Licenses Closes,
Winning Bidders Announced for Auction 78, Down Payments Due
September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008,
Final Payments Due September 23, 2008, Ten-Day Petition to Deny
Period'', public notice, 23 FCC Rcd 12749-65 (2008).
---------------------------------------------------------------------------
31. Narrowband Personal Communications Services. In 1994, the
Commission conducted an auction for Narrowband PCS licenses. A
second auction was also conducted later in 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.\123\ Through these auctions, the
Commission awarded a total of 41 licenses, 11 of which were obtained
by four small businesses.\124\ 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.\125\ 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.\126\ 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.\127\ The SBA has approved these small business size
standards.\128\ A third auction was conducted in 2001. Here, five
bidders won 317 (Metropolitan Trading Areas and nationwide)
licenses.\129\ Three of these claimed status as a small or very
small entity and won 311 licenses.
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\123\ 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).
\124\ 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).
\125\ 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'').
\126\ Narrowband PCS Second Report and Order, 15 FCC Rcd at
10476, para. 40.
\127\ Id.
\128\ See Alvarez Letter 1998.
\129\ See ``Narrowband PCS Auction Closes,'' public notice, 16
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------
32. 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.\130\ 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.\131\ 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.\132\ 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.\133\ The SBA approved these small size standards.\134\
The Commission conducted an auction in 2002 of 740 licenses (one
license in each of the 734 MSAs/RSAs and one license in each of the
six Economic Area Groupings (EAGs)). Of the 740 licenses available
for auction, 484 licenses were sold to 102 winning bidders. Seventy-
two of the winning bidders claimed small business, very small
business or entrepreneur status and won a total of 329 licenses.
\135\ The Commission conducted a second auction in 2003 that
included 256 licenses: 5 EAG licenses and 476 Cellular Market Area
[[Page 21555]]
licenses.\136\ 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.\137\ In 2005, the
Commission completed an auction of 5 licenses in the lower 700 MHz
band (Auction 60). There were three winning bidders for five
licenses. All three winning bidders claimed small business status.
---------------------------------------------------------------------------
\130\ 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'').
\131\ See Channels 52-59 Report and Order, 17 FCC Rcd at 1087-
88, para. 172.
\132\ See id.
\133\ See id., 17 FCC Rcd at 1088, para. 173.
\134\ See Letter from Aida Alvarez, Administrator, SBA, to
Thomas Sugrue, Chief, WTB, FCC (Aug. 10, 1999) (``Alvarez Letter
1999'').
\135\ See ``Lower 700 MHz Band Auction Closes,'' public notice,
17 FCC Rcd 17272 (WTB 2002).
\136\ See ``Lower 700 MHz Band Auction Closes,'' public notice,
18 FCC Rcd 11873 (WTB 2003).
\137\ See id.
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33. In 2007, the Commission adopted the 700 MHz Second Report
and Order.\138\ The Order revised the band plan for the commercial
(including Guard Band) and public safety spectrum, adopted services
rules, including stringent build-out requirements, an open platform
requirement on the C Block, and a requirement on the D Block
licensee to construct and operate a nationwide, interoperable
wireless broadband network for public safety users. In 2008, the
Commission commenced Auction 73 which offered all available,
commercial 700 MHz Band licenses (1,099 licenses) for bidding using
the Commission's standard simultaneous multiple-round (``SMR'')
auction format for the A, B, D, and E block licenses and an SMR
auction design with hierarchical package bidding (``HPB'') for the C
Block licenses. Later in 2008, the Commission concluded Auction
73.\139\ A bidder with attributed average annual gross revenues that
did not exceed $15 million for the preceding three years (very small
business) qualified for a 25 percent discount on its winning bids. A
bidder with attributed average annual gross revenues that exceeded
$15 million, but did not exceed $40 million for the preceding three
years, qualified for a 15 percent discount on its winning bids.
There were 36 winning bidders (who won 330 of the 1,090 licenses
won) that identified themselves as very small businesses. There were
20 winning bidders that identified themselves as a small business
that won 49 of the 1,090 licenses won.\140\ The provisionally
winning bids for the A, B, C, and E Block licenses exceeded the
aggregate reserve prices for those blocks. However, the
provisionally winning bid for the D Block license did not meet the
applicable reserve price and thus did not become a winning bid.\141\
---------------------------------------------------------------------------
\138\ Service Rules for the 698-746, 747-762 and 777-792 MHz
Band, 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 Telephone, 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 No. 03-264, Former Nextel Communications, Inc.
Upper700 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''), 22 FCC Rcd 15289 (2007).
\139\ Auction of 700 MHz Band Licenses Closes, Winning Bidders
Announced for Auction 73, Down Payments Due April 3, 2008, FCC Forms
601 and 602 April 3, 2008, Final Payment Due April 17, 2008, Ten-Day
Petition to Deny Period, Public Notice, 23 FCC Rcd 4572 (2008).
