[Federal Register Volume 62, Number 214 (Wednesday, November 5, 1997)]
[Rules and Regulations]
[Pages 59822-59825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29176]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 96-186; FCC 97-384]
Assessment and Collection of Regulatory Fees for Fiscal Year 1997
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission is revising its collection procedures for
regulatory fees in order to help assure increased accuracy and
timeliness of regulatory fee payments. First, permittees, licensees or
other entities subject to a regulatory fee and claiming an exemption
from regulatory fees based upon its status as a nonprofit entity, shall
make a one-time filing with the Secretary of the Commission written
documentation establishing the basis for its exemption with 60 days of
its coming under the regulatory jurisdiction of the Commission or at
the time its fee payment would otherwise be due, whichever is sooner,
or at such other time as required by the Managing Director. Second,
for-profit purchasers or assignees of licenses, stations or facilities
previously owned by non-profit entities not subject to regulatory fees
must notify the Secretary of the Commission of such purchase or
reassignment within 60 days of the effective date of the purchase or
assignment. Third, the Commission is requiring licensees of Commercial
Mobile Radio Service (CMRS) stations to retain for two years, and
submit to the Commission upon request, documentation used in
calculating their fee payments. Finally, the Commission is delegating
authority to the Managing Director to publish annually in the Federal
Register lists of those commercial communications firms and businesses
for commercial purposes that have paid a regulatory fee for the
preceding fiscal year.
EFFECTIVE DATE: November 5, 1997.
ADDRESSES: Federal Communications Commission, Room 222, 1919 M Street,
N.W., Washington, D.C. 20554.
FOR FURTHER INFORMATION CONTACT: Regina W. Dorsey, Chief, Billings &
Collections Branch, (202) 418-1995.
SUPPLEMENTARY INFORMATION:
1. In the Further Notice of Proposed Rulemaking in this proceeding,
the Commission proposed to adopt several new procedures in order to
more efficiently and equitably collect the annual regulatory fees
required by
[[Page 59823]]
Section 9 of the Communications Act, 47 U.S.C. 159. See Further Notice
of Proposed Rulemaking in the Matter of Assessment and Collection of
Regulatory Fees for Fiscal Year 1997, 62 FR 40036 (July 25,
1997)(FNPRM). We address below the comments filed in this proceeding
and adopt the proposed new procedures with some
modifications.1
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\1\ See Attachment for a list of commenters who responded to the
FNPRM.
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2. Specifically, we adopt a requirement that non-profit entities
claiming an exemption from regulatory fees make a one-time filing of
documentation establishing their exempt status. We also adopt a
requirement that for-profit purchasers or assignees of stations or
facilities previously owned by non-profit entities notify the
Commission of such reassignment or sale. Additionally, we adopt a
requirement that licensees of Commercial Mobile Radio Services (CMRS)
maintain, and submit upon request, documentation supporting the
calculations of their fee payments. Finally, the amendments will
authorize the Managing Director to publish annually in the Federal
Register the names of all fee payers.
Documentation for Non-Profit Entities
3. Section 1.1162(c) of the Commission's Rules currently exempts
from payment of regulatory fees those entities possessing non-profit
status under section 501 of the Internal Revenue Code, 26 U.S.C. 501,
or certification as a non-profit corporation or other non-profit entity
by a state or other governmental authority. See 47 CFR 1.1162(c). The
FNPRM proposed a one-time requirement that non-profit entities claiming
exemptions from the regulatory fee requirement submit documentation
establishing their non-profit status. Currently, non-profit entities
are required to file such documentation only when requested by the
Commission. In its comments, the National Telephone Cooperative
Association (NTCA) opposed this proposed requirement, arguing that the
FNPRM failed to demonstrate a need for the filing requirement.
4. We are adopting the requirement for filing non-profit
documentation as proposed. We believe this requirement will
substantially assist us in administering the fee program. Development
of a comprehensive data base of exempt entities will enable us to
assure that only those entities entitled to the exemption benefit from
it. It will also help assure that we calculate fees based upon a more
accurate assessment of the number of entities expected to pay fees. The
one-time filing requirement will thus enable us to more equitably
establish appropriate fees for all payers. Further, although NTCA
expresses concern regarding the burden of the filing requirement, we
believe that duplication and mailing of a document already retained in
the ordinary course of an entity's business for tax and other purposes
results in only a minimal administrative burden. We will thus require
that all entities claiming an exemption from payment of regulatory fees
file a copy of the documentation supporting their non-profit status.
