97-5744. Assessment and Collection of Regulatory Fees For Fiscal Year 1997

[Federal Register Volume 62, Number 46 (Monday, March 10, 1997)]
[Proposed Rules]
[Pages 10793-10821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5744]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 96-186; FCC 97-49]

Assessment and Collection of Regulatory Fees For Fiscal Year 1997

AGENCY: Federal Communications Commission.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Commission is proposing to revise its Schedule of
Regulatory Fees in order to recover the amount of regulatory fees that
Congress has required it to collect for fiscal year 1997. Section 9 of
the Communications Act of 1934, as amended, provides for the annual
assessment and collection of

[[Page 10794]]

regulatory fees. For fiscal year 1997 sections 9(b) (2) and (3) provide
for annual ``Mandatory Adjustments'' and ``Permitted Amendments'' to
the Schedule of Regulatory Fees. These revisions will further the
National Performance Review goals of reinventing Government by
requiring beneficiaries of Commission services to pay for such
services.

DATES: Comments are due on or before March 25, 1997 and Reply Comments
are due on or before April 4, 1997.

ADDRESSES; Comments and reply comments should be sent to the Office of
the Secretary, Federal Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Peter W. Herrick, Office of Managing
Director at (202) 418-0443, or Terry D. Johnson, Office of Managing
Director at (202) 418-0445.

SUPPLEMENTARY INFORMATION: Adopted: February 14, 1997; Released: March
5, 1997.

TABLE OF CONTENTS

Paragraph
Topic Nos.

I. Introduction............................................ 1-3
II. Background............................................. 4-7
III. Discussion............................................ 8-51
A. Summary of FY 1997 Fee Methodology.................... 8-12
B. Development of FY 1997 Fees........................... 13-25
1. Adjustment of Payment Units........................... 13
2. Calculation of Revenue Requirements................... 14
3. Calculation of Regulatory Costs....................... 15-16
4. Establishment of 25% Revenue Ceiling.................. 17-18
5. Recalculation Of Fees................................. 19
6. Other Proposed Change--Consolidation of Private
Microwave and Domestic Public Fixed Fee Categories...... 20-24
7. Effect of Revenue Redistributions on Major
Constituencies.......................................... 25
C. Other Issues.......................................... 26-43
1. Commercial AM/FM Radio................................ 26-37
2. Personal Communications Service (PCS)................. 38
3. Commercial Mobile Radio Services (CMRS)............... 39
4. Intelsat & Inmarsat Signatories....................... 40-42
5. Non-Common Carrier International Bearer Circuits...... 43
D. Procedures for Payment of Regulatory Fees............. 44-50
1. Annual Payments of Standard Fees...................... 45
2. Installment Payments for Large Fees................... 46
3. Advance Payments of Small Fees........................ 47
4. Minimum Fee Payment Liability......................... 48
5. Standard Fee Calculations and Payments................ 49-50
E. Schedule of Regulatory Fees........................... 51
IV. Procedural Matters..................................... 52-60
A. Comment Period and Procedures......................... 52
B. Ex Parte Rules........................................ 53
C. Initial Regulatory Flexibility Analysis............... 54
D. Paperwork Reduction Act Compliance.................... 55-58
E. Authority and Further Information..................... 59-60

Attachment A--Initial Regulatory Flexibility Analysis
Attachment B--Sources of Payment Unit Estimates
Attachment C--Calculation of Revenue Requirements
Attachment D--Calculation of Regulatory Costs
Attachment E--Calculation of FY 1997 Regulatory Fees
Attachment F--Schedule of Regulatory Fees
Attachment G--Comparison Between FY 1996 and FY 1997 Fees
Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees
Attachment I--Description of FCC Activities

I. Introduction

1. By this Notice of Proposed Rulemaking, the Commission commences
a proceeding to revise its Schedule of Regulatory Fees in order to
recover the amount of regulatory fees that Congress, pursuant to
Section 9(a) of the Communications Act, as amended, has required it to
collect for Fiscal Year (FY) 1997. See 47 U.S.C. Sec. 159 (a).
2. Congress has required that we collect $152,523,000 through
regulatory fees in order to recover the costs of our enforcement,
policy and rulemaking, international and user information activities
for FY 1997. Public Law 104-208 and 47 U.S.C. Sec. 159(a)(2). This
amount is $26,123,000 or nearly 21% more than the amount that Congress
designated for recovery through regulatory fees for FY 1996. See
Assessment and Collection of Regulatory Fees for Fiscal Year 1996, FCC
96-295, released July 5, 1996, 61 FR 36629 (July 12, 1996). Thus, we
are proposing to revise our fees in order to collect the increased
amount that Congress has required that we collect. Additionally, we
propose to amend the Schedule in order to assess regulatory fees upon
licensees and/or regulatees of services not previously subject to
payment of a fee, to simplify and streamline the Fee Schedule, and to
clarify and/or revise certain payment procedures. 47 U.S.C.
Sec. 159(b)(3).
3. In proposing to revise our fees, we adjusted the payment units
and revenue requirement for each service subject to a fee, consistent
with Sections 159(b)(2) and (3). In addition, we have made changes to
the fees pursuant to public interest considerations. The current
Schedule of Regulatory Fees is set forth in sections 1.1152 through
1.1156 of the Commission's rules. 47 CFR Secs. 1.1152 through 1.1156.

II. Background

4. Section 9(a) of the Communications Act of 1934, as amended,
authorizes the Commission to assess and collect annual regulatory fees
to recover the costs, as determined annually by Congress, that it
incurs in carrying out enforcement, policy and rulemaking,
international, and user information activities. 47 U.S.C. 159(a). See
Attachment I for a description of feeable activities. In our FY 1994
Fee Report and Order, 59 FR 30984 (June 16, 1994), we adopted the
Schedule of Regulatory Fees that Congress established and we prescribed
rules to govern payment of the fees, as required by Congress. 47 U.S.C.
Sec. 159(b), (f)(1). Subsequently, in our FY 1995 and FY 1996 Fee
Reports and Orders, 60 FR 34004 (June 29, 1995) and 61 FR 36629 (July
12, 1996), we modified the Schedule to increase by approximately 93
percent and 9 percent, respectively, the revenue generated by these
fees in accordance with the amounts Congress required us to collect in
FY 1995 and FY 1996. Also, in both our FY 1995 and FY 1996 Fee Reports
and Orders, we amended certain rules governing our regulatory fee
program based upon our experience administering the program in prior
years. See 47 CFR Secs. 1.1151 et seq.
5. As noted above, for FY 1994 we adopted the Schedule of
Regulatory Fees established in Section 9(g) of the Act. For fiscal
years after FY 1994, however, Sections 9(b)(2) and (3), respectively,
provide for ``Mandatory Adjustments'' and ``Permitted Amendments'' to
the Schedule of Regulatory Fees. 47 U.S.C. Sec. 159(b)(2), (b)(3).
Section 9(b)(2), entitled ``Mandatory Adjustments,'' requires that we
revise the Schedule of Regulatory Fees whenever Congress changes the
amount that we are to recover through regulatory fees. 47 U.S.C.
Sec. 159(b)(2).

[[Page 10795]]

6. Section 9(b)(3), entitled ``Permitted Amendments,'' requires
that we determine annually whether adjustments to the fees are
warranted based upon the requirements of this subsection and that,
whenever we make such adjustments, we take into account factors that
are reasonably related to the payer of the fee and factors that are in
the public interest. In making these amendments, we are to ``add,
delete, or reclassify services in the Schedule to reflect additions,
deletions or changes in the nature of its services.'' 47 U.S.C.
Sec. 159(b)(3).
7. Section 9(i) requires that we develop accounting systems
necessary to adjust our fees pursuant to changes in the costs of
regulation of the various services subject to a fee and for other
purposes. 47 U.S.C. Sec. 9(i). In this proceeding, we are proposing for
the first time to rely on cost accounting data to identify our
regulatory costs and to develop our FY 1997 fees based upon these
costs. Also, as noted, we are proposing to limit the increase in the
amount of the fee for any service in order to phase in our reliance on
cost-based fees for those services whose proposed revenue requirement
would be more than 25 percent above the revenue requirement which would
have resulted from the ``mandatory adjustments'' to the FY 1996 fees
without incorporation of costs. The methodology we propose enables us
to develop regulatory fees which more closely reflect our costs of
regulating a service and also allows us to make annual revisions to our
fees based to the fullest extent possible, and consistent with the
public interest, on the actual costs of regulating those services
subject to a fee. Finally, Section 9(b)(4)(B) requires that we notify
Congress of any permitted amendments 90 days before those amendments go
into effect. 47 U.S.C. Sec. 159(b)(4)(B).

III. Discussion

A. Summary of FY 1997 Fee Methodology

8. As noted above, Congress has required that the Commission
recover $152,523,000 for FY 1997 through the collection of regulatory
fees, representing the costs applicable to our enforcement, policy and
rulemaking, international, and user information activities. 47 U.S.C.
Sec. 159(a). Congress' increase does not fall equally on all payers due
to revised payment units and revenue requirement allocations resulting
from the cost accounting system.
9. In developing our proposed FY 1997 fee schedule, we first
estimated payment units ^{1 for FY 1997 in order to determine the
aggregate amount of revenue we would collect without any revision to
our FY 1996 fees. Next, we compared this revenue amount to the
$152,523,000 that Congress has required us to collect in FY 1997 and
pro-rated the shortfall among all the existing fee categories. We then
adjusted the projected revenue requirements so that they equaled the
actual costs of each service, using data generated by our cost
accounting system, described infra, to ensure that revenues equaled our
regulatory costs for each fee category.
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\1\ Payment units are the number of subscribers, mobile units,
pagers, cellular telephones, licenses, call signs, adjusted gross
revenue dollars, etc. which represent the base volumes against which
fee amounts are calculated.
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10. We next examined the impact of using actual costs to establish
regulatory fees for each class of regulatees to determine whether any
regulatees experienced an unduly large fee increase. We found that, in
many cases, cost-based fees result in fee payments dramatically higher
in FY 1997 than they were in FY 1996. Therefore, rather than proposing
fully cost-based fees for FY 1997, we are proposing to phase in full
reliance on cost-based fees and, for FY 1997, to establish a revenue
ceiling in each service no higher than 25 percent above the revenue
that payers within a fee category would have paid if FY 1997 fees had
remained at FY 1996 levels adjusted only for changes in volume and the
increase required by Congress. Our proposed methodology would reduce
fees for services whose regulatory costs have declined while increasing
fees for services experiencing higher regulatory costs in order to
begin eliminating disparities disclosed by our cost accounting system
between a service's current costs and fees ascribed to these services
in prior fiscal years.
11. Once we established our tentative FY 1997 fees, we evaluated
various proposals made by Commission staff concerning other adjustments
to the Fee Schedule and to our collection procedures. The proposals are
discussed in Paragraphs 20-40 and are factored into our proposed FY
1997 Schedule of Regulatory Fees, set forth in Attachment F.
12. Finally, we have incorporated, as Attachment H, proposed
Guidance containing detailed descriptions of each fee category,
information on the individual or entity responsible for paying a
particular fee and other critical information designed to assist
potential fee payers in determining the extent of their fee liability,
if any, for FY 1997.^{2 In the following paragraphs, we describe in
greater detail our methodology for establishing our FY 1997 regulatory
fees.
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\2\ We also will incorporate a similar Attachment in the Report
and Order concluding this rulemaking. That Attachment will contain
updated information concerning any changes made to the proposed fees
adopted by the Report and Order.
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B. Development of FY 1997 Fees

1. Adjustment of Payment Units
13. As the first step in calculating individual service regulatory
fees for FY 1997, we adjusted the estimated payment units for each
service because payment units for many services have changed
substantially since we adopted our FY 1996 fees. We obtained our
estimated payment units through a variety of means, including our
licensee data bases, actual prior year payment records, and industry
and trade group projections. Whenever possible, we verified these
estimates from multiple sources to ensure the accuracy of these
estimates. Attachment B provides a summary of how revised payment units
were determined for each fee category.^{3
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\3\ It is important to note also that, due to revised payment
units, Congress' required revenue increase in regulatory fee
payments of approximately 21 percent in FY 1997 will not fall
equally on all payers.
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2. Calculation of Revenue Requirements
14. We next multiplied the revised payment units for each service
by our FY 1996 fee amounts in each fee category to determine how much
revenue we would collect without any change to the existing Schedule of
Regulatory Fees. The amount of revenue we would collect is
approximately $136.5 million. This amount is approximately $16.0
million less than the amount the Commission is required to collect in
FY 1997. We then adjusted these revenue requirements for each fee
category on a proportional basis, consistent with Section 9(b)(2) of
the Act, to obtain an estimate of revenue requirements for each fee
category at the $152,523,000 level required by Congress for FY 1997.
Attachment C provides detailed calculations showing how we determined
the revised revenue amount for each service.
3. Calculation of Regulatory Costs
15. On October 1, 1995, the Commission established, in accordance
with 47 U.S.C. Sec. 159(i), a cost accounting system designed, in part,
to provide us with useful data, in combination with other information,
to help ensure that fees closely reflected our actual costs of
regulation. The Commission's cost accounting system, which is
integrated with our personnel/payroll system to ensure accuracy and

[[Page 10796]]

timeliness of cost information, accumulates both personnel and non-
personnel costs on a service-by-service basis.
16. In order to utilize actual costs for fee development purposes,
we first had to add indirect support costs to the direct costs ^{4
and then adjust the results to approximate the amount of revenue that
Congress requires us to collect in FY 1997 ($152,523,000).^{5 Thus,
we adjusted the actual cost data pertaining to regulatory fee
activities recorded for the period October 1, 1995 through September
30, 1996 proportionally among the fee categories so that total costs
approximated $152,523,000. For fee categories where fees are further
differentiated by class or market (e.g., Markets 1-10 under the general
VHF and UHF Commercial Television fee category), we distributed the
costs to the class or market group by maintaining the same ratios
between the classes or market groups as between the fees in the FY 1996
schedule.^{6 The results of these calculations are shown in detail
in Attachment D and represent our best estimate of actual total
attributable costs relative to each fee category for FY 1997.^{7
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\4\ One feature of the cost accounting system is that it
separately identifies direct and indirect costs. Direct costs
include salary and expenses for (a) staff directly assigned to our
operating Bureaus and performing regulatory activities and (b) staff
assigned outside the operating Bureaus to the extent that their time
is spent performing regulatory activities pertinent to an operating
Bureau. These costs include rent, utilities and contractual costs
attributable to such personnel. Indirect costs include support
personnel assigned to overhead functions such as field and
laboratory staff and certain staff assigned to the Office of
Managing Director. The combining of direct and indirect costs is
accomplished on a proportional basis among all fee categories as
shown on Attachment D.
\5\ Congress' estimate of costs to be recovered through
regulatory fees is generally determined twelve months before the end
of the fiscal year to which the fees actually apply. As such, year-
end actual activity costs for FY 1996 do not equal exactly the
amount Congress designated for collection for FY 1997.
\6\ While some might argue that the Commission should further
distinguish our work activities by fee category (e.g., television
markets or radio classes), it would not be practical to use small,
time-consuming incremental breakouts of work time.
\7\ For example, under the FM Radio fee classification, the
actual costs attributable to FM radio are $8,452,323. This amount is
allocated to FM Classes C,C1,C2,B; Classes A,B1,C3; and FM
Construction Permits (CP) as follows:
(1) First we determine the relationships between the three
categories by dividing the smallest of the FY 1996 FM fees into each
of the FY 1996 FM fees to determine the appropriate ratios for
allocation of the revenue requirement.
(a) FY 1996 FM CP fee=$690
FY 1996 FM Classes A, B1, and C3=$830
FY 1996 FM Classes C, C1, C2, and B=$1,250
(b) FM CP ratio is $690 divided by $690=1:1
FM Classes A, B1, and C3 ratio is $830 divided by $690=1:1.2
FM Classes C, C1, C2, and B ratio is $1,250 divided by
$690=1:1.8
(2) Next we add the three ratios and divide the sum into the
total revenue requirement for FM to determine the amount
corresponding to the ratio of 1.
(a) 1+1.2+1.8=4
(b) $8,452,323 divided by 4=$2,113,081
(3) Finally, we determine the fee for each of the three by
multiplying the amount calculated in step (2)(b) by each of the
ratios.
FM CP revenue requirement=1 times $2,113,081=$2,113,081
FM Classes A, B1, and C3 revenue requirement=1.2 times
$2,113,081=$2,535,697
FM Classes C, C1, C2, and B revenue requirement=1.8 times
$2,113,081=$3,803,546
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4. Establishment of 25% Revenue Ceiling
17. Our next step was to determine whether reliance on actual costs
to develop FY 1997 regulatory fees would result in fees which are too
disparate from corresponding FY 1996 fees. As a result of this
analysis, we are proposing to establish a ceiling of 25 percent on the
increase in the revenue requirement of any service over and above the
Congressionally mandated increase in the overall revenue requirement
and the difference in unit counts.^{8 Because Congress has increased
our overall fee collection requirement, we are already required to
collect substantially more than we collected in FY 1996. Nevertheless,
capping each service's revenue requirement at no more than a 25 percent
increase enables us to begin the process of reducing fees for services
with lower costs and increasing fees for services with higher costs in
order to close the gap between actual costs and fees designed to
recover these costs. We are not suggesting that fee increases be
limited to a 25 percent increase over the FY 1996 fees. The 25 percent
increase is over and above the revenue which would be required after
adjusting for the projected FY 1997 payment units and the proportional
share of the 21 percent increase in the amount that Congress requires
us to collect. Thus, FY 1997 fees may increase more than 25 percent
over FY 1996 fees depending upon the number of payment units.
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\8\ For example, the regulatory cost associated with the
Aviation (Aircraft) service is $933,492. If no change were made to
this service's FY 1996 regulatory fee ($3 per year), the total
revenue collected from licensees in this service would be only
$117,327 in FY 1997, a shortfall of $816,165. Application of the
proposed 25 percent revenue ceiling to this service results in a
capped revenue ceiling of $146,659 ($117,327 x 125%).
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18. An important consideration in proposing the establishment of a
revenue ceiling is the impact on other fee payers. Because the
Commission is required to collect a full $152,523,000 in FY 1997
regulatory fees, the additional revenue ($28,024,533) that would have
been collected from classes of licensees subject to the revenue ceiling
had there been no ceiling, needs to be collected instead from licensees
not subject to the ceiling. This results in a certain amount of
subsidization between fee payer classes.^{9 We believe, however,
that the public interest is best served by adopting our proposed
revenue ceiling methodology. To do otherwise would subject several
entities to unexpected major increases which would severely impact the
economic well being of certain licensees who will not be able to adjust
their business plans accordingly. Attachment E displays the step-by-
step process we used to calculate adjusted revenue requirements for
each fee category for FY 1997, including the reallocation of revenue
requirements resulting from the application of our proposed revenue
ceilings.^{10 We invite comments on our proposed methodology to
incorporate actual costs into the computation of regulatory fees and to
establish the 25% revenue ceiling.
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\9\ Revenues from current fee payers already offset costs
attributable to regulatees exempt from payment of a fee or otherwise
not subject to a fee pursuant to section 9(h) of the Act or the
Commission's rules. For example, CB and ship radio station users,
amateur radio licensees, governmental entities, licensees in the
public safety radio services, and all non-profit groups are not
required to pay a fee. The costs of regulating these entities is
borne by those regulatees subject to a fee requirement.
\10\ Application of the 25% ceiling was accomplished by choosing
a ``target'' fee revenue requirement for each individual fee
category. This ``target'' was either the actual calculated revenue
requirement (for those categories at or below the 25% ceiling) or,
in the case where the calculated revenue exceeded the ceiling, an
amount equal to the ceiling. The shortfall created by reducing the
revenue requirement of those whose revenue requirement exceeded the
revenue ceiling was proportionately spread among those fee
categories whose revenue requirements were below the ceiling. This
computation required more than one round of adjustment because the
allocation of this revenue, in a few instances, caused the new
revenue requirement amount to exceed the 25% ceiling. After two
iterations (rounds), all the revenue requirements were at or below
the revenue ceiling. See Attachment E.
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5. Recalculation of Fees
19. Once we determined the amount of fee revenue necessary to
collect from each class of licensee, we divided the revenue requirement
by the number of payment units (and by the license term, if applicable,
for ``small'' fees) to obtain actual fee amounts for each fee category.
These calculated fee amounts were then rounded in accordance with
Section 9(b)(3) of the Act. See Attachment E.
6. Other Proposed Change--Consolidation of Private Microwave & Domestic
Public Fixed Fee Categories
20. We examined the results of our calculations made in Paragraphs
15-19