\140\ Id. 23 FCC Rcd at 4572-73.
\141\ Id.
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34. 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.\142\ 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.\143\ 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.\144\ SBA approval of
these definitions is not required.\145\ In 2000, the Commission
conducted an auction of 52 Major Economic Area (``MEA'')
licenses.\146\ 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 and closed in 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.\147\
---------------------------------------------------------------------------
\142\ 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'').
\143\ See 746-764 MHz Band Second Report and Order, 15 FCC Rcd
at 5343, para. 108.
\144\ See id.
\145\ 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).
\146\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' public notice, 15 FCC Rcd 18026 (2000).
\147\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' public notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------
35. 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.\148\ 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.\149\
The SBA has approved these small business size standards for the 900
MHz Service.\150\ The Commission has held auctions for geographic
area licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR
auction was completed in 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 was conducted in 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.\151\ A second
auction for the 800 MHz band was conducted in 2002 and included 23
BEA licenses. One bidder claiming small business status won five
licenses.\152\
---------------------------------------------------------------------------
\148\ 47 CFR 90.814(b)(1).
\149\ 47 CFR 90.814(b)(1).
\150\ See Alvarez Letter 1999.
\151\ 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).
\152\ See ``Multi-Radio Service Auction Closes,'' public notice,
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------
36. The auction of the 1,053 800 MHz SMR geographic area
licenses for the General Category channels was conducted in 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.\153\ In an auction
completed in 2000, a total of 2,800 Economic Area licenses in the
lower 80 channels of the 800 MHz SMR service were awarded.\154\ Of
the 22 winning bidders, 19 claimed small business status and won 129
licenses. Thus, combining all three auctions, 40 winning bidders for
geographic licenses in the 800 MHz SMR band claimed status as small
business.
---------------------------------------------------------------------------
\153\ 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).
\154\ See, ``800 MHz SMR Service Lower 80 Channels Auction
Closes; Winning Bidders Announced,'' public notice, 16 FCC Rcd 1736
(2000).
---------------------------------------------------------------------------
37. 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. In addition, we do not know how many of these
firms have 1,500 or fewer employees.\155\ 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.
---------------------------------------------------------------------------
\155\ See generally 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------
38. 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.
[[Page 21556]]
To estimate the number of such licensees that are small businesses,
we apply the small business size standard under the SBA rules
applicable to Wireless Telecommunications Carriers (except
Satellite).\156\ This category provides that a small business is a
wireless company employing no more than 1,500 persons.\157\ The
Commission estimates that most such licensees are small businesses
under the SBA's small business standard.
---------------------------------------------------------------------------
\156\ Id.
\157\ Id.
---------------------------------------------------------------------------
39. 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.\158\
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.\159\ 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.\160\ The SBA has approved these small
size standards.\161\ Auctions of Phase II licenses commenced on and
closed in 1998.\162\ 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.\163\ 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.\164\ 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.\165\ In 2007, the Commission conducted a fourth
auction of the 220 MHz licenses.\166\ Bidding credits were offered
to small businesses. A bidder with attributed average annual gross
revenues that exceeded $3 million and did not exceed $15 million for
the preceding three years (``small business'') received a 25 percent
discount on its winning bid. A bidder with attributed average annual
gross revenues that did not exceed $3 million for the preceding
three years received a 35 percent discount on its winning bid
(``very small business''). Auction 72, which offered 94 Phase II 220
MHz Service licenses, concluded in 2007.\167\ In this auction, five
winning bidders won a total of 76 licenses. Two winning bidders
identified themselves as very small businesses won 56 of the 76
licenses. One of the winning bidders that identified themselves as a
small business won 5 of the 76 licenses won.
---------------------------------------------------------------------------
\158\ 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).
\159\ Id. at 11068, para. 291.
\160\ Id.
\161\ See Letter from Aida Alvarez, Administrator, SBA, to
Daniel Phythyon, Chief, WTB, FCC (Jan. 6, 1998) (``Alvarez to
Phythyon Letter 1998'').
\162\ See generally ``220 MHz Service Auction Closes,'' public
notice, 14 FCC Rcd 605 (1998).
\163\ 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).
\164\ See ``Phase II 220 MHz Service Spectrum Auction Closes,''
public notice, 14 FCC Rcd 11218 (1999).
\165\ See ``Multi-Radio Service Auction Closes,'' public notice,
17 FCC Rcd 1446 (2002).
\166\ See ``Auction of Phase II 220 MHz Service Spectrum
Scheduled for June 20, 2007, Notice and Filing Requirements, Minimum
Opening Bids, Upfront Payments and Other Procedures for Auction 72,
public notice, 22 FCC Rcd 3404 (2007).