These documents must be submitted to the Secretary of the Commission at
a time to be established in a public notice which will be published in
the Federal Register. Entities claiming non-profit status must also
notify the Secretary within sixty days of any change in their non-
profit status; and for-profit purchasers or assignees of stations or
facilities previously owned or operated by non-profit entities must
also notify the Secretary of the purchase or reassignment within 60
days of the purchase or assignment.
5. NTCA also requested that we permit entities claiming exemption
from payment of a regulatory fee to establish their non-profit status
using types of documentation other than their current IRS determination
letters or certification from a state or other governmental authority.
Specifically, NTCA argues that an entity's Articles of Incorporation
are the best evidence of its non-profit status and the Commission
should also accept the Articles, annual state reports or similar
documents. NTCA believes that its proposal will lessen the
administrative burden on small entities. We note that IRS determination
letters and state or government certifications are generally one or two
page documents maintained as part of an entity's business files, which
can easily be copied and filed with the Commission. Nevertheless, if
for some reason an entity is unable to produce governmental
certification, the amended rules also permit submission of other
documents establishing non-profit status, as long as the documents bear
evidence that non-profit status has been approved by a state or other
governmental authority, consistent with the laws or regulations of the
jurisdiction.
Documentation of CMRS Fees
6. The FNPRM proposed to require Commercial Mobile Radio Service
(CMRS) licensees to retain documents used in the calculation of their
regulatory fees for a period of three years. A number of commenters
argued that the Commission should not specify a format for those
documents; that CMRS licensees should continue to retain flexibility in
maintaining record keeping systems; that they should not be required to
generate new or additional paperwork; and that they should not be
required to substantiate fees in a manner not required for other
services. See Comments filed by Bell Atlantic, NYNEX Mobile, Inc.,
Rural Cellular Association, Rural Telecommunications Group and GTE
Service Corporation (GTE).
7. We agree that CMRS licensees should have maximum flexibility to
determine what documents they will use to calculate fees and that they
should not be required to generate new or additional paperwork. Our
proposal required only that CMRS entities retain the work papers used
or developed in the course of calculating their fees. Thus, we were not
requiring that CMRS licensees undertake new or additional paperwork, or
utilize any particular format for calculating their fees. Also to the
extent this proposal imposed somewhat different requirements on CMRS
licensees, we believe those differences were justified. We have
identified several discrepancies between projected and actual CMRS
regulatory fees which are of concern. For example, for FY 1996 the
actual number of units for which regulatory fees were paid was 18.1%
below the total that was used to formulate the CMRS fees. While this
disparity may result from errors in estimating the overall number of
subscribers in the CMRS services, we believe that closer oversight of
CMRS fee payments is prudent. Assessing more accurate fees would also
benefit, without any significant burden, all CMRS licensees by helping
to ensure that all CMRS fee payers fully comply with their obligation
to contribute to the recovery of our costs of regulating CMRS. Thus, we
will require CMRS licensees to retain, and submit to the Commission
upon request, those documents which were actually used in the
calculation of their fee payments and that demonstrate the accuracy of
the payment. This will enable the Commission to efficiently audit the
fee payments of CMRS licensees without creating any undue additional
burden.
8. GTE and United States Cellular Corporation (USCC) also argue
that our proposed requirement that CMRS regulatees maintain their
payment records for a three year period is unreasonable. GTE notes that
our rules require telephone companies to retain their billing records
for only eighteen
[[Page 59824]]
months. See 47 CFR 42.6. We agree that requiring CMRS licensees to
retain these records for three years is unnecessary. We expect that any
verification of fee payments would be accomplished within two years
from the time that the fee payments are made. Thus, we are modifying
our proposal and will require only a two year retention period for this
documentation. Southwestern Bell Mobile Systems, Inc. also asserts that
the fee documentation may contain highly confidential customer
information. In this regard, CMRS licensees with concerns about the
disclosure of sensitive information in any submissions to the
Commission may request confidential treatment pursuant to Sec. 0.459 of
the Rules. See 47 CFR 0.459.
Publication of Fee Data
9. In the FNPRM, we proposed to publish in the Federal Register a
list of all commercial regulatees that have paid their regulatory fees,
along with the amount of the fee paid by each fee payor, and the volume
or number of units upon which the fee payment was based.2
Many commenters opposed our proposal, contending that publication of
fee payments and units would require regulatees to disclose highly
confidential business information.