[[Page 10797]]

to determine if further adjustments of the fees and/or changes to
payment procedures were warranted based upon the public interest and
other criteria established in 47 U.S.C. 159(b)(3). As a result of this
review, we are proposing the following change to our Fee Schedule:
21. In our FY 1994, FY 1995 and FY 1996 fee schedules, Private
Microwave licensees were required to pay a ``small'' regulatory fee, in
advance, for the entire license term at the time of application. In
contrast, the Domestic Public Fixed category was considered a ``large''
regulatory fee subject to an annual payment. The domestic public fixed
category is comprised of several commercial microwave services; e.g.,
microwave multiple address, microwave common carrier fixed, microwave
digital electronic message, and microwave local TV transmission.^{11
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\11\ Although the Multipoint Distribution Service (MDS) and the
Multichannel Multipoint Distribution Service (MMDS) were originally
grouped with Domestic Public Fixed services, we have, since FY 1995,
listed them separately in our Fee Schedule.
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22. Since inception of the regulatory fee program, many parties
holding microwave licenses have expressed confusion concerning which
fee they are required to pay. In order to alleviate this confusion and
because operational and technical characteristics of private microwave
and commercial microwave systems are similar, we are proposing to
combine these two fee categories into a single Microwave category for
FY 1997.
23. Accordingly, we are proposing to adjust the anticipated number
of payment units and combine the revenue requirements for the Private
Microwave and Domestic Public Fixed categories and establish a
``small'' fee, payable in advance for the entire license term, for the
new consolidated Microwave category. The annual regulatory fee for all
microwave licensees would be $10 per license. This new fee was
calculated as follows:
(a) From Attachments C and E:

(1) 5,350 private microwave stations (units) (Revenue requirement =
$523,083)
(2) 18,845 commercial microwave/public fixed stations (units) (Revenue
requirement = $118,026)

(b) Converting from annual payment (``large fee'') to license term
payment (``small fee''):

(1) 18,845 commercial microwave units divided by 10 year license term =
1,885 commercial microwave units to be licensed each year.
(c) Calculation of new microwave fee: The sum of the two revenue
requirements divided by the sum of the units to be licensed and divided
by the license term as follows:

(1) (($523,083 + $118,026) divided by (5,350 + 1,885)) divided by 10
years = $8.86

(d) Round fee to the nearest $5 = $10 (47 U.S.C Sec. 159(b)(2)).
24. We invite comments on our proposal to combine the Private
Microwave and Domestic Public Fixed (Commercial Microwave) service
categories for regulatory fee purposes into a single Microwave category
and to establish an appropriate ``small'' fee for this single category.
7. Effect of Revenue Redistributions on Major Constituencies
25. The chart below illustrates the relative percentages of the
revenue requirements borne by the major constituencies since inception
of regulatory fees in FY 1994.

Revenue Requirement Percentages by Constituencies
----------------------------------------------------------------------------------------------------------------
FY 1994 FY 1995 FY 1996 FY 1997
(Actual) (Actual) (Actual) (Proposed)
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Cable TV Operators (Inc. CARS Licenses)..................... 41.36 24.02 28.19 23.74
Broadcast Licensees......................................... 23.84 13.76 14.77 14.96
Satellite Operators (Inc. Earth Stations)................... 3.32 3.62 4.28 4.28
Common Carriers............................................. 25.01 44.52 45.54 46.27
Wireless Licensees.......................................... 6.47 14.07 7.23 10.75
---------------------------------------------------
Total................................................. 100.00 99.99 100.01 100.00
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C. Other Issues

1. Commercial AM/FM Radio
26. In November 1996 the Commission released a Notice of Inquiry to
determine if, in FY 1997, it is feasible to utilize a methodology based
on market size and class of station to assess annual regulatory fees
upon licensees of commercial AM and FM broadcast radio stations. We
invited interested parties to comment upon a methodology proposed by
the Montana Broadcasters Association (Montana), or to propose any other
methodology for assessing AM and FM fees they believe would serve the
public interest. See Amendment of Part 1 of the Commission's Rules
Pertaining to the Schedule of Annual Regulatory Fees for Mass Media
Services, FCC 96-422, released November 6, 1996, 61 FR 59397 (November
22, 1996).
27. In establishing our regulatory fee program, we recognized that
Congress had required the Commission to adopt the Schedule of
Regulatory Fees for FY 1994 contained in Section 9(g) of the
Communications Act, as amended. 47 U.S.C. Sec. 159(g). The Schedule
assessed AM and FM radio fees based upon class of station. Thus, each
licensee paid a fee identical to other licensees with the same class of
station, without regard to the size or population of its service area.
See Implementation of Section 9 of the Communications Act, 9 FCC Rcd
5333, 5339 (1994), 59 FR 30984 (June 16, 1994). We declined to consider
any revision to the fee schedule for FY 1994, but we invited interested
parties to propose alternative methodologies for various services
subject to the regulatory fees, including AM and FM radio, for
consideration in our proceeding to adopt the FY 1995 Schedule of
Regulatory Fees. 9 FCC Rcd 5360. Subsequently, in our NPRM proposing
fees for FY 1995, we recognized that ``population density of a [AM or
FM] station's geographic location was also a public interest factor
warranting recognition in the fee schedule.'' Therefore, we proposed
for consideration by interested parties a methodology incorporating
market size in the calculation of AM and FM fees, by assessing higher
fees for radio stations located in Arbitron Rating Co. (Arbitron)
designated markets. We proposed a two-tiered fee schedule with stations
in Arbitron rated markets paying higher fees than the same classes of
stations located in smaller, non-

[[Page 10798]]

Arbitron rated markets. See Notice of Proposed Rulemaking in the
Matter of Assessment and Collection of Regulatory Fees for Fiscal Year
1995, MD Docket No. 95-3, FCC 95-14, released January 12, 1995 at
Paragraph 29. In our Report and Order establishing our FY 1995 fees, we
declined to adopt this proposed method because, after consideration of
the public comments, we found that it did not provide a ``sufficiently
accurate and equitable methodology for determining fees.'' See
Assessment and Collection of Regulatory Fees for Fiscal Year 1995, 10
FCC Rcd 13512, 13531-32 (1996), 60 FR 34004 (June 29, 1995).
28. In our Notice of Proposed Rulemaking to establish regulatory
fees for FY 1996, we stated, with regard to the fees for AM and FM
radio stations, that we ``were particularly interested in a proposal
which would associate population density and service area contours with
license data'' and we again requested interested parties to propose
viable alternative methodologies for assessment of AM and FM fees.
Assessment and Collection of Regulatory Fees for Fiscal Year 1996, FCC
96-153, at Paragraphs 20-21 (April 9, 1996), 61 FR 16432 (April 15,
1996). In response, Montana filed comments proposing an AM and FM fee
structure based on class of station and on market size. We received no
comments addressing Montana's proposal. However, following our own
review of the proposal, we decided not to take any action until we had
an opportunity to evaluate more extensively the impact of Montana's
proposal on AM and FM licensees through a Notice of Inquiry. Assessment
and Collection of Regulatory Fees for Fiscal Year 1996, FCC 96-295, at
Paragraphs 23-29, July 5, 1996, 61 FR 36629 (July 12, 1996).
29. Montana's proposed methodology utilizes broad groupings of
radio markets determined by Arbitron market size, with the fee for each
market grouping predicated on the ratios that Congress initially
established in Section 9(g) of the Act (47 U.S.C. Sec. 159(g)) for
assessing fees for licensees of television stations serving different
sized markets. Montana proposed four specific radio market
classifications: Markets 1-25; Markets 26-50; Markets 51-100; and
Remaining Markets. Montana's proposal assigned stations to each market
grouping based upon Arbitron television market designations and relied
on an analysis of broadcast markets prepared by Dataworld MediaXpert
Service (``Dataworld''), which grouped radio stations by class of
station within a particular market size. It then calculated the fees
for stations in different markets utilizing the ratios between the fees
for television markets in Section 9(g). Montana argued that its
proposal was more equitable than the groupings based on class of
station relied on by the Commission because, under its proposal,
stations in smaller markets would pay lower fees than stations serving
more populous markets.
30. In order to collect the total aggregate fees to be recovered
from AM and FM radio stations as proposed in the FY 1995 NPRM,
Montana's proposed methodology would have allocated fees among radio
stations as follows:

----------------------------------------------------------------------------------------------------------------
FM Class FM Class
Markets AM Class A AM Class B AM Class C AM Class D I\12\ II\13\
----------------------------------------------------------------------------------------------------------------
1-25.............................. $2,890 $1,710 $645 $815 $2,890 $1,940
26-50............................. 2,040 1,140 455 575 2,040 1,370
51-100............................ 1,360 760 305 385 1,360 910
Remaining......................... 850 475 190 240 850 570
----------------------------------------------------------------------------------------------------------------
\12\ Class I includes FM Classes C, C1, C2 and B.
\13\ Class II includes FM Classes A, B1 and C3.

31. However, subsequent to the filing of Montana's proposal,
Congress increased the aggregate amount of fees to be recovered by the
Commission and amended the Commission's regulatory fee schedule for
television stations to increase the fees paid by licensees in larger
markets and to reduce the fees paid by licensees located in Markets 51-
100 and the Remaining Markets. Public Law 104-134. See Assessment and
Collection of Regulatory Fees for Fiscal Year 1996, supra at Paragraph
14. This substantially changed the ratios between the fees for
television stations in different sized markets used by Montana to
compute its proposed radio fees. Substituting the actual ratios between
the regulatory fees for television stations in different sized markets
for the old ratios utilized in Montana's proposal would have produced
the following radio fees for FY 1996: \14\
---------------------------------------------------------------------------

\14\ By contrast, according to the FY 1996 Schedule of
Regulatory Fees, AM class A stations are assessed a fee of $1,250;
Class B stations $690; Class C stations $280; and Class D stations
$345. Similarly, FM Class C, C1, C2 and B stations (Montana's FM
Class I) are assessed a fee of $1,250; and FM Class A, B1 and C3
stations (Montana's FM Class II) a fee of $830.

----------------------------------------------------------------------------------------------------------------
FM Class FM Class
Markets AM Class A AM Class B AM Class C AM Class D I\15\ II\16\
----------------------------------------------------------------------------------------------------------------
1-25.............................. $11,500 $6,325 $2,575 $3,150 $4,875 $3,250
26-50............................. 6,675 3,675 1,500 1,850 2,850 1,900
51-100............................ 3,550 1,975 800 980 1,525 1,000
Remaining......................... 1,000 555 225 275 430 285
----------------------------------------------------------------------------------------------------------------
\15\ Class I includes FM Classes C, C1, C2 and B.
\16\ Class II includes FM Classes A, B1 and C3.

32. The above fees illustrate the impact of the Montana proposal
when the changes mandated by Congress to the Regulatory Fee Schedule
are considered. We are particularly concerned about the size of the
increases in larger markets which, in addition to having more potential
listeners, have greater concentrations of stations, thereby increasing
the competition for listeners in those markets. Moreover, the accuracy
of both sets of calculations are predicated on assumptions that the
total aggregate amount of fees to be collected remains unchanged, that
the revenue requirement allocated to all broadcast licensees remains
unchanged, and that

[[Page 10799]]

there are no changes in the numbers and classes of licensees subject to
broadcast fees. The calculations presented herein are illustrative
only, because the fees are predicated on assumptions that will not
recur in FY 1997. A change in any or all three of these factors would
result in individual fees different than those illustrated in
Paragraphs 30 and 31.
33. In response to the NOI, the National Association of
Broadcasters (``NAB'') submitted a proposed fee table for AM and FM
radio stations relying on a database prepared by Dataworld. NAB states
that Dataworld developed its database by using the engineering
specifications for every operating AM and FM radio station to calculate
the populations served by those stations using 1990 census information.
Under NAB's proposal, stations with more powerful signals would
generally pay higher fees because they usually serve more people than
stations with weaker signals. NAB maintains that a fee schedule based
on the Dataworld information would equitably allocate fees among all
stations.
34. In support of its proposal, NAB notes that Congress has
recognized the importance of service classes in the fee schedule it
enacted in Section 9(g) of the Act, and that there are significant
differences in the value and revenue potential of stations in different
classes. 47 U.S.C. Sec. 159(g). Thus, NAB contends that radio station
fees should not be calculated on the basis of predicted audience alone.
Moreover, NAB recognizes that Dataworld's data does not reflect
population changes since 1990 and that, in certain instances, there
will be discrepancies between the Dataworld calculations and some
stations' actual engineering characteristics. Thus, NAB proposes fees
based on the estimate of population served and the class of station
rather than strictly on the basis of population served.
35. The proposed NAB fee table includes 24 fee levels for AM and 12
fee levels for FM. NAB's proposed fee table would collect $6,104,196
from FM licensees and $2,235,956 from AM licensees, as follows:

----------------------------------------------------------------------------------------------------------------
Population served AM Class A AM Class B AM Class C AM Class D
----------------------------------------------------------------------------------------------------------------
<= 100,000..................................................="" $325="" $260="" $125="" $165="" 100,001-250,000.............................................="" 375="" 325="" 175="" 225="" 250,001-500,000.............................................="" 575="" 450="" 250="" 325="" 500,001-1,500,000...........................................="" 975="" 650="" 325="" 425="" 1,500,001-3,000,000.........................................="" 1,500="" 950="" 450="" 575=""> 3,000,000................................................. 1,800 1,300 650 750
----------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------
FM Classes
Population served FM classes B, C, C1,
A, B1, C3 C2
------------------------------------------------------------------------
<= 40,000.....................................="" $300="" $450="" 40,001-100,000................................="" 450="" 925="" 100,001-250,000...............................="" 925="" 1,350="" 250,001-750,000...............................="" 1,150="" 1,750="" 750,001-1,750,000.............................="" 1,300="" 2,000=""> 1,750,000................................... 1,650 2,750
------------------------------------------------------------------------

36. While the NAB proposal has merit, further study and refinement
of its methodology is required. First, we note that the NAB proposal
increases fees based on the average increase in the amount that
Congress has required us to collect for FY 1997 without taking into
account our cost of regulation of AM and FM stations as measured by our
cost accounting system. As a result, its proposal would fail to raise
sufficient revenue to cover the pro rata share of the Commission's
revenue requirements for AM and FM radio. Moreover, NAB's proposal does
not disclose the number of stations in each of its payment categories
so that its proposal can be modified to meet our revenue requirements,
there are discrepancies between our estimate of the number of stations
and the number of stations included in Dataworld's database, and it is
not clear whether the Dataworld station count includes government and
non-commercial stations which are exempt from regulatory fee
requirements. In addition, NAB has not presented an explanation or
rationale for its specific fee classifications. Nor is there sufficient
information to permit the Commission to determine how NAB's proposed
fee table can be modified to cover changes in station characteristics
and populations. If we were to adopt NAB's proposal, we would also be
required to develop a methodology for advising each individual station
of its fee based on our estimate of the population in its service area.
37. Thus, while the Montana and NAB proposals hold the promise of a
more equitable fee schedule, there are problems with these proposals
that must be addressed before they can be relied on to develop a
revised fee schedule for AM and FM radio. Therefore, interested parties
are invited to comment not only on both the NAB and Montana proposals,
but also on any alternative methods for assessing radio station fees.
Parties who have filed comments on the NOI need not duplicate them in
this proceeding. Comments are also invited with respect to the revised
schedule for AM and FM radio stations set forth in Attachment F based
on the general methodology for calculating FY 1997 fees.
2. Personal Communications Service (PCS)
38. Our FY 1996 Report and Order deferred assessing a regulatory
fee upon licensees in the Personal Communications Service (``PCS'') in
FY 1996 because the service was in a very early start-up phase. See FY
1996 Report and Order at Appendix F, Paragraph 15. We now believe that
there are sufficient operational PCS systems to justify their inclusion
among those licensees who are assessed fees in the CMRS Mobile Services
and CMRS One-Way Paging fee categories for FY 1997. We have therefore
incorporated fees for PCS in Paragraphs 14 and 15 of Attachment H.
3. Commercial Mobile Radio Services (CMRS)
39. In our FY 1996 Report and Order at Paragraph 22, we discussed a
proposal offered by Destineer, Inc., a PCS licensee, that we establish
a CMRS Messaging Service fee category to