\167\ See ``Auction of Phase II 220 MHz Service Spectrum
Licenses Closes, Winning Bidders Announced for Auction 72, Down
Payments due July 18, 2007, FCC Forms 601 and 602 due July 18, 2007,
Final Payments due August 1, 2007, Ten-Day Petition to Deny Period,
public notice, 22 FCC Rcd 11573 (2007).
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40. Cellular Radiotelephone Service. Auction 77 was held to
resolve one group of mutually exclusive applications for Cellular
Radiotelephone Service licenses for unserved areas in New
Mexico.\168\ Bidding credits for designated entities were not
available in Auction 77.\169\ In 2008, the Commission completed the
closed auction of one unserved service area in the Cellular
Radiotelephone Service, designated as Auction 77. Auction 77
concluded with one provisionally winning bid for the unserved area
totaling $25,002.\170\
---------------------------------------------------------------------------
\168\ See Closed Auction of Licenses for Cellular Unserved
Service Area Scheduled for June 17, 2008, Notice and Filing
Requirements, Minimum Opening Bids, Upfront Payments, and Other
Procedures for Auction 77, public notice, 23 FCC Rcd 6670 (2008).
\169\ Id. at 6685.
\170\ See Auction of Cellular Unserved Service Area License
Closes, Winning Bidder Announced for Auction 77, Down Payment due
July 2, 2008, Final Payment due July 17, 2008, public notice, 23 FCC
Rcd 9501 (2008).
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41. 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, Wireless
Telecommunications Carriers (except Satellite). 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 517210.
\172\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------
42. As of March 2010, there were 424,162 PLMR licensees
operating 921,909 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 any revised rules in this context
could therefore potentially impact small entities covering a great
variety of industries.
43. Fixed Microwave Services. Fixed microwave services include
common carrier,\173\ private operational-fixed,\174\ and broadcast
auxiliary radio services.\175\ 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 category Wireless
Telecommunications Carriers (except Satellite), which is 1,500 or
fewer employees.\176\ 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.
---------------------------------------------------------------------------
\173\ See 47 CFR 101 et seq. for common carrier fixed microwave
services (except Multipoint Distribution Service).
\174\ 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.
\175\ 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.
\176\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------
44. 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.\177\ An
[[Page 21557]]
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.\178\
The SBA has approved these small business size standards.\179\ The
auction of the 2,173, 39 GHz licenses, began and closed in 2000. The
18 bidders who claimed small business status won 849 licenses.
---------------------------------------------------------------------------
\177\ 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).
\178\ Id.
\179\ 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).
---------------------------------------------------------------------------
45. 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.\180\ The auction of the 986 LMDS licenses began
and closed in 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.\181\ 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.\182\ The SBA has approved
these small business size standards in the context of LMDS
auctions.\183\ 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. In 1999, the Commission re-auctioned 161 licenses;
there were 32 small and very small businesses winning that won 119
licenses.
---------------------------------------------------------------------------
\180\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order on
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC
Rcd 12545, 12689-90, para. 348 (1997) (``LMDS Second Report and
Order'').
\181\ See LMDS Second Report and Order, 12 FCC Rcd at 12689-90,
para. 348.
\182\ See id.
\183\ See Alvarez to Phythyon Letter 1998.
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46. 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'').\184\ 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.\185\ 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.\186\ 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.\187\ The SBA has approved of these
definitions.\188\ 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.
---------------------------------------------------------------------------
\184\ See ``Interactive Video and Data Service (IVDS)
Applications Accepted for Filing,'' public notice, 9 FCC Rcd 6227
(1994).
\185\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330
(1994).
\186\ 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).
\187\ Id.
\188\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------
47. 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.\189\ 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.\190\ These definitions have been approved by
the SBA.\191\ An auction for LMS licenses commenced and closed in
1999. Of the 528 licenses auctioned, 289 licenses were sold to four
small businesses.
---------------------------------------------------------------------------
\189\ Amendment of Part 90 of the Commission's Rules to Adopt
Regulations for Automatic Vehicle Monitoring Systems, Second Report
and Order, 13 FCC Rcd 15182, 15192, para. 20 (1998) (``Automatic
Vehicle Monitoring Systems Second Report and Order''); see also 47
CFR 90.1103.
\190\ Automatic Vehicle Monitoring Systems Second Report and
Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
\191\ See Alvarez Letter 1998.
