[Federal Register Volume 76, Number 102 (Thursday, May 26, 2011)]
[Proposed Rules]
[Pages 30605-30637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-12685]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 11-76; FCC 11-68]
Assessment and Collection of Regulatory Fees For Fiscal Year 2011
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 2011. The Communications Act
of 1934, as amended, provides for the annual assessment and collection
of regulatory fees for annual ``Mandatory Adjustments'' and ``Permitted
Amendments'' to the Schedule of Regulatory Fees.
DATES: Submit comments on or before June 2, 2011, and reply comments on
or before June 9, 2011.
ADDRESSES: You may submit comments, identified by MD Docket No. 11-76,
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.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
E-mail: [email protected]. Include MD Docket No. 11-76 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 detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), FCC 11-68, MD Docket No. 11-76, adopted
and released May 3, 2011. The full text of this document is available
for inspection and copying during normal business hours in the FCC
Reference Center, 445 Twelfth Street, SW., Room CY-A257, Portals II,
Washington, DC 20554, and may also be purchased from the Commission's
copy contractor, BCPI, Inc., Portals II, 445 Twelfth Street, SW., Room
CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via
their Web site, http://www.bcpi.com, or call 1-800-378-3160. This
document is available in alternative formats (computer diskette, large
print, audio record, and braille). Persons with disabilities who need
documents in these formats may contact the FCC by e-mail:
[email protected] or phone: 202-418-0530 or TTY: 202-418-0432.
I. Procedural Matters
A. Ex Parte Rules-Permit-But Disclose Proceeding
1. This is a ``permit-but-disclose'' proceeding subject to the
requirements under section 1.1206(b) of the Commission's rules.\1\ 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
[[Page 30606]]
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.\2\ Additional rules pertaining to oral
and written presentations are set forth in Section 1.1206(b).
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\1\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
\2\ See 47 CFR 1.1206(b)(2).
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B. Comment Filing Procedures
2. 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).
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.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
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. The filing hours
are 8 a.m. to 7 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes must be disposed of before
entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be 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).
3. Documents in MD Docket No. 11-76 will be available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 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.
4. 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.
C. Paperwork Reduction Act
5. This NPRM does not contain proposed or modified information
collection burden (s) subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. In addition, therefore, it does not contain
any new or modified information collection burden for small business
concerns with fewer than 25 employees, pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4).
D. Congressional Review Act Analysis
6. The Commission will send a copy of this NPRM to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act.\3\
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\3\ 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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E. Initial Regulatory Flexibility Analysis
7. An initial regulatory flexibility analysis (``IRFA'') is
contained herein. 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.
II. Notice of Proposed Rulemaking
Introduction
8. In this NPRM, we propose to collect $335,794,000 in regulatory
fees for Fiscal Year (``FY'') 2011, 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.\4\ 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.\5\ 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 a September 2011 filing window in order to
collect the required amount by the end of our fiscal year.
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\4\ 47 U.S.C. 159(a).
\5\ 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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III. Discussion
A. FY 2011 Regulatory Fee Assessment Methodology
9. In our FY 2011 regulatory fee assessment, we will use the same
Section 9 regulatory fee assessment methodology adopted in FY 2010 and
in prior years. Each fiscal year, the Commission proportionally
allocates the total amount that must be collected via Section 9
regulatory fees. The results of our FY 2011 regulatory fee assessment
methodology (including a comparison to the prior year's results) are
contained in the table below. To collect the $335,794,000 required by
Congress, we adjusted the FY 2010 amount upward by 4.7 percent and
allocated this amount across the various fee categories. Consistent
with past practice, we then divided the FY 2011 amount by the number of
estimated payment units in each fee category to determine the unit
fee.\6\ As in prior
[[Page 30607]]
years, for cases involving small fees, e.g., licenses that are renewed
over a multiyear term, we divided 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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\6\ 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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BILLING CODE 6712-01-P
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10. In calculating the FY 2011 regulatory fees listed in (see
Table--FY 2011 Schedule of Regulatory Fees below), we adjusted the FY
2011 list of payment units (see Table--Sources of Payment Unit
Estimates for FY 2011 below) based upon licensee databases, industry
and trade group projections, as well as prior year payment information.
In some instances, Commission licensee databases are used; in other
instances, actual prior year payment records and/or industry and trade
association projections are used in determining the payment units.\7\
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 2011, and fluctuations in the number of licenses or station
operators due to economic, technical, or other reasons. Our estimated
FY 2011 payment units, therefore, are based on several variable factors
that are relevant to each fee category. The fee rate may also be
rounded or adjusted slightly to account for these variables.
BILLING CODE 6712-01-P
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\7\ 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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[[Page 30612]]
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BILLING CODE 6712-01-C
TABLE--FY 2011 Schedule of Regulatory Fees (Continued)
FY 2011 Radio Station Regulatory Fees
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FM Classes
Population served AM Class A AM Class B AM Class C AM Class D FM Classes B, C, C0, C1
A, B1 & C3 & C2
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<=25,000.................... $700 $575 $525 $600 $675 $850
25,001-75,000............... 1,400 1,150 800 900 1,350 1,500
75,001-150,000.............. 2,100 1,450 1,050 1,500 1,850 2,750
150,001-500,000............. 3,150 2,450 1,575 1,800 2,875 3,600
500,001-1,200,000........... 4,550 3,750 2,625 3,000 4,550 5,300
1,200,001-3,000,00.......... 7,000 5,750 3,950 4,800 7,425 8,500
>3,000,000.................. 8,400 6,900 5,000 6,000 9,450 11,050
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[[Page 30614]]
FY 2011 Schedule of Regulatory Fees (Continued)
International Bearer Circuits--Submarine Cable
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Submarine cable systems (capacity as of
December 31, 2010) Fee amount Address
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<2.5 Gbps................................ $12,825 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
2.5 Gbps or greater, but less than 5 Gbps 25,650 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
5 Gbps or greater, but less than 10 Gbps. 51,275 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
10 Gbps or greater, but less than 20 Gbps 102,575 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
20 Gbps or greater....................... 205,125 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
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Table--Sources of Payment Unit Estimates for FY 2011
In order to calculate individual service fees for FY 2011, we
adjusted FY 2010 payment units for each service to more accurately
reflect expected FY 2011 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 2011 estimates with actual FY 2010
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 2011 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 2011 payment units are based on FY 2010
actual payment units, it does not necessarily mean that our FY 2011
projection is exactly the same number as in FY 2010. We have either
rounded the FY 2011 number or adjusted it slightly to account for these
variables.
Table--Sources of Payment Unit Estimates for FY 2011 (Continued)
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Fee Category Sources of payment unit estimates
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Land Mobile (All), Microwave, 218- Based on Wireless Telecommunications
219 MHz, Marine (Ship & Coast), Bureau (``WTB'') projections of new
Aviation (Aircraft & Ground), applications and renewals taking
GMRS, Amateur Vanity Call Signs, into consideration existing
Domestic Public Fixed. Commission licensee data bases.
Aviation (Aircraft) and Marine
(Ship) estimates have been adjusted
to take into consideration the
licensing of portions of these
services on a voluntary basis.
CMRS Cellular/Mobile Services..... Based on WTB projection reports, and
FY 10 payment data.
CMRS Messaging Services........... Based on WTB reports, and FY 10
payment data.
AM/FM Radio Stations.............. Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
UHF/VHF Television Stations....... Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
AM/FM/TV Construction Permits..... Based on CDBS data, adjusted for
exemptions, and actual FY 2010
payment units.
LPTV, Translators and Boosters, Based on CDBS data, adjusted for
Class A Television. exemptions, and actual FY 2010
payment units.
Broadcast Auxiliaries............. Based on actual FY 2010 payment
units.
BRS (formerly MDS/MMDS)........... Based on WTB reports and actual FY
LMDS.............................. 2010 payment units.
Based on WTB reports and actual FY
2010 payment units.
Cable Television Relay Service Based on data from Media Bureau's
(``CARS'') Stations. COALS database and actual FY 2010
payment units.
Cable Television System Based on publicly available data
Subscribers. sources for estimated subscriber
counts and actual FY 2010 payment
units.
Interstate Telecommunication Based on FCC Form 499-Q data for the
Service Providers. four quarters of calendar year
2010, the Wireline Competition
Bureau projected the amount of
calendar year 2009 revenue that
will be reported on 2011 FCC Form
499-A worksheets in April, 2011.
Earth Stations.................... Based on International Bureau
(``IB'') licensing data and actual
FY 2010 payment units.
Space Stations (GSOs & NGSOs)..... Based on IB data reports and actual
FY 2010 payment units.
International Bearer Circuits..... Based on IB reports and submissions
by licensees.
Submarine Cable Licenses.......... Based on IB license information.