[[Page 10800]]

replace our CMRS One-Way Paging fee category. Destineer stated that,
with the exception of two-way paging services, our CMRS Mobile Services
fee category includes only broadband services which provide two-way
interactive voice communications. Destineer recommended establishing a
CMRS Messaging Service to include all narrowband services, including
two-way paging services. We invite interested parties to file comments
on Destineer's proposal or propose alternative methods to assess CMRS
fees for FY 1997. We are particularly interested in the number of
estimated units associated with an alternative proposal and the impact
the proposed changes would have on projected revenues.
4. Intelsat & Inmarsat Signatories
40. The Commission incurs regulatory costs for satellite policy and
rulemaking, enforcement and user information activities. As directed by
Congress, these costs must be recovered through the collection of
regulatory fees. In accordance with the provisions of Section 9, the
Commission's overall goal is to recover all of the costs associated
with satellite regulatory activities and to distribute these costs
fairly amongst fee payers, taking into account factors reasonably
related to the benefits provided by the payer, and ``other factors we
determine are necessary in the public interest.''
41. In FY 1994 and FY 1995 the Commission recovered satellite
regulatory costs by collecting fees from satellite earth station and
geosynchronous space station regulatees (Part 25) only. Satellite
providers using international bearer circuits to provide service were
assessed a separate fee under the International Bearer Circuits
category in order to recover the regulatory costs associated with
international telecommunications policy and rulemaking, enforcement and
user information activities. The Commission received comments during
both years' regulatory fees proceedings concerning the distribution of
the burden of costs. In an effort to explore alternative methods of fee
collection the Commission conducted focus group sessions in FY 1995
which were attended by satellite industry representatives. One of the
major issues raised was a perceived inequity in the distribution of the
total satellite regulatory fee burden. Commission activities associated
with Intelsat, Inmarsat and the U.S. signatory to both were identified
as areas where space and earth station regulatees were unfairly bearing
the regulatory fee burden.
42. In response to distribution issues raised in the focus group
sessions and comments filed in previous years, we examined satellite
regulatory activities and determined that since the Commission incurs
regulatory costs associated with Signatory-related activities, a
regulatory fee for Signatories was the proper vehicle for recovering
these costs. In its comments on the proposed FY 1996 fees, Comsat
challenged the Commission's proposal regarding the Signatory fee,
contending that it would be unlawful and excessive. Each of these
arguments was discussed in our FY 1996 Report and Order, in which we
adopted the Signatory fee. However, in Paragraph 47 of the FY 1996
Report and Order, we indicated our intent to explore alternative means
of recovering these costs and to seek public comment on such
alternatives. We therefore request interested parties to comment on
alternative methods of collecting costs associated with Signatories. We
request that comments specify whether other regulatees should be
assessed a portion of the fee applicable to the signatory category,
and, if so, the estimated percentage of the fee that should be assessed
upon other regulatees. We are particularly interested in ways to
recover our costs without unfairly burdening other regulatees. If no
specific alternative is identified, we propose to retain the current
Signatory fee category for FY 1997.
5. Non-Common Carrier International Bearer Circuits
43. International bearer circuit fees are currently assessed upon
domestic and international common carriers only. In its comments
responding to proposals contained in our FY 1996 NPRM, Comsat contended
that payment of international bearer circuit fees should be expanded to
non-common carriers providing international services. See FY 1996
Report and Order at Paragraph 65. In our FY 1996 Report and Order we
declined to expand collection of international bearer circuit fees to
non-common carriers. As we noted at that time, the Commission is
unable, due to lack of appropriate data, to calculate a fee applicable
to bearer circuits provided directly to end users over non-common
carrier domestic and international facilities. The foregoing situation
has not changed. We, therefore, are proposing to assess the
international bearer circuit fee only on domestic and international
common carriers in FY 1997. However, we invite interested parties to
comment on Comsat's proposal. We are especially interested in
information concerning the number of bearer circuits provided directly
to end users over non-common carrier domestic and international
facilities.

D. Procedures for Payment of Regulatory Fees

44. Generally, we propose to retain the procedures that we have
established for the payment of regulatory fees. Section 9(f) requires
that we permit ``payment by installments in the case of fees in large
amounts, and in the case of small amounts, shall require the payment of
the fee in advance for a number of years not to exceed the term of the
license held by the payer.'' See 47 U.S.C. Sec. 159(f)(1). Consistent
with Section 9(f), we are again establishing three categories of fee
payments, based upon the category of service for which the fee payment
is due and the amount of the fee to be paid. The fee categories are (1)
``standard'' fees, (2) ``large'' fees, and (3) ``small'' fees.
1. Annual Payments of Standard Fees
45. Standard fees are those regulatory fees that are payable in
full on an annual basis. Payers of standard fees are not required to
make advance payments for their full license term and are not eligible
for installment payments. All standard fees are payable in full on the
date we establish for payment of fees in their regulatory fee category.
The payment dates for each regulatory fee category will be announced
either in the Report and Order in this proceeding or by public notice
in the Federal Register following the termination of this proceeding.
2. Installment Payments for Large Fees
46. While we are mindful that time constraints may preclude an
opportunity for installment payments, we propose that regulatees in any
category of service with a liability of $12,000 or more be eligible to
make installment payments and that eligibility for installment payments
be based upon the amount of either a single regulatory fee payment or
combination of fee payments by the same licensee or regulatee. We
propose that regulatees eligible to make installment payments may
submit their required fees in two equal payments (on dates to be
announced) or, in the alternative, in a single payment on the date that
their final installment payment is due. Due to statutory constraints
concerning notification to Congress prior to actual collection of the
fees, however, it is unlikely that there will be sufficient time for
installment payments, and that

[[Page 10801]]

regulatees eligible to make installment payments will be required to
pay these fees on the last date that fee payments may be submitted. The
dates for installment payments, or a single payment, will be announced
either in the Report and Order terminating this proceeding or by public
notice published pursuant to delegated authority in the Federal
Register.
3. Advance Payments of Small Fees
47. As we have in the past, we are proposing to treat regulatory
fee payments by certain licensees as ``small'' fees subject to advance
payment consistent with the requirements of Section 9(f)(2). Advance
payments will be required from licensees of those services that we
decided would be subject to advance payments in our FY 1994 Report and
Order, and to those additional payers set forth herein.^{17 Payers
of advance fees will submit the entire fee due for the full term of
their licenses when filing their initial, renewal, or reinstatement
application. Regulatees subject to a payment of small fees shall pay
the amount due for the current fiscal year multiplied by the number of
years in the term of their requested license. In the event that the
required fee is adjusted following their payment of the fee, the payer
would not be subject to the payment of a new fee until filing an
application for renewal or reinstatement of the license. Thus, payment
for the full license term would be made based upon the regulatory fee
applicable at the time the application is filed. The effective date for
payment of small fees established in this proceeding will be announced
in our Report and Order terminating this proceeding or by public notice
published pursuant to delegated authority in the Federal Register.
---------------------------------------------------------------------------

\17\ Applicants for new, renewal and reinstatement licenses in
the following services will be required to pay their regulatory fees
in advance: Land Mobile Services, Microwave services, Marine (Ship)
Service, Marine (Coast) Service, Private Land Mobile (Other)
Services, Aviation (Aircraft) Service, Aviation (Ground) Service,
General Mobile Radio Service (GMRS). In addition, applicants for
Amateur Radio vanity call signs will be required to submit an
advance payment.
---------------------------------------------------------------------------

4. Minimum Fee Payment Liability
48. Regulatees whose total fee liability, including all categories
of fees for which payment is due by an entity, amounts to less than $10
are exempted from fee payment in FY 1997.
5. Standard Fee Calculations and Payment Dates
49. As noted, the time for payment of standard fees and any
installment payments will be published in the Federal Register pursuant
to delegated authority. For licensees, permittees and holders of other
authorizations in the Common Carrier, Mass Media, and Cable Services
whose fees are not based on a subscriber, unit, or circuit count, fees
should be submitted for any authorization held as of October 1, 1996.
October 1 is the date to be used for establishing liability for payment
of standard fees since it is the first day of the federal government's
fiscal year.
50. In the case of regulatees whose fees are based upon a
subscriber, unit or circuit count, the number of a regulatees'
subscribers, units or circuits on December 31, 1996, will be used to
calculate the fee payment.^{18 We have selected the last date of the
calendar year because many of these entities file reports with us as of
that date. Others calculate their subscriber numbers as of that date
for internal purposes. Therefore, calculation of the regulatory fee as
of that date will facilitate both an entity's computation of its fee
payment and our verification that the correct fee payment has been
submitted.
---------------------------------------------------------------------------

\18\ Cable system operators are to compute their subscribers as
follows: Number of single family dwellings + number of individual
households in multiple dwelling unit (apartments, condominiums,
mobile home parks, etc.) paying at the basic subscriber rate + bulk
rate customers + courtesy and free service. Note: Bulk-Rate
Customers = Total annual bulk-rate charge divided by basic annual
subscription rate for individual households. Cable system operators
may base their count on ``a typical day in the last full week'' of
December 1996, rather than on a count as of December 31, 1996.
---------------------------------------------------------------------------

E. Schedule of Regulatory Fees

51. The Commission's proposed Schedule of Regulatory Fees for FY
1997 is contained in Attachment F of this NPRM.

IV. Procedural Matters

A. Comment Period and Procedures

52. Pursuant to procedures set forth in Sections 1.415 and 1.419 of
the Commission's rules, interested parties may file comments on or
before March 25, 1997, and reply comments on or before April 4, 1997.
All relevant comments will be considered by the Commission before final
action is taken in this proceeding. To file formally in this
proceeding, participants must file an original and four copies of all
comments, reply comments and supporting materials. If participants want
each Commissioner to receive a personal copy of their comments, an
original and nine copies must be filed. Comments and reply comments
should be sent to the Office of the Secretary, Federal Communications
Commission, Washington, D.C. 20554. Interested parties, who do not wish
to formally participate in this proceeding, may file informal comments
at the same address. Comments and reply comments will be available for
public inspection during regular business hours in the FCC Reference
Center (Room 239) of the Federal Communications Commission, 1919 M
Street, N.W., Washington, D.C. 20054.

B. Ex Parte Rules

53. This is a non-restricted notice and comment rulemaking
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed pursuant to the
Commission's rules. See 47 CFR Secs. 1.1202, 1.1203 and 1026(a).

C. Initial Regulatory Flexibility Analysis

54. As required by section 603 of the Regulatory Flexibility Act
(Public Law 96-354, 94 Stat. 1165, 5 U.S.C. Sec. 601 et seq. (1981)),
the Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the expected impact on small entities of the proposals
suggested in this document. The IRFA is set forth in Attachment A.
Written public comments are requested with respect to the IRFA. These
comments must be filed in accordance with the same filing deadlines for
comments on the rest of the NPRM, but they must have a separate and
distinct heading, designating the comments as responses to the IRFA.
The Secretary shall send a copy of this NPRM, including the IRFA, to
the Chief Counsel for Advocacy of the Small Business Administration in
accordance with section 603(a) of the Regulatory Flexibility Act.

D. Paperwork Reduction Act Compliance

55. The Federal Communications Commission, as part of its
continuing effort to reduce paperwork burden, invites the general
public and other Federal agencies to take this opportunity to comment
on the following proposed and/or continuing information collections, as
required by the Paperwork Reduction Act of 1995, Public Law 104-13.
Comments are requested concerning (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission's burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected, and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of

[[Page 10802]]

automated collection techniques or other forms of information
technology.
56. Written comments should be submitted on or before May 9, 1997.
If you anticipate that you will be submitting comments, but find it
difficult to do so within the period of time allowed by this notice,
you should advise the contact listed below as soon as possible.
57. Direct all comments to Dorothy Conway, Federal Communications
Commission, Room 234, 1919 M St. NW., Washington, DC 20554 or via
internet to dconway@fcc.gov, and Timothy Fain, OMB Desk Officer, 10236
NEOB, 725 17th St. NW., Washington, DC 20503 or via internet to
fain__t@a1.eop.gov.
58. For Further Information Contact: For additional information or
copies of the information collections, contact Dorothy Conway at 202-
418-0217 or via internet at dconway@fcc.gov.
OMB Approval Number: (Number should be included if it is a revision
to an existing collection).
Title:
Form No.:
Type of Review: (i.e. new collection, revision of existing
collection)
Respondents:
Number of Respondents:
Estimated Time Per Response:
Total Annual Burden:
Needs and Uses: (Brief description of how the information will be
used)

E. Authority and Further Information

59. Authority for this proceeding is contained in sections 4(i) and
(j), 9, and 303(r) of the Communications Act of 1934 as amended, 47
U.S.C. Secs. 154(1) and (j) and 159 and 303(r).
60. Further information about this proceeding may be obtained by
contacting the Fees Hotline at (202) 418-0192.

List of Subjects in 47 CFR Part 1

Administrative practice and procedures, Communications common
carriers, Penalties, Radio, Telecommunications, Television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Attachment A--Initial Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act (RFA),^{19 as
amended by the Contract with America Advancement Act (CWAAA), Public
Law 104-121, 110 Stat. 847 (1996),^{20 the Commission has prepared
an Initial Regulatory Flexibility Analysis (IRFA) of the expected
significant economic impact on small entities by the policies and rules
proposed in this Notice of Proposed Rulemaking In the Matter of
Assessment and Collection of Regulatory Fees for Fiscal Year 1997.
Written public comments are requested on the IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the NPRM provided above in Paragraph 53.
---------------------------------------------------------------------------

\19\ 5 U.S.C. Sec. 603.
\20\ Title II of the CWAAA is ``The Small Business Regulatory
Enforcement Fairness Act of 1996'' (SBREFA), codified at 5 U.S.C.
Sec. 601 et seq.
---------------------------------------------------------------------------

I. Need for and Objectives of the Proposed Rule

2. This rulemaking proceeding is initiated to obtain comments
concerning the Commission's proposed amendment of its Schedule of
Regulatory Fees in order to collect regulatory fees in the amount of
$152,523,000, the amount that Congress has required the Commission to
recover through regulatory fees in Fiscal Year 1997. The Commission
seeks to collect the necessary amount through its proposed revised
regulatory fees, as contained in the attached Schedule of Regulatory
Fees, in the most efficient manner possible and without undue burden to
the public.

II. Legal Basis

3. The proposed action is authorized under Sections (4)(i) and (j),
9 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
Secs. 154(i) and (j), 159, and 303(r).

III. Description and Estimate of the Number of Small Entities to
Which the Proposed Rule Will Apply

4. The RFA generally defines ``small entity'' as having the same
meaning as the terms ``small business,'' ``small organization,'' and
``small governmental jurisdiction'' and ``the same meaning as the term
`small business concern' under the Small Business Act unless the
Commission has developed one or more definitions that are appropriate
for its activities.^{21 A small business concern is one which: (1)
is independently owned and operated; (2) is not dominant in its field
of operation; and (3) satisfies any additional criteria established by
the Small Business Administration (SBA).^{22 The Small Business
Enforcement Fairness Act of 1996 (SBREFA) provision of the RFA also
applies to nonprofit organizations and to governmental organizations
such as governments of cities, counties, towns, townships, villages,
school districts, or special districts with populations of less than
50,000.^{23 There are 85,006 governmental entities in the United
States.^{24 5 U.S.C. Sec. 601(3) (incorporating by reference the
definition of ``small business concern'' in 15 U.S.C. Sec. 632).
Pursuant to 5 U.S.C. Sec. 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.''
---------------------------------------------------------------------------

\21\ 5 U.S.C. Sec. 601(3) (incorporating by reference the
definition of ``small business concern'' in 15 U.S.C. Sec. 632).
Pursuant to 5 U.S.C. Sec. 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.''
\22\ Small Business Act, 15 U.S.C. Sec. 632 (1996).
\23\ 5 U.S.C. Sec. 601(5).
\24\ United States Dept. of Commerce, Bureau of the Census, 1992
Census of Governments (1992 Census).
---------------------------------------------------------------------------

Cable Services or Systems

5. The SBA has developed a definition of small entities for cable
and other pay television services, which includes all such companies
generating $11 million or less in revenue annually.^{25 This
definition includes cable systems operators, closed circuit television
services, direct broadcast satellite services, multipoint distribution
systems, satellite master antenna systems and subscription television
services. According to the Census Bureau, there were 1,788 total cable
and other pay television services and 1,423 had less than $11 million
in revenue.^{26
---------------------------------------------------------------------------

\25\ 13 CFR Sec. 121.201, SIC 4841.
\26\ 1992 Economic Census Industry and Enterprise Receipts Size
Report, Table 2D, SIC 4841 (U.S. Bureau of the Census data under
contract to the Office of Advocacy of the U.S. Small Business
Administration).
---------------------------------------------------------------------------

6. The Commission has developed its own definition of a small cable
system operator for the purposes of rate regulation. Under the
Commission's rules, a ``small cable company,'' is one serving fewer
than 400,000 subscribers nationwide.^{27 Based on our most recent
information, we estimate that there were 1,439 cable operators that
qualified as

[[Page 10803]]

small cable system operators at the end of 1995.^{28 Since then,
some of those companies may have grown to serve over 400,000
subscribers, and others may have been involved in transactions that
caused them to be combined with other cable operators. Consequently, we
estimate that there are fewer than 1,439 small entity cable system
operators.
---------------------------------------------------------------------------

\27\ 47 CFR Sec. 76.901(e). The Commission developed this
definition based on its determination that a small cable system
operator is one with annual revenues of $100 million or less.
Implementation of Sections of the 1992 Cable Act: Rate Regulation,
Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC
Rcd 7393 (1995), 60 FR 10534 (February 27, 1995).
\28\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29,
1996 (based on figures for December 30, 1995).
---------------------------------------------------------------------------

7. The Communications Act also contains a definition of a small
cable system operator, 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.'' ^{29 The Commission has determined that there are
61,700,000 subscribers in the United States. Therefore, we found that
an operator serving fewer than 617,000 subscribers shall be deemed a
small operator, if its annual revenues, when combined with the total
annual revenues of all of its affiliates, do not exceed $250 million in
the aggregate.^{30 Based on available data, we find that the number
of cable operators serving 617,000 subscribers or less totals
1,450.^{31 We do not request nor do we collect information
concerning whether cable system operators are affiliated with entities
whose gross annual revenues exceed $250,000,000,^{32 and thus are
unable at this time to estimate with greater precision the number of
cable system operators that would qualify as small cable operators
under the definition in the Communications Act. It should be further
noted that recent industry estimates project that there will be a total
65,000,000 subcribers, and we have based our fee revenue estimates on
that figure.
---------------------------------------------------------------------------

