The United States and its citizens are best served when the Federal workplace is free of discrimination and retaliation. In order to maintain a productive workplace that is fully engaged with the many important missions before the Government, Congress noted that it is essential that the rights of employees, former employees and applicants for Federal employment under Federal antidiscrimination, whistleblower, and retaliation laws be steadfastly protected. Congress also stated that agencies cannot be run effectively if those agencies practice or tolerate discrimination. Congress has found that notification of present and former Federal employees and applicants for Federal employment of their rights under antidiscrimination and whistleblower laws, combined with training of current employees, should increase Federal agency compliance with the laws. Congress entrusted the President with the authority to promulgate rules to carry out this title, and the President, in turn, delegated to OPM the authority to issue proposed regulations to implement the notification and training provisions of Title II of the No FEAR Act, Pub. L. 107-174. These regulations carry out that authority.

Section 202 of the No FEAR Act requires Federal agencies to notify their employees, former employees, and applicants for employment of their rights and protections under Federal antidiscrimination, whistleblower and retaliation laws. These proposed regulations prescribe the “time, form, and manner” of the notice required by the No FEAR Act, including the requirement to place the notice on each agency's Internet Web site.

The proposed regulations provide model paragraphs that must, at a minimum, be included in the notice. Agencies have the discretion to insert additional provisions as they deem appropriate. Agencies must provide the first notice within 60 days after final publication of this rule. Thereafter, such notice must be provided by the end of each successive fiscal year and remain posted until replaced or revised to help ensure that employees are kept informed of their rights and protections against discrimination and/or retaliation. After the initial notice deadline, new employees will be given notice during each agency's new employee orientation session(s) or, in the absence of such a program, within 60 days of the individual's appointment.

The notice requires language that agencies retain the right, where appropriate, to discipline a Federal employee who has engaged in discriminatory or retaliatory conduct, up to and including removal. It also requires language that unfounded disciplinary action or violation of the procedural rights of a Federal employee accused of discrimination is not permitted. Another part of the notice advises readers how to get additional information about their rights and protections.

Section 202 of the No FEAR Act also requires that Federal agencies provide training to all their employees regarding the rights and remedies under Federal antidiscrimination, whistleblower and retaliation laws. The regulations propose to require all agencies to develop written plans describing how they will meet their training obligations under the Act. Agencies have the discretion to develop the content and method of their own training programs. Agencies may also consult the Equal Employment Opportunity Commission and/or the Office of Special Counsel for information and/or assistance regarding the agency's training program.

Recognizing the importance of the required training under the No FEAR Act, OPM encourages all agencies to implement training programs as soon as possible and requires all agencies to complete initial training by the end of fiscal year 2005. Thereafter, the training must be completed on a training cycle of no longer than every two years.

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulations pertain only to Federal employees and agencies.

This proposed rule has been reviewed by the Office of Management and Budget under Executive Order 12866.

This regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment.

This regulation meets the applicable standard set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This action pertains to agency management, personnel and organization and does not substantially affect the rights or obligations of non-agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

Accordingly, OPM proposes to amend part 724 to title 5, Code of Federal Regulations, as follows:

This proposed rule has been determined to be significant and has been reviewed by the Office of Management and Budget (OMB) under Executive Order 12866.

The Catalog of Federal Domestic Assistance number for the program impacted by this action is 10.768, Business and Industry Loans.

Business and Industry Guaranteed Loans are subject to the provisions of Executive Order 12372, which require intergovernmental consultation with state and local officials. RBS will conduct intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Rural Development Programs and Activities” and 7 CFR part 3015, subpart V.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule, (1) all state and local laws and regulations that are in conflict with this rule will be preempted, (2) no retroactive effect will be given this rule, and (3) administrative proceedings of the National Appeals Division (7 CFR part 11) must be exhausted before bringing suit in court challenging action taken under this rule.

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq. , an Environmental Impact Statement is not required.

In accordance with the Paperwork Reduction Act of 1995, the Agency will seek OMB approval of the reporting requirements contained in this regulation. These reporting and recordkeeping requirements have been previously approved under OMB control number 0570-0017. The estimate of burden is as follows:

Estimate of Burden: Burden per response is 30 minutes.

Respondents: Lenders and business owners.

Estimated Number of Respondents: 1,725.

Estimated Number of Responses per Respondent: 1.

Estimated Number of Responses: 1,725.

Estimated Total Annual Burden of Respondents: 863 hours.

Comments: Comments are invited on (a) whether the proposed collection of information is necessary for the proper performance of the functions of RBS, including whether the information will have a practical utility; (b) the accuracy of RBS's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to Cheryl Thompson, Regulations and Paperwork Management Branch, Rural Development, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC 20250-0742. All responses to this rule will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L 104-4 establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

In compliance with the Regulatory Flexibility Act, RBS has determined that this action would not have a significant economic impact on a substantial number of small entities, because the action will not affect a significant number of small entities, as defined by the Regulatory Flexibility Act (5 U.S.C. 601). RBS made this determination based on the fact that this regulation only impacts those who choose to participate in the program. Small entity applicants will not be impacted to a greater extent than large entity applicants.

It has been determined that, under Executive Order 13132, Federalism, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on states or their political subdivisions or on the distribution of power and responsibilities among the various levels of government.

Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, imposes requirements on USDA in the development of regulatory policies that have tribal implications or preempt tribal law. USDA has determined that the proposed regulation does not have a substantial direct effect on one or more Indian tribes or on either the relationship or the distribution of powers and responsibilities between the Federal Government and the Indian Tribes. Thus, the proposed rule is not subject to the requirements of Executive Order 13175.