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\2\ Southwestern Bell Mobil Systems also contends that the
FNPRM's statement that regulatory fee payments by CMRS licensees
shall be calculated on the ``number of pagers, cellular telephones,
or PCS units'' is inconsistent with the fee payment requirements set
forth in the Report and Order. We disagree. The Report and Order
established fees for cellular telephone and PCS units in the CMRS
Mobile Services and a fee for paging units in the CMRS Messaging
Service.
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10. We agree that the proposal to publish payment data could result
in the disclosure of sensitive marketing information in some instances.
We also conclude that there is an insufficient basis at this time to
warrant disclosure of such information. Thus, we will not publish
either fee payment information or the unit totals upon which a fee
payment is calculated. We believe, however, that publication of the
names of commercial fee payers may serve as a deterrent to non-payment.
Thus, we delegate to the Managing Director authority to issue annually
a public notice setting forth the names of commercial regulatory fee
payers and to publish the public notice in the Federal Register.
Final Regulatory Flexibility Analysis
11. As required by the Regulatory Flexibility Act
(RFA),3 an Initial Regulatory Flexibility Analysis (IRFA)
was incorporated in the Further Notice of Proposed Rulemaking In the
Matter of Assessment and Collection of Regulatory Fees for Fiscal Year
1997, 62 FR 40036 (July 25, 1997). The Commission sought written public
comments on the proposals in its FNPRM, including on the IRFA. This
present Final Regulatory Flexibility Analysis (FRFA) conforms to the
RFA, as amended.4
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\3\ 5 U.S.C. Sec. 603.
\4\ See 5 U.S.C. Sec. 604. The RFA, see 5 U.S.C. 601 et seq.,
has been amended by the Contract with America Advancement Act
(CWAAA), Public Law 104-121, 110 Stat. 847 (1996). Title II of the
CWAAA is ``The Small Business Regulatory Enforcement Fairness Act of
1996'' (SBREFA).
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I. Need for and Objectives of this Report and Order
12. This rulemaking proceeding was initiated in order to modify our
collection procedures for regulatory fees in order to help assure
increased accuracy and timeliness of regulatory fee payments.
II. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
13. None.
III. Description and Estimate of the Number of Small Entities To Which
the Proposed Rules Will Apply
14. Under the RFA, small entities may include small organizations,
small businesses, and small governmental jurisdictions. 5 U.S.C.
601(6). The RFA, 5 U.S.C. 601(3), generally defines the term ``small
business'' as having the same meaning as the term ``small business
concern'' under the Small Business Act, 15 U.S.C. 632. A small business
concern is one that: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) meets any additional
criteria established by the Small Business Administration (SBA).
15. The proposals adopted in this Report and Order affect a very
broad array of small entities, including small entities described as
cable services or systems, common carrier services and related
entities, international services, mass media services, and wireless and
commercial mobile services. In the rulemaking proceeding in this docket
preceding the FNPRM, we extensively described the small entities that
might be affected by this action, and have also described the numbers
of such entities. (See ``Final Regulatory Flexibility Analysis,''
Attachment A of Report and Order, MD Docket No. 96-186, FCC 97-215,
released June 26, 1997, 62 FR 37408 (July 11, 1997).) We hereby
incorporate into this FRFA, by reference, those descriptive sections
from the previous Report and Order.
IV. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
16. With certain exceptions, the Commission's Schedule of
Regulatory Fees applies to all Commission licensees and regulatees. In
the rulemaking proceeding in this docket preceding the FNPRM, we
described the methodology used by affected entities to determine
required fee amounts, the procedures for calculating and filing fee
payments, the skills necessary to file, and the results of not filing
in accordance with the rules. (See Report and Order, FCC 97-215 supra.
at Attachment H and Sec. 1.1157 through 1.1167 of the Commission's
Rules, 47 CFR 1.1157 through 1.1167.) We hereby incorporate into this
FRFA, by reference, those descriptions. In addition, we note that the
proposals adopted here require Commercial Mobile Radio Service (CMRS)
licensees to maintain and make available to the FCC, upon request,
documentation concerning the basis for their fee payments and that
these documents be retained by the payer for two years; require that
non-profit entities exempt from the regulatory fee requirement submit
documentation of their non-profit status; that for-profit entities
purchasing a station from a non-profit entity notify the Commission of
the sale or reassignment; and authorize the Commission to publish
annually, in the Federal Register, a list of those firms and
individuals who paid a fee for the preceding fiscal year and who
engaged in the provision of communications for commercial purposes.