\29\ 47 U.S.C. Sec. 543(m)(2).
\30\ 47 CFR Sec. 76.1403(b).
\31\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29,
1996 (based on figures for Dec. 30, 1995).
\32\ We do receive such information on a case-by-case basis only
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 76.1403(b) of the Commission's rules. See 47 CFR
Sec. 76.1403(d).
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8. Other Pay Services. Other pay television services are also
classified under SIC 4841, which includes cable systems operators,
closed circuit television services, direct broadcast satellite services
(DBS),^{33 multipoint distribution systems (MDS),^{34 satellite
master antenna systems (SMATV), and subscription television services.
---------------------------------------------------------------------------

\33\ Direct Broadcast Services (DBS) are discussed in depth with
the international services infra.
\34\ Multipoint Distribution Services (MDS) are discussed in
depth with the mass media services infra.
---------------------------------------------------------------------------

Common Carrier Services and Related Entities

9. According to the Telecommunications Industry Revenue:
Telecommunications Relay Service Fund Worksheet Data (TRS Worksheet),
there are 2,847 interstate carriers. These carriers include, inter
alia, local exchange carriers, wireline carriers and service providers,
interexchange carriers, competitive access providers, operator service
providers, pay telephone operators, providers of telephone toll
service, providers of telephone exchange service, and resellers.
10. The SBA has defined a small business for Radiotelephone
Communications (SIC 4812) and Telephone Communications, Except
Radiotelephone (4813), to be small entities when they have fewer than
1,500 employees.^{35 We first discuss generally the total number of
small telephone companies falling within both of those SIC categories.
Then, we discuss the number of small businesses within the two
subcategories, and attempt to refine further those estimates to
correspond with the categories of telephone companies that are commonly
used under our rules.
---------------------------------------------------------------------------

\35\ 13 CFR Sec. 121.201.
---------------------------------------------------------------------------

11. Because the small incumbent LECs subject to these rules are
either dominant in their field of operations or are not independently
owned and operated, consistent with our prior practice, they are
excluded from the definition of ``small entitiy'' and ``small business
concerns.'' \36\ Accordingly, our use of the terms ``small entities''
and ``small businesses'' does not encompass small incumbent LECs. Out
of an abundance of caution, however, for regulatory flexibility
analysis purposes, we will consider small incumbent LECs within this
analysis and use the term ``small incumbent LECs'' to refer to any
incumbent LECs that arguably might be defined by the SBA as ``small
business concerns.'' \37\
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\36\ See Implementation of the Local Competition Provisions in
the Telecommunications Act of 1996, First Report and Order, 11 FCC
Rcd 15499 (1996), 61 FR 45476 (August 29, 1996), motion for stay of
the FCC's rules pending judicial review denied, Implementation of
the Local Competition Provisions in the Telecommunications Act of
1996, Order, 11 FCC Rcd 11754 (1996), 61 FR 54099 (October 17,
1996), partial stay granted, Iowa Utilities Board v. FCC, No. 96-
3321, 1996 WL 589204 (8th Cir. 1996) at paragraphs 1328-1330 and
1342.
\37\ See id.
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12. Total Number of Telephone Companies Affected. The United States
Bureau of the Census (``the Census Bureau'') reports that, at the end
of 1992, there were 3,497 firms engaged in providing telephone
services, as defined therein, for at least one year.\38\ This number
contains a variety of different categories of carriers, including local
exchange carriers, interexchange carriers, competitive access
providers, cellular carriers, mobile service carriers, operator service
providers, pay telephone operators, personal communications services
providers, covered specialized mobile radio providers, and resellers.
It seems certain that some of those 3,497 telephone service firms may
not qualify as small entities or small incumbent LECs because they are
not ``independently owned and operated.'' \39\ For example, a PCS
provider that is affiliated with an interexchange carrier having more
than 1,500 employees would not meet the definition of a small business.
It seems reasonable to tentatively conclude that fewer than 3,497
telephone service firms are small entity telephone service firms or
small incumbent local exchange carriers.
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\38\ United States Department of Commerce, Bureau of the Census,
1992 Census of Transportation, Communications, and Utilities:
Establishment and Firm Size, at Firm Size 1-123 (1995) (1992
Census).
\39\ 15 U.S.C. Sec. 632(a)(1).
---------------------------------------------------------------------------

13. Wireline Carriers and Service Providers. The SBA has developed
a definition of small entities for telephone communications companies
except radiotelephone (wireless) companies. The Census Bureau reports
that, there were 2,321 such telephone companies in operation for at
least one year at the end of 1992.\40\ According to the SBA's
definition, a small business telephone company other than a
radiotelephone company is one employing fewer than 1,500 persons.\41\
All but 26 of the 2,321 non-radiotelephone companies listed by the
Census Bureau were reported to have fewer than 1,000 employees. Thus,
even if all 26 of those companies had more than 1,500 employees, there
would still be 2,295 non-radiotelephone companies that might qualify as
small entities or small incumbent LECs. We do not have information on
the number of carriers that are not independently owned and operated,
and thus are unable at this time to estimate with greater precision the
number of wireline carriers and service providers that would qualify as
small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 2,295 small telephone

[[Page 10804]]

communications companies other than radiotelephone companies.
---------------------------------------------------------------------------

\40\ 1992 Census, supra, at Firm Size 1-123.
\41\ 13 CFR Sec. 121.201, SIC Code 4812.
---------------------------------------------------------------------------

14. Local Exchange Carriers. Neither the Commission nor the SBA has
developed a definition for small providers of local exchange services
(LECs). The closest applicable definition under the SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies.\42\ The most reliable source of information regarding the
number of LECs nationwide is the data that we collect annually in
connection with the TRS Worksheet. According to our most recent data,
1,347 companies reported that they were engaged in the provision of
local exchange services.\43\ We do not have information on the number
of carriers that are not independently owned and operated, nor what
carriers have more than 1,500 employees, and thus are unable at this
time to estimate with greater precision the number of LECs that would
qualify as small business concerns under SBA's definition.
Consequently, we estimate that there are fewer than 1,347 small
incumbent LECs.
---------------------------------------------------------------------------

\42\ 13 CFR Sec. 121.201, SIC Code 4813.
\43\ Federal Communications Commission, CCB, Industry Analysis
Division, Telecommunications Industry Revenue: TRS Fund Worksheet
Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by
Class of Carrier) (December 1996) (TRS Worksheet).
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15. Interexchange Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA rules is for telephone communications
companies except radiotelephone (wireless) companies.\44\ The most
reliable source of information regarding the number of IXCs nationwide
is the data that we collect annually in connection with the TRS
Worksheet. According to our most recent data, 130 companies reported
that they were engaged in the provision of interexchange services.\45\
We do not have information on the number of carriers that are not
independently owned and operated, nor have more than 1,500 employees,
and thus we are unable at this time to estimate with greater precision
the number of IXCs that would qualify as small business concerns under
the SBA's definition. Consequently, we estimate that there are fewer
than 130 small entity IXCs.
---------------------------------------------------------------------------

\44\ 13 CFR Sec. 121.201, SIC 4813.
\45\ TRS Worksheet.
---------------------------------------------------------------------------

16. Competitive Access Providers. Neither the Commission nor the
SBA has developed a definition of small entities specifically
applicable to providers of competitive access services (CAPs). The
closest applicable definition under the SBA rules is for telephone
communications companies except radiotelephone (wireless)
companies.\46\ The most reliable source of information regarding the
number of CAPs nationwide is the data that we collect annually in
connection with the TRS Worksheet. According to our most recent data,
57 companies reported that they were engaged in the provision of
competitive access services.\47\ We do not have information on the
number of carriers that are not independently owned and operated, nor
have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of CAPs that would qualify
as small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 57 small CAPs.
---------------------------------------------------------------------------

\46\ 13 CFR Sec. 121.201, SIC 4813.
\47\ TRS Worksheet.
---------------------------------------------------------------------------

17. Operator Service Providers. Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
providers of operator services. The closest applicable definition under
the SBA rules is for telephone communications companies except
radiotelephone (wireless) companies.\48\ The most reliable source of
information regarding the number of operator service providers
nationwide is the data that we collect annually in connection with the
TRS Worksheet. According to our most recent data, 25 companies reported
that they were engaged in the provision of operator services.\49\ We do
not have information on the number of carriers that are not
independently owned and operated, nor have more than 1,500 employees,
and thus are unable at this time to estimate with greater precision the
number of operator service providers that would qualify as small
business concerns under the SBA's definition. Consequently, we estimate
that there are fewer than 25 small operator service providers.
---------------------------------------------------------------------------

\48\ 13 CFR Sec. 121.201, SIC 4813.
\49\ Id.
---------------------------------------------------------------------------

18. Pay Telephone Operators. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to pay
telephone operators. The closest applicable definition under SBA rules
is for telephone communications companies except radiotelephone
(wireless) companies.\50\ The most reliable source of information
regarding the number of pay telephone operators nationwide is the data
that we collect annually in connection with the TRS Worksheet.
According to our most recent data, 271 companies reported that they
were engaged in the provision of pay telephone services.\51\ We do not
have information on the number of carriers that are not independently
owned and operated, nor have more than 1,500 employees, and thus are
unable at this time to estimate with greater precision the number of
pay telephone operators that would qualify as small business concerns
under SBA's definition. Consequently, we estimate that there are fewer
than 271 small pay telephone operators.
---------------------------------------------------------------------------

\50\ 13 CFR Sec. 121.201, SIC 4813.
\51\ TRS Worksheet.
---------------------------------------------------------------------------

19. Resellers (including debit card providers). Neither the
Commission nor the SBA has developed a definition of small entities
specifically applicable to resellers. The closest applicable SBA
definition for a reseller is a telephone communications company except
radiotelephone (wireless) companies.\52\ However, the most reliable
source of information regarding the number of resellers nationwide is
the data that the Commission collects annually in connection with the
TRS Worksheet. According to our most recent data, 260 companies
reported that they were engaged in the resale of telephone service.\53\
We do not have information on the number of carriers that are not
independently owned and operated, nor have more than 1,500 employees,
and thus we are unable at this time to estimate with greater precision
the number of resellers that would qualify as small entities or small
incumbent LEC concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 260 small entity resellers.
---------------------------------------------------------------------------

\52\ 13 CFR Sec. 121.201, SIC 4813.
\53\ TRS Worksheet.
---------------------------------------------------------------------------

20. 800 Subscribers.\54\ Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to 800
subscribers. The most reliable source of information regarding the
number of 800 subscribers is data we collect on the number of 800
numbers in use.\55\ According to our most recent data, at the end of
1995, the number of 800 numbers in use was 6,987,063. We do not have
information on the number of carriers not independently owned and
operated, nor have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of 800
subscribers that would qualify as

[[Page 10805]]

small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 6,987,063 small entity 800
subscribers.
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\54\ We include all toll-free number subscribers in this
category, including 888 numbers.
\55\ Federal Communications Commission, CCB, Industry Analysis
Division, FCC Releases, Study on Telephone Trends, Tbl. 20 (May 16,
1996).
---------------------------------------------------------------------------

International Services

21. The Commission has not developed a definition of small entities
applicable to licensees in the international services. Therefore, the
applicable definition of small entity is the definition under the SBA
rules applicable to Communications Services, Not Elsewhere Classified
(NEC). This definition provides that a small entity is expressed as one
with $11.0 million or less in annual receipts.\56\ According to the
Census Bureau, there were a total of 848 communications services, NEC
in operation in 1992, and a total of 775 had annual receipts of less
than $9,999 million.\57\ The Census report does not provide more
precise data.
---------------------------------------------------------------------------

\56\ 13 CFR Sec. 120.121, SIC Code 4899.
\57\ 1992 Economic Census Industry and Enterprise Receipts Size
Report, Table 2D, SIC 4899 (U.S. Bureau of the Census data under
contract to the Office of Advocacy of the U.S. Small Business
Administration).
---------------------------------------------------------------------------

22. International Broadcast Stations. Commission records show that
there are 20 international broadcast station licensees. We do not
request nor collect annual revenue information, and thus are unable to
estimate the number of international broadcast licensees that would
constitute a small business under the SBA definition. However, the
Commission estimates that only six international broadcast stations are
subject to regulatory fee payments.
23. International Public Fixed Radio (Public and Control Stations).
There are 15 licensees in this service. We do not request nor
collect annual revenue information, and thus are unable to estimate the
number of international broadcast licensees that would constitute a
small business under the SBA definition.
24. Fixed Satellite Transmit/Receive Earth Stations. There are
approximately 4200 earth station authorizations, a portion of which are
Fixed Satellite Transmit/Receive Earth Stations. We do not request nor
collect annual revenue information, and thus are unable to estimate the
number of the earth stations that would constitute a small business
under the SBA definition.
25. Fixed Satellite Small Transmit/Receive Earth Stations. There
are 4200 earth station authorizations, a portion of which are Fixed
Satellite Small Transmit/Receive Earth Stations. We do not request nor
collect annual revenue information, and thus are unable to estimate the
number of fixed satellite transmit/receive earth stations may
constitute a small business under the SBA definition.
26. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems.
These stations operate on a primary basis, and frequency coordination
with terrestrial microwave systems is not required. Thus, a single
``blanket'' application may be filed for a specified number of small
antennas and one or more hub stations. The Commission has processed 377
applications. We do not request nor collect annual revenue information,
and thus are unable to estimate the number of VSAT systems that would
constitute a small business under the SBA definition.
27. Mobile Satellite Earth Stations. There are two licensees. We do
not request nor collect annual revenue information, and thus are unable
to estimate of the number of mobile satellite earth stations that would
constitute a small business under the SBA definition.
28. Radio Determination Satellite Earth Stations. There are four
licensees. We do not request nor collect annual revenue information,
and thus are unable to estimate of the number of radio determination
satellite earth stations that would constitute a small business under
the SBA definition.
29. Space Stations (Geostationary). Commission records reveal that
there are 37 space station licensees. We do not request nor collect
annual revenue information, and thus are unable to estimate of the
number of geostationary space stations that would constitute a small
business under the SBA definition.
30. Space Stations (Non-Geostationary). There are six Non-
Geostationary Space Station licensees, of which only one system is
operational. We do not request nor collect annual revenue information,
and thus are unable to estimate of the number of non-geostationary
space stations that would constitute a small business under the SBA
definition.
31. Direct Broadcast Satellites. Because DBS provides subscription
services, DBS falls within the SBA definition of Cable and Other Pay
Television Services (SIC 4841). This definition provides that a small
entity is expressed as one with $11.0 million or less in annual
receipts. ^{58 As of December 1996, there were eight DBS licensees.
However, the Commission does not collect annual revenue data for DBS
and, therefore, is unable to ascertain the number of small DBS
licensees that could be impacted by these proposed rules. Although DBS
service requires a great investment of capital for operation, we
acknowledge that there are several new entrants in this field that may
not yet have generated $11 million in annual receipts, and therefore
may be categorized as a small business, if independently owned and
operated.
---------------------------------------------------------------------------

\58\ 13 CFR 121.201, SIC 4841.
---------------------------------------------------------------------------

Mass Media Services

32. Commercial Radio and Television Services. The proposed rules
and policies will apply to television broadcasting licensees and radio
broadcasting licensees. ^{59 The SBA defines a television
broadcasting station that has $10.5 million or less in annual receipts
as a small business. ^{60 Television broadcasting stations consist
of establishments primarily engaged in broadcasting visual programs by
television to the public, except cable and other pay television
services. ^{61 Included in this industry are

[[Page 10806]]

commercial, religious, educational, and other television stations.
^{62 Also included are establishments primarily engaged in
television broadcasting and which produce taped television program
materials. ^{63 Separate establishments primarily engaged in
producing taped television program materials are classified under
another SIC number. ^{64 There were 1,509 television stations
operating in the nation in 1992. ^{65 That number has remained
fairly constant as indicated by the approximately 1,550 operating
television broadcasting stations in the nation as of August, 1996.
^{66 For 1992, ^{67 the number of television stations that
produced less than $10.0 million in revenue was 1,155 establishments.
^{68 Only commercial stations are subject to regulatory fees.
---------------------------------------------------------------------------

\59\ We tentatively conclude that the SBA's definition of
``small business'' greatly overstates the number of radio and
television broadcast stations that are small businesses and is not
suitable for purposes of determining the impact of the proposals on
small television and radio stations. However, for purposes of this
Policy Statement, we utilize the SBA's definition in determining the
number of small businesses to which the proposed rules would apply,
but we reserve the right to adopt a more suitable definition of
``small business'' as applied to radio and television broadcast
stations or other entities subject to this Policy Statement and to
consider further the issue of the number of small entities that are
radio and television broadcasters or other small media entities in
the future. See Report and Order in MM Docket No. 93-48 (Children's
Television Programming), 11 FCC Rcd 10660, 10737-38 (1996), 61 FR
43981 (August 27, 1996), citing 5 U.S.C. 601(3). We have pending
proceedings seeking comment on the definition of and data relating
to small businesses. In our Notice of Inquiry in GN Docket No. 96-
113 (Section 257 Proceeding to Identify and Eliminate Market Entry
Barriers for Small Businesses), FCC 96-216, released May 21, 1996,
we requested commenters to provide profile data about small
telecommunications businesses in particular services, including
television, and the market entry barriers they encounter, and we
also sought comment as to how to define small businesses for
purposes of implementing Section 257 of the Telecommunications Act
of 1996, which requires us to identify market entry barriers and to
prescribe regulations to eliminate those barriers. Additionally, in
our Order and Notice of Proposed Rule Making in MM Docket No. 96-16
(In the Matter of Streamlining Broadcast EEO Rule and Policies,
Vacating the EEO Forfeiture Policy Statement and Amending Section
1.80 of the Commission's Rules to Include EEO Forfeiture
Guidelines), 11 FCC Rcd 5154 (1996), 61 FR 9964 (March 12, 1996), we
invited comment as to whether relief should be afforded to stations:
(1) based on small staff and what size staff would be considered
sufficient for relief, e.g., 10 or fewer full-time employees; (2)
based on operation in a small market; or (3) based on operation in a
market with a small minority work force.
\60\ 13 CFR 121.201, SIC 4833.
\61\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1992 Census of Transportation,
Communications and Utilities, Establishment and Firm Size, Series
UC92-S-1, Appendix A-9 (1995).
\62\ Id. See Executive Office of the President, Office of
Management and Budget, Standard Industrial Classification Manual
(1987), at 283, which describes ``Television Broadcasting Stations''
(SIC Code 4833) as:
Establishments primarily engaged in broadcasting visual programs
by television to the public, except cable and other pay television
services. Included in this industry are commercial, religious,
educational and other television stations. Also included here are
establishments primarily engaged in television broadcasting and
which produce taped television program materials.
\63\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1992 Census of Transportation,
Communications And Utilities, Establishment and Firm Size, Series
UC92-S-1, Appendix A-9 (1995).
\64\ Id. SIC 7812 (Motion Picture and Video Tape Production);
SIC 7922 (Theatrical Producers and Miscellaneous Theatrical
Services) (producers of live radio and television programs).
\65\ FCC News Release No. 31327, January 13, 1993; Economics and
Statistics Administration, Bureau of Census, U.S. Department of
Commerce.
\66\ FCC News Release No. 64958, September 6, 1996.
\67\ Census for Communications' establishments are performed
every five years ending with a ``2'' or ``7''. See Economics and
Statistics Administration, Bureau of Census, U.S. Department of
Commerce.
\68\ The amount of $10 million was used to estimate the number
of small business establishments because the relevant Census
categories stopped at $9,999,999 and began at $10,000,000. No
category for $10.5 million existed. Thus, the number is as accurate
as it is possible to calculate with the available information.
---------------------------------------------------------------------------