The cost of the B&I Guaranteed Loan Program has gone up in recent years. This is due to higher defaults and lower interest rates. In the meantime, there is still an interest in funding this program in order to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. To do that in a cost efficient manner for the taxpayer, RBS is proposing to implement an annual renewal fee. This will reduce the subsidy but will allow us to maintain the level of assistance that has been historically provided for this program at a level or even reduced cost to the taxpayers.

The proposed annual renewal fee is based on Small Business Administration (SBA) programs and is adopted for this program to provide additional funds to supplement the available funds appropriate to the program, thereby allowing the program to reach more potential applicants. Additionally, this type of fee is consistent with the recently authorized Renewable Energy Systems and Energy Efficiency Improvements Guaranteed Loan Program within RBS. The borrower pool for the B&I Guaranteed Loan is even more likely to be able to afford this type of fee than the other programs mentioned because they are not required to lack the ability to get credit elsewhere.

The SBA 7(a) Loan Guarantee Program and the B&I program are similar in that they both require an initial one-time fee; and 7(a) loans have an annual fee similar to the one being proposed for the B&I program. In fiscal year 1996, SBA made major changes in its 7(a) program by lowering the maximum percentage of the loan which could be guaranteed and increasing both the initial fee and the annual fee, which made the program more expensive and less valuable for borrowers and lenders. We examined changes in loan volume and loss levels associated with these changes, and found no convincing evidence that the FY96 changes decreased demand for the 7(a) program.

Subsidy rates are established using historic loss data from the program and other assumptions. In recent years the subsidy rate has increased significantly, resulting in a reduction in the amount of loans that could be guaranteed with the same budget authority. In the absence of additional budgetary authority, the proposed annual fee is necessary to cover expected losses from the program. The effect of the fee on the loan demand and program activity over the long term will depend on the size of the fee and other factors not related to the fee, including interest rates and general economic growth. This proposed change is prudent and cost efficient and will allow us to maintain the level of assistance going to rural America at a reasonable cost to the taxpayer.

Therefore, chapter XLII, title 7, Code of Federal Regulations, is proposed to be amended as follows:

For additional information see the direct final rule published in the final rules section of this Federal Register .

This rule is limited to the changes contained in Amendment 1 to CoC No. 1029 and does not include other aspects of the Standardized Advanced NUHOMS ® System design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The direct final rule will become effective on May 16, 2005. However, if the NRC receives significant adverse comments by March 30, 2005, then the NRC will publish a document that withdraws the direct final rule and will subsequently address the comments received, in a final rule. The NRC will not initiate a second comment period on this action.

A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:

(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or Technical Specifications.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 553; the NRC is proposing to adopt the following amendments to 10 CFR part 72.

For additional information see the direct final rule published in the final rules section of this Federal Register .

This rule is limited to the changes contained in Amendment 2 to CoC No. 1014 and does not include other aspects of the HI-STORM 100 cask system design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The direct final rule will become effective on May 16, 2005. However, if the NRC receives significant adverse comments by March 30, 2005, then the NRC will publish a document that withdraws the direct final rule and will subsequently address the comments received in a final rule. The NRC will not initiate a second comment period on this action.

A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:

(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or Technical Specifications.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 553; the NRC is proposing to adopt the following amendments to 10 CFR part 72.

The Bank System consists of 12 Banks and the Office of Finance (OF). The Banks are instrumentalities of the United States organized under the authority of the Federal Home Loan Bank Act (Bank Act). 12 U.S.C. 1421 et seq. The Banks also are “government sponsored enterprises” (GSEs), i.e., Federally chartered but privately owned institutions created by Congress to support the financing of housing and community lending by their members. See 12 U.S.C. 1422a(a)(3)(B)(ii), 1430(i), and 1430(j). By virtue of their GSE status, the Banks are able to borrow in the capital markets at favorable rates. The Banks are then able to pass along that funding advantage to their members—and ultimately to consumers—by providing advances (secured loans) and other financial services to their members (principally, depository institutions) at rates that the members generally could not obtain elsewhere.

The Banks, along with the OF, operate under the supervision of the Finance Board. The primary duty of the Finance Board is to ensure that the Banks operate in a financially safe and sound manner. Consistent with that duty, the Finance Board is required to supervise the Banks, ensure that they carry out their housing finance mission, and ensure that they remain adequately capitalized and able to raise funds in the capital markets. 12 U.S.C. 1422a(a)(3)(A) and (B).

Congress has delegated to the Finance Board broad authority to fulfill its statutory mandates. Section 2B of the Bank Act states that the Finance Board has the power “[t]o supervise the Federal Home Loan Banks and to promulgate and enforce such regulations and orders as are necessary from time to time to carry out the provisions of this chapter [ i.e., Chapter 11 of Title 12, codified at 12 U.S.C. 1421-1449].” 12 U.S.C. 1422b(a)(1). Section 20 of the Bank Act provides the Finance Board with the authority to require, “from time to time, [but] at least annually,” examinations and reports of condition of all the Banks in such form as the Finance Board prescribes. 12 U.S.C. 1440. Section 20 also vests in Finance Board examiners “the same powers and privileges as are vested in” examiners under the National Bank Act and the Federal Reserve Act. These Acts, in turn, provide examiners with sweeping powers, including the power to “make a thorough examination of all the affairs of the bank.” 12 U.S.C. 481. Thus, the Finance Board and its examiners have been vested with broad access to the books, records, and information of the Banks in order to fulfill the statutory mission of the Finance Board.

The United States Supreme Court has recognized the importance of this broad access to the ability of financial institution regulators to perform their supervisory functions. In United States v. Philadelphia National Bank, 374 U.S. 321 (1963), the Court stated:

An agency's exercise of its investigatory power will be upheld if the request for information is “reasonably relevant.” FTC v. Invention Submission Corp., 965 F.2d 1086, 1089 (D.C. Cir. 1992). Courts have said that an agency's own appraisal of relevancy must be accepted as long as it is not “obviously wrong.” 965 F.2d at 1089. Furthermore, an agency may delegate its investigatory powers to staff. See Fleming v. Mohawk Wrecking & Lumber Co., 331 U.S. 111 (1947).