V. Steps Taken To Minimize Any Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
17. As described in the Paragraph 16, the Commission proposed
certain modifications to the collection procedures for regulatory fees
in order to help assure increased accuracy and timeliness of regulatory
fee payments. Each of the above-described proposals that require
compliance would entail some level of economic impact, and this impact
would fall on some small entities. We believe, however, that these
proposals, if adopted, would help ensure the integrity of the
regulatory fees program. We have reduced the impact as a result of
public comments. Documentation concerning the basis for CMRS fees must
be retained for only two years rather than three, and need not be
submitted to the Commission
[[Page 59825]]
unless requested. Further, this Report and Order authorizes the
Managing Director the option to publish only the names of fee payers
and not fee amounts and unit counts objected to by commenters.
Report to Congress: The Commission shall include a copy of this
Final Regulatory Flexibility Analysis, along with this Report and
Order, in a report to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601(a)(1)(A). A
copy of this FRFA (or summary thereof) will also be published in the
Federal Register, along with this Report and Order.
Ordering Clauses
18. Accordingly, it is ordered, That the rule changes as specified
above and as set forth in the Attachment are adopted.
19. It is further ordered that the rule changes made herein will
become effective November 5, 1997. This action is taken pursuant to
Sections 4(i), 4(j), 9 and 303(r) of the Communications Act as amended,
47 U.S.C. 154(i), 154(j), 159 and 303(r).
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 1 of title 47 of the Code of Federal Regulations is amended as
follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: 47 U.S.C. 151, 154, 207, 303 and 309(j) unless
otherwise noted.
2. Section 1.1157 is amended by adding a new paragraph (d) to read
as follows:
Sec. 1.1157 Payment of charges for regulatory fees.
* * * * *
(d) Any Commercial Mobile Radio Service (CMRS) licensee subject to
payment of an annual regulatory fee shall retain for a period of two
(2) years from the date on which the regulatory fee is paid, those
business records which were used to calculate the amount of the
regulatory fee.
3. Section 1.1159 is amended by adding a new paragraph (e) to read
as follows:
Sec. 1.1159 Filing locations and receipts for regulatory fees.
* * * * *
(e) The Managing Director may issue annually, at his discretion, a
Public Notice setting forth the names of all commercial regulatees that
have paid a regulatory fee and shall publish the Public Notice in the
Federal Register.
4. Section 1.1162 is amended by adding new paragraphs (c)(1) and
(c)(2) to read as follows:
Sec. 1.1162 General exemptions from regulatory fees.
* * * * *
(c) * * *
(1) Any permittee, licensee or other entity subject to a regulatory
fee and claiming an exemption from a regulatory fee based upon its
status as a nonprofit entity, as described above, shall file with the
Secretary of the Commission (Attn: Managing Director) written
documentation establishing the basis for its exemption within 60 days
of its coming under the regulatory jurisdiction of the Commission or at
the time its fee payment would otherwise be due, whichever is sooner,
or at such other time as required by the Managing Director. Acceptable
documentation may include Internal Revenue Service determination
letters, state or government certifications or other documentation that
non-profit status has been approved by a state or other governmental
authority. Applicants, permittees and licensees are required to file
documentation of their nonprofit status only once, except upon request
of the Managing Director.
(2) Within sixty (60) days of a change in nonprofit status, a
licensee or permittee previously claiming a 501(C) exemption is
required to file with the Secretary of the Commission (Attn: Managing
Director) written notice of such change in its nonprofit status or
ownership. Additionally, for-profit purchasers or assignees of a
license, station or facility previously licensed or operated by a non-
profit entity not subject to regulatory fees must notify the Secretary
of the Commission (Attn: Managing Director) of such purchase or
reassignment within 60 days of the effective date of the purchase or
assignment.
* * * * *
Note: The following attachment will not appear in the Code of
Federal Regulations.
Attachment
Comments were filed by the following parties:
GTE Service Corporation
United States Cellular Corporation
Saco River Cellular Corporation
Citizens Utilities Company
Cellular XL Associates
Cellular Telecommunications Industry Association
American Mobile Telecommunications Association
BellSouth Corporation
PrimCo Personal Communications
Rural Cellular Association
Bell Atlantic NYNEX Mobile, Inc.
Rural Telecommunications Group
National Telephone Cooperative Association
Southwestern Bell Mobile Systems, Inc., et. al.
Personal Communications Industry Association
[FR Doc. 97-29176 Filed 11-4-97; 8:45 am]
BILLING CODE 6712-01-P