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11. When calculating the fee methodology for AM and FM radio
stations, we consider many factors, such as facility attributes and the
population served by each station. The calculation of the population
served is determined by coupling current United States Census Bureau
data with technical and engineering data, as detailed in the table
below. In FY 2011, we will begin to incorporate new Census data that
was taken in 2010, and this could have an impact in altering the fees
of some radio stations. Hence, the population served, as well as the
class and type of service (AM or FM), will continue to be the
[[Page 30615]]
principal variables in determining the amount of regulatory fees to be
paid.\8\
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\8\ 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 2010 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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Table--Factors, Measurements, and Calculations That Go Into Determining
Station Signal Contours and Associated Population Coverages
AM Stations
For stations with nondirectional daytime antennas, the theoretical
radiation was used at all azimuths. For stations with directional
daytime antennas, specific information on each day tower, including
field ratio, phasing, spacing and orientation was retrieved, as well as
the theoretical pattern root-mean-square of the radiation in all
directions in the horizontal plane (``RMS'') figure milliVolt per meter
(mV/m) @ 1 km) for the antenna system. The standard, or modified
standard if pertinent, horizontal plane radiation pattern was
calculated using techniques and methods specified in Sections 73.150
and 73.152 of the Commission's rules (see 47 CFR 73.150 and 73.152).
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 (see Map
of Estimated Effective Ground Conductivity in the United States, 47 CFR
73.190 Figure R3). Using the calculated horizontal radiation values,
and the retrieved soil conductivity data, the distance to the principal
community (5 mV/m) contour was predicted for each of the 360 radials.
The resulting distance to principal community contours were used to
form a geographical polygon. Population counting was accomplished by
determining which 2000 block centroids were contained in the polygon.
(A block centroid is the center point of a small area containing
population as computed by the U.S. Census Bureau.) The sum of the
population figures for all enclosed blocks represents the total
population for the predicted principal community coverage area.
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
(47 CFR 73.313). The resulting distance to principal community contours
were used to form a geographical polygon. Population counting was
accomplished by determining which 2000 block centroids were contained
in the polygon. The sum of the population figures for all enclosed
blocks represents the total population for the predicted principal
community coverage area.
B. Regulatory Fee Obligations for Digital Low Power, Class A, and TV
Translators/Boosters
12. The digital transition to full-service television stations was
completed on June 12, 2009, but the digital transition for Low Power,
Class A, and TV Translators/Boosters remains voluntary, and there is
presently 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. As a result, the ``digital only'' exemption does not impact
this class of regulatees. Because the digital transition in the Low
Power, Class A, and TV Translators/Booster facilities is still
voluntary and the transition will occur over a period time, some
facilities may still be in the process of converting from an analog to
a digital service. During this transition period, licensees of Low
Power, Class A, and TV Translator/Booster facilities may 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.
C. Commercial Mobile Radio Service Messaging Service
13. Commercial Mobile Radio Service (``CMRS'') Messaging Service,
which replaced the CMRS One-Way Paging fee category in 1997, includes
all narrowband services.\9\ Since 1997, the number of subscribers has
declined from 40.8 million to 4.9 million, and there does not appear to
be any sign of recovery to the subscriber levels of 1997-1999.\10\
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 2011 to continue
maintaining the regulatory fee rate at $0.08 per subscriber due to the
declining subscriber base in this industry. We seek comment on this
proposal.
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\9\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 1997, MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161,
17184-85, para. 60 (1997) (``FY 1997 Report and Order'').
\10\ Between FY 1997 and FY 2010, the subscriber base in the
paging industry declined 89 percent from 40.8 million to 4.9 million
subscribers, according to FY 2010 collections data as of September
30, 2010.
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D. Interstate Telecommunications Service Provider (ITSP)
14. In our FY 2010 Regulatory Fee Report and Order,\11\ we
acknowledged that the revenue base upon which the ITSP fee is
calculated has been decreasing for several years.\12\ Because of this
continued decline, we limited the increase in the FY 2010 ITSP fee rate
from $.00342 to $.00349, and assessed a slightly higher fee across all
other fee categories. In FY 2011, the ITSP revenue base has experienced
an even more significant decline. Over the past six months, we note an
additional decline of nine percent (9%) in the ITSP base revenue, which
would increase the ITSP
[[Page 30616]]
fee rate for FY 2011 to $.00402,\13\ an increase of 15% from the fee
rate adopted in FY 2010.\14\ This increase in the FY 2011 ITSP fee rate
from $.00349 to $.00402 will be detrimental to the operations of many
small and medium ITSP providers, and will further burden a regulatory
fee category already bearing the majority of the agency's overall
regulatory fee burden. Therefore, as we did in FY 2010, we propose to
limit the increase of the FY 2011 ITSP fee rate to $.00361 per revenue
dollar, and assess a slightly higher fee across all other regulatory
fee categories. We seek comment on this proposal.
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\11\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, MD Docket No. 10-87, Report and Order, 25 FCC Rcd 9278 at
para. 31 (2010) (``FY 2010 Report and Order'').
\12\ In FY 2010 ITSP, the fee factor in the FY 2010 NPRM of
$.00351 was based on December 2009 ITSP revenue data. April 2010
ITSP revenue data, however, reflected revenues 3.4 percent lower
than projections. This revenue decrease would have resulted in an
increase in the resulting fee factor from the projected $.00351 to a
fee factor of $.00364. Thus, based on the proposed methodology of
the FY 2010 NPRM and the revised revenue numbers, the ITSP fee
factor would have increased from $.00342 (FY 2009 ITSP fee rate) to
$.00364. The concerns of these providers, which collectively
represent 46.82 percent of all regulatory fees paid in any given
year, resulted in the adoption, as an interim measure, an ITSP fee
rate at $.00349, which is a 2.1% increase from FY 2009. We find this
to be a reasonable interim measure pending our review of whether
part of that 46.82 percent of the regulatory fee burden might be
moved from ITSP in the context of fundamental reform.
\13\ If the Commission did not provide any relief or consider
changes in the ITSP revenue stream, the fee factor rate would be
$0.00402 per revenue dollar.
\14\ See FY 2010 Report and Order at Appendix C, Page 28.
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15. Each year, the Commission downloads 499-A revenue data \15\
onto a FCC Form 159-W to establish an ITSP regulatory fee bill. These
bills are then loaded into the Commission's electronic payment and
filing system (``Fee Filer'') so that providers can view and pay their
annual regulatory fee bill. Historically, in creating ITSP regulatory
fee bills, the Commission separated 499-A filers into two categories:
(1) Those whose primary revenue stream categorized them as interstate
telecommunications service providers (ITSP), and (2) those whose
primary revenue stream was considered to be non-ITSP, such as wireless,
satellite, and other service providers. Simply stated, the logic here
was to categorize 499-A filers into two regulatory fee paying
categories--those that pay ITSP regulatory fees on the basis of a fee
factor per revenue dollar, and those whose primary revenue stream would
place them in a category other than ITSP (``non-ITSP providers''), such
as wireless or satellite carriers, that pay regulatory fees on some
other basis (e.g. wireless carriers pay regulatory fees on a per
subscriber basis). By separating 499-A filers into these two categories
(ITSP providers and non-ITSP providers), the Commission was not
assessing the ITSP revenues of certain particular entities (non-ITSP
providers) simply because these entities were paying another form of
regulatory fee (e.g. wireless or satellite fees). After more careful
consideration, we realize that this treatment resulted in predominantly
ITSP providers paying fees on both ITSP revenues and, if they also
provided other services, a per unit subscriber fee on other services
(e.g. wireless services), while non-ITSP paid on a per unit basis only
(e.g. for wireless services), and were not assessed fees on their ITSP
revenues. There is no basis for this disparate treatment; it is only
logical that these wireless providers and other non-ITSP providers be
subject to ITSP fees based on their ITSP revenues, similar to the fees
that are currently paid by wireline carriers. Therefore, instead of
separating 499-A filers into these two categories of regulatory fee
payers, we propose to assess ITSP regulatory fees on all ITSP revenues,
regardless of the predominant classification of the payor. More
specifically, we find that a more equitable way of assessing ITSP
regulatory fees is to assess an ITSP fee on 499-A reported ITSP revenue
items regardless of whether the payor is predominantly an ITSP or a
non-ITSP provider. If FCC Form 499-A has revenues identified on lines
412(e), 420(d), and/or 420(e), the provider would be subject to ITSP
regulatory fees.\16\
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\15\ FCC Form 499-A is filed annually with USAC on April 1st,
but it can be revised many times for up to a year of the April 1st
filing.
\16\ See FCC Form 159-W on page 7 of the Commission's Interstate
Telecommunications Service Provider (ITSP) Fact Sheet, August 2010.
499-A Form Line 412(e) corresponds with Line 1 of FCC Form 159-W;
499-A Form Line 420(d) corresponds with Line 2 of FCC Form 159-W;
and 499-A Form Line 420(e) corresponds with Line 3 of FCC Form 159-
W. However, from FCC Form 159-W revenue Lines 1 through 3, a
provider can also subtract Lines 5 through 12, resulting in a net
revenue amount upon which regulatory fees would be due.