The Bank Act makes clear that Congress intended the Finance Board to operate with broad investigatory powers to ensure that the Banks operate in a safe and sound manner and carry out their housing finance mission. See 12 U.S.C. 1422a, 1422b(a)(1), and 1440. To date, Finance Board staff has exercised the agency's investigatory power to require the Banks to submit call reports as well as instrument level data used by the Banks to run their market risk models. The Finance Board also has delegated to the OF the authority to require the Banks to submit information needed to prepare the combined financial statements of the Bank System. 12 CFR 989.3.

The Finance Board also may impose reporting requirements using its rulemaking authority. 12 U.S.C. 1422b(a)(1). The Finance Board has exercised its rulemaking authority to require reports related to a Bank's condition or activities, including: Bank director eligibility (12 CFR 915.7 and 915.12(a)); a Bank's performance in achieving certain goals described in the Bank's strategic plan (12 CFR 917.5(c)); capital member stock purchases (12 CFR 925.20); stock advances and commitments outstanding to each member (12 CFR 950.4(e)); Affordable Housing Program (AHP) (12 CFR 951.3(d)); Advisory Council annual analysis (12 CFR 951.4(f)(3)); Affordable Housing Reserve Fund annual statement (12 CFR 951.15(b)); Community Investment and Cash Advance (CICA) reporting (12 CFR 952.6); and acquired member assets (AMA) (12 CFR 955.4).

To make it easier for interested parties to locate Bank reporting requirements and to simplify the process for modifying these requirements as circumstances warrant, the Finance Board intends to issue many of the requirements in a manual to be titled Data Reporting Manual (DRM). For certain reporting requirements currently contained in Finance Board regulations, the Finance Board proposes to relocate them to the DRM. The DRM would include instructions addressing data definitions as well as requirements concerning data elements, reporting format, reporting method ( e.g. , electronic or paper), record retention, timeliness, reporting frequency, and certification. Going forward, changes to the reporting requirements will be made by amendments to the DRM. 1

The DRM would represent an enforceable order issued pursuant to the Finance Board's investigatory powers. The reorganization of reporting requirements, and the proposed amendments to Finance Board regulations, will allow the Finance Board to address problems it has experienced with the timeliness, accuracy, and completeness of data reporting by the Banks. The Bank Act gives the Finance Board enforcement authority to redress, among other things, violations of the Bank Act, or any law, order, rule, or regulation. 12 U.S.C. 1422b(a)(5). After this rulemaking is issued in final form and the DRM is issued, the Finance Board will deem data reporting problems as violations of an investigatory order and, where applicable, violations of the regulations being proposed today.

Reporting requirements imposed pursuant to the Finance Board's investigatory powers are not subject to the notice and comment provisions of the Administrative Procedures Act. See Appeal of FTC Line of Business Report Litigation , 595 F.2d at 695-696. Nevertheless, the Finance Board recognizes that changes to reporting requirements can impose regulatory burden. The Finance Board also recognizes the utility of input from the Banks and the public in determining what information is appropriate to collect. Thus, where practicable, Finance Board staff will consult with the Banks and the public with respect to significant changes in the DRM before changes are made. Moreover, information collections that are subject to the Paperwork Reduction Act, such as those related to the AMA rule, will continue to be published in the Federal Register for comment in accordance with that Act. The Finance Board welcomes written comments on all aspects of the proposed rule.

The Finance Board is proposing to add a new part 914 to its regulations that would address a Bank's obligation with respect to reporting requirements and make its books and records available to the Finance Board. Section 914.1 would contain a number of provisions directed at how a Bank reports data to the Finance Board and makes its books and records available to Finance Board examiners. Section 914.1(a) would define the term regulatory report to mean any report of raw or summary data required to evaluate the safe and sound condition and operations of a Bank or to determine compliance with any: (1) Provision in the Bank Act, or any law, order, rule, or regulation; (2) condition imposed in writing by the Finance Board in connection with the granting of any application or other request by a Bank; or (3) written agreement entered into by the Finance Board and a Bank. Section 914.1(b) would provide examples of a regulatory report , including the call report, reports of information to the OF pursuant to § 989.3, and reports of instrument-level data submitted for risk assessment purposes. The term regulatory report also includes reports related to a Bank's housing mission achievement, such as reports related to AMA, AHP, Community Investment Program (CIP), and other CICA programs.

Section 914.2 would require each Bank to file regulatory reports with the Finance Board pursuant to the Finance Board's forms and instructions for the reports. These reports must be filed no later than the deadline established by the Finance Board. In some cases, this will involve reporting at regular intervals; in other cases, it will involve responding to Finance Board requests for information that are in addition to the information submitted at regular intervals.

Section 914.3 would require each Bank to make its books and records available upon request by the Finance Board within a reasonable period at a location acceptable to the Finance Board. Section 914.3 establishes presumptions about what the Finance Board considers a reasonable period of time to respond to requests that occur during and outside of an ongoing examination as well as those that occur at other times.

Part 917 of the Finance Board's current regulations sets forth various powers and responsibilities of Bank boards of directors. In addition to setting out the basic fiduciary duties of care and loyalty for each director, part 917 requires each board, as a group, to take specific actions with respect to functions such as risk management, strategic planning, internal controls, budget, and oversight of the audit function.