33. Additionally, the Small Business Administration defines a radio
broadcasting station that has $5 million or less in annual receipts as
a small business. ^{69 A radio broadcasting station is an
establishment primarily engaged in broadcasting aural programs by radio
to the public. ^{70 Included in this industry are commercial,
religious, educational, and other radio stations. ^{71 Radio
broadcasting stations which primarily are engaged in radio broadcasting
and which produce radio program materials are similarly included.
^{72 However, radio stations which are separate establishments and
are primarily engaged in producing radio program material are
classified under another SIC number. ^{73 The 1992 Census indicates
that 96 percent (5,861 of 6,127) radio station establishments produced
less than $5 million in revenue in 1992. ^{74 Official Commission
records indicate that 11,334 individual radio stations were operating
in 1992. ^{75 As of August 1996, official Commission records
indicate that 12,088 radio stations were operating. ^{76 Only
commercial stations are subject to regulatory fees.
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\69\ 13 CFR 121.201, SIC 4832.
\70\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce.
\71\ Id.
\72\ Id.
\73\ Id.
\74\ The Census Bureau counts radio stations located at the same
facility as one establishment. Therefore, each co-located AM/FM
combination counts as one establishment.
\75\ FCC News Release No. 31327, January 13, 1993.
\76\ FCC News Release No. 64958, September 6, 1996.
---------------------------------------------------------------------------

34. Thus, the NPRM adopted today will affect approximately 1,550
full power television stations; approximately 1,194 of those stations
are considered small businesses, ^{77 and 12,088 full power radio
stations, approximately 11,605 of which are small businesses. ^{78
These estimates may overstate the number of small entities since the
revenue figures on which they are based do not include or aggregate
revenues from non-television or non-radio affiliated companies. There
are also 1,954 low power television stations (LPTV). ^{79 Given the
nature of this service, we will presume that all LPTV licensees qualify
as small entities under the SBA definition.
---------------------------------------------------------------------------

\77\ We use the 77 percent figure of TV stations operating at
less than $10 million for 1992 and apply it to the 1996 total of
1550 TV stations to arrive at 1,194 stations categorized as small
businesses.
\78\ We use the 96% figure of radio station establishments with
less than $5 million revenue from the Census data and apply it to
the 12,088 individual station count to arrive at 11,605 individual
stations as small businesses.
\79\ FCC News Release, Broadcast Station Totals as of December
31, 1996, No. 71831, January 21, 1997.
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Alternative Classification of Small Stations

35. An alternative way to classify small radio and television
stations is the number of employees. The Commission currently applies a
standard based on the number of employees in administering its Equal
Employment Opportunity Rule (EEO) for broadcasting.^{80 Thus, radio
or television stations with fewer than five full-time employees are
exempted from certain EEO reporting and record keeping
requirements.^{81 We estimate that the total number of broadcast
stations with 4 or fewer employees is approximately 4,239.^{82
---------------------------------------------------------------------------

\80\ The Commission's definition of a small broadcast station
for purposes of applying its EEO rules was adopted prior to the
requirement of approval by the SBA pursuant to Section 3(a) of the
Small Business Act, 15 U.S.C. Sec. 632 (a), as amended by Section
222 of the Small Business Credit and Business Opportunity
Enhancement Act of 1992, Public Law 102-366, Sec. 222(b)(1), 106
Stat. 999 (1992), as further amended by the Small Business
Administration Reauthorization and Amendments Act of 1994, Public
Law 103-403, Sec. 301, 108 Stat. 4187 (1994). However, this
definition was adopted after the public notice and the opportunity
for comment. See Report and Order in Docket No. 18244, 23 FCC 2d 430
(1970), 35 FR 8925 (June 6, 1970).
\81\See, e.g., 47 CFR Sec. 73.3612 (Requirement to file annual
employment reports on Form 395 applies to licensees with five or
more full-time employees); First Report and Order in Docket No.
21474 (Amendment of Broadcast Equal Employment Opportunity Rules and
FCC Form 395), 70 FCC 2d 1466 (1979), 50 FR 50329 (December 10,
1985). The Commission is currently considering how to decrease the
administrative burdens imposed by the EEO rule on small stations
while maintaining the effectiveness of our broadcast EEO
enforcement. Order and Notice of Proposed Rule Making in MM Docket
No. 96-16 (Streamlining Broadcast EEO Rule and Policies, Vacating
the EEO Forfeiture Policy Statement and Amending Section 1.80 of the
Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd
5154 (1996), 61 FR 9964 (March 12, 1996). One option under
consideration is whether to define a small station for purposes of
affording such relief as one with ten or fewer full-time employees.
\82\ Compilation of 1994 Broadcast Station Annual Employment
Reports (FCC Form 395B), Equal Opportunity Employment Branch, Mass
Media Bureau, FCC.
---------------------------------------------------------------------------

Auxiliary, Special Broadcast and Other Program Distribution Services

36. 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. Therefore, the applicable definition of small
entity is the definition under the Small Business Administration (SBA)
rules applicable to radio broadcasting stations (SIC 4832) and
television broadcasting stations (SIC 4833).
37. There are currently 2,720 FM translators and boosters, 4,952 TV
translators.^{83 The FCC 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, however, that most, if not all, of these auxiliary facilities
could be classified as small

[[Page 10807]]

businesses by themselves. We also recognize that most 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 (either $5 million for
a radio station or $10.5 million for a TV station). Furthermore, they
do not meet the Small Business Act's definition of a ``small business
concern'' because they are not independently owned and operated.^{84
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\83\ FCC News Release, Broadcast Station Totals as of December
31, 1996, No. 71831, January 21, 1997.
\84\ 15 U.S.C. Sec. 632.
---------------------------------------------------------------------------

38. Multipoint Distribution Service (MDS). This service involves a
variety of transmitters, which are used to relay programming to the
home or office, similar to that provided by cable television
systems.^{85 In connection with the 1996 MDS auction the Commission
defined small businesses as entities who had annual average gross
revenues for the three preceding years not in excess of $40
million.^{86 This definition of a small entity in the context of MDS
auctions has been approved by the SBA.^{87 These stations were
licensed prior to implementation of Section 309(j) of the Act. Licenses
for new MDS facilities are now awarded to auction winners in Basic
Trading Areas (BTAs) and BTA-like areas.^{88 The MDS auctions
resulted in 67 successful bidders obtaining licensing opportunities for
493 BTAs. Of the 67 auction winners, 61 meet the definition of a small
business. There are 1,573 previously authorized and proposed MDS
stations currently licensed. Thus, we conclude that there are 1,634 MDS
providers that are small businesses as deemed by the SBA and the
Commission's auction rules. It is estimated, however, that only 1,145
MDS licensees are subject to regulatory fees and the number which are
small businesses is unknown.
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\85\ For purposes of this item, MDS also includes single channel
Multipoint Distribution Service (MDS) and Multipoint Distribution
Service (MMDS) application and authorizations collectively.
\86\ See 47 CFR Sec. 1.2110 (a)(1).
\87\ 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, 10
FCC Rcd 9589 (1995), 60 FR 36524 (July 17, 1995).
\88\ Id. A Basic Trading Area (BTA) is the geographic area by
which the Multipoint Distribution Service is licensed. See Rand
McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition,
pp. 36-39.
---------------------------------------------------------------------------

Wireless and Commercial Mobile Services

39. Cellular Licensees. Neither the Commission nor the SBA has
developed a definition of small entities applicable to cellular
licensees. The closest applicable definition of small entity is the
definition under the SBA rules applicable to radiotelephone (wireless)
companies (SIC 4812). The most reliable source of information regarding
the number of cellular services carriers nationwide of which we are
aware appears to be the data that the Commission collects annually in
connection with the TRS Worksheet.^{89 According to the most recent
data, 792 companies reported that they were engaged in the provision of
cellular services.^{90 Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of cellular services carriers that would qualify
as small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 792 small cellular service carriers.
---------------------------------------------------------------------------

\89\ Federal Communications Commission. CCB industry Analysis
Division, Telecommunication Industry Revenue: TRS Worksheet Data,
Tbl. 1 (Average Total Telecommunication Revenue Reported by Class of
Carrier) (December 1996) (TRS Worksheet).
\90\ Id.
---------------------------------------------------------------------------

40. 220 MHz Radio Services. Since the Commission has not yet
defined a small business with respect to 220 MHz radio services, we
will utilize the SBA's definition applicable to radiotelephone
companies--i.e., an entity employing less than 1,500 persons.^{91
With respect to the 220 MHz services, the Commission has proposed a
two-tiered definition of small business for purposes of auctions: (1)
For Economic Area (EA) licensees,^{92 a firm with average annual
gross revenues of not more than $6 million for the preceding three
years; and (2) for regional and nationwide licensees, a firm with
average annual gross revenues of not more than $15 million for the
preceding three years.^{93 Since this definition has not yet been
approved by the SBA, we will utilize the SBA's definition applicable to
radiotelephone companies. Given the fact that nearly all radiotelephone
companies employ fewer than 1,500 employees,^{94 with respect to the
approximately 3,800 incumbent licensees in this service, we will
consider them as small businesses under the SBA definition.
---------------------------------------------------------------------------

\91\ 13 CFR Sec. 121.201, SIC 4812.
\92\ Economic Area (EA) licenses refer to the 60 channels in the
172 geographic areas as defined by the Bureau of Economic Analysis,
Department of Commerce. See 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, Second Memorandum Opinion and Order and
Third Notice of Proposed Rule Making, GN Docket 93-252, 10 FCC Rcd
6880 (1995), 60 FR 26861 (May 19, 1995).
\93\ Id.
\94\ See U.S. Bureau of the Census, U.S. Department of Commerce,
1992 Census of Transportation, Communications, and Utilities, UC92-
S-1, Subject Series, Establishment and Firm Size, Tbl. 5, Employment
Size of Firms; 1992, SIC 4812 (issued May 1995).
---------------------------------------------------------------------------

41. Private and Common Carrier Paging. The Commission has proposed
a two-tier definition of small businesses in the context of auctioning
licenses in the Common Carrier Paging and exclusive Private Carrier
Paging services. Under the proposal, a small business will be defined
as either (1) an entity that, together with its affiliates and
controlling principals, has average gross revenues for the three
preceding years of not more than $3 million, or (2) an entity that,
together with affiliates and controlling principals, has average gross
revenues for the three preceding calendar years of not more than $15
million. Since the SBA has not yet approved this definition for paging
services, we will utilize the SBA's definition applicable to
radiotelephone companies, i.e., an entity employing fewer than 1,500
persons.^{95 At present, there are approximately 24,000 Private
Paging licensees and 74,000 Common Carrier Paging licensees. We
estimate that the majority of private and common carrier paging
providers would qualify as small businesses under the SBA definition.
---------------------------------------------------------------------------

\95\ 13 CFR Sec. 121.201, SIC 4812.
---------------------------------------------------------------------------

42. Mobile Service Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. The closest
applicable definition under the SBA rules is for radiotelephone
(wireless) companies. The most reliable source of information regarding
the number of mobile service carriers nationwide of which we are aware
appears to be the data that the Commission collects annually in
connection with the TRS Worksheet. According to the most recent data,
117 companies reported that they were engaged in the provision of
mobile services.^{96 Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of mobile service carriers that would qualify
under the SBA's definition.

[[Page 10808]]

Consequently, we estimate that there are fewer than 117 small entity
mobile service carriers.
---------------------------------------------------------------------------

\96\ Id.
---------------------------------------------------------------------------

43. Broadband Personal Communications Service (PCS). The broadband
PCS spectrum is divided into six frequency blocks designated A through
F and the Commission has held auctions for each block. The Commission
defined ``small entity'' for Blocks C and F as an entity that has
average gross revenues of less than $40 million in the three previous
calendar years.^{97 For Block F, an additional classification for
``very small business'' was added and is defined as an entity that,
together with their affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years.^{98 These
regulations defining ``small entity'' in the context of broadband PCS
auctions have been approved by the SBA. No small businesses within the
SBA-approved definition 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% of the 1,479 licenses for Blocks D, E,
and F.^{99 However, licenses for blocks C through F have not been
awarded fully, therefore there are few, if any, small businesses
currently providing PCS services. Based on this information, we
conclude that the number of small broadband PCS licensees will include
the 90 winning C Block bidders and the 93 qualifying bidders in the D,
E, and F blocks, for a total of 183 small PCS providers as defined by
the SBA and the Commission's auction rules.
---------------------------------------------------------------------------

\97\ 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, FCC 96-278, WT Docket
No. 96-59, paras. 57-60 (released June 24, 1996), 61 FR 33859 (July
1, 1996); see also 47 CFR Sec. 24.720(b).
\98\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commerical Mobile
Radio Service Spectrum Cap, Report and Order, FCC 96-278, WT Docket
No. 96-59, para. 60 (1996), 61 FR 33859 (July 1, 1996).
\99\ FCC News, Broadband PCS, D, E and F Block Auction Closes,
No. 71744 (released January 14, 1997).
---------------------------------------------------------------------------

44. Narrowband PCS. The Commission has auctioned nationwide and
regional licenses for narrowband PCS. There are 11 nationwide and 30
regional licensees for narrowband PCS. The Commission does not have
sufficient information to determine whether any of these licensees are
small businesses within the SBA-approved definition. At present, there
have been no auctions held for the major trading area (MTA) and basic
trading area (BTA) narrowband PCS licenses. The Commission anticipates
a total of 561 MTA licenses and 2,958 BTA licenses will be awarded in
the auctions. Those auctions, however, have not yet been scheduled.
Given the facts that nearly all radiotelephone companies have fewer
than 1,500 employees and that no reliable estimate of the number of
prospective MTA and BTA narrowband licensees can be made, we assume,
that all of the licenses will be awarded to small entities, as that
term is defined by the SBA.
45. Rural Radiotelephone Service. The Commission has not adopted a
definition of small business specific to the Rural Radiotelephone
Service, which is defined in Section 22.99 of the Commission's
Rules.^{100 A significant subset of the Rural Radiotelephone Service
is BETRS, or Basic Exchange Telephone Radio Systems (the parameters of
which are defined in Sections 22.757 and 22.759 of the Commission's
Rules). Accordingly, we will use the SBA's definition applicable to
radiotelephone companies, i.e., an entity employing fewer than 1,500
persons. There are approximately 1,000 licensees in the Rural
Radiotelephone Service, and we estimate that almost all of them qualify
as small under the SBA's definition of a small business.^{101
---------------------------------------------------------------------------

\100\ 47 CFR Sec. 22.9.
\101\ 13 CFR Sec. 121.201, SIC 4812.
---------------------------------------------------------------------------

46. Air-Ground Radiotelephone Service. The Commission has not
adopted a definition of small business specific to the Air-Ground
Radiotelephone Service, which is defined in Section 22.99 of the
Commission's Rules.^{102 Accordingly, we will use the SBA's
definition applicable to radiotelephone companies, i.e., an entity
employing fewer than 1,500 persons.^{103 There are approximately 100
licensees in the Air-Ground Radiotelephone Service, and we estimate
that almost all of them qualify as small under the SBA definition.
---------------------------------------------------------------------------

\102\ Id.
\103\ Id.
---------------------------------------------------------------------------

47. Specialized Mobile Radio Licensees (SMR). Pursuant to 47 CFR
Sec. 90.814(b)(1), the Commission awards bidding credits in auctions
for geographic area 800 MHz and 900 MHz Specialized Mobile Radio (SMR)
licenses to firms that had revenues of less than $15 million in each of
the three previous calendar years. This regulation defining ``small
entity'' in the context of 800 MHz and 900 MHz SMR has been approved by
the SBA.^{104
---------------------------------------------------------------------------

\104\ See Amendment of Parts 2 and 90 of the Commission's Rules
to Provide for the Use of 200 Channels Outside the Designated Filing
Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the
Specialized Mobile Radio Pool, PR Docket No. 89-583, Second Order on
Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639, 2693-
702 (1995), 60 FR 48913 (September 21, 1995); Amendment of Part 90
of the Commission's Rules to Facilitate Future Development of SMR
Systems in the 800 MHz Frequency Band, PR Docket No. 93-144, First
Report and Order, Eighth Report and Order, and Second Further Notice
of Proposed Rule Making, 11 FCC Rcd 1463 (1995), 61 FR 6212
(February 16, 1996).
---------------------------------------------------------------------------

48. The proposed fees in the NPRM applies to SMR providers in the
800 MHz and 900 MHz bands that either hold geographic area licenses or
have obtained extended implementation authorizations. We do not know
how many firms provide 800 MHz or 900 MHz geographic area SMR service
pursuant to extended implementation authorizations, nor how many of
these providers have annual revenues of less than $15 million. We do
know that one of these firms has over $15 million in revenues. We
assume that all of the remaining existing extended implementation
authorizations are held by small entities, as that term is defined by
the SBA.
49. The Commission recently held auctions for geographic area
licenses in the 900 MHz SMR band. There were 60 winning bidders who
qualified as small entities in the 900 MHz auction. Based on this
information, we conclude that the number of geographic area SMR
licensees affected includes these 60 small entities.
50. Private Land Mobile Radio Licensees (PLMR). These radios are
used by companies of all sizes operating in all U.S. business
categories. Because of the vast array of PLMR users, the Commission has
not developed nor would it be possible to develop a definition of small
entities specifically applicable to PLMR users. For the purpose of
determining whether a licensee is a small business as defined by the
SBA, each licensee would need to be evaluated within its own business
area.
51. The Commission is unable at this time to estimate the number of
small businesses which could be impacted by the rules. However, the
Commission's 1994 Annual Report on PLMRs ^{105 indicates that at the
end of fiscal year 1994 there were 1,087,267 licensees operating
12,481,989 transmitters in the PLMR bands below 512 MHz. Further,
because any entity engaged in a commercial activity is eligible to hold
a PLMR license, these rules could potentially impact every small
business in the U.S.
---------------------------------------------------------------------------

\105\ Federal Communications Commission, 60th Annual Report,
Fiscal Year 1994 at 116.