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16. FCC Form 159-W was established in FY 2001 to assist providers
in transposing revenue information from their FCC Form 499-A to a
worksheet that would assist them in computing their regulatory fee
obligation. Initially, the Form 159-W worksheet was left blank for the
provider to complete and mail it in along with their check. In later
years, the Commission provided a pre-completed Form 159-W based on
revenue information directly from FCC Form 499-A. In this Notice of
Proposed Rulemaking, the Commission proposes to assess a regulatory fee
on all providers that have subject revenues on Line 14 of Form 159-W,
which after the fee factor is applied, results in a regulatory fee
obligation of $10 or greater. By assessing regulatory fees on all
providers ($10 or greater), we believe we can achieve a more equitable
assessment of ITSP regulatory fees across all providers, and reduce the
subjective factor involved in identifying some providers as non-ITSP
because their primary business is cellular or a satellite provider. If
ITSP revenues are derived from the service and identified on the
appropriate lines of Form 499-A (and subsequently transposed to Form
159-W), then a regulatory fee would be assessed on those revenues. In
FY 2011, we believe our proposal will add $2.0 billion to the unit base
estimate, which will help to support maintaining the FY 2011 ITSP fee
factor rate at $0.00361, reducing the impact of this limitation on all
other regulatory fee categories. We seek comment on this proposal of
assessing regulatory fees on ITSP revenues from all providers.
E. Fee Waiver Policies
17. As our rules expressly provide, petitions for waiver of a
regulatory fee must be accompanied by the required fee ``unless
accompanied by a petition to defer payment due to financial hardship,
supported by documentation of the financial hardship.'' \17\ Similarly,
petitions for reduction of fees filed with less than the full fee due
must be accompanied by a request for deferral ``supported by
documentation of financial hardship.'' \18\ However, citing section
1.1166(b) of the rules, which states that ``Deferrals of fees will be
granted for a period of six months following the date that the fee is
initially due,'' some have argued that, even where supporting
documentation of financial hardship is not provided, a regulatee can
delay its payment of the fees owed for up to six months simply by
requesting the deferral. That argument is inconsistent with sections
1.1166(c) and (d) of our rules, which provide that petitions for
waivers or reductions will be dismissed if they are not accompanied by
the full fee owed, unless the regulatee requests a deferral of payment
supported by documentation of financial hardship.\19\ A regulatee's
mere allegation of financial hardship thus does not automatically
entitle it to a deferral of its obligation to pay regulatory fees; only
a properly supported claim of financial hardship will entitle the
regulatee to a deferral. Accordingly, if a request for deferral is not
supported by documentation of financial hardship, it will be denied,
and an associated petition for waiver or reduction will be dismissed. A
regulatee cannot delay payment on the theory that its deferral request
triggered an automatic six-month extension of its obligation to pay. We
thus propose to amend section 1.1166(b) of the Rules \20\ to read,
``Deferrals of fees, if granted, will be for
[[Page 30617]]
a designated period of time not to exceed six months.'' We seek comment
on this rule clarification.
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\17\ 47 CFR 1.1166(c).
\18\ 47 CFR 1.1166(d).
\19\ 47 CFR 1.1166(c) and (d) (requests for waivers and
reductions of fees ``that do not include the required fees or forms
will be dismissed unless accompanied by a petition to defer payment
due to financial hardship, supported by documentation of the
financial hardship.''
\20\ 47 CFR 1.1166(b).
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F. Administrative and Operational Issues
18. 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 2011, the
Commission will promote greater use of technology (and less use of
paper) to improve the regulatory fee notification and collection
process. In addition to seeking comment on the specific initiatives
discussed in the paragraphs below, we ask whether there are other steps
we could take to promote greater use of technology in collecting
regulatory fees.
1. Mandatory Use of Fee Filer
19. In FY 2009, we instituted a mandatory filing requirement using
the Commission's electronic filing and payment system (also known as
``Fee Filer'').\21\ 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.\22\ This
change was beneficial to both licensees and to the Commission. For
licensees, the mandatory use of Fee Filer eliminates 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. We propose to
continue to make the use of Fee Filer for filing annual regulatory fees
mandatory. We seek comment on this proposal. We also request comment on
ways we might improve the mandatory use of Fee Filer. 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.
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\21\ FY 2009 Report and Order at paras. 20 and 21.
\22\ Therefore, it is very important for licensees to have a
current and valid FRN address on file in the Commission's
Registration System (CORES).
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2. Notification and Collection of Regulatory Fees
a. Pre-Bills
20. 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,\23\ holders of Cable Television Relay Service (``CARS'')
licenses, and Earth Station licensees.\24\ 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.\25\ In
FY 2011, the Commission will continue to reduce its use of hardcopy
documents by not mailing out annual regulatory fee pre-bills, and
instead place the pre-bill information on the Commission's Web site for
licensees to access through the Commission's electronic filing and
payment system (``Fee Filer''). Regulatees can also look to the
Commission's Web site for information on upcoming events and deadlines
relating to regulatory fees. We ask whether further changes to our
system of electronic notification would serve to more efficiently and
effectively inform regulatees of information and procedures pertaining
to regulatory fees.
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\23\ Geostationary orbit space station (``GSO'') licensees
received regulatory fee pre-bills for satellites that (1) were
licensed by the Commission and operational on or before October 1 of
the respective fiscal year; and (2) were not co-located with and
technically identical to another operational satellite on that date
(i.e., were not functioning as a spare satellite). Non-geostationary
orbit space station (``NGSO'') licensees received regulatory fee
pre-bills for systems that were licensed by the Commission and
operational on or before October 1 of the respective fiscal year.
\24\ 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.
\25\ See FY 2009 Report and Order at paras. 24, 26.
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IV. Procedural Matters
21. 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
do not propose changes to these procedures. Rather, we include them
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
22. 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 relevant 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
23. Beginning in FY 2003, we sent fee assessment notifications via
surface mail to media services entities on a per-facility basis.\26\
These 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 to be more electronic and
paperless.\27\ In our FY 2010 NPRM, we proposed to discontinue mailing
the media notifications beginning in FY 2011, relying instead on
information on the Commission's Web site and the use of the Commission-
authorized Web site at http://www.fccfees.com.\28\ We kept the comment
and reply comment period open until September 30, 2010 to be receptive
to the needs of media licensees. We received no comments or reply
comments on this particular issue. Therefore, beginning in FY 2011, we
will discontinue mailing hardcopy notification assessment letters to
media licensees.
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\26\ As stated previously in a footnote, a pre-bill is
considered an account receivable in the Commission's accounting
system. Pre-bills include an amount owed and have a payment due date
of the last day of the regulatory fee payment window. If a pre-bill
is not paid by the due date, it becomes delinquent and is subject to
our debt collection procedures. On the other hand, 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.
\27\ 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. The notifications also provide licensees
with a telephone number to call in the event that they need customer
assistance.
\28\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, Report and Order, 25 FCC Rcd 9278 at para. 42 (2010)
(``FY 2010 Report and Order'').
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24. Every ten years, when the United States Census data is
released, this data is incorporated into the population counts of AM &
FM radio stations on a county basis. These population counts, along
with the station's class and type of service, are the basis for
determining regulatory fees. Although the 2010 Census data has been
completed, the data is still subject to revisions. In addition, because
FY 2011 regulatory fees are determined on the basis of the station's
attributes as of October 1, 2010, it would be inappropriate to apply
incomplete 2010 Census data in
[[Page 30618]]
determining FY 2011 regulatory fees for radio stations. Therefore, we
will apply 2010 Census data in determining the population counts of
radio stations as of October 1, 2011, as part of our calculations of FY
2012 regulatory fees.
2. CMRS Cellular and Mobile Services Assessments
25. As we have done in prior years, our procedures for conveying
CMRS subscriber counts to providers are as follows. 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'').\29\
The letter will include a listing of the carrier's Operating Company
Numbers (``OCNs'') upon which the assessment is based.\30\ The letters
will not include OCNs with their respective assigned number counts, but
rather, an aggregate total of assigned numbers for each carrier.
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\29\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2005 and Assessment and Collection of Regulatory Fees for
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paras. 38-44
(2005).
\30\ Id.
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26. A carrier wishing to revise their subscriber count can access
Fee Filer within a designated time frame to revise their count.
Providers should follow the prompts in Fee Filer to record their
subscriber revisions, along with any supporting documentation.\31\ The
Commission will then review the revised count and supporting
documentation and either approve or disapprove the submission in Fee
Filer. If the submission is disapproved, the Commission will 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 letter. 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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\31\ 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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27. 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 \32\ that is currently in place for CMRS Wireless services
(e.g., compute their subscriber counts as of December 31, 2010), 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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\32\ See, e.g., Federal Communications Commission, Regulatory
Fees Fact Sheet: What You Owe--Commercial Wireless Services for FY
2010 at 1 (released September 2010).
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3. Submarine Cable Allocation
28. The Commission collects a revenue amount each year based on a
Congressional mandate. Because the dollar amount differs each year, a
revenue apportionment is required each year to determine the projected
regulatory fee revenue to be collected from submarine cable providers
and from terrestrial/satellite facilities.\33\ Since FY 2009, the
Commission has used the 87.4/12.6 percent allocation proposed in the
Consensus Proposal as the percentage upon which to determine the
regulatory fee revenue amounts for submarine cable providers and
terrestrial/satellite facilities, respectively.\34\ Each year, the
Commission reserves the right to revise this 87.4/12.6 allocation.
Although we will continue to review this allocation as part of our
annual regulatory fee proceeding, we do not at this time find any basis
to alter the 87.4/12.6 percent revenue allocation for 2011 regulatory
fees.
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\33\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, Second Report and Order, 24 FCC Rcd 4208 at n. 35 (2009)
(``Submarine Cable Order'').