The Finance Board is proposing to revise part 917 to require each Bank's board of directors to have in place at all times policies and procedures to ensure that the Bank complies with Finance Board reporting requirements. Given the Finance Board's need for Bank information that is timely, accurate, and complete, it is essential that responsibility for maintaining that information and reporting it to the Finance Board rest at the highest level of each Bank's corporate structure. 2

The Finance Board is proposing to revise various reporting requirements set forth in parts 915, 917, 925, 950, 951, 952, and 955 to refer the reader to forms and instructions issued pursuant to the DRM when this rulemaking is issued in final form.

The proposed rule would have no substantive effect on any collection of information covered by the Paperwork Reduction Act of 1995 (PRA). See 44 U.S.C. 3501 et seq. Therefore, the Finance Board has not submitted this proposal to the Office of Management and Budget (OMB) for review. Data requests that will be set out in the DRM or other investigatory orders that are “information collections” as that term is used in the PRA will be submitted to OMB for review and published in the Federal Register in accordance with the PRA's requirements.

The proposed rule would apply only to the Banks, which do not come within the meaning of “small entities” as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Thus, in accordance with section 605(b) of the RFA, 5 U.S.C. 605(b), the Finance Board hereby certifies that the proposed rule, if promulgated as a final rule, will not have a significant economic impact on a substantial number of small entities.

For the reasons stated in the preamble, the Finance Board proposes to amend 12 CFR, chapter IX, as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2005-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2005-20452; Directorate Identifier 2004-NM-206-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of our docket website, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

The Direction Ge ne rale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on certain Airbus Model A330, A340-200, and A340-300 series airplanes. The DGAC advises of several cases of bushing migration on the inboard and outboard actuator fittings of the aileron servo-controls; in one case the bushing had migrated completely out of the actuator fitting and the fitting was cracked. Investigation revealed that, in cases of bushing migration, the cracking is due to fatigue initiated by very high unsymmetrical loads. It has been determined that airplanes affected are those equipped with aileron servo-controls with ECP-8 or ECP-9 standard installed in service. These aileron servo-controls are equipped with new attachment bolts with a reduced diameter and small head. This condition, if not corrected, could result in rupture of the inboard and outboard actuator fittings of the aileron servo controls, which could result in airframe vibration and consequent reduced structural integrity of the airplane.

Airbus has issued the service bulletins listed in the table below, which describe procedures for modifying the aileron servo-controls.

Airbus has also issued Service Bulletins A330-57-3075 and A340-57-4083, both Revision 02, both including Appendix 01, both dated May 28, 2004. The service bulletins describe procedures for repetitive detailed visual inspections for discrepancies of the inboard and outboard actuator fitting of the aileron servo-controls, any related investigative/corrective actions; and eventual replacement of all the attachment bolts of the aileron servo-controls with large-head bolts. The related investigative/corrective actions are included in Figure 2, Sheets 1 through 5, of the Accomplishment Instructions of the applicable service bulletin. The investigative/corrective actions include, among other things:

• Accomplishing a detailed visual inspection for bushing migration of the rod end fittings of the inboard and outboard aileron servo-controls.

• If there is no bushing migration: Applying a paint mark on the fitting and bushing, or accomplishing follow-on detailed visual inspections to monitor bushing rotation or migration.

• If the bushing is missing (full migration): Accomplishing a special detailed inspection for cracking of the aileron fitting.

• If any discrepancies are found (bushing rotation or partial migration, missing bushing, cracks): Replacing with a new bushing or repairing the bushing.

• If the bushing migration is outside the limits specified in the service bulletins: Contacting Airbus for repair procedures.

The service bulletins also recommend submitting an inspection report to Airbus with the results of the detailed visual inspections.

Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

The DGAC mandated the service information and issued French airworthiness directives F-2004-067 and F-2004-068, both dated May 26, 2004, to ensure the continued airworthiness of these airplanes in France.

These airplane models are manufactured in France and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the DGAC has kept us informed of the situation described above. We have examined the DGAC's findings, evaluated all pertinent information, and determined that we need to issue an AD for products of this type design that are certificated for operation in the United States.

Therefore, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Among Proposed AD, French Airworthiness Directives, and Service Information.”

The French airworthiness directives and Airbus Service Bulletins A330-57-3075 and A340-57-4083 specify that operators may contact the manufacturer for disposition of certain repair conditions, but this proposed AD would require operators to repair those conditions per a method approved by either the FAA or the DGAC (or its delegated agent). In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair approved by either the FAA or the DGAC would be acceptable for compliance with this proposed AD.

Airbus Service Bulletins A330-57-3075 and A340-57-4083 recommend reporting inspection results to the airplane manufacturer; however, this proposed AD would not contain that requirement.

French airworthiness directive F-2004-068 requires that all Model A340 series airplanes be retrofitted with the ECP-9 standard aileron servo-controls before December 31, 2004. Since issuance of that airworthiness directive, the manufacturer has verified that all Model A340 series airplanes have been retrofitted with the ECP-9 standard, as recommended in Airbus Service Bulletin A340-27-4062. Therefore, this proposed AD differs from French airworthiness directive F-2004-068 by excluding the requirements to modify aileron servo controls with ECP-7 and ECP-8 standards for those airplanes. The manufacturer has also verified that all Model A330 series airplanes had the ECP-9 standard installed by either Airbus Modification 45512 or by retrofit, as recommended in Airbus Service Bulletin A330-27-3054. Therefore, this proposed AD excludes those requirements for Model A330 and A340 series airplanes that were equipped with ECP-7 and ECP-8 standard aileron servo-controls because those airplanes have had the ECP-9 standard installed. For these reasons, accomplishing the modifications of the aileron servo-controls to ECP-9 standard by accomplishing the concurrent service bulletins specified in Airbus Service Bulletins A330-57-3076, Revision 01, and A330-57-4084, Revision 01, is not required by this proposed AD.