---------------------------------------------------------------------------
48. Rural Radiotelephone Service. The Commission has not adopted
a size standard for small businesses specific to the Rural
Radiotelephone Service.\192\ A significant subset of the Rural
Radiotelephone Service is the Basic Exchange Telephone Radio System
(``BETRS'').\193\ In the present context, we will use the SBA's
small business size standard applicable to Wireless
Telecommunications Carriers (except Satellite), i.e., an entity
employing no more than 1,500 persons.\194\ There are approximately
1,000 licensees in the Rural Radiotelephone Service, and the
Commission estimates that there are 1,000 or fewer small entity
licensees in the Rural Radiotelephone Service that may be affected
by the rules and policies proposed herein.
---------------------------------------------------------------------------
\192\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\193\ BETRS is defined in sections 22.757 and 22.759 of the
Commission's rules, 47 CFR 22.757 and 22.759.
\194\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------
49. Air-Ground Radiotelephone Service.\195\ The Commission has
previously used the SBA's small business definition applicable to
Wireless Telecommunications Carriers (except Satellite), i.e., an
entity employing no more than 1,500 persons.\196\ 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.\197\ 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.\198\ These
definitions were approved by the SBA.\199\ In 2006, the Commission
completed an auction of nationwide commercial Air-Ground
Radiotelephone Service licenses in the 800 MHz band (Auction 65).
Later in 2006, the auction closed with two winning bidders winning
two Air-Ground Radiotelephone Services licenses. Neither of the
winning bidders claimed small business status.
---------------------------------------------------------------------------
\195\ The service is defined in section 22.99 of the
Commission's rules, 47 CFR 22.99.
\196\ 13 CFR 121.201, NAICS codes 517210.
\197\ Amendment of Part 22 of the Commission's Rules to Benefit
the Consumers of Air-Ground Telecommunications Services, Biennial
Regulatory Review--Amendment of Parts 1, 22, and 90 of the
Commission's Rules, Amendment of Parts 1 and 22 of the Commission's
Rules to Adopt Competitive Bidding Rules for Commercial and General
Aviation Air-Ground Radiotelephone Service, WT Docket Nos. 03-103
and 05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd
19663, paras. 28-42 (2005).
\198\ Id.
\199\ See Letter from Hector V. Barreto, Administrator, SBA, to
Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access
Division, WTB, FCC (Sept. 19, 2005).
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50. Aviation and Marine Radio Services. There are approximately
26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast)
licensees.\200\ 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 Wireless Telecommunications
[[Page 21558]]
Carriers (except Satellite), which is 1,500 or fewer employees.\201\
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.\202\ In 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.\203\
Further, the Commission made available Automated Maritime
Telecommunications System (``AMTS'') licenses in Auctions 57 and
61.\204\ Winning bidders could claim status as a very small business
or a 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.\205\ 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.
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\200\ 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).
\201\ 13 CFR 121.201, NAICS code 517210.
\202\ A licensee may have a license in more than one category.
\203\ 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).
\204\ 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).
\205\ 47 CFR 80.1252.
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51. 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.\206\ 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 Wireless Telecommunications Carriers
(except Satellite) services.\207\ Under that SBA small business size
standard, a business is small if it has 1,500 or fewer
employees.\208\
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\206\ This service is governed by subpart I of part 22 of the
Commission's rules. See 47 CFR 22.1001-22.1037.
\207\ 13 CFR 121.201, NAICS code 517210.
\208\ Id.
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52. 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.\209\ ``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.\210\ The SBA has approved of these definitions.\211\
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 March 5, 2010,
there were over 11,500 MAS station authorizations. In addition, an
auction for 5,104 MAS licenses in 176 EAs was conducted in
2001.\212\ Seven winning bidders claimed status as small or very
small businesses and won 611 licenses. In 2005, the Commission
completed an auction (Auction 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 of 2,323 licenses. Of the 26 winning
bidders in this auction, five claimed small business status and won
1,891 licenses.
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\209\ See Amendment of the Commission's Rules Regarding Multiple
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para.
123 (2000).
\210\ Id.
\211\ See Alvarez Letter 1999.
\212\ See ``Multiple Address Systems Spectrum Auction Closes,''
public notice, 16 FCC Rcd 21011 (2001).
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53. 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 Wireless Telecommunications Carriers
(except Satellite). This definition provides that a small entity is
any such entity employing no more than 1,500 persons.\213\ 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.
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\213\ See 13 CFR 121.201, NAICS code 517210.
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54. 1.4 GHz Band Licensees. The Commission conducted an auction
of 64 1.4 GHz band licenses \214\ in 2007.\215\ 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.\216\ Neither of the two winning bidders
sought designated entity status.\217\
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\214\ See ``Auction of 1.4 GHz Bands Licenses Scheduled for
February 7, 2007,'' public notice, 21 FCC Rcd 12393 (WTB 2006).
\215\ 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'').
\216\ Auction No. 69 Closing PN, Attachment C.
\217\ See Auction No. 69 Closing PN.