\34\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2009, Report and Order, 24 FCC Rcd 10301 at para. 8 (2009)
(``FY 2009 Report and Order'').
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4. Re-Assessment of Regulatory Fee Issues in a Further Notice of
Proposed Rulemaking
29. Since 1994 when the first regulatory fees were collected, the
communications industry has undergone a rapid transformation. The
current basis of how regulatory fees are assessed, however, has changed
only slightly since its inception in 1994.\35\ In FY 2008, the
Commission released a FNPRM which identified some of the issues raised
by commenters with regard to the need for fundamental reform of our
regulatory fee assessment methodology \36\ From this rulemaking, the
Commission has already acted on three of the issues: 1) a change in the
bearer circuit methodology for calculating regulatory fees, 2) the
elimination of two regulatory fee categories, the International Public
Fixed Radio and International High Frequency Broadcast Stations, and 3)
the conversion of UHF and VHF Television stations from analog to
digital television. In our FY 2010 Regulatory Fees Report & Order, we
stated that in a future proceeding, we will ``further examine the
nature and extent of all changes that need to be made to our regulatory
fee schedule and calculations. In a separate and forthcoming action, we
will call for comment on issues including, but not limited to, how
changes in the telecommunications marketplace may warrant rebalancing
of regulatory fees among existing service providers * * *''\37\ As our
commitment to this ``forthcoming action'', the Commission will by the
end of 2011, initiate a further rulemaking that will update the record
on regulatory fee rebalancing, as well as expand this inquiry to
include new issues and services not covered by the 2008 FNPRM, such as
whether and how to re-assess the regulatory fee burden of all fee
categories, whether to incorporate 499-A wireless revenue in the
calculation of ITSP regulatory fees, and whether to eliminate the
regulatory fee portion (but not the application fee portion) of General
Mobile Radio Service (GMRS).
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\35\ 47 U.S.C. 159(a) and 159(b).
\36\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2008, MD Docket No. 08-65, RM-11312, Report and Order and
Further Notice of Proposed Rulemaking, 73 FR 50201 (August 26, 2008)
at paras. 38-41.
\37\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2010, MD Docket No. 10-87, Report and Order, 25 FCC Rcd 9278
para. 31 (2010).
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C. Streamlined Regulatory Fee Payment Process
1. Cable Television Subscribers
30. 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 report cable subscriber
counts on a per community unit identifier (``CUID'') basis.
[[Page 30619]]
2. CMRS Cellular and Mobile Providers
31. 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.\38\ We will continue this practice in FY 2011. 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
2011, we will continue this practice of combining the CMRS cellular and
CMRS mobile fee categories into one regulatory fee category.
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\38\ 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'')
32. 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 2011, we will continue rounding lines 14
and 16 when calculating the FY 2011 ITSP fee obligation. In addition,
we will continue the practice of not mailing out Form 159-W via surface
mail.
D. Payment of Regulatory Fees
1. Lock Box Bank
33. All lock box payments to the Commission for FY 2011 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
34. 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 not to 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
35. Regulatees whose total FY 2011 regulatory fee liability,
including all categories of fees for which payment is due, is less than
$10 are exempted from payment of FY 2011 regulatory fees.
4. Standard Fee Calculations and Payment Dates
36. The Commission will accept fee payments made in advance of the
window for the payment of regulatory fees. The responsibility for
payment of fees by service category is as follows:
Media Services: Regulatory fees must be paid for initial
construction permits that were granted on or before October 1, 2010 for
AM/FM radio stations, 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, 2010. In
instances where a permit or license is transferred or assigned after
October 1, 2010, 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,
2010. In instances where a permit or license is transferred or assigned
after October 1, 2010, 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.\39\
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\39\ 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, 2010. The number of subscribers, units,
or telephone numbers on December 31, 2010 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, 2010,
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 Table--Schedule of Regulatory Fees) pay ``small
multi-year wireless regulatory fees.'' Entities pay these regulatory
fees in advance for the entire amount of their five-year or ten-year
term of initial license, and only pay regulatory fees again when the
license is renewed or a new license is obtained. We include these fee
categories in our Schedule of Regulatory Fees to publicize our
estimates of the number of ``small multi-year wireless'' licenses that
will be renewed or newly obtained in FY 2011.
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,
2010.\40\ Regulatory fees also must be paid for CARS licenses that were
granted on or before October 1, 2010. In instances where a permit or
license is transferred or assigned after October 1, 2010,
responsibility for payment rests with the holder of the permit or
license as of the fee due date.
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\40\ 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 2010, rather than on a count as of December 31,
2010.
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International Services: Regulatory fees must be paid for
earth stations, geostationary orbit space stations and non-
geostationary orbit satellite systems that were licensed and
operational on or before October 1, 2010. In instances
[[Page 30620]]
where a permit or license is transferred or assigned after October 1,
2010, 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, 2010. In instances where a license is transferred or assigned after
October 1, 2010, responsibility for payment rests with the holder of
the license as of the fee due date. For regulatory fee purposes, the
allocation in FY 2011 will remain at 87.6 percent for submarine cable
and 12.4 percent for satellite/terrestrial facilities.
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, 2010 in any
terrestrial or satellite transmission facility for the provision of
service to an end user or resale carrier, which includes active
circuits to themselves or to their affiliates. In addition, non-common
carrier satellite operators must pay a fee for each circuit sold or
leased to any customer, including themselves or their affiliates, other
than an international common carrier authorized by the Commission to
provide U.S. international common carrier services. ``Active circuits''
for these purposes include backup and redundant circuits as of December
31, 2010. 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, 2010, responsibility for payment rests with
the holder of the permit or license as of the fee due date. For
regulatory fee purposes, the allocation in FY 2011 will remain at 87.6
percent for submarine cable and 12.4 percent for satellite/terrestrial
facilities.
E. Enforcement
37. 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 a late payment penalty of 25 percent of the unpaid amount to be
assessed on the first day following the deadline date for filing of
these fees.\41\ 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 \42\ and in the Debt
Collection Improvement Act of 1996 (``DCIA'').\43\ 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.\44\ 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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\41\ 47 U.S.C. 159(c).
\42\ See 47 CFR 1.1910.
\43\ 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.
\44\ 47 CFR 1.1940(d).
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38. 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.\45\ 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).
\45\ See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.
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BILLING CODE 6712-01-P
[[Page 30621]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.012
[[Page 30622]]
[GRAPHIC] [TIFF OMITTED] TP26MY11.013
BILLING CODE 6712-01-C
Table--Reference to FY 2010 Schedule of Regulatory Fees
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FY 2010 radio station regulatory fees
---------------------------------------------------------------------------------------------------------------------------------------------------------
FM Classes A, FM Classes B,
Population served AM Class A AM Class B AM Class C AM Class D B1 & C3 C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................ $675 $550 $500 $575 $650 $825
25,001-75,000........................................... 1,350 1,075 750 875 1,325 1,450
75,001-150,000.......................................... 2,025 1,350 1,000 1,450 1,825 2,725
150,001-500,000......................................... 3,050 2,300 1,500 1,725 2,800 3,550
500,001-1,200,000....................................... 4,400 3,500 2,500 2,875 4,450 5,225
1,200,001-3,000,000..................................... 6,750 5,400 3,750 4,600 7,250 8,350
>3,000,000.............................................. 8,100 6,475 4,750 5,750 9,250 10,850
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[[Page 30623]]
Table--Reference to FY 2010 Schedule of Regulatory Fees
[International Bearer Circuits--Submarine Cable]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Submarine cable systems (capacity as of
December 31, 2009) Fee amount Address
--------------------------------------------------------------------------------------------------------------------------------------------------------
< 2.5 Gbps............................. $14,625 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
2.5 Gbps or greater, but less than 5 29,250 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
Gbps.
5 Gbps or greater, but less than 10 58,500 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
Gbps.
10 Gbps or greater, but less than 20 116,975 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
Gbps.
20 Gbps or greater..................... 233,950 FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Regulatory Flexibility Analysis
39. As required by the Regulatory Flexibility Act (``RFA''),\46\
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 NPRM. Written
public comments are requested on this IRFA. Comments must be identified
as responses to the IRFA and must be filed on or before the dates
indicated on the first page of this NPRM. The Commission will send a
copy of the Notice, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration.\47\ In addition, the
Notice and IRFA (or summaries thereof) will be published in the Federal
Register.\48\
---------------------------------------------------------------------------
\46\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the CWAAA is the
Small Business Regulatory Enforcement Fairness Act of 1996
(``SBREFA'').
\47\ 5 U.S.C. 603(a).
\48\ Id.
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A. Need for, and Objectives of, the Notice
40. This rulemaking proceeding was 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.
B. Legal Basis
41. This action, including publication of proposed rules, is
authorized under Sections (4)(i) and (j), 9, and 303(r) of the
Communications Act of 1934, as amended.\49\
---------------------------------------------------------------------------
\49\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
---------------------------------------------------------------------------
C. Description and Estimate of the Number of Small Entities To Which
the Rules Will Apply
42. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and policies, if adopted.\50\ The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \51\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\52\ A ``small business concern'' is one
which: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the SBA.\53\
---------------------------------------------------------------------------
\50\ 5 U.S.C. 603(b)(3).