The differences cited above have been coordinated with the DGAC.

The Airbus service bulletins specify to do a “detailed visual inspection” for discrepancies of the inboard and outboard actuator fitting of the aileron servo-controls. This proposed AD instead requires a “detailed inspection,” which is defined in Note 2 of this AD.

This proposed AD would affect about 20 airplanes of U.S. registry.

The proposed inspection would take about 16 work hours per airplane (2 hours per fitting), at an average labor rate of $65 per work hour. Based on these figures, the estimated cost of the proposed inspection is $20,800, or $1,040 per airplane, per inspection cycle.

The proposed replacement would take about 12 work hours per airplane, at an average labor rate of $65 per work hour. Required parts would be free of charge. Based on these figures, the estimated cost of the proposed replacement is $15,600, or $780 per airplane.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this proposed AD will not have federalism implications under Executive Order 13132. This proposed AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

This proposed rule is a companion to the direct final rule regarding adverse event reporting requirements for medical devices that is published in the final rules section of this issue of the Federal Register . The direct final rule and this companion proposed rule are identical. We are publishing the direct final rule because we believe the rule contains noncontroversial changes, and we anticipate that it will receive no significant adverse comment. A detailed discussion of the rule is set forth in the preamble of the direct final rule. If no significant adverse comment is received in response to the direct final rule, no further action will be taken related to this proposed rule. Instead, we will publish a confirmation document within 30 days after the comment period ends confirming that the direct final rule will go into effect on July 13, 2005. You can find additional information about FDA's direct final rulemaking procedures in a guidance published in the Federal Register of November 21, 1997 (62 FR 62466).

If we receive any significant adverse comment regarding the direct final rule, we will withdraw the direct final rule within 30 days after the comment period ends and proceed to respond to all of the comments under this companion proposed rule using usual notice-and-comment rulemaking procedures. The comment period for this companion proposed rule runs concurrently with the direct final rule's comment period. Any comments received under this companion proposed rule will also be considered as comments regarding the direct final rule.

A significant adverse comment is defined as a comment that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. In determining whether a significant adverse comment is sufficient to terminate a direct final rulemaking, we will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process. Comments that are frivolous, insubstantial, or outside the scope of the rule will not be considered adverse under this procedure. For example, a comment recommending an additional change to the rule will not be considered a significant adverse comment, unless the comment states why the rule would be ineffective without the additional change. In addition, if a significant adverse comment applies to part of a rule and that part can be severed from the remainder of the rule, we may adopt as final those parts of the rule that are not the subject of a significant adverse comment.

FDA's regulations governing device adverse event reporting, codified at part 803 (21 CFR part 803), implement section 519 of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 360i). That statutory provision has undergone several changes since its enactment as part of the Medical Device Amendments of 1976 (the 1976 amendments) (Public Law 94-295). As a result, FDA's regulations at part 803 have also undergone multiple revisions.

In the Federal Register of September 14, 1984 (49 FR 36326), FDA first issued final medical device reporting (MDR) regulations (part 803) for manufacturers and importers under the section 519 of the act, requiring reports of deaths, serious injuries, and certain malfunctions involving devices.

To address shortcomings in the 1976 amendments, and to better protect the public health by ensuring reporting of device-related adverse events, Congress enacted the Safe Medical Devices Act of 1990 (Public Law 101-629), which amended the statute to add requirements for medical device user facilities and distributors to report certain device-related adverse events. Reporting regulations for user facilities and for distributors became effective by operation of law on May 28, 1992, following the November 26, 1991 (56 FR 60024), publication of those requirements in a tentative final rule. This regulation required user facilities to report deaths to FDA and to manufacturers, and to report serious illnesses and injuries to manufacturers, or to FDA if the manufacturer was unknown. Distributors were required to report deaths and serious illnesses or injuries to FDA and to manufacturers, and to report certain malfunctions to manufacturers. Existing reporting requirements for manufacturer and importers under the 1984 regulation remained in effect.

In the Federal Register of September 1, 1993 (58 FR 46514), we published a notice confirming that the distributor reporting regulation had become final and was codified in part 804 (21 CFR part 804). On June 16, 1992, the President signed into law the Medical Device Amendments of 1992 (the 1992 amendments) (Public Law 102-112) further amending certain provisions of section 519 of the act relating to reporting of adverse device events. Among other things, the 1992 amendments amended section 519 of the act to modify the requirements for manufacturer and importer reporting. Consequently, under the regulation issued September 1, 1993, importers were required to report as manufacturers if they were engaged in manufacturing activities or to report as distributors if they were engaged solely in distribution activities.

On November 21, 1997, the President signed the Food and Drug Administration Modernization Act (FDAMA) (Public Law 105-115) into law. FDAMA made several changes regarding the reporting of adverse experiences related to devices. In the Federal Register of May 12, 1998, FDA published a direct final rule (63 FR 26069) and a companion proposed rule (63 FR 26129) to implement new amendments to the MDR provisions. We received significant adverse comments on the 1998 direct final rule and the 1998 companion proposed rule; therefore, we withdrew the 1998 direct final rule and issued a revised final rule on January 26, 2000 (65 FR 4112). Under the act as amended by FDAMA, distributors are no longer required to report adverse events but are required to keep records. Importers are still required to report adverse events related to medical devices. Because of FDAMA's changes, we revised part 803 and rescinded part 804.

In summary, the present version of part 803, as it is codified in the Code of Federal Regulations, imposes the following general reporting and recordkeeping requirements:

Device user facilities must report deaths and serious injuries that a device has or may have caused or contributed to, establish and maintain adverse event files, and submit annual reports. Manufacturers and importers must report deaths and serious injuries that a device has or may have caused or contributed to, must report certain device malfunctions, and must establish and maintain adverse event files. Manufacturers also must submit specified followup and baseline reports. Distributors must maintain records of incidents but are not required to report these incidents.