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55. 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
Wireless Telecommunications Carriers (except Satellite). This
category provides that such a company is small if it employs no more
than 1,500 persons.\218\ The 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 \219\ 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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\218\ 13 CFR 121.201, NAICS code 517210.
\219\ 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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56. 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.\220\ ``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.\221\ The SBA has approved
these definitions.\222\ 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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\220\ Amendments to Parts 1, 2, 87 and 101 of the Commission's
Rules To License Fixed Services at 24 GHz, Report and Order, 15 FCC
Rcd 16934, 16967, para 77 (2000) (``24 GHz Report and Order''); see
also 47 CFR 101.538(a)(2).
\221\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77;
see also 47 CFR 101.538(a)(1).
\222\ 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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57. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as
Multipoint Distribution Service (``MDS'')
[[Page 21559]]
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'')).\223\ 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.\224\ 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.\225\ After 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. In 2009, the
Commission conducted Auction 86, the sale of 78 licenses in the BRS
areas.\226\ The Commission offered three levels of bidding credits:
(i) A bidder with attributed average annual gross revenues that
exceed $15 million and do not exceed $40 million for the preceding
three years (small business) will receive a 15 percent discount on
its winning bid; (ii) a bidder with attributed average annual gross
revenues that exceed $3 million and do not exceed $15 million for
the preceding three years (very small business) will receive a 25
percent discount on its winning bid; and (iii) a bidder with
attributed average annual gross revenues that do not exceed $3
million for the preceding three years (entrepreneur) will receive a
35 percent discount on its winning bid.\227\ Auction 86 concluded in
2009 with the sale of 61 licenses.\228\ Of the ten winning bidders,
two bidders that claimed small business status won 4 licenses; one
bidder that claimed very small business status won three licenses;
and two bidders that claimed entrepreneur status won six licenses.
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\223\ 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, para 7 (1995) (``MDS
Auction R&O'').
\224\ 47 CFR 21.961(b)(1).
\225\ 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.
\226\ Auction of Broadband Radio Service (BRS) Licenses,
Scheduled for October 27, 2009, Notice and Filing Requirements,
Minimum Opening Bids, Upfront Payments, and Other Procedures for
Auction 86, public notice, 24 FCC Rcd 8277 (2009).
\227\ Id. at 8296.
\228\ Auction of Broadband Radio Service Licenses Closes,
Winning Bidders Announced for Auction 86, Down Payments Due November
23, 2009, Final Payments Due December 8, 2009, Ten-Day Petition to
Deny Period, public notice, 24 FCC Rcd 13572 (2009).
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58. In addition, the SBA's Cable Television Distribution
Services 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.\229\ Thus, we estimate
that at least 1,932 licensees are small businesses. Since 2007,
Cable Television Distribution Services have been defined within the
broad economic census category of Wired Telecommunications Carriers;
that category is defined as follows: ``This industry comprises
establishments primarily engaged in operating and/or providing
access to transmission facilities and infrastructure that they own
and/or lease for the transmission of voice, data, text, sound, and
video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.''\230\ The SBA has developed a small business size
standard for this category, which is: all such firms having 1,500 or
fewer employees. To gauge small business prevalence for these cable
services we must, however, use current census data that are based on
the previous category of Cable and Other Program Distribution and
its associated size standard; that size standard was: all such firms
having $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 previous 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\ Thus, the majority of these firms can be considered
small.
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\229\ 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.
\230\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\231\ 13 CFR 121.201, NAICS code 517110.
\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 (issued November 2005).
\233\ Id. An additional 61 firms had annual receipts of $25
million or more.
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59. Television Broadcasting. This Economic Census category
``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.'' \234\ The SBA has created
the following small business size standard for Television
Broadcasting firms: those having $14 million or less in annual
receipts.\235\ The Commission has estimated the number of licensed
commercial television stations to be 1,395.\236\ In addition,
according to Commission staff review of the BIA Publications, Inc.,
Master Access Television Analyzer Database (BIA) on March 30, 2007,
about 986 of an estimated 1,395 commercial television stations (or
approximately 72 percent) had revenues of $13 million or less.\237\
We therefore estimate that the majority of commercial television
broadcasters are small entities.
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\234\ U.S. Census Bureau, 2007 NAICS Definitions, ``515120
Television Broadcasting'' (partial definition); http://www.census.gov/naics/2007/def/ND515120.HTM#N515120.
\235\ 13 CFR 121.201, NAICS code 515120 (updated for inflation
in 2008).
\236\ See FCC News Release, ``Broadcast Station Totals as of
June 30, 2009,'' dated September 4, 2009; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
\237\ We recognize that BIA's estimate differs slightly from the
FCC total given supra.
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60. We note, however, that in assessing whether a business
concern qualifies as small under the above definition, business
(control) affiliations \238\ 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. 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 does not exclude any
television station from the definition of a small business on this
basis and is therefore possibly over-inclusive to that extent.