\51\ 5 U.S.C. 601(6).
\52\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\53\ 15 U.S.C. 632.
---------------------------------------------------------------------------
43. Small Businesses. Nationwide, there are a total of
approximately 29.6 million small businesses, according to the SBA.\54\
---------------------------------------------------------------------------
\54\ See SBA, Office of Advocacy, ``Frequently Asked
Questions,'' http://web.sba.gov/faqs (accessed Jan. 2009).
---------------------------------------------------------------------------
44. Small Organizations. Nationwide, as of 2002, there are
approximately 1.6 million small organizations.\55\ A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
\56\
---------------------------------------------------------------------------
\55\ Independent Sector, The New Nonprofit Almanac & Desk
Reference (2002).
\56\ 5 U.S.C. 601(4).
---------------------------------------------------------------------------
45. 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.'' \57\ Census Bureau data for
2002 indicate that there were 87,525 local governmental jurisdictions
in the United States.\58\ We estimate that, of this total, 84,377
entities were ``small governmental jurisdictions.'' \59\ Thus, we
estimate that most governmental jurisdictions are small.
---------------------------------------------------------------------------
\57\ 5 U.S.C. 601(5).
\58\ U.S. Census Bureau, Statistical Abstract of the United
States: 2006, Section 8, p. 272, Table 415.
\59\ 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.
---------------------------------------------------------------------------
46. 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.''
\60\ 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.\61\ 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.
---------------------------------------------------------------------------
\60\ 15 U.S.C. 632.
\61\ 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).
---------------------------------------------------------------------------
47. Incumbent Local Exchange Carriers (``ILECs''). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local
[[Page 30624]]
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.\62\ According to Commission data,\63\ 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
action.
---------------------------------------------------------------------------
\62\ 13 CFR 121.201, North American Industry Classification
System (NAICS) code 517110.
\63\ 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.
---------------------------------------------------------------------------
48. 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.\64\ According to Commission data,\65\ 1,005 carriers have
reported that they are engaged in the provision of either competitive
access provider services or competitive local exchange carrier
services. Of these 1,005 carriers, an estimated 918 have 1,500 or fewer
employees and 87 have more than 1,500 employees. In addition, 16
carriers have reported that they are ``Shared-Tenant Service
Providers,'' and all 16 are estimated to have 1,500 or fewer employees.
In addition, 89 carriers have reported that they are ``Other Local
Service Providers.'' Of the 89, all have 1,500 or fewer employees.
Consequently, the Commission estimates that most providers of
competitive local exchange service, competitive access providers,
``Shared-Tenant Service Providers,'' and ``Other Local Service
Providers'' are small entities that may be affected by our action.
---------------------------------------------------------------------------
\64\ 13 CFR 121.201, NAICS code 517110.
\65\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
49. 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.\66\ According to Commission data,\67\ 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 action.
---------------------------------------------------------------------------
\66\ 13 CFR 121.201, NAICS code 517310.
\67\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
50. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\68\ According to Commission data,\69\ 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 action.
---------------------------------------------------------------------------
\68\ 13 CFR 121.201, NAICS code 517310.
\69\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
51. 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.\70\ According to Commission data,\71\ 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 action.
---------------------------------------------------------------------------
\70\ 3 CFR 121.201, NAICS code 517110.
\71\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
52. 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.\72\ According to Commission data,\73\ 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 action.
---------------------------------------------------------------------------
\72\ 13 CFR 121.201, NAICS code 517110.
\73\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
53. 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.\74\ According to Commission data,\75\ 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
action.
---------------------------------------------------------------------------
\74\ 13 CFR 121.201, NAICS code 517110.
\75\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
54. 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.\76\ According to Commission data,\77\ 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 action.
---------------------------------------------------------------------------
\76\ 13 CFR 121.201, NAICS code 517310.
\77\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
55. 800 and 800-Like Service Subscribers.\78\ 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.\79\ 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
[[Page 30625]]
use.\80\ 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.
---------------------------------------------------------------------------
\78\ We include all toll-free number subscribers in this
category.
\79\ 13 CFR 121.201, NAICS code 517310.
\80\ ``Trends in Telephone Service'' at Tables 18.4, 18.5, 18.6,
and 18.7.
---------------------------------------------------------------------------
56. 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.\81\ The second has a
size standard of $25 million or less in annual receipts.\82\ 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.\83\
---------------------------------------------------------------------------
\81\ 13 CFR 121.201, NAICS code 517410.
\82\ 13 CFR 121.201, NAICS code 517919.
\83\ 13 CFR 121.201, NAICS codes 517410 and 517910 (2002).
---------------------------------------------------------------------------
57. 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.'' \84\ For this category, Census Bureau data for
2002 show that there were a total of 371 firms that operated for the
entire year.\85\ Of this total, 307 firms had annual receipts of under
$10 million, and 26 firms had receipts of $10 million to
$24,999,999.\86\ Consequently, we estimate that the majority of
Satellite Telecommunications firms are small entities that might be
affected by our action.
---------------------------------------------------------------------------
\84\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410
Satellite Telecommunications''; http://www.census.gov/naics/2007/def/ND517410.HTM.
\85\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, ``Establishment and Firm Size (Including Legal Form of
Organization),'' Table 4, NAICS code 517410 (issued Nov. 2005).
\86\ Id. An additional 38 firms had annual receipts of $25
million or more.
---------------------------------------------------------------------------
58. 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.'' \87\ For
this category, Census Bureau data for 2002 show that there were a total
of 332 firms that operated for the entire year.\88\ 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.\89\ Consequently, we estimate
that the majority of All Other Telecommunications firms are small
entities that might be affected by our action.
---------------------------------------------------------------------------
\87\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
\88\ 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).
\89\ Id. An additional 14 firms had annual receipts of $25
million or more.
---------------------------------------------------------------------------
59. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category.\90\ Prior to that time, such firms
were within the now-superseded categories of ``Paging'' and ``Cellular
and Other Wireless Telecommunications.'' \91\ Under the present and
prior categories, the SBA has deemed a wireless business to be small if
it has 1,500 or fewer employees.\92\ 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.\93\ Of this total, 804 firms had
employment of 999 or fewer employees, and three firms had employment of
1,000 employees or more.\94\ 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.\95\ Of this total, 1,378 firms
had employment of 999 or fewer employees, and 19 firms had employment
of 1,000 employees or more.\96\ Thus, we estimate that the majority of
wireless firms are small.
---------------------------------------------------------------------------
\90\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
\91\ 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.
\92\ 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).
\93\ 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).
\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.''
\95\ 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).
\96\ 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.''
---------------------------------------------------------------------------
60. Auctions. Initially, we note that, as a general matter, the
number of winning bidders that qualify as small businesses at the close
of an auction does not necessarily represent the number of small
businesses currently in service. Also, the Commission does not
generally track subsequent business size unless, in the context of
assignments or transfers, unjust enrichment issues are implicated.
61. 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.'' \97\ Since 2007,
the Census Bureau has placed wireless firms within this new, broad,
economic census category.\98\ Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' \99\ Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer
[[Page 30626]]
employees.\100\ 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.\101\ Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.\102\ 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.\103\ Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.\104\ Thus, we estimate that the majority of
wireless firms are small.
---------------------------------------------------------------------------
\97\ 13 CFR 121.201, NAICS code 517212.
\98\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
\99\ 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.
\100\ 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).
\101\ 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).
\102\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.''
\103\ 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).
\104\ 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.''
---------------------------------------------------------------------------
62. 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.\105\ 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.\106\ The SBA has approved this
definition.\107\ An initial auction of Metropolitan Economic Area
(``MEA'') licenses was conducted in the year 2000. Of the 2,499
licenses auctioned, 985 were sold.\108\ Fifty-seven companies claiming
small business status won 440 licenses.\109\ 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.\110\ 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.\111\
---------------------------------------------------------------------------
\105\ 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).
\106\ Paging Second Report and Order, 12 FCC Rcd at 2811, para.
179.
\107\ 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'').
\108\ See ``929 and 931 MHz Paging Auction Closes,'' Public
Notice, 15 FCC Rcd 4858 (WTB 2000).
\109\ See id.
\110\ See ``Lower and Upper Paging Band Auction Closes,'' Public
Notice, 16 FCC Rcd 21821 (WTB 2002).
\111\ 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.
---------------------------------------------------------------------------
63. 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.\112\ Of these, an estimated 279 have 1,500 or
fewer employees and two have more than 1,500 employees.\113\ We
estimate that the majority of common carrier paging providers would
qualify as small entities under the SBA definition.
---------------------------------------------------------------------------
\112\ ``Trends in Telephone Service'' at Table 5.3.
\113\ Id.
---------------------------------------------------------------------------
64. 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.\114\ The
SBA has approved these definitions.\115\ 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.
---------------------------------------------------------------------------
\114\ 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).
\115\ See Alvarez Letter 1998.
---------------------------------------------------------------------------
65. 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.
66. 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).\116\ Under the SBA small business size standard, a business
is small if it has 1,500 or fewer employees.\117\ According to Trends
in Telephone Service data, 434 carriers reported that they were engaged
in wireless telephony.\118\ Of these, an estimated 222 have 1,500 or
fewer employees and 212 have more than 1,500 employees.\119\ We have
estimated that 222 of these are small under the SBA small business size
standard.