This proposed rule does not change the substantive regulatory requirements described previously in this document. FDA is revising part 803 solely to ensure that despite the many revisions that have been made, part 803 is clear and easy to understand. To achieve this goal, we have rewritten part 803 into plain language, in accordance with the Presidential Memorandum on Plain Language, issued on June 1, 1998. That memorandum directed the agency to ensure that all of its documents are clear and easy to read. Part of achieving that goal involves having readers of a regulation feel that it is speaking directly to them. Therefore, we have attempted to incorporate plain language in this rule as much as possible. We have tried to make each section of the proposed rule easy to understand by using clear and simple language rather than jargon, by keeping sentences short, and by using active voice rather than passive voice whenever possible. We have also made changes to improve the consistency of the format and language used throughout parallel regulations governing user facilities, importers, and manufacturers that were added or amended at different times. We would like your comments on the following topics: (1) How effectively we have used plain language, (2) the organization and format of the proposed rule, and (3) whether these changes have made the document clear and easy to read. In addition, in this proposed rule, as in the direct final rule, we have made technical corrections to several provisions.

A detailed description of specific changes in the rule is contained in the preamble to the direct final rule, published elsewhere in this issue of the Federal Register .

We note that §§ 803.55(b)(9) and (b)(10) and 803.58 were stayed indefinitely, under notices published in the Federal Registers of July 31, 1996 (61 FR 39868 at 39869) and July 23, 1996 (61 FR 38346 at 38347). This proposed rule does not propose any changes to those provisions, which remain stayed indefinitely, but for the sake of completeness, we include as follows, the current text of those provisions.

This proposed rule, like the existing medical device adverse event reporting regulations to which it makes nonsubstantive changes, is authorized by sections 502, 510, 519, 520, 701, and 704 of the act (21 U.S.C. 352, 360, 360i, 360j, 371, and 374).

We have determined under 21 CFR 25.30(h) and (i) that this action does not have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

We have examined the impacts of this proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages, distributive impacts, and equity). We believe that this proposed rule is not a significant regulatory action under the Executive order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this proposed rule will not change any existing requirements or impose any new requirements, we certify that this proposed rule, if finalized, will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $115 million, using the most current (2003) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.

This rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The collections of information addressed in the rule have been approved by OMB in accordance with the PRA under the regulations governing medical device reporting (part 803, OMB control number 0910-0437).

We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we have concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

Interested persons may submit to the Division of Dockets Management (see ADDRESSES ) written or electronic comments regarding this proposed rule. Submit a single copy of electronic comments or two paper copies of any mailed comments, except that individuals may submit one paper copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

Among other changes, the Consolidated Appropriations Act (section 801 of Division B) provides that 35 U.S.C. 41(a), (b), and (d) shall be administered in a manner that revises patent application fees (35 U.S.C. 41(a)) and patent maintenance fees (35 U.S.C. 41(b)), and provides for a separate filing fee (35 U.S.C. 41(a)), search fee (35 U.S.C. 41(d)(1)), and examination fee (35 U.S.C. 41(a)(3)) during fiscal years 2005 and 2006. The Consolidated Appropriations Act also provides that the provisions of 35 U.S.C. 111(a) for payment of the fee for filing the application apply to the payment of the examination fee (35 U.S.C. 41(a)(3)) and search fee (35 U.S.C. 41(d)(1)) in an application filed under 35 U.S.C. 111(a), and that the provisions of 35 U.S.C. 371(d) for the payment of the national fee apply to the payment of the examination fee (35 U.S.C. 41(a)(3)) and search fee (35 U.S.C. 41(d)(1)) in an international application filed under the Patent Cooperation Treaty (PCT) and entering the national stage under 35 U.S.C. 371. See 35 U.S.C. 41(a)(3) and 41(d)(1)(C). Thus, the examination fee and search fee are due on filing in an application filed under 35 U.S.C. 111(a) or on commencement of the national stage in a PCT international application, but may be paid at a later time if paid within such period and under such conditions (including payment of a surcharge) as may be prescribed by the Director. See H.R. Rep. 108-241, at 16 (2003) (H.R. Rep. 108-241 contains an analysis and discussion of an identical provision in H.R. 1561, 108th Cong. (2004)).

In view of the revised patent fee structure during fiscal years 2005 and 2006 set forth in the Consolidated Appropriations Act, the Office is proposing the following changes in Office practice for handling patent applications filed without the appropriate fees: That is, the filing fee, search fee, and examination fee.

The Office is proposing to: (1) Require the surcharge under § 1.16(f) in any application filed under 35 U.S.C. 111(a) in which the search fee or examination fee is paid on a date later than the filing date; and (2) require the surcharge under § 1.492(h) in any application filed under the PCT in which the search fee or examination fee is paid on a date later than thirty months from the priority date. This change is because the Consolidated Appropriations Act splits the former patent application filing (or national) fee into a separate filing (or national) fee, search fee and examination fee during fiscal years 2005 and 2006. The filing of an application which lacks any of the basic filing (or national) fee, the search fee, the examination fee, or oath or declaration requires the Office to issue a notice to file the missing parts (or requirements) of the application.