---------------------------------------------------------------------------

[[Page 10809]]

52. Amateur Radio Service. We estimate that 10,000 applicants will
apply for vanity call signs in FY 1997. All are presumed to be
individuals. All other amateur licensees are exempt from payment of
regulatory fees.
53. Aviation and Marine Radio Service. Small businesses in the
aviation and marine radio services use a marine very high frequency
(VHF) radio, any type of emergency position indicating radio beacon
(EPIRB), and/or radar, a VHF aircraft radio, and/or any type of
emergency locator transmitter (ELT). The Commission has not developed a
definition of small entities specifically applicable to these small
businesses. Therefore, the applicable definition of small entity is the
definition under the Small Business Administration rules applicable to
water transportation and transportation by air. This definition
provides that a small entity is any entity employing less than 500
persons for water transportation, and 1,500 for transportation by
air.^{106 The Commission is unable at this time to make a meaningful
estimate of the number of potential small businesses.
---------------------------------------------------------------------------

\106\ See 13 CFR Sec. 121.201, SIC Major Group Code 44--Water
Transportation (4491, 4492, 4493, 4499) and 45--Transportation by
Air (4522, 4581).
---------------------------------------------------------------------------

54. Most applicants for individual 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. Therefore,
for purposes of our evaluations and conclusions in this FRFA, we
estimate that there may be at least 712,000 potential licensees which
are small businesses, as that term is defined by the SBA. We estimate,
however, that only 22,250 will be subject to FY 1997 regulatory fees.
55. Microwave Video Services. Microwave services includes common
carrier,^{107 private operational fixed,^{108 and broadcast
auxiliary radio services.^{109 At present, there are 22,015 common
carrier licensees, approximately 61,670 private operational fixed
licensees and broadcast auxiliary radio licensees in the microwave
services. Inasmuch as the Commission has not yet defined a small
business with respect to microwave services, we will utilize the SBA's
definition applicable to radiotelephone companies--i.e., an entity with
less than 1,500 persons.^{110 As for estimates regarding small
businesses within the broadcast service, we rely on our estimates as
discussed under mass media services. Although some of these companies
may have more than 1,500 employees, we are unable at this time to
estimate with greater precision the number of microwave service
providers other than broadcast licensees that would qualify under the
SBA's definition.
---------------------------------------------------------------------------

\107\ 47 CFR Sec. 101 et seq (formerly part 21 of the
Commission's rules).
\108\ Persons eligible under Parts 80 and 90 of the Commission's
rules can use private Operational Fixed Microwave services. See 47
CFR Secs. 80 et seq, 90 et seq. Stations in this service are called
operational-fixed to distinguish them from common carrier and public
fixed stations. Only the licensee may use an operational-fixed
station, and only for communications related to the licensee's
commercial, industrial, or safety operations.
\109\ Broadcast Auxiliary Microwave Service is governed by Part
74 of Title 47 of the Commission's rules. See 47 CFR Sec. 74 et seq.
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 broadcast auxiliary microwave services also
include mobile TV pickups which relay signals from a remote location
back to the studio.
\110\ 13 CFR Sec. 121.201, SIC 4812.
---------------------------------------------------------------------------

56. Public Safety Radio Services. Public Safety radio services
include police, fire, local government, forestry conservation, highway
maintenance, and emergency medical services.^{111 There are a total
of approximately 127,540 licensees within these services. Governmental
entities as well as private businesses comprise the licensees for these
services. As we indicated in the introductory paragraph, all
governmental entities with populations of less than 50,000 fall within
the definition of a small business.^{112 There are approximately
37,566 governmental entities with populations of less than
50,000.^{113 All of these licensees are exempt from payment of
regulatory fees.
---------------------------------------------------------------------------

\111\ 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 Secs. 90.15 through 90.27. The police service includes
26,608 licensees that serve state, county, and municipal enforcement
through telephony (voice), telegraphy (code) and teletype and
facsimile (printed material). The fire radio service includes 22,677
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 40,512 licensees
that are state, county, or municipal entities that use the radio for
official purposes not covered by other public safety services. There
are 7,325 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 9,480 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 1,460
licensees in the Emergency Medical Radio Service (EMRS) use the 39
channels allocated to this service for emergency medical service
communication related to the actual delivery of emergency medical
treatment. 47 CFR Sec. Sec. 90.15 through 90.27. The 19,478
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 Secs. 90.33
through 90.55.
\112\ 5 U.S.C. Sec. 601(5).
\113\ United States Dept. of Commerce, Bureau of the Census,
1992 Census of Governments (1992 Census).
---------------------------------------------------------------------------

57. Personal Radio Services. Personal radio services provide short-
range, low power radio for personal communications, radio signalling
and business communications not provided for in other services. These
services include citizen band (CB) radio service, general mobile radio
service (GMRS), radio control radio service, and family radio service
(FRS).^{114 Inasmuch as the CB, GMRS, and FRS licensees are
individuals, no small business definition applies for these services.
We are unable at this time to estimate the number of licensees that
would qualify as small under the SBA's definition, however, only GMRS
licensees are subject to regulatory fees.
---------------------------------------------------------------------------

\114\ Licensees in the Citizens Band (CB) Radio Service, General
Mobile Radio Service (GMRS), Radio Control (R/C) Radio Service and
Family Radio Service (FRS) are governed by subpart D, subpart A,
subpart C, and subpart B, respectively, of Part 95 of the
Commission's rules. 47 CFR Secs. 95.401 through 95.428; Secs. 95.1
through 95.181; Secs. 95.201 through 95.225; 47 CFR Secs. 95.191
through 95.194.
---------------------------------------------------------------------------

58. Offshore Radiotelephone Service. This service operates on
several UHF TV broadcast channels that are not used for TV broadcasting
in the coastal area of the states bordering the Gulf of Mexico.^{115
At present, there are approximately 55 licensees in this service. We
are unable at this time to estimate the number of licensees that would
qualify as small under the SBA's definition.
---------------------------------------------------------------------------

\115\ These licensees are governed by subpart I of part 22 of
the Commission's rules. 47 CFR Sec. 22.1001 through 22.1037.
---------------------------------------------------------------------------

IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements

59. With certain exceptions, the Commission's Schedule of
Regulatory Fees applies to all Commission licensees and regulatees.
Most licensees will be required to count the number of licenses or call
signs authorized, complete and submit an FCC Form 159, ``FCC Remittance
Advice,'' and pay a regulatory fee based on the number of licenses or
call signs.^{116 Interstate

[[Page 10810]]

telephone service providers must compute their annual regulatory fee
based on their adjusted gross interstate revenue using information they
already supply to the Commission in compliance with the TRS Fund, and
they must complete and submit the FCC Form 159. Compliance with the fee
schedule will require some licensees to tabulate the number of units
(e.g., cellular telephones, pagers, cable TV subscribers) they have in
service, complete and submit an FCC Form 159. Licensees ordinarily will
keep a list of the number of units they have in service as part of
their normal business practices. No additional outside professional
skills are required to complete the FCC Form 159, and it can be
completed by the employees responsible for an entity's business
records.
---------------------------------------------------------------------------

\116\ The following categories are exempt from the Commission's
Schedule of Regulatory Fees: Amateur radio licensees (except
applicants for vanity call signs) and operators in other non-
licensed services (e.g., Personal Radio, part 15, ship and
aircraft). Governments and non-profit (exempt under Section 501(c)
of the Internal Revenue Code) entities are exempt from payment of
regulatory fees and need not submit payment. Non-commercial
educational broadcast licensees are exempt from regulatory fees as
are licensees of auxiliary broadcast services such as low power
auxiliary stations, television auxiliary service stations, remote
pickup stations and aural broadcast auxiliary stations where such
licenses are used in conjunction with commonly owned non-commercial
educational stations. Emergency Alert System licenses for auxiliary
service facilities are also exempt as are instructional television
fixed service licensees. Regulatory fees are automatically waived
for the licensee of any translator station that: (1) is not licensed
to, in whole or in part, and does not have common ownership with,
the licensee of a commercial broadcast station; (2) does not derive
income from advertising; and (3) is dependent on subscriptions or
contributions from members of the community served for support.
Receive only earth station permittees are exempt from payment of
regulatory fees. A regulatee will be relieved of its fee payment
requirement if its total fee due, including all categories of fees
for which payment is due by the entity, amounts to less than $10.
---------------------------------------------------------------------------

60. Each licensee must submit the FCC Form 159 to the Commission's
lockbox bank after computing the number of units subject to the fee. As
an option, licensees are permitted to file electronically or on
computer diskette to minimize the burden of submitting multiple copies
of the FCC Form 159. Although not mandatory, the latter procedure may
require additional technical skills. Licensees who pay small fees in
advance supply fee information as part of their application and do not
need to use the FCC Form 159.
61. 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 fee of an additional 25% in addition to the
required fee.^{117 Until payment is received, no new or pending
applications will be processed, and existing authorizations may be
subject to rescission.^{118 Further, in accordance with the Debt
Collection Improvement Act of 1996, federal agencies may bar a person
or entity from obtaining a federal loan or loan insurance guarantees if
that person or entity fails to pay a delinquent debt owed to any
federal agency.^{119 Thus, 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.^{120
---------------------------------------------------------------------------

\117\ 47 U.S.C. Sec. 1.1164(a).
\118\ 47 U.S.C. Sec. 1.1164(c).
\119\ Public Law 104-134, 110 Stat. 1321 (1996).
\120\ 31 U.S.C. Sec. 7701(c)(2)(B).
---------------------------------------------------------------------------

62. The Commission's rules currently make provision for relief in
exceptional circumstances. Persons or entities that believe they have
been placed in the wrong regulatory fee category or are experiencing
extraordinary and compelling financial hardship, upon a showing that
such circumstances override the public interest in reimbursing the
Commission for its regulatory costs, may request a waiver, reduction or
deferment of payment of the regulatory fee.^{121 However, timely
submission of the required regulatory fee must accompany requests for
waivers or reductions. This will avoid any late payment penalty if the
request is denied. The fee will be refunded if the request is granted.
In exceptional and compelling instances (where payment of the
regulatory fee along with the waiver or reduction request could result
in reduction of service to a community or other financial hardship to
the licensee), the Commission will accept a petition to defer payment
along with a waiver or reduction request.
---------------------------------------------------------------------------

\121\ 47 U.S.C. Sec. 1.1166.
---------------------------------------------------------------------------

V. Significant Alternatives To Proposed Rule Which Minimize
Significant Economic Impact on Small Entities and Accomplish Stated
Objectives

63. The Omnibus Consolidated Appropriation Act, Public Law 104-208,
requires the Commission to revise its Schedule of Regulatory Fees in
order to recover the amount of regulatory fees that Congress, pursuant
to Section 9(a) of the Communications Act, as amended, has required it
to collect for Fiscal Year (FY) 1997. See! 47 U.S.C. Sec. 159 (a). We
seek comment on the proposed methodology for implementing these
statutory requirements and any other potential impact of these
proposals on small business entities.
64. With the introduction of actual cost accounting data for
computation of regulatory fees, we found that some fees which were very
small in previous years would have increased dramatically. The
methodology proposed in this NPRM minimizes this impact by limiting the
amount of increase and shifting costs to other services which, for the
most part, are larger entities. We seek comment on this proposal.
65. Conversely, we have found that our costs for regulating
commercial microwave (domestic public fixed) services are significantly
lower than previously thought. We are, therefore, proposing to
eliminate the annual ``large'' regulatory fee for domestic public fixed
services and combining this fee category with the private microwave
service with a single ``microwave'' designation. The impact on domestic
public fixed licensees will be a reduction of the fee to a ``small'' up
front payment for the entire license term applied only to new,
modification and renewal applicants. Current domestic public fixed
licensees would be exempt from payment of a regulatory fee until such
time as they apply for a modification or renewal of their license.
66. This item also solicits alternative methodologies for assessing
fees to recover the regulatory costs attributable to AM and FM radio
stations. The radio industry has requested relief for small stations,
and we currently have received two alternative proposals which are
being evaluated. One would segment licensees by Arbitron radio markets
in addition to station class.^{122 The other proposal would segment
licensees by service area population in addition to station
class.^{123 The impact of adoption of either alternative proposal is
unknown at this time, although either proposal could be expected to
result in lower fees for smaller, less powerful stations relative to
larger, more powerful stations in the same radio market; or stations
potentially serving a larger population. We seek comment on these
alternative proposals and the impact they may have on small entities.
---------------------------------------------------------------------------

\122\ See discussion of Montana Broadcasters Association
Comments at NPRM paragraphs 29-32 supra.
\123\ See discussion of NAB Comments at NPRM paragraphs 33-36
supra.
---------------------------------------------------------------------------

67. Several categories of licensees and regulatees are exempt from
payment of regulatory fees. See Footnote 3 supra.

VI. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule

68. None.

Attachment B--Sources of Payment Unit Estimates for FY 1997

In order to calculate individual service fees for FY 1997, we
adjusted FY 1996 payment units for each service to

[[Page 10811]]

more accurately reflect expected FY 1997 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.
We tried to obtain verification for these estimates from multiple
sources and, in all cases, we compared FY 1997 estimates with actual FY
1996 payment units to ensure that our revised estimates were
reasonable. Where it made sense, we adjusted and/or rounded our final
estimates to take into consideration the fact that certain variables
that impact on the number of payment units cannot yet be estimated
exactly. These include an unknown number of waivers and/or exemptions
that may occur in FY 1997 and the fact that, in many services, the
number of actual licensees or station operators fluctuates from time to
time due to economic, technical or other reasons. Therefore, when we
note, for example, that our estimated FY 1997 payment units are based
on FY 1996 actual payment units, it does not necessarily mean that our
FY 1997 projection is exactly the same number as FY 1996. It means that
we have either rounded the FY 1997 number or adjusted it slightly to
account for these variables.

----------------------------------------------------------------------------------------------------------------
Fee category Sources of payment unit estimates
----------------------------------------------------------------------------------------------------------------
Land Mobile (All), Microwave, IVDS \124\, Based on Wireless Telecommunications Bureau (WTB) projections of new
Marine (Ship & Coast), Aviation applications and renewals taking into consideration existing
(Aircraft & Ground), GMRS, Amateur Commission licensee data bases. Aviation (Aircraft) and Marine
Vanity Call Signs, Domestic Public Fixed. (Ship) estimates have been adjusted to take into consideration
proposals to license portions of these services on a voluntary
basis.
CMRS Mobile Services (incl. Cellular/ Based on actual FY 1996 payment units adjusted to take into
Public Mobile Radio Services and Two Way consideration industry estimates of growth between FY 1996 and FY
Paging Services) \125\. 1997 and Wireless Telecommunications Bureau projections of new
applications and average number of mobile units associated with each
application.
CMRS One Way Paging Services............. Based on industry estimates of the number of pager units in
operation.
AM/FM Radio Stations..................... Based on actual FY 1996 payment units.
UHF/VHF Television Stations.............. Based on actual FY 1996 payment units.
AM/FM/TV Construction Permits............ Based on actual FY 1996 payment units.
LPTV, Translators and Boosters........... Based on actual FY 1996 payment units.
Auxiliaries.............................. Based on actual FY 1996 payment units.
MDS/MMDS................................. Based on actual FY 1996 payment units.
Cable Antenna Relay Service (CARS)....... Based on actual FY 1996 payment units.
Cable Television System Subscribers...... Based on Cable Services Bureau and industry estimates of
subscribership.
IXCs/LECs,CAPs, Other Service Providers.. Based on actual FY 1996 interstate revenues associated with
contributions to the Telecommunications Relay System (TRS) Fund,
adjusted to take into consideration FY 1997 revenue growth in this
industry as estimated by the Common Carrier Bureau.
Earth Stations........................... Based on actual FY 1996 payment units.
Space Stations & LEOs.................... Based on International Bureau licensee data bases.
International Bearer Circuits............ Based on International Bureau estimate.
International HF Broadcast Stations, Based on actual FY 1996 payment units.
International Public Fixed Radio Service.
----------------------------------------------------------------------------------------------------------------
\124\ The Wireless Telecommunications Bureau's staff advises that they do not anticipate receiving any
applications for IVDS in FY 1997. Therefore, since there is no volume, there will be no regulatory fee in the
IVDS category for FY 1997.
\125\ Licensees in the PMRS were given until August of 1996 to decide whether to convert to CMRS. For FY 1997,
we anticipate a substantial increase in the volume of licensees in the CMRS categories and a corresponding
decrease in the number of licensees remaining in the PMRS category.

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Attachment F--FY 1997 Schedule of Regulatory Fees

------------------------------------------------------------------------
Annual
Fee category regulatory fee
------------------------------------------------------------------------
PMRS (per license) (Formerly Land Mobile--Exclusive Use
at 220-222 MHz, above 470 MHz, Base Station and SMRS)
(47 CFR Part 90)....................................... 10
Microwave (per license) (47 CFR Part 101)............... 10
Interactive Video Data Service (per license) (47 CFR
Part 95)............................................... (\1\)
Marine (Ship) (per station) (47 CFR Part 80)............ 5
Marine (Coast) (per license) (47 CFR Part 80)........... 5
General Mobile Radio Service (per license) (47 CFR Part
95).................................................... 5
Land Mobile (per license) (all stations not covered by
PMRS and CMRS)......................................... 5
Aviation (Aircraft) (per station) (47 CFR Part 87)...... 5
Aviation (Ground) (per license) (47 CFR Part 87)........ 5
Amateur Vanity Call Signs (per call sign) (47 CFR Part
97).................................................... 5
CMRS Mobile Services (per unit) (47 CFR Parts 20, 22,
24, 80 and 90)......................................... .24
CMRS One-Way Paging (per unit) (47 CFR Parts 20, 22 and
90).................................................... .03
Multipoint Distribution Services (per call sign) (47 CFR
Part 21)............................................... 215
AM Radio (47 CFR Part 73):
Class A............................................. 1,750
Class B............................................. 965
Class C............................................. 390
Class D............................................. 480
Construction Permits................................ 195
FM Radio (47 CFR Part 73):
Classes C, C1, C2, B................................ 1,750
Classes A, B1, C3................................... 1,050
Construction Permits................................ 965
TV (47 CFR Part 73) VHF Commercial:
Markets 1-10........................................ 44,700
Markets 11-25....................................... 30,500
Markets 26-50....................................... 16,350
Markets 51-100...................................... 4,925
Remaining Markets................................... 835
Construction Permits................................ 7,750
TV (47 CFR Part 73) UHF Commercial:
Markets 1-10........................................ 18,875
Markets 11-25....................................... 15,625
Markets 26-50....................................... 8,250
Markets 51-100...................................... 2,875
Remaining Markets................................... 815
Construction Permits................................ 5,950
Satellite Television Stations (All Markets)............. 975
Construction Permits--Satellite Television Stations..... 350
Low Power TV, TV/FM Translators & Boosters (47 CFR Part
74).................................................... 225
Broadcast Auxiliary (47 CFR Part 74).................... 25
Cable Antenna Relay Service (47 CFR Part 78)............ 65
Cable Television Systems (per subscriber) (47 CFR Part
76).................................................... .55
Interstate Telephone Service Providers (per revenue
dollar)................................................ .00119
Earth Stations (47 CFR Part 25)......................... 515
Space Stations (per operational station in
geosynchronous orbit) (47 CFR Part 25) also includes
Direct Broadcast Satellite Service (per operational
station) (47 CFR Part 100)............................. 98,575
Low Earth Orbit Satellite (per operational system) (47
CFR Part 25)........................................... 136,500
INMARSAT/INTELSAT Signatory (per signatory)............. 326,025
International Circuits (per active 64KB circuit)........ 5
International Public Fixed (per call sign) (47 CFR Part
23).................................................... 315
International (HF) Broadcast (47 CFR Part 73)........... 390
------------------------------------------------------------------------
\1\ No fee.