---------------------------------------------------------------------------
\238\ ``[Business 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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61. In addition, the Commission has estimated the number of
licensed noncommercial educational (NCE) television stations to be
390.\239\ These stations are non-profit, and therefore considered to
be small entities.\240\
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\239\ See FCC News Release, ``Broadcast Station Totals as of
June 30, 2009,'' dated September 4, 2009; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
\240\ See generally 5 U.S.C. 601(4), (6).
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62. In addition, there are also 2,386 low power television
stations (LPTV).\241\ 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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\241\ See FCC News Release, ``Broadcast Station Totals as of
June 30, 2009,'' dated September 4, 2009; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
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63. Radio Broadcasting. This Economic Census category
``comprises establishments primarily engaged in broadcasting aural
programs by radio to the public. Programming may originate in their
own
[[Page 21560]]
studio, from an affiliated network, or from external sources.''
\242\ The SBA has established a small business size standard for
this category, which is: such firms having $7 million or less in
annual receipts.\243\ According to Commission staff review of BIA
Publications, Inc.'s Master Access Radio Analyzer Database on March
31, 2005, about 10,840 (95%) of 11,410 commercial radio stations had
revenues of $6 million or less. Therefore, the majority of such
entities are small entities.
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\242\ U.S. Census Bureau, 2007 NAICS Definitions, ``515112 Radio
Stations''; http://www.census.gov/naics/2007/def/ND515112.HTM#N515112.
\243\ 13 CFR 121.201, NAICS code 515112 (updated for inflation
in 2008).
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64. We note, however, that in assessing whether a business
concern qualifies as small under the above size standard, business
affiliations must be included.\244\ In addition, to be determined to
be a ``small business,'' the entity may not be dominant in its field
of operation.\245\ We note that it is difficult at times to assess
these criteria in the context of media entities, and our estimate of
small businesses may therefore be over-inclusive.
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\244\ ``Concerns and entities are affiliates of each other when
one controls or has the power to control the other, or a third party
or parties controls or has the power to control both. It does not
matter whether control is exercised, so long as the power to control
exists.'' 13 CFR 121.103(a)(1) (an SBA regulation).
\245\ 13 CFR 121.102(b) (an SBA regulation).
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65. 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.\246\
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\246\ 13 CFR 121.201, NAICS codes 515112 and 515120.
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66. The Commission estimates that there are approximately 5,618
FM translators and boosters.\247\ 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
($7.0 million for a radio station or $14.0 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.\248\
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\247\ See supra note 242.
\248\ See 15 U.S.C. 632.
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67. Cable Television Distribution Services. Since 2007, these
services have been defined within the broad economic census category
of Wired Telecommunications Carriers; that category is defined as
follows: ``This industry comprises establishments primarily engaged
in operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired telecommunications
networks. Transmission facilities may be based on a single
technology or a combination of technologies.'' \249\ The SBA has
developed a small business size standard for this category, which
is: all such firms having 1,500 or fewer employees. To gauge small
business prevalence for these cable services we must, however, use
current census data that are based on the previous category of Cable
and Other Program Distribution and its associated size standard;
that size standard was: all such firms having $13.5 million or less
in annual receipts.\250\ According to Census Bureau data for 2002,
there were a total of 1,191 firms in this previous category that
operated for the entire year.\251\ 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.\252\ Thus, the
majority of these firms can be considered small.
---------------------------------------------------------------------------
\249\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\250\ 13 CFR 121.201, NAICS code 517110.
\251\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\252\ Id. An additional 61 firms had annual receipts of $25
million or more.
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68. 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.\253\ Industry data indicate that, of 1,076 cable
operators nationwide, all but eleven are small under this size
standard.\254\ In addition, under the Commission's rules, a ``small
system'' is a cable system serving 15,000 or fewer subscribers.\255\
Industry data indicate that, of 6,635 systems nationwide, 5,802
systems have under 10,000 subscribers, and an additional 302 systems
have 10,000-19,999 subscribers.\256\ Thus, under this second size
standard, most cable systems are small.
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\253\ 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).
\254\ 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.
\255\ 47 CFR 76.901(c).
\256\ Warren Communications News, Television & Cable Factbook
2008, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data
current as of Oct. 2007). The data do not include 851 systems for
which classifying data were not available.
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69. 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.'' \257\ 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.\258\ Industry data indicate that, of 1,076 cable
operators nationwide, all but ten are small under this size
standard.\259\ 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,\260\ 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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\257\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
\258\ 47 CFR 76.901(f); see public notice, FCC Announces New
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001).
\259\ 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.