The Office is also proposing to eliminate the processing and retention fee (§ 1.21(l)) practice. The processing and retention fee practice permits an applicant to file an application without the basic filing fee (which formerly covered the cost of the initial processing of an application and part of the cost of the search and examination of an application) and pay only the processing and retention fee set forth in § 1.21(l) in order for the application to be used as a basis for foreign filing and benefit claims under 35 U.S.C. 120 and § 1.78(a). Under the revised patent fee structure set forth in the Consolidated Appropriations Act, the basic filing fee covers only the cost of the initial processing of an application. Thus, the Office is proposing to require payment of the basic filing fee (rather than just the current processing and retention fee set forth in § 1.21(l)) to retain the application. Since the Office must retain an application to permit benefit of the application to be claimed under 35 U.S.C. 120 and § 1.78 in a subsequent nonprovisional or international application, the Office is also proposing to require payment of the basic filing fee (rather than just the current processing and retention fee set forth in § 1.21(l)) to permit benefit of the application to be claimed under 35 U.S.C. 120 and § 1.78 in a subsequent nonprovisional or international application.

The Office is also implementing the provision in 35 U.S.C. 41(a)(1)(G) for the Office to prescribe the paper size equivalent of an application filed in whole or in part in an electronic medium for purposes of the application size fee specified in 35 U.S.C. 41(a)(1)(G) (§ 1.16(s) and § 1.492(j)). A 21.6 cm by 27.9 cm (8 1/2 by 11 inches) sheet of paper with a top margin of 2.0 cm ( 3/4 inch), a left side margin of 2.5 cm (1 inch), a right side margin of 2.0 cm ( 3/4 inch), and a bottom margin of 2.0 cm ( 3/4 inch)), will contain about 30 lines of double-spaced text, with each line having about 50 to 65 characters. An ASCII text (the only format permitted by § 1.52(e)) document containing 30 lines of text, each line having about 50 to 65 characters, will be slightly less than two kilobytes in size. Therefore, the Office is proposing that each two kilobytes of content submitted on an electronic medium shall be counted as a sheet of paper for purposes of the application size fee specified in 35 U.S.C. 41(a)(1)(G) (§ 1.16(s) and § 1.492(j)).

Title 37 of the Code of Federal Regulations, Part 1, is proposed to be amended as follows:

Section 1.16: Section 1.16(f) is proposed to be amended to require a surcharge if any of the basic filing fee, the search fee, the examination fee, or oath or declaration is filed in a nonprovisional application on a date later than the filing date of the application. Section 1.16(s) is proposed to be amended to include a cross reference to § 1.52(f).

Section 1.21: Section 1.21 is proposed to be amended to remove and reserve paragraph (l), which set forth the fee for processing and retaining an application in which the basic filing fee has not been paid.

Section 1.52: Section 1.52(f)(1) is proposed to be amended to provide that for purposes of determining the application size fee required by § 1.16(s) or § 1.492(j), for an application the specification and drawings of which (excluding any sequence listing in compliance with § 1.821(c) or (e), and any computer program listing filed in an electronic medium in compliance with §§ 1.52(e) and 1.96) are submitted in whole or in part on an electronic medium other than the Office electronic filing system, each two kilobytes of content submitted on an electronic medium shall be counted as a sheet of paper.

Section 1.53: Section 1.53(f)(5) is proposed to be amended to provide that if the applicant does not pay the basic filing fee during the pendency of the application, the Office may dispose of the application.

Section 1.78: Section 1.78(a)(1) is proposed to be amended to provide that to claim the benefit of a prior-filed nonprovisional application under 35 U.S.C. 120 and § 1.78(a) in a subsequent nonprovisional or international application, the prior-filed nonprovisional application must be entitled to a filing date as set forth in § 1.53(b) or § 1.53(d) and have paid therein the basic filing fee set forth in § 1.16 within the pendency of the application.

Section 1.492: Section 1.492(h) is proposed to be amended to require a surcharge if any of the search fee, the examination fee, or the oath or declaration is filed later than thirty months from the priority date. Section 1.492(j) is proposed to be amended to include a cross reference to § 1.52(f).

Administrative Procedure Act: The changes proposed in this notice relate solely to the procedures to be followed in prosecuting a patent application: i.e. , the procedures for paying the fees due upon filing an application for patent. This notice does not propose any change to the amount of fees charged by the Office. Specifically, the changes proposed in this notice concern the procedures for payment of the filing fee, search fee, and examination fee, and setting forth which fees must be paid in order for a nonprovisional application to be processed and retained by the Office such that it may be used as the basis for foreign filing and for benefit claims under 35 U.S.C. 120 and § 1.78(a). Therefore, these rule changes involve interpretive rules, or rules of agency practice and procedure under 5 U.S.C. 553(b)(A). See Bachow Communications Inc. v. FCC, 237 F.3d 683, 690 (D.C. Cir. 2001) (rules governing an application process are “rules of agency organization, procedure, or practice” and are exempt from the Administrative Procedure Act's notice and comment requirement); see also Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-50, 38 USPQ2d 1347, 1351 (Fed. Cir. 1996) (the rules of practice promulgated under the authority of former 35 U.S.C. 6(a) (now in 35 U.S.C. 2(b)(2)) are not substantive rules (to which the notice and comment requirements of the Administrative Procedure Act apply)), and Fressola v. Manbeck, 36 USPQ2d 1211, 1215 (D.D.C. 1995) (“it is doubtful whether any of the rules formulated to govern patent and trade-mark practice are other than ‘interpretative rules, general statements of policy, * * * procedure, or practice.’ ”) (quoting C.W. Ooms, The United States Patent Office and the Administrative Procedure Act, 38 Trademark Rep. 149, 153 (1948)).

Under the Office's pre-existing “missing parts” or “missing requirements” practice, an applicant was required to pay a surcharge if the basic filing fee was not present on filing in an application filed under 35 U.S.C. 111 or if the basic national fee was not present on the date of commencement of the national stage of processing in a PCT application entering the national stage under 35 U.S.C. 371. The Consolidated Appropriations Act split the patent application filing (or national) fee into a separate filing (or national) fee, search fee and examination fee. Therefore, the proposed replacement of the basic filing (or national) fee in §§ 1.16 and 1.492 with the basic filing (or national) fee, the search fee, or the examination fee is simply a procedural change that is necessary to maintain (or restore) the status quo ante with respect to the Office's pre-existing “missing parts” or “missing requirements” practice.