---------------------------------------------------------------------------
\116\ 13 CFR 121.201, NAICS code 517210.
\117\ Id.
\118\ ``Trends in Telephone Service'' at Table 5.3.
\119\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------
67. Broadband Personal Communications Service. The broadband
personal communications services (``PCS'') spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission has created a small business
size standard for Blocks C and F as an entity that has average gross
revenues of less than $40 million in the three previous calendar
years.\120\ 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.\121\ These
small business size standards, in the context of broadband PCS
auctions, have been approved by the SBA.\122\ 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
[[Page 30627]]
licenses for Blocks D, E, and F.\123\ In 1999, the Commission
reauctioned 155 C, D, E, and F Block licenses; there were 113 small
business winning bidders.\124\
---------------------------------------------------------------------------
\120\ 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).
\121\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
\122\ See Alvarez Letter 1998.
\123\ FCC News, ``Broadband PCS, D, E and F Block Auction
Closes,'' No. 71744 (rel. Jan. 14, 1997).
\124\ See ``C, D, E, and F Block Broadband PCS Auction Closes,''
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------
68. 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.\125\
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.\126\ 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.\127\ Of the 14 winning bidders, six were
designated entities.\128\ In 2008, the Commission completed an auction
of 20 Broadband PCS licenses in the C, D, E and F block licenses in
Auction 78.\129\
---------------------------------------------------------------------------
\125\ See ``C and F Block Broadband PCS Auction Closes; Winning
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
\126\ See ``Broadband PCS Spectrum Auction Closes; Winning
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd
3703 (2005).
\127\ See ``Auction of Broadband PCS Spectrum Licenses Closes;
Winning Bidders Announced for Auction No. 71,'' Public Notice, 22
FCC Rcd 9247 (2007).
\128\ Id.
\129\ 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'').
---------------------------------------------------------------------------
69. Advanced Wireless Services. In 2006, the Commission conducted
its first auction of Advanced Wireless Services licenses in the 1710-
1755 MHz and 2110-2155 MHz bands (``AWS-1''), designated as Auction
66.\130\ The Commission defined ``small business'' as an entity with
attributed average annual gross revenues that exceeded $15 million and
did not exceed $40 million for the preceding three years.\131\ A small
business received a 15 percent discount on its winning bid.\132\ A
``very small business'' is defined as an entity with attributed average
annual gross revenues that did not exceed $15 million for the preceding
three years.\133\ A very small business received a 25 percent discount
on its winning bid.\134\ In Auction 66, thirty-one winning bidders
identified themselves as very small businesses and won 142
licenses.\135\ Twenty-six of the winning bidders identified themselves
as small businesses and won 73 licenses.\136\ In 2008, the Commission
conducted an auction of AWS-1 licenses, designated as Auction 78, which
offered 35 licenses for which there were no winning bids in Auction
66.\137\ Four winning bidders that identified themselves as very small
businesses won 17 AWS-1 licenses.\138\ Three of the winning bidders
that identified themselves as a small business won five AWS-1 licenses.
---------------------------------------------------------------------------
\130\ See Auction of Advanced Wireless Services Licenses
Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum
Opening Bids, Upfront Payments and Other Procedures for Auction No.
66, AU Docket No. 06-30, Public Notice, 21 FCC Rcd 4562 (2006)
(``Auction 66 Procedures Public Notice'');
\131\ 47 CFR 27.1102(a)(1).
\132\ See 47 CFR 1.2110(f)(2).
\133\ 47 CFR 27.1102(a)(2)
\134\ See 47 CFR 1.2110(f)(2).
\135\ See Auction of Advanced Wireless Services Licenses Closes;
Winning Bidders Announced for Auction No. 66, Public Notice, 21 FCC
Rcd 10,521 (2006) (``Auction 66 Closing Public Notice'')
\136\ See id.
\137\ See AWS-1 and Broadband PCS Procedures Public Notice, 23
FCC Rcd 7496. Auction 78 also included an auction of Broadband PCS
licenses.
\138\ 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).
---------------------------------------------------------------------------
70. 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.\139\ Through these auctions, the Commission awarded a
total of 41 licenses, 11 of which were obtained by four small
businesses.\140\ 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.\141\ 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.\142\ 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.\143\ The SBA has approved
these small business size standards.\144\ A third auction was conducted
in 2001. Here, five bidders won 317 (Metropolitan Trading Areas and
nationwide) licenses.\145\ Three of these claimed status as a small or
very small entity and won 311 licenses.
---------------------------------------------------------------------------
\139\ 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).
\140\ 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 (released 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 (released Nov. 9, 1994).
\141\ 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'').
\142\ Narrowband PCS Second Report and Order, 15 FCC Rcd at
10476, para. 40.
\143\ Id.
\144\ See Alvarez Letter 1998.
\145\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------
71. 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.\146\ 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.\147\ 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.\148\ 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.\149\ The
SBA approved these small size standards.\150\ 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
[[Page 30628]]
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.\151\ The
Commission conducted a second auction in 2003 that included 256
licenses: 5 EAG licenses and 476 Cellular Market Area licenses.\152\
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.\153\ 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.
---------------------------------------------------------------------------
\146\ 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'').
\147\ See Channels 52-59 Report and Order, 17 FCC Rcd at 1087-
88, para. 172.
\148\ See id.
\149\ See id, 17 FCC Rcd at 1088, para. 173.
\150\ See Letter from Aida Alvarez, Administrator, SBA, to
Thomas Sugrue, Chief, WTB, FCC (Aug. 10, 1999) (``Alvarez Letter
1999'').
\151\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
17 FCC Rcd 17272 (WTB 2002).
\152\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice,
18 FCC Rcd 11873 (WTB 2003).
\153\ See id.
---------------------------------------------------------------------------
72. In 2007, the Commission adopted the 700 MHz Second Report and
Order.\154\ 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 conducted
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. 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. At the conclusion of Auction 73,
there were 36 winning bidders (who won 330 of the 1,090 licenses won)
that identified themselves as very small businesses.\155\ There were 20
winning bidders that identified themselves as a small business that won
49 of the 1,090 licenses won.\156\ 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.\157\
---------------------------------------------------------------------------
\154\ 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.
Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the
Commission's Rules, WT Docket No. 06-169, Implementing a Nationwide,
Broadband Interoperable Public Safety Network in the 700 MHz Band,
PS Docket No. 06-229, Development of Operational, Technical and
Spectrum Requirements for Meeting Federal, State, and Local Public
Safety Communications Requirements Through the Year 2010, WT Docket
No. 96-86, Second Report and Order, FCC 07-132 (2007) (``700 MHz
Second Report and Order''), 22 FCC Rcd 15289 (2007).
\155\ See 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).
\156\ Id. 23 FCC Rcd at 4572-73.
\157\ Id.
---------------------------------------------------------------------------
73. 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.\158\ 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.\159\ 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.\160\ SBA approval of these definitions is not
required.\161\ In 2000, the Commission conducted an auction of 52 Major
Economic Area (``MEA'') licenses.\162\ 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 eight
700 MHz Guard Band licenses commenced and closed in 2001. Of the three
winning bidders, one was a small business that won two of the eight
licenses.\163\
---------------------------------------------------------------------------
\158\ 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'').
\159\ See 746-764 MHz Band Second Report and Order, 15 FCC Rcd
at 5343, para. 108.
\160\ See id.
\161\ 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. Sec. 632, which requires Federal agencies to obtain SBA
approval before adopting small business size standards).
\162\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
\163\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------
74. Specialized Mobile Radio. The Commission awards small business
bidding credits in auctions for Specialized Mobile Radio (SMR)
geographic area licenses in the 800 MHz and 900 MHz bands to entities
that had revenues of no more than $15 million in each of the three
previous calendar years.\164\ The Commission awards very small business
bidding credits to entities that had revenues of no more than $3
million in each of the three previous calendar years.\165\ The SBA has
approved these small business size standards for the 800 MHz and 900
MHz SMR Service.\166\ 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.\167\ 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.\168\
---------------------------------------------------------------------------
\164\ 47 CFR 90.810, 90.814(b), 90.912.
\165\ 47 CFR 90.810, 90.814(b), 90.912.
\166\ See Alvarez Letter 1999.
\167\ 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).
\168\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------
75. 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.\169\ In an auction completed in
[[Page 30629]]
2000, a total of 2,800 Economic Area licenses in the lower 80 channels
of the 800 MHz SMR service were awarded.\170\ 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.
---------------------------------------------------------------------------
\169\ 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).
\170\ See, ``800 MHz SMR Service Lower 80 Channels Auction
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736
(2000).
---------------------------------------------------------------------------
76. 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 1500 or fewer
employees.\171\ 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.
---------------------------------------------------------------------------
\171\ See generally 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------
77. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
definition of small entities specifically applicable to such incumbent
220 MHz Phase I licensees. To estimate the number of such licensees
that are small businesses, we apply the small business size standard
under the SBA rules applicable to Wireless Telecommunications Carriers
(except Satellite).\172\ This category provides that a small business
is a wireless company employing no more than 1,500 persons.\173\ The
Commission estimates that most such licensees are small businesses
under the SBA's small business standard.