Attachment G--Comparison Between FY 1996 and FY 1997 Proposed
Regulatory Fees

------------------------------------------------------------------------
Annual
Fee category regulatory fee NPRM proposed
FY 1996 fee FY 1997
------------------------------------------------------------------------
PMRS (per license) (Formerly Land Mobile-
Exclusive Use at 220-222 Mhz, above 470
Mhz, Base Station and SMRS) (47 CFR
Part 90)............................... 7 10
Microwave (per license) (47 CFR Part
101)................................... 7 10
Interactive Video Data Service (per
license) (47 CFR Part 95).............. 7 (\1\)

[[Page 10816]]

Marine (Ship) (per station) (47 CFR Part
80).................................... 3 5
Marine (Coast) (per license) (47 CFR
Part 80)............................... 3 5
General Mobile Radio Service (per
license) (47 CFR Part 95).............. 3 5
Land Mobile (per license) (all stations
not covered by PMRS and CMRS).......... 3 5
Aviation (Aircraft) (per station) (47
CFR Part 87)........................... 3 5
Aviation (Ground) (per license) (47 CFR
Part 87)............................... 3 5
Amateur Vanity Call Signs (per call
sign) (47 CFR Part 97)................. 3 5
CMRS Mobile Services (per unit) (47 CFR
Parts 20, 22, 24, 80 and 90)........... .17 .24
CMRS One-Way Paging (per unit) (47 CFR
Parts 20, 22, and 90).................. .02 .03
Domestic Public Fixed Radio............. 155 (\2\)
Multipoint Distribution Services (per
call sign) (47 CFR Part 21)............ 155 215
AM Radio (47 CFR Part 73):
Class A............................. 1,250 1,750
Class B............................. 690 965
Class C............................. 280 390
Class D............................. 345 480
Construction Permits................ 140 195
FM Radio (47 CFR Part 73):
Classes C, C1, C2, B................ 1,250 1,750
Classes A, B1, C3................... 830 1,050
Construction Permits................ 690 965
TV (47 CFR Part 73) VHF Commercial:
Markets 1-10........................ 32,000 44,700
Markets 11-25....................... 26,000 30,500
Markets 26-50....................... 17,000 16,350
Markets 51-100...................... 9,000 4,925
Remaining Markets................... 2,500 835
Construction Permits................ 5,550 7,750
TV (47 CFR Part 73) UHF Commercial:
Markets 1-10........................ 25,000 18,875
Markets 11-25....................... 20,000 15,625
Markets 26-50....................... 13,000 8,250
Markets 51-100...................... 7,000 2,875
Remaining Markets................... 2,000 815
Construction Permits................ 4,425 5,950
Satellite Television Stations (All
Markets)............................... 690 975
Construction Permits--Satellite
Television Stations.................... 250 350
Low Power TV, TV/FM Translators &
Boosters (47 CFR Part 74).............. 190 225
Broadcast Auxiliary (47 CFR Part 74).... 35 25
Cable Antenna Relay Service (47 CFR Part
78).................................... 35 65
Earth Stations (47 CFR Part 25)......... 370 515
Cable Television Systems (per
subscriber) (47 CFR Part 76)........... .55 .55
Interstate Telephone Service Providers
(per revenue dollar)................... .00098 .00119
Space Stations (per operational station
in geosynchronous orbit) (47 CFR Part
25) also includes Direct Broadcast
Satellite Service (per operational
station) (47 CFR Part 100)............. 70,575 98,575
Low Earth Orbit Satellite (per
operational system) (47 CFR Part 25)... 97,725 136,500
INMARSAT/INTELSAT Signatory (per
signatory)............................. 233,425 326,025
International Circuits (per active 64KB
circuit)............................... 4 5
International Public Fixed (per call
sign) (47 CFR Part 23)................. 225 315
International (HF) Broadcast (47 CFR
Part 73)............................... 280 390
------------------------------------------------------------------------
\1\ No fee.
\2\ See microwave.

Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees

1. The guidelines below provide an explanation of regulatory fee
categories established by the Schedule of Regulatory Fees in section 9
(g) of the Communications Act, 47 U.S.C. Sec. 159(g) as modified in the
instant Report and Order. Where regulatory fee categories need
interpretation or clarification, we have relied on the legislative
history of section 9, our own experience in establishing and regulating
the Schedule of Regulatory Fees for Fiscal Years (FY) 1994 and 1995 and
the services subject to the fee schedule, and the comments of the
parties in our proceeding to adopt fees for FY 1995. The categories and
amounts set out in the schedule have been modified to reflect changes
in the number of payment units, additions and changes in the services
subject to the fee requirement and the benefits derived from the
Commission's regulatory activities, and to simplify the structure of
the schedule. The schedule may be similarly modified or adjusted in
future years to reflect changes in the Commission's budget and in the
services regulated by the Commission. See 47 U.S.C. Sec. 159(b)(2),
(3).
2. Exemptions. Governments and nonprofit entities are exempt from
paying regulatory fees and should not submit payment. A nonprofit
entity may be asked to submit a current IRS Determination Letter
documenting that it is exempt from taxes under Section 501 of the
Internal Revenue Code or the certification of a governmental authority
attesting to its nonprofit status. The governmental exemption applies
even where the government-owned or community-owned facility is in

[[Page 10817]]

competition with a commercial operation. Other specific exemptions are
discussed below in the descriptions of other particular service
categories.

1. Private Wireless Radio Services

3. Two levels of statutory fees were established for the Private
Wireless Radio Services--exclusive use services and shared use
services. Thus, licensees who generally receive a higher quality
communication channel due to exclusive or lightly shared frequency
assignments will pay a higher fee than those who share marginal quality
assignments. This dichotomy is consistent with the directive of Section
9, that the regulatory fees reflect the benefits provided to the
licensees. See 47 U.S.C. Sec. 159(b)(1)(A). In addition, because of the
generally small amount of the fees assessed against Private Wireless
Radio Service licensees, applicants for new licenses and reinstatements
and for renewal of existing licenses are required to pay a regulatory
fee covering the entire license term, with only a percentage of all
licensees paying a regulatory fee in any one year. Applications for
modification or assignment of existing authorizations do not require
the payment of regulatory fees. The expiration date of those
authorizations will reflect only the unexpired term of the underlying
license rather than a new license term.

a. Exclusive Use Services

4. Private Mobile Radio Services (PMRS) (Formerly Land Mobile
Services): Regulatees in this category include those authorized under
Part 90 of the Commission's Rules to provide limited access Wireless
Radio service that allows high quality voice or digital communications
between vehicles or to fixed stations to further the business
activities of the licensee. These services, using the 220-222 MHz band
and frequencies at 470 MHz and above, may be offered on a private
carrier basis in the Specialized Mobile Radio Services (SMRS).^{126
For FY 1997, we are proposing that PMRS licensees will pay a $10 annual
regulatory fee per license, payable for an entire five or ten year
license term at the time of application for a new, renewal, or
reinstatement license.^{127 The total regulatory fee due is either
$50 for a license with a five year term or $100 for a license with a 10
year term.
---------------------------------------------------------------------------

\126\ This category only applies to licensees of shared-use
private 220-222 MHz and 470 MHz and above in the Specialized Mobile
Radio (SMR) service who have elected not to change to the Commercial
Mobile Radio Service (CMRS). Those who have elected to change to the
CMRS are referred to paragraph 14 of this Attachment.
\127\ Although this fee category includes licenses with ten-year
terms, the estimated volume of ten-year license applications in FY
1997 is less than one-tenth of one percent and, therefore, is
statistically insignificant.
---------------------------------------------------------------------------

5. Microwave Services: These services include private and
commercial microwave systems and private and commercial carrier systems
authorized under Part 101 of the Commission's Rules to provide
telecommunications services between fixed points on a high quality
channel of communications. Microwave systems are often used to relay
data and to control railroad, pipeline, and utility equipment.
Commercial systems typically are used for video or data transmission or
distribution. For FY 1997, we are proposing that Microwave licensees
will pay a $10 annual regulatory fee per license, payable for an entire
ten year license term at the time of application for a new, renewal, or
reinstatement license. The total regulatory fee due is $100 for the ten
year license term.
6. Interactive Video Data Service (IVDS): The IVDS is a two-way,
point-to-multi-point radio service allocated high quality channels of
communications and authorized under Part 95 of the Commission's Rules.
The IVDS provides information, products, and services, and also the
capability to obtain responses from subscribers in a specific service
area. The IVDS is offered on a private carrier basis. The Commission
does not anticipate receiving any applications in the IVDS during FY
1997. Therefore, for FY 1997, we are proposing that there be no
regulatory fee established for IVDS licensees.

b. Shared Use Services

7. Marine (Ship) Service: This service is a shipboard radio service
authorized under Part 80 of the Commission's Rules to provide
telecommunications between watercraft or between watercraft and shore-
based stations. Radio installations are required by domestic and
international law for large passenger or cargo vessels. Radio equipment
may be voluntarily installed on smaller vessels, such as recreational
boats. The Telecommunications Act of 1996 gave the Commission the
authority to license certain ship stations by rule rather than by
individual license. Private boat operators sailing entirely within
domestic U.S. waters and who are not otherwise required by treaty or
agreement to carry a radio, are no longer required to hold a marine
license, and they will not be required to pay a regulatory fee. For FY
1997, we are proposing that parties required to be licensed and those
choosing to be licensed for Marine (Ship) Stations will pay a $5 annual
regulatory fee per station, payable for an entire ten-year license term
at the time of application for a new, renewal, or reinstatement
license. The total regulatory fee due is $50 for the ten year license
term.
8. Marine (Coast) Service: This service includes land-based
stations in the maritime services, authorized under Part 80 of the
Commission's Rules, to provide communications services to ships and
other watercraft in coastal and inland waterways. For FY 1997, we are
proposing that licensees of Marine (Coast) Stations will pay a $5
annual regulatory fee per call sign, payable for the entire five-year
license term at the time of application for a new, renewal, or
reinstatement license. The total regulatory fee due is $25 per call
sign for the five-year license term.
9. Private Land Mobile (Other) Services: These services include
Land Mobile Radio Services operating under Parts 90 and 95 of the
Commission's Rules. Services in this category provide one-or two-way
communications between vehicles, persons or fixed stations on a shared
basis and include radiolocation services, industrial radio services,
and land transportation radio services. For FY 1997, we are proposing
that licensees of services in this category will pay a $5 annual
regulatory fee per call sign, payable for an entire five-year license
term at the time of application for a new, renewal, or reinstatement
license. The total regulatory fee due is $25 for the five-year license
term.
10. Aviation (Aircraft) Service: These services include stations
authorized to provide communications between aircraft and between
aircraft and ground stations and include frequencies used to
communicate with air traffic control facilities pursuant to Part 87 of
the Commission's Rules. The Telecommunications Act of 1996 gave the
Commission the authority to license certain aircraft radio stations by
rule rather than by individual license. Private aircraft operators
flying entirely within domestic U.S. airspace and who are not otherwise
required by treaty or agreement to carry a radio are no longer required
to hold an aircraft license, and they will not be required to pay a
regulatory fee. For FY 1997, we are proposing that parties required to
be licensed and those choosing to be licensed for Aviation (Aircraft)
Stations will pay a $5 annual regulatory fee per station, payable for
the entire ten-year license term at the time of application for a new,
renewal, or reinstatement license. The total regulatory fee due is

[[Page 10818]]

$50 per station for the ten-year license term.
11. Aviation (Ground) Service: This service includes stations
authorized to provide ground-based communications to aircraft for
weather or landing information, or for logistical support pursuant to
Part 87 of the Commission's Rules. Certain ground-based stations which
only serve itinerant traffic, i.e., possess no actual units on which to
assess a fee, are exempt from payment of regulatory fees. For FY 1997,
we are proposing that licensees of Aviation (Ground) Stations will pay
a $5 annual regulatory fee per license, payable for the entire five-
year license term at the time of application for a new, renewal, or
reinstatement license. The total regulatory fee is $25 per call sign
for the five-year license term.
12. General Mobile Radio Service (GMRS): These services include
Land Mobile Radio licensees providing personal and limited business
communications between vehicles or to fixed stations for short-range,
two-way communications pursuant to Part 95 of the Commission's Rules.
For FY 1997, we are proposing that GMRS licensees will pay a $5 annual
regulatory fee per license, payable for an entire five-year license
term at the time of application for a new, renewal or reinstatement
license. The total regulatory fee due is $25 per license for the five-
year license term.

c. Amateur Radio Vanity Call Signs

13. Amateur Vanity Call Signs: This fee covers voluntary requests
for specific call signs in the Amateur Radio Service authorized under
part 97 of the Commission's Rules. For FY 1997, we are proposing that
applicants for Amateur Vanity Call-Signs will pay a $5 annual
regulatory fee per call sign, payable for an entire ten-year license
term at the time of application for a vanity call sign. The total
regulatory fee due would be $50 per license for the ten-year license
term.^{128
---------------------------------------------------------------------------

\128\ Section 9(h) exempts ``amateur radio operator licenses
under Part 97 of the Commission's rules (47 CFR Part 97)'' from the
requirement. However, Section 9(g)'s fee schedule explicitly
includes ``Amateur vanity call signs'' as a category subject to the
payment of a regulatory fee.
---------------------------------------------------------------------------

d. Commercial Wireless Radio Services

14. Commercial Mobile Radio Services (CMRS) Mobile Services: The
Commercial Mobile Radio Service (CMRS) is an ``umbrella'' descriptive
term attributed to various existing services authorized to provide
interconnected mobile radio services for profit to the public, or to
such classes of eligible users as to be effectively available to a
substantial portion of the public. CMRS Mobile Services include certain
licensees which formerly were licensed as part of the Private Radio
Services (e.g., Specialized Mobile Radio Services) and others formerly
licensed as part of the Common Carrier Radio Services (e.g., Public
Mobile Services and Cellular Radio Service). While specific rules
pertaining to each covered service remain in separate Parts 22, 24, 80
and 90, general rules for CMRS are contained in Part 20. CMRS Mobile
Services will include: qualifying Business Radio Services, 220-222 MHz
Land Mobile Systems, Specialized Mobile Radio Services (Part 90);
^{129 Personal Communications Services (Part 24), Public Coast
Stations (Part 80); Public Mobile Radio (Cellular, 800 MHz Air-Ground
Radiotelephone, and Offshore Radio Services) (Part 22). Each licensee
in this group will pay an annual regulatory fee for each mobile or
cellular unit (mobile or cellular call sign or telephone number),
including two-way paging units, assigned to its customers, including
resellers of its services. For FY 1997, we are proposing that the
regulatory fee be $.24 per unit.
---------------------------------------------------------------------------

\129\ This category does not include licensees of private
shared-use 220 MHz and 470 MHz and above in the Specialized Mobile
Radio (SMR) service who have elected to remain non-commercial. Those
who have elected not to change to the Commercial Mobile Radio
Service (CMRS) are referred to paragraph 4 of this Attachment.
Further, Congress provided for a three year transition period until
August 10, 1996, for conversion to CMRS. See Omnibus Budget
Reconciliation Act of 1993, Public Law 103-66, Title VI
Sec. 6002(b), 107 Stat. 312,392. Therefore, licensees who had not
converted to CMRS prior to December 31, 1995, are not subject to the
CMRS Mobile Services fee for FY 1996.
---------------------------------------------------------------------------

15. Commercial Mobile Radio Services (CMRS) One-Way Paging
Services: The Commercial Mobile Radio Service (CMRS) is an ``umbrella''
descriptive term attributed to various existing services authorized to
provide interconnected mobile radio services for profit to the public,
or to such classes of eligible users as to be effectively available to
a substantial portion of the public. CMRS One-Way Paging Services
include certain licensees which formerly were licensed as part of the
Private Radio Services (e.g., Private Paging), licensees formerly
licensed as part of the Common Carrier Radio Services (e.g., Public
Mobile One-Way Paging), and licensees of Personal Communications
Service (PCS) one-way paging. While specific rules pertaining to each
covered service remain in separate Parts 22, 24 and 90, general rules
for CMRS are contained in Part 20. We have replaced the Public Mobile
One-Way Paging regulatory fee category with a CMRS One-Way Paging
Services category for regulatory fee collection purposes. Each licensee
in the CMRS One-Way Paging Services will pay an annual regulatory fee
for each paging unit assigned to its customers, including resellers of
its services. For FY 1997, we are proposing that the regulatory fee be
$.03 per unit.