\260\ 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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70. Open Video Systems. The open video system (``OVS'')
framework was established in 1996, and is one of four statutorily
recognized options for the provision of video programming services
by local exchange carriers.\261\ The OVS framework provides
opportunities for the distribution of video programming other than
through cable systems. Because OVS operators provide subscription
services,\262\ OVS falls within the SBA small business size standard
covering cable services, which is ``Wired Telecommunications
Carriers.'' \263\ The SBA has developed a small business size
standard for this category, which is: all such firms having 1,500 or
fewer employees. To gauge small business prevalence for such
services we must, however, use current census data that are based on
the previous category of
[[Page 21561]]
Cable and Other Program Distribution and its associated size
standard; that size standard was: all such firms having $13.5
million or less in annual receipts.\264\ According to Census Bureau
data for 2002, there were a total of 1,191 firms in this previous
category that operated for the entire year.\265\ 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.\266\
Thus, the majority of cable firms can be considered small. In
addition, we note that the Commission has certified some OVS
operators, with some now providing service.\267\ Broadband service
providers (``BSPs'') are currently the only significant holders of
OVS certifications or local OVS franchises.\268\ The Commission does
not have financial or employment information regarding the entities
authorized to provide OVS, some of which may not yet be operational.
Thus, again, at least some of the OVS operators may qualify as small
entities.
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\261\ 47 U.S.C. 571(a)(3)-(4). See Annual Assessment of the
Status of Competition in the Market for the Delivery of Video
Programming, Thirteenth Annual Report, 24 FCC Rcd 542, 606 para. 135
(2009) (``Thirteenth Annual Cable Competition Report'').
\262\ See 47 U.S.C. 573.
\263\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\264\ 13 CFR 121.201, NAICS code 517110.
\265\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\266\ Id. An additional 61 firms had annual receipts of $25
million or more.
\267\ A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
\268\ See Thirteenth Annual Cable Competition Report, 24 FCC Rcd
at 606-07 para. 135. BSPs are newer firms that are building state-
of-the-art, facilities-based networks to provide video, voice, and
data services over a single network.
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71. Cable Television Relay Service. This service includes
transmitters generally used to relay cable programming within cable
television system distribution systems. This cable service is
defined within the broad economic census category of Wired
Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in
operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired telecommunications
networks. Transmission facilities may be based on a single
technology or a combination of technologies.'' \269\ The SBA has
developed a small business size standard for this category, which
is: all such firms having 1,500 or fewer employees. To gauge small
business prevalence for cable services we must, however, use current
census data that are based on the previous category of Cable and
Other Program Distribution and its associated size standard; that
size standard was: all such firms having $13.5 million or less in
annual receipts.\270\ According to Census Bureau data for 2002,
there were a total of 1,191 firms in this previous category that
operated for the entire year.\271\ 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.\272\ Thus, the
majority of these firms can be considered small.
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\269\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\270\ 13 CFR 121.201, NAICS code 517110.
\271\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\272\ Id. An additional 61 firms had annual receipts of $25
million or more.
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72. 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.\273\ These definitions were approved
by the SBA.\274\ On January 27, 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.\275\ 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.\276\
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\273\ 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, para. 252 (2002).
\274\ 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).
\275\ See ``Multichannel Video Distribution and Data Service
Auction Closes,'' public notice, 19 FCC Rcd 1834 (2004).
\276\ 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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73. Amateur Radio Service. These licensees are held by
individuals in a noncommercial capacity; these licensees are not
small entities.
74. 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 Wireless
Telecommunications Carriers (except Satellite), which is 1,500 or
fewer employees.\277\ Most applicants for recreational licenses are
individuals. Approximately 581,000 ship station licensees and
131,000 aircraft station licensees operate domestically and are not
subject to the radio carriage requirements of any statute or treaty.
For purposes of our evaluations in this analysis, we estimate that
there are up to approximately 712,000 licensees that are small
businesses (or individuals) under the SBA standard. In addition,
between December 3, 1998 and December 14, 1998, the Commission held
an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500
MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands.
For purposes of the auction, the Commission defined a ``small''
business as an entity that, together with controlling interests and
affiliates, has average gross revenues for the preceding three years
not to exceed $15 million dollars. In addition, a ``very small''
business is one that, together with controlling interests and
affiliates, has average gross revenues for the preceding three years
not to exceed $3 million dollars.\278\ 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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\277\ 13 CFR 121.201, NAICS code 517210.
\278\ 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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75. 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.\279\ 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'').\280\ 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 Wireless Telecommunications
Carriers (except Satellite), pursuant to which a small entity is
defined as employing 1,500 or fewer
[[Page 21562]]
persons.\281\ 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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\279\ 47 CFR Part 90.
\280\ 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.
\281\ 13 CFR 121.201, NAICS Code 517210.