---------------------------------------------------------------------------
\172\ Id.
\173\ Id.
---------------------------------------------------------------------------
78. 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
licenses are assigned by auction, where mutually exclusive applications
are accepted. 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.\174\ 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.\175\ 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.\176\ The SBA has approved
these small size standards.\177\ A small business is eligible for a 25
percent discount on its winning bid. A very small business is eligible
for a 35 percent discount on its winning bid. The first auction of
Phase II licenses was conducted in 1998.\178\ In the first auction, 908
licenses were offered 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.\179\ Thirty-nine small businesses won 373
licenses in the first 220 MHz auction. A second auction in 1999
included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen
companies claiming small business status won 158 licenses.\180\ 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.\181\ In 2007, the Commission conducted a fourth auction of
the 220 MHz licenses, designated as Auction 72.\182\ Auction 72 offered
94 Phase II 220 MHz Service licenses.\183\ In this auction, five
winning bidders won a total of 76 licenses.\184\ Two winning bidders
identified themselves as very small businesses won 56 of the 76
licenses. One of the winning bidders that identified itself as a small
business won 5 of the 76 licenses won.
---------------------------------------------------------------------------
\174\ 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).
\175\ Id. at 11068, para. 291.
\176\ Id.
\177\ See Letter from Aida Alvarez, Administrator, SBA, to
Daniel Phythyon, Chief, WTB, FCC (Jan. 6, 1998) (``Alvarez to
Phythyon Letter 1998'').
\178\ See generally ``220 MHz Service Auction Closes,'' Public
Notice, 14 FCC Rcd 605 (1998).
\179\ 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).
\180\ See ``Phase II 220 MHz Service Spectrum Auction Closes,''
Public Notice, 14 FCC Rcd 11218 (1999).
\181\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (2002).
\182\ 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).
\183\ Id.
\184\ 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).
---------------------------------------------------------------------------
79. 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.\185\
Bidding credits for designated entities were not available in Auction
77.\186\ 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.\187\
---------------------------------------------------------------------------
\185\ 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).
\186\ Id. at 6685.
\187\ 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).
---------------------------------------------------------------------------
80. 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.\188\ 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
[[Page 30630]]
assess PLMR licensees under the standards applied to the particular
industry subsector to which the licensee belongs.\189\
---------------------------------------------------------------------------
\188\ See 13 CFR 121.201, NAICS code 517210.
\189\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------
81. 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.
82. Fixed Microwave Services. Fixed microwave services include
common carrier,\190\ private operational-fixed,\191\ and broadcast
auxiliary radio services.\192\ 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.\193\
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.
---------------------------------------------------------------------------
\190\ See 47 CFR 101 et seq. for common carrier fixed microwave
services (except Multipoint Distribution Service).
\191\ 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.
\192\ 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.
\193\ 13 CFR 121.201, NAICS code 517210.
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83. 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.\194\ An additional size standard for ``very small business'' is:
an entity that, together with affiliates, has average gross revenues of
not more than $15 million for the preceding three calendar years.\195\
The SBA has approved these small business size standards.\196\ The
auction of the 2,173, 39 GHz licenses was conducted in 2000. The 18
bidders who claimed small business status won 849 licenses.
---------------------------------------------------------------------------
\194\ 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).
\195\ Id.
\196\ 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).
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84. 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.\197\ 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.\198\ 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.\199\ The SBA has approved these small business size
standards in the context of LMDS auctions.\200\ 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
that won 119 licenses.
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\197\ 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'').
\198\ See LMDS Second Report and Order, 12 FCC Rcd at 12689-90,
para. 348.
\199\ See id.
\200\ See Alvarez to Phythyon Letter 1998.
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85. 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'').\201\ 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.\202\ 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.\203\ 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.\204\ The SBA has approved of these definitions.\205\
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\201\ See ``Interactive Video and Data Service (IVDS)
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227
(1994).
\202\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330
(1994).
\203\ 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).
\204\ Id.
\205\ See Alvarez to Phythyon Letter 1998.
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86. 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.\206\ A ``very small business'' is defined as an entity that,
together with controlling interests and affiliates, has average annual
gross revenues for the
[[Page 30631]]
preceding three years not exceeding $3 million.\207\ These definitions
have been approved by the SBA.\208\ An auction for LMS licenses was
conducted in 1999. Of the 528 licenses auctioned, 289 licenses were
sold to four small businesses.
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\206\ 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.
\207\ Automatic Vehicle Monitoring Systems Second Report and
Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
\208\ See Alvarez Letter 1998.
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87. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service.\209\ A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio System (``BETRS'').\210\ 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.\211\ 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
our action.
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\209\ The service is defined in Section 22.99 of the
Commission's rules, 47 CFR 22.99.
\210\ BETRS is defined in Sections 22.757 and 22.759 of the
Commission's rules, 47 CFR 22.757 and 22.759.
\211\ 13 CFR 121.201, NAICS code 517210.
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88. Air-Ground Radiotelephone Service.\212\ 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.\213\ 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.\214\ 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.\215\ These definitions were approved by the SBA.\216\ In 2006,
the Commission completed an auction of nationwide commercial Air-Ground
Radiotelephone Service licenses in the 800 MHz band (Auction 65). The
auction closed with two winning bidders winning two Air-Ground
Radiotelephone Services licenses. Neither of the winning bidders
claimed small business status.
---------------------------------------------------------------------------
\212\ The service is defined in Section 22.99 of the
Commission's rules, 47 CFR 22.99.
\213\ 13 CFR 121.201, NAICS codes 517210.
\214\ 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).
\215\ Id.
\216\ 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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89. Aviation and Marine Radio Services. There are approximately
26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast)
licensees.\217\ 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 Carriers (except Satellite), which
is 1,500 or fewer employees.\218\ 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.\219\ 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.\220\
Further, the Commission made available Automated Maritime
Telecommunications System (``AMTS'') licenses in Auctions 57 and
61.\221\ Winning bidders could claim status as a very small business or
a very small business. A very small business for this service is
defined as an entity with attributed average annual gross revenues that
do not exceed $3 million for the preceding three years, and a small
business is defined as an entity with attributed average annual gross
revenues of more than $3 million but less than $15 million for the
preceding three years.\222\ 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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\217\ 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).
\218\ 13 CFR 121.201, NAICS code 517210.
\219\ A licensee may have a license in more than one category.
\220\ 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).
\221\ 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).
\222\ 47 CFR 80.1252.
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90. 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.\223\ 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.\224\
Under that SBA small business size standard, a business is small if it
has 1,500 or fewer employees.\225\
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\223\ This service is governed by Subpart I of Part 22 of the
Commission's rules. See 47 CFR 22.1001-22.1037.
\224\ 13 CFR 121.201, NAICS code 517210.
\225\ Id.
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91. 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. The Commission defines a small business for MAS
licenses as an entity that has average gross revenues of less than $15
million in the three previous calendar years.\226\ A 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.\227\ The
[[Page 30632]]
SBA has approved these definitions.\228\ 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.\229\ 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.
---------------------------------------------------------------------------
\226\ See Amendment of the Commission's Rules Regarding Multiple
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para.
123 (2000).
\227\ Id.
\228\ See Alvarez Letter 1999.
\229\ See ``Multiple Address Systems Spectrum Auction Closes,''
Public Notice, 16 FCC Rcd 21011 (2001).
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92. With respect to 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.\230\ 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.
---------------------------------------------------------------------------
\230\ See 13 CFR 121.201, NAICS code 517210.
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93. 1.4 GHz Band Licensees. The Commission conducted an auction of
64 1.4 GHz band licenses \231\ in 2007.\232\ 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.\233\ Neither of the two winning bidders sought designated entity
status.\234\
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\231\ See ``Auction of 1.4 GHz Bands Licenses Scheduled for
February 7, 2007,'' Public Notice, 21 FCC Rcd 12393 (WTB 2006).
\232\ 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'').
\233\ Auction No. 69 Closing PN, Attachment C.
\234\ See Auction No. 69 Closing PN.
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94. 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.\235\ 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\236\ 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 our action.
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\235\ 13 CFR 121.201, NAICS code 517210.
\236\ 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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95. 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.\237\ ``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.\238\ The SBA has approved these definitions.\239\ In a 2004
auction of 24 GHz licenses, three winning bidders won seven licenses.
Two of the winning bidders were very small businesses that won five
licenses.
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\237\ 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).
\238\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77;
see also 47 CFR 101.538(a)(1).
\239\ 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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96. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (``MDS'') and Multichannel Multipoint Distribution
Service (``MMDS'') systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (``BRS'') and Educational Broadband Service (``EBS'')
(previously referred to as the Instructional Television Fixed Service
(``ITFS'')).\240\ 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.\241\ 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.\242\ 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. The Commission has adopted three levels of
bidding credits for BRS: (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
[[Page 30633]]
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.\243\ In 2009, the
Commission conducted Auction 86, which offered 78 BRS licenses.\244\
Auction 86 concluded with the sale of 61 licenses.\245\ Of the ten
winning bidders, three bidders that claimed small business status won 7
licenses, and two bidders that claimed entrepreneur status won six
licenses.