2. Mass Media Services

16. The regulatory fees for the Mass Media fee category apply to
broadcast licensees and permittees. Noncommercial Educational
Broadcasters are exempt from regulatory fees.

a. Commercial AM and FM Radio

17. These categories include licensed Commercial AM (Classes A, B,
C, and D) and FM (Classes A, B, B1, C, C1, C2, and C3) Radio Stations
operating under Part 73 of the Commission's Rules.^{130 We are
proposing that the regulatory fees for AM and FM Stations for FY 1997
are as follows:
---------------------------------------------------------------------------

\130\ The Commission acknowledges that certain stations
operating in Puerto Rico and Guam have been assigned a higher level
station class than would be expected if the station were located on
the mainland. Although this results in a higher regulatory fee, we
believe that the increased interference protection associated with
the higher station class is necessary and justifies the fee.
---------------------------------------------------------------------------

AM Radio

Class A..........................................................$1,750
Class B.............................................................965
Class C.............................................................390
Class D.............................................................480

FM Radio

Classes C, C1, C2, B.............................................$1,750
Classes A, B1, C3.................................................1,050

b. Construction Permits--Commercial AM Radio

18. This category includes holders of permits to construct new
Commercial AM Stations. For FY 1997, we are proposing that permittees
will pay a fee of $195 for each permit held. Upon issuance of an
operating license, this fee would no longer be applicable and licensees
would be required to pay the applicable fee for the designated class of
the station.

c. Construction Permits--Commercial FM Radio

19. This category includes holders of permits to construct new
Commercial FM Stations. For FY 1997, we are proposing that permittees
will pay a fee of $965 for each permit held. Upon issuance of an
operating license, this fee would no longer be applicable. Instead,
licensees would pay a regulatory fee based upon the designated class of
the station.

[[Page 10819]]

d. Commercial Television Stations

20. This category includes licensed Commercial VHF and UHF
Television Stations covered under Part 73 of the Commission's Rules,
except commonly owned Television Satellite Stations, addressed
separately below. Markets are Nielsen Designated Market Areas (DMA) as
listed in the Television & Cable Factbook, Stations Volume No. 64, 1996
Edition, Warren Publishing, Inc. We are proposing that the fees for
each category of station are as follows:

VHF Markets 1-10................................................$44,700
VHF Markets 11-25................................................30,500
VHF Markets 26-50................................................16,350
VHF Markets 51-100................................................4,925
VHF Remaining Markets...............................................835
UHF Markets 1-10.................................................18,875
UHF Markets 11-25................................................15,625
UHF Markets 26-50.................................................8,250
UHF Markets 51-100................................................2,875
UHF Remaining Markets...............................................815

e. Commercial Television Satellite Stations

21. We are proposing that commonly owned Television Satellite
Stations in any market (authorized pursuant to Note 5 of Section
73.3555 of the Commission's Rules) that retransmit programming of the
primary station be assessed a fee of $975 annually. Those stations
designated as Television Satellite Stations in the 1996 Edition of the
Television and Cable Factbook are subject to the fee applicable to
Television Satellite Stations. All other television licensees are
subject to the regulatory fee payment required for their class of
station and market.

f. Construction Permits--Commercial VHF Television Stations

22. This category includes holders of permits to construct new
Commercial VHF Television Stations. For FY 1997, we are proposing that
VHF permittees will pay an annual regulatory fee of $7,750. Upon
issuance of an operating license, this fee would no longer be
applicable. Instead, licensees would pay a fee based upon the
designated market of the station.

g. Construction Permits--Commercial UHF Television Stations

23. This category includes holders of permits to construct new UHF
Television Stations. For FY 1997, we are proposing that UHF Television
permittees will pay an annual regulatory fee of $5,950. Upon issuance
of an operating license, this fee would no longer be applicable.
Instead, licensees would pay a fee based upon the designated market of
the station.

h. Construction Permits--Satellite Television Stations

24. We are proposing that the fee for UHF and VHF Television
Satellite Station construction permits for FY 1997 be $350. An
individual regulatory fee payment is to be made for each Television
Satellite Station construction permit held.

i. Low Power Television, FM Translator and Booster Stations, TV
Translator and Booster Stations

25. This category includes Low Power UHF/VHF Television stations
operating under Part 74 of the Commission's Rules with a transmitter
power output limited to 1 kW for a UHF facility and, generally, 0.01 kW
for a VHF facility. Low Power Television (LPTV) stations may retransmit
the programs and signals of a TV Broadcast Station, originate
programming, and/or operate as a subscription service. This category
also includes translators and boosters operating under Part 74 which
rebroadcast the signals of full service stations on a frequency
different from the parent station (translators) or on the same
frequency (boosters). The stations in this category are secondary to
full service stations in terms of frequency priority. We have also
received requests for waivers of the regulatory fees from operators of
community based Translators. These Translators are generally not
affiliated with commercial broadcasters, are nonprofit, nonprofitable,
or only marginally profitable, serve small rural communities, and are
supported financially by the residents of the communities served. We
are aware of the difficulties these Translators have in paying even
minimal regulatory fees, and we have addressed those concerns in the
ruling on reconsideration of the FY 1994 Report and Order. Community
based Translators are exempt from regulatory fees. For FY 1997, we are
proposing that licensees in low power television, FM translator and
booster, and TV translator and booster category will pay a regulatory
fee of $225 for each license held.

j. Broadcast Auxiliary Stations

26. This category includes licensees of remote pickup stations
(either base or mobile) and associated accessory equipment authorized
pursuant to a single license, Aural Broadcast Auxiliary Stations
(Studio Transmitter Link and Inter-City Relay) and Television Broadcast
Auxiliary Stations (TV Pickup, TV Studio Transmitter Link, TV Relay)
authorized under Part 74 of the Commission's Rules. Auxiliary Stations
are generally associated with a particular television or radio
broadcast station or cable television system. This category does not
include translators and boosters (see paragraph 26). For FY 1997, we
are proposing that licensees of Commercial Auxiliary Stations will pay
a $25 annual regulatory fee on a per call sign basis.

k. Multipoint Distribution Service

27. This category includes Multipoint Distribution Service (MDS),
and Multichannel Multipoint Distribution Service (MMDS), authorized
under Part 21 of the Commission's Rules to use microwave frequencies
for video and data distribution within the United States. For FY 1997,
we are proposing that MDS and MMDS stations will pay an annual
regulatory fee of $215 per call sign.

3. Cable Services

a. Cable Television Systems

28. This category includes operators of Cable Television Systems,
providing or distributing programming or other services to subscribers
under Part 76 of the Commission's Rules. For FY 1997, we are proposing
that Cable Systems will pay a regulatory fee of $.55 per
subscriber.^{131 Payments for Cable Systems are to be made on a per
subscriber basis as of December 31, 1995. Cable Systems should
determine their subscriber numbers by calculating the number of single
family dwellings, the number of individual households in multiple
dwelling units, e.g., apartments, condominiums, mobile home parks,
etc., paying at the basic subscriber rate, the number of bulk rate
customers and the number of courtesy or fee customers. In order to
determine the number of bulk rate subscribers, a system should divide
its bulk rate charge by the annual subscription rate for individual
households. See FY 1994 Report and Order, Appendix B at Paragraph 31.
---------------------------------------------------------------------------

\131\ Cable systems are to pay their regulatory fees on a per
subscriber basis rather than per 1,000 subscribers as set forth in
the statutory fee schedule. See FY 1994 Report and Order at
Paragraph 100.
---------------------------------------------------------------------------

b. Cable Antenna Relay Service

29. This category includes Cable Antenna Relay Service (CARS)
stations used to transmit television and related audio signals, signals
of AM and FM Broadcast Stations, and cablecasting from the point of
reception to a terminal point from where the signals are distributed to
the public by a Cable Television System. For FY 1997, we are proposing
that licensees will pay an

[[Page 10820]]

annual regulatory fee of $65 per CARS license.

4. Common Carrier Services

a. Domestic Public Fixed Radio Service

30. This category includes licensees in the Point-to-Point
Microwave Radio Service, Local Television Transmission Radio Service,
and Digital Electronic Message Service, authorized under Part 101 of
the Commission's Rules to use microwave frequencies for video and data
distribution within the United States. These services are now included
in the Microwave category (see paragraph 5 above).

b. Interstate Telephone Service Providers

31. This category includes Inter-Exchange Carriers (IXCs), Local
Exchange Carriers (LECs), Competitive Access Providers (CAPs), domestic
and international carriers that provide operator services, Wide Area
Telephone Service (WATS), 800, 900, telex, telegraph, video, other
switched, interstate access, special access, and alternative access
services either by using their own facilities or by reselling
facilities and services of other carriers or telephone carrier holding
companies, and companies other than traditional local telephone
companies that provide interstate access services to long distance
carriers and other customers. This category also includes pre-paid
calling card providers. These common carriers, including resellers,
must submit fee payments based upon their proportionate share of gross
interstate revenues using the methodology that we have adopted for
calculating contributions to the TRS fund. See Telecommunications Relay
Services, 8 FCC Rcd 5300 (1993), 58 FR 39671 (July 26, 1993). In order
to avoid imposing any double payment burden on resellers, we will
permit carriers to subtract from their gross interstate revenues, as
reported to NECA in connection with their TRS contribution, any
payments made to underlying common carriers for telecommunications
facilities and services, including payments for interstate access
service, that are sold in the form of interstate service. For this
purpose, resold telecommunications facilities and services are only
intended to include payments that correspond to revenues that will be
included by another carrier reporting interstate revenue. For FY 1997,
we are proposing that carriers multiply their adjusted gross revenue
figure (gross revenue reduced by the total amount of their payments to
underlying common carriers for telecommunications facilities or
services) by the factor 0.00119 to determine the appropriate fee for
this category of service. Regulatees may want to use the following
worksheet to determine their fee payment:

------------------------------------------------------------------------
Total Interstate
------------------------------------------------------------------------
(1) Revenue reported in TRS Fund worksheets... ........... ...........
(2) Less: Access charges paid................. ........... ...........
(3) Less: Other telecommunications facilities
and services taken for resale................ ........... ...........
(4) Adjusted revenues (1)minus(2)minus(3)..... ........... ...........
(5) Fee factor................................ ........... 0.00119
(6) Fee due (4)times(5)....................... ........... ...........
------------------------------------------------------------------------

5. International Services

a. Earth Stations

32. Very Small Aperture Terminal (VSAT) Earth Stations, equivalent
C-Band Earth Stations and antennas, and earth station systems comprised
of very small aperture terminals operate in the 12 and 14 GHz bands and
provide a variety of communications services to other stations in the
network. VSAT systems consist of a network of technically-identical
small Fixed-Satellite Earth Stations which often include a larger hub
station. VSAT Earth Stations and C-Band Equivalent Earth Stations are
authorized pursuant to Part 25 of the Commission's Rules. Mobile
Satellite Earth Stations, operating pursuant to Part 25 of the
Commission's Rules under blanket licenses for mobile antennas
(transceivers), are smaller than one meter and provide voice or data
communications, including position location information for mobile
platforms such as cars, buses, or trucks.^{132 Fixed-Satellite
Transmit/Receive and Transmit-Only Earth Station antennas, authorized
or registered under Part 25 of the Commission's Rules, are operated by
private and public carriers to provide telephone, television, data, and
other forms of communications. Included in this category are telemetry,
tracking and control (TT&C) earth stations, and earth station uplinks.
For FY 1997, we are proposing that licensees of VSATs, Mobile Satellite
Earth Stations, and Fixed-Satellite Transmit/Receive and Transmit-Only
Earth Stations will pay a fee of $515 per authorization or registration
as well as a separate fee of $515 for each associated Hub Station.
---------------------------------------------------------------------------

\132\ Mobile earth stations are hand-held or vehicle-based units
capable of operation while the operator or vehicle is in motion. In
contrast, transportable units are moved to a fixed location and
operate in a stationary (fixed) mode. Both are assessed the same
regulatory fee for FY 1997.
---------------------------------------------------------------------------

33. Receive-only earth stations. For FY 1997, we are proposing that
there be no regulatory fee for receive-only earth stations.

b. Space Stations (Geosynchronous)

34. Geosynchronous Space Stations are domestic and international
satellites positioned in orbit to remain approximately fixed relative
to the earth. Most are authorized under Part 25 of the Commission's
Rules to provide communications between satellites and earth stations
on a common carrier and/or private carrier basis. In addition, this
category includes Direct Broadcast Satellite (DBS) Service which
includes space stations authorized under Part 100 of the Commission's
rules to transmit or re-transmit signals for direct reception by the
general public encompassing both individual and community reception.
For FY 1997, we are proposing that entities authorized to operate
geosynchronous space stations (including DBS satellites) will be
assessed an annual regulatory fee of $98,575 per operational station in
orbit. Payment is required for any geosynchronous satellite that has
been launched and tested and is authorized to provide service.

c. Low Earth Orbit Satellites (LEOs)

35. Low Earth Orbit Satellite Systems are space stations that orbit
the earth in non-geosynchronous orbit. They are authorized under Part
25 of the Commission's rules to provide communications between
satellites and earth stations on a common carrier and/or private
carrier basis. For FY 1997, we are proposing that entities authorized
to operate Low Earth Orbit Satellite Systems will be assessed an annual
regulatory fee of $136,500 per operational system in orbit. Payment is
required for any LEO System that has one or more operational
satellites.

[[Page 10821]]

d. Signatories

36. A Signatory to INMARSAT is an Administration or government, or
the telecommunications entity designated as sole operating entity by an
Administration or government, which participates in the International
Mobile Satellite Organization (INMARSAT) in order to develop and
operate a global maritime satellite telecommunication system which
serves maritime commercial and safety needs of the United States and
foreign countries. A Signatory to INTELSAT is an Administration or
government, or the telecommunications entity designated as sole
operating entity by an Administration or government, which participates
in the International Telecommunications Satellite Organization
(INTELSAT) in order to develop, construct, operate, and maintain the
space segment of the global commercial telecommunications satellite
system established under the Interim Agreement and Special Agreement
signed by Governments on August 20, 1964. For FY 1997, we are proposing
that Signatories to INMARSAT and INTELSAT will be assessed an annual
regulatory fee of $326,025 in order to recover the cost of the
Commission's regulatory activities associated with such entities.

e. International Bearer Circuits

37. Regulatory fees for International Bearer Circuits are to be
paid by the facilities-based common carriers (either domestic or
international) activating the circuit in any transmission facility for
the provision of service to an end user or resale carrier. Payment of
the fee for bearer circuits by private submarine cable operators is
required for circuits sold on an indefeasible right of use (IRU) basis
or leased to any customer other than an international common carrier
authorized by the Commission to provide U.S. international common
carrier services. Compare FY 1994 Report and Order at 5367. The fee is
based upon active 64 Kbps circuits, or their equivalent circuits. Under
this formulation, 64 Kbps circuits or their equivalent will be assessed
a fee. Equivalent circuits include the 64 Kbps circuit equivalent of
larger bit stream circuits. For example, the 64 Kbps circuit equivalent
of a 2.048 Mbps circuit is 30 64 Kbps circuits. Analog circuits such as
3 and 4 KHz circuits used for international service are also included
as 64 Kbps circuits. However, circuits derived from 64 Kbps circuits by
the use of digital circuit multiplication systems are not equivalent 64
Kbps circuits. Such circuits are not subject to fees. Only the 64 Kbps
circuit from which they have been derived will be subject to payment of
a fee. For FY 1997, we are proposing that the regulatory fee be $5.00
for each active 64 Kbps circuit or equivalent. For analog television
channels we will assess fees as follows:

------------------------------------------------------------------------
No. of
equivalent
Analog television channel size in MHz 64 Kbps
circuits
------------------------------------------------------------------------
36.......................................................... 630
24.......................................................... 288
18.......................................................... 240
------------------------------------------------------------------------

f. International Public Fixed

38. This fee category includes common carriers authorized under
Part 23 of the Commission's Rules to provide radio communications
between the United States and a foreign point via microwave or HF
troposcatter systems, other than satellites and satellite earth
stations, but not including service between the United States and
Mexico and the United States and Canada using frequencies above 72 MHz.
For FY 1997, we are proposing that International Public Fixed Radio
Service licensees will pay a $315 annual regulatory fee per call sign.

g. International (HF) Broadcast

39. This category covers International Broadcast Stations licensed
under Part 73 of the Commission's Rules to operate on frequencies in
the 5,950 KHz to 26,100 KHz range to provide service to the general
public in foreign countries. For FY 1997, we are proposing that
International HF Broadcast Stations will pay an annual regulatory fee
of $390 per station license.

Attachment I--Description of FCC Activities

Authorization of Service: The authorization or licensing of radio
stations, telecommunications equipment, and radio operators, as well as
the authorization of common carrier and other services and facilities.
Includes policy direction, program development, legal services, and
executive direction, as well as support services associated with
authorization activities.^{133
---------------------------------------------------------------------------

\133\ Although Authorization of Service is described in this
exhibit, it is not one of the activities included as a feeable
activity for regulatory fee purposes pursuant to Section 9(a)(1) of
the Act. 47 U.S.C. Sec. 159(a)(1).
---------------------------------------------------------------------------

Policy and Rulemaking: Formal inquiries, rulemaking proceedings to
establish or amend the Commission's rules and regulations, action on
petitions for rulemaking, and requests for rule interpretations or
waivers; economic studies and analyses; spectrum planning, modeling,
propagation-interference analyses, and allocation; and development of
equipment standards. Includes policy direction, program development,
legal services, and executive direction, as well as support services
associated with policy and rulemaking activities.
Enforcement: Enforcement of the Commission's rules, regulations and
authorizations, including investigations, inspections, compliance
monitoring, and sanctions of all types. Also includes the receipt and
disposition of formal and informal complaints regarding common carrier
rates and services, the review and acceptance/rejection of carrier
tariffs, and the review, prescription and audit of carrier accounting
practices. Includes policy direction, program development, legal
services, and executive direction, as well as support services
associated with enforcement activities.
Public Information Services: The publication and dissemination of
Commission decisions and actions, and related activities; public
reference and library services; the duplication and dissemination of
Commission records and databases; the receipt and disposition of public
inquiries; consumer, small business, and public assistance; and public
affairs and media relations. Includes policy direction, program
development, legal services, and executive direction, as well as
support services associated with public information activities.

[FR Doc. 97-5744 Filed 3-7-97; 8:45 am]
BILLING CODE 6712-01-P}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}

Visit the Official Version

Document Information

Published:: 03/10/1997
Department:: Federal Communications Commission
Entry Type:: Proposed Rule
Action:: Notice of Proposed Rulemaking.
Document Number:: 97-5744
Dates:: Comments are due on or before March 25, 1997 and Reply Comments are due on or before April 4, 1997.
Pages:: 10793-10821 (29 pages)
Docket Numbers:: MD Docket No. 96-186, FCC 97-49
PDF File:: 97-5744.pdf
CFR: (8): 47 CFR 159(a); 47 CFR 159(b)(3); 47 CFR 159(b); 47 CFR 159(b)(2); 47 CFR 90.814(b)(1); More ...