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76. Public Safety Radio Services. Public Safety radio services
include police, fire, local government, forestry conservation,
highway maintenance, and emergency medical services.\282\ There are
a total of approximately 127,540 licensees in these services.
Governmental entities \283\ 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.\284\
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\282\ 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.
\283\ 47 CFR 1.1162.
\284\ 5 U.S.C. 601(5).
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77. Internet Service Providers. The 2007 Economic Census places
these firms, whose services might include voice over Internet
protocol (VoIP), in either of two categories, depending on whether
the service is provided over the provider's own telecommunications
connections (e.g. cable and DSL, ISPs), or over client-supplied
telecommunications connections (e.g. dial-up ISPs). The former are
within the category of Wired Telecommunications Carriers,\285\ which
has an SBA small business size standard of 1,500 or fewer
employees.\286\ The latter are within the category of All Other
Telecommunications,\287\ which has a size standard of annual
receipts of $25 million or less.\288\ The most current Census Bureau
data for all such firms, however, are the 2002 data for the previous
census category called Internet Service Providers.\289\ That
category had a small business size standard of $21 million or less
in annual receipts, which was revised in late 2005 to $23 million.
The 2002 data show that there were 2,529 such firms that operated
for the entire year.\290\ Of those, 2,437 firms had annual receipts
of under $10 million, and an additional 47 firms had receipts of
between $10 million and $24,999,999.\291\ Consequently, we estimate
that the majority of ISP firms are small entities.
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\285\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'', http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\286\ 13 CFR 121.201, NAICS code 517110 (updated for inflation
in 2008).
\287\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
\288\ 13 CFR 121.201, NAICS code 517919 (updated for inflation
in 2008).
\289\ U.S. Census Bureau, 2002 NAICS Definitions, ``518111
Internet Service Providers''; http://www.census.gov/eped/naics02/def/NDEF518.HTM.
\290\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 518111 (issued Nov. 2005).
\291\ An additional 45 firms had receipts of $25 million or
more.
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78. The ISP industry has changed dramatically since 2002. The
2002 data cited above may therefore include entities that no longer
provide Internet access service and may exclude entities that now
provide such service. To ensure that this (IRFA/FRFA) describes the
universe of small entities that our action might affect, we discuss
in turn several different types of entities that might be providing
Internet access service.
79. We note that, although we have no specific information on
the number of small entities that provide Internet access service
over unlicensed spectrum, we include these entities in our IRFA/
FRFA.
IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
80. 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.\292\ Interstate telephone service providers
must compute their annual regulatory fee based on their interstate
and international end-user revenue using information they already
supply to the Commission in compliance with the Form 499-A,
Telecommunications Reporting Worksheet, and they must complete and
submit the FCC Form 159. Compliance with the fee schedule will
require some licensees to tabulate the number of units (e.g.,
cellular telephones, pagers, cable TV subscribers) they have in
service when they complete and submit the 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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\292\ 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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81. As discussed previously in this Notice of Proposed
Rulemaking, the Commission concluded in its FY 2009 regulatory fee
cycle that licensees filing their annual regulatory fee payments
must begin the process by entering the Commission's Fee Filer system
with a valid FRN and password. In some instances, it will be
necessary to use a specific FRN and password that is linked to a
particular regulatory fee bill. Going forward, the submission of
hardcopy Form 159 documents will not be permitted for making a
regulatory fee payment during the regulatory fee cycle. By requiring
licensees to use Fee Filer to begin the regulatory fee payment
process, errors resulting from illegible handwriting on hardcopy
Form 159's will be reduced, and we will create 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.
82. 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.\293\ If payment is not received, new
or pending applications may be dismissed, and existing
authorizations may be subject to rescission.\294\ 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.\295\ Nonpayment of regulatory fees is a debt owed to
the United States pursuant to 31 U.S.C. 3711 et seq., and the DCIA.
Appropriate
[[Page 21563]]
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.\296\
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\293\ 47 CFR 1.1164.
\294\ 47 CFR 1.1164(c).
\295\ Public Law 104-134, 110 Stat. 1321 (1996).
\296\ 31 U.S.C. 7701(c)(2)(B).
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83. 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.\297\
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 (e.g., 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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\297\ 47 CFR 1.1166.
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V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
84. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which
may include the following four alternatives, among others: (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small
entities; (3) the use of performance, rather than design, standards;
and (4) an exemption from coverage of the rule, or any part thereof,
for small entities.\298\ In this NPRM, we seek 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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\298\ 5 U.S.C. 603.
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85. 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. We note that small entities should be assisted by our
implementation of the Fee Filer program, and that we have continued
our practice of exempting fees whose total sum owed is less than
$10.00.
VI. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
86. None.
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[FR Doc. 2010-9553 Filed 4-23-10; 8:45 am]
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