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\240\ 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'').
\241\ 47 CFR 21.961(b)(1).
\242\ 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.
\243\ Id. at 8296.
\244\ 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).
\245\ 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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97. 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.\246\ 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.'' \247\ 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.\248\ 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.\249\ 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.\250\ Thus, the majority of these firms can be considered
small.
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\246\ 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.
\247\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\248\ 13 CFR 121.201, NAICS code 517110.
\249\ 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).
\250\ Id. An additional 61 firms had annual receipts of $25
million or more.
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98. 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.'' \251\ The SBA has created the
following small business size standard for Television Broadcasting
firms: those having $14 million or less in annual receipts.\252\ The
Commission has estimated the number of licensed commercial television
stations to be 1,392.\253\ 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.\254\ We therefore estimate that the
majority of commercial television broadcasters are small entities.
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\251\ U.S. Census Bureau, 2007 NAICS Definitions, ``515120
Television Broadcasting'' (partial definition); http://www.census.gov/naics/2007/def/ND515120.HTM#N515120.
\252\ 13 CFR 121.201, NAICS code 515120 (updated for inflation
in 2008).
\253\ See FCC News Release, ``Broadcast Station Totals as of
September 30, 2010,'' dated October 22, 2010; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
\254\ We recognize that BIA's estimate differs slightly from the
FCC total given supra.
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99. We note, however, that in assessing whether a business concern
qualifies as small under the above definition, business (control)
affiliations \255\ 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.
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\255\ ``[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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100. In addition, the Commission has estimated the number of
licensed noncommercial educational (NCE) television stations to be
391.\256\ These stations are non-profit, and therefore considered to be
small entities.\257\
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\256\ See FCC News Release, ``Broadcast Station Totals as of
September 30, 2010,'' dated October 22, 2010; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
\257\ See generally 5 U.S.C. 601(4), (6).
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101. In addition, there are also 2,387 low power television
stations (LPTV).\258\ 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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\258\ See FCC News Release, ``Broadcast Station Totals as of
September 30, 2010,'' dated October 22, 2010; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-280836A1.pdf.
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102. 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 studio,
from an affiliated network, or from external sources.''\259\ The SBA
has established a small business size standard for this category, which
is: such firms having $7 million or less in annual receipts.\260\
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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\259\ U.S. Census Bureau, 2007 NAICS Definitions, ``515112 Radio
Stations''; http://www.census.gov/naics/2007/def/ND515112.HTM#N515112.
\260\ 13 CFR 121.201, NAICS code 515112 (updated for inflation
in 2008).
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103. We note, however, that in assessing whether a business concern
qualifies as small under the above size standard, business affiliations
must be included.\261\ In addition, to be
[[Page 30634]]
determined to be a ``small business,'' the entity may not be dominant
in its field of operation.\262\ 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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\261\ ``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).
\262\ 13 CFR 121.102(b) (an SBA regulation).
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104. 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.\263\
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\263\ 13 CFR 121.201, NAICS codes 515112 and 515120.
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105. The Commission estimates that there are approximately 5,618 FM
translators and boosters.\264\ 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. \265\
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\264\ See supra note 242.
\265\ See 15 U.S.C. 632.
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106. 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.'' \266\ 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.\267\ 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.\268\ 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.\269\ Thus, the majority of these firms can be considered
small.
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\266\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\267\ 13 CFR 121.201, NAICS code 517110.
\268\ 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).
\269\ Id. An additional 61 firms had annual receipts of $25
million or more.
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107. 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.\270\ Industry
data indicate that, of 1,076 cable operators nationwide, all but eleven
are small under this size standard.\271\ In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers.\272\ 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.\273\ Thus, under
this second size standard, most cable systems are small.
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\270\ 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).
\271\ 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.
\272\ 47 CFR 76.901(c).
\273\ 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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108. 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.'' \274\ 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.\275\ Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard.\276\ 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,\277\ 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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\274\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
\275\ 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).
\276\ 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.
\277\ 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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109. 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.\278\ The OVS framework provides opportunities for
the distribution of video programming other than through cable systems.
Because OVS operators provide subscription services,\279\ OVS falls
within the SBA small business size standard covering cable services,
which
[[Page 30635]]
is ``Wired Telecommunications Carriers.'' \280\ 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 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.\281\
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.\282\
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.\283\ 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.\284\ Broadband service
providers (``BSPs'') are currently the only significant holders of OVS
certifications or local OVS franchises.\285\ 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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\278\ 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'').
\279\ See 47 U.S.C. 573.
\280\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\281\ 13 CFR 121.201, NAICS code 517110.
\282\ 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).
\283\ Id. An additional 61 firms had annual receipts of $25
million or more.
\284\ A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
\285\ 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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110. 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.'' \286\ 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.\287\ 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.\288\ 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.\289\ Thus, the majority of these firms can be considered
small.
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\286\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\287\ 13 CFR 121.201, NAICS code 517110.
\288\ 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).
\289\ Id. An additional 61 firms had annual receipts of $25
million or more.
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111. 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.\290\ These definitions were approved by the SBA.\291\ 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.\292\ 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.\293\
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\290\ 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).
\291\ 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).
\292\ See ``Multichannel Video Distribution and Data Service
Auction Closes,'' Public Notice, 19 FCC Rcd 1834 (2004).
\293\ 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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112. Amateur Radio Service. These licensees are held by individuals
in a noncommercial capacity; these licensees are not small entities.
113. 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.\294\ 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
[[Page 30636]]
million dollars.\295\ 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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\294\ 13 CFR 121.201, NAICS code 517210.
\295\ 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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114. 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.\296\ 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'').\297\ 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 persons.\298\ 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 our action.
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\296\ 47 CFR Part 90.
\297\ 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.
\298\ 13 CFR 121.201, NAICS Code 517210.
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115. Public Safety Radio Services. Public Safety radio services
include police, fire, local government, forestry conservation, highway
maintenance, and emergency medical services.\299\ There are a total of
approximately 127,540 licensees in these services. Governmental
entities\300\ 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.\301\
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\299\ 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.
\300\ 47 CFR 1.1162.
\301\ 5 U.S.C. 601(5).
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116. 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,\302\ which has an SBA small business
size standard of 1,500 or fewer employees.\303\ The latter are within
the category of All Other Telecommunications,\304\ which has a size
standard of annual receipts of $25 million or less.\305\ The most
current Census Bureau data for all such firms, however, are the 2002
data for the previous census category called Internet Service
Providers.\306\ 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.\307\ 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.\308\ Consequently, we estimate
that the majority of ISP firms are small entities.
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\302\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'', http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\303\ 13 CFR 121.201, NAICS code 517110 (updated for inflation
in 2008).
\304\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
\305\ 13 CFR 121.201, NAICS code 517919 (updated for inflation
in 2008).
\306\ U.S. Census Bureau, ``2002 NAICS Definitions, ``518111
Internet Service Providers''; http://www.census.gov/eped/naics02/def/NDEF518.HTM.
\307\ 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).
\308\ An additional 45 firms had receipts of $25 million or
more.
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117. 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.
118. 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.
D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
119. With certain exceptions, the Commission's Schedule of
Regulatory Fees applies to all Commission licensees and regulatees.
Most licensees will be required to count the number of licenses or call
signs authorized, and pay a regulatory fee based on the number of
licenses or call signs.\309\ In
[[Page 30637]]
some instances, licensees may decide to submit an FCC Form 159
Remittance Advice. 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. 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. 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 submit a regulatory fee payment,
and it can be completed by the employees responsible for an entity's
business records.
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\309\ 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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120. 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 the Commission
will be able to create an electronic record of licensee payment
attributes that are more easily traceable than payments that were
previously mailed in with a hardcopy Form 159.
121. Licensees and regulatees are advised that failure to submit
the required regulatory fee in a timely manner will subject the
licensee or regulatee to a late payment penalty of 25 percent in
addition to the required fee.\310\ If payment is not received, new or
pending applications may be dismissed, and existing authorizations may
be subject to rescission.\311\ 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.\312\ 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 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.\313\
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\310\ 47 CFR 1.1164.
\311\ 47 CFR 1.1164(c).
\312\ Public Law 104-134, 110 Stat. 1321 (1996).
\313\ 31 U.S.C. 7701(c)(2)(B).
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122. The Commission's rules currently provide for relief in
exceptional circumstances. Persons or entities may request a waiver,
reduction or deferment of payment of the regulatory fee.\314\ 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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\314\ 47 CFR 1.1166.
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E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
123. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its 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.\315\ In our NPRM, we sought comment on alternatives that
might simplify our fee procedures or otherwise benefit filers,
including small entities, while remaining consistent with our statutory
responsibilities in this proceeding. We received no comments
specifically in response to the IRFA.
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\315\ 5 U.S.C. 603.
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124. 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.
F. Federal Rules that May Duplicate, Overlap, or Conflict With the
Proposed Rules
125. None.
V. Ordering Clauses
126. 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 NPRM is hereby adopted.
127. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this NPRM including the Initial Regulatory Flexibility Analysis
in Appendix E, to the Chief Counsel for Advocacy of the U.S. Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2011-12685 Filed 5-25-11; 8:45 am]
BILLING CODE 6712-01-P