The processing and retention fee practice allows applicants to file an application without the filing fee and to pay only a processing and retention fee in order for the application to be used as a basis for foreign filing and for priority under 35 U.S.C. 120. Under the revised patent fee structure set forth in the Consolidated Appropriations Act (which split the filing fee into a separate filing, search fee and examination fee), the filing fee covers the cost of the initial processing and retention of an application. Thus, requiring payment of the basic filing fee under the Consolidated Appropriations Act in order for an application to be used as a basis for foreign filing and for priority under 35 U.S.C. 120 is more compatible with the filing fee scheme set forth in the Consolidated Appropriations Act than is continuing the processing and retention fee practice.

The Consolidated Appropriations Act provides for the Office to prescribe the paper size equivalent of an application filed in whole or in part in an electronic medium for purposes of the application size fee specified in 35 U.S.C. 41(a)(1)(G). Thus, setting a paper size equivalent based upon the number of kilobytes of content that can fit onto a sheet of paper (given the current requirements for applications filed in part on CD and for paper size and margins) simply sets forth the procedures for determining the paper size equivalent of an application filed in whole or in part in an electronic medium for purposes of the application size fee.

Accordingly, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law). Nevertheless, the Office is providing this opportunity for public comment on the changes proposed in this notice because the Office desires the benefit of public comment on these proposed changes.

Regulatory Flexibility Act: As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553 (or any other law), an initial regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is not required. See 5 U.S.C. 603.

Executive Order 13132: This rule making does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

Executive Order 12866: This rule making has been determined to be not significant for purposes of Executive Order 12866 (Sept. 30, 1993).

Paperwork Reduction Act: This notice involves information collection requirements which are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collections of information involved in this notice have been reviewed and previously approved by OMB under OMB control numbers: 0651-0021, 0651-0031, and 0651-0032. The United States Patent and Trademark Office is not resubmitting any information collection package to OMB for its review and approval because the changes in this notice do not affect the information collection requirements associated with the information collection under these OMB control numbers. The changes proposed in this notice concern the procedures for payment of the filing fee, search fee, examination fee, and the application size fee, including setting forth which fees must be paid in order for an application to be processed and retained by the Office such that it may be used as the basis for foreign filing and for benefit claims under 35 U.S.C. 120 and § 1.78(a).

Interested persons are requested to send comments regarding these information collections, including suggestions for reducing this burden, to Robert J. Spar, Director, Office of Patent Legal Administration, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450, or to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Patent and Trademark Office.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

For the reasons set forth in the preamble, 37 CFR part 1 is proposed to be amended as follows:

This action applies to a single source, Pfizer, Incorporated in Vigo County, IN.

1. Submitting CBI. Do not submit Confidential Business Information to EPA through RME, regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for Preparing Your Comments. When submitting comments, remember to:

a. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

b. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

c. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

d. Describe any assumptions and provide any technical information and/or data that you used.

e. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

f. Provide specific examples to illustrate your concerns, and suggest alternatives.

g. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

h. Make sure to submit your comments by the comment period deadline identified.

The EPA is proposing to approve revisions to the particulate matter and sulfur dioxide emission requirements for Pfizer. On October 7, 2004, Indiana submitted a request for PM and SO 2 emissions limit revisions as an amendment to its SIP. Pfizer is replacing three boilers and removing two additional boilers. Indiana requested deleting the limits for all five boilers. The new boiler is subject to the new source performance standard limits for PM and SO 2 emissions which are not being revised. The requested SIP revisions consist of the limit deletions only. There will be no increase in PM or SO 2 emissions from the requested revisions. Pfizer operates a medicinal chemical manufacturing facility in Vigo County, Indiana.

For additional information, see the Direct Final Rule which is located in the Rules section of this Federal Register . Copies of the request and the EPA's analysis are available electronically at RME or in hard copy at the above address. Please telephone Matt Rau at (312) 886-6524 before visiting the Region 5 Office.

Initial Paperwork Reduction Act of 1995 Analysis: This document contains proposed information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due April 29, 2005. Comments should address: (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 automated collection techniques or other forms of information technology. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

OMB Control Number: 3060-1064.

Title: Regulatory Fee Assessment True-Ups.

Form No.: Not applicable.

Type of Review: Revision of currently approved collection.

Respondents: Businesses or other for-profit entities.

Estimated Number of Respondents: 1,650.

Estimated Time Per Response: .25 hours.

Frequency of Response: Annually.

Estimated Total Annual Burden: 413 hours.

Estimated Total Annual Costs: $0.

Privacy Act Impact Assessment: This information collection does not affect individuals or households; thus, there is no impact under the Privacy Act.

Needs and Uses: The Commission collects Congressionally-mandated regulatory fees from its regulatees based upon a schedule of fees that it establishes each year in an annual rulemaking proceeding. As part of our modernization efforts, we are able to provide regulatory fee assessments to select categories of regulatees: (1) Cable television operators, (2) media services licensees and (3) commercial mobile radio service (CMRS) licensees. Along with the fee assessment notices that we intend to send to these three categories of regulatees, we will provide them with a “true-up” opportunity to correct, update or otherwise rectify their assessed fee amounts well before the actual due date for payment of regulatory fees. This “true-up” collection of information is necessary because it enables regulatees to confirm for themselves what their regulatory fee payment obligations will be, well before their fees are due. The “true-up” opportunity also serves to provide the Commission with a higher degree of certainty in its regulatory fee payment expectations for the fiscal year.

Adopted: February 11, 2005; Released: February 15, 2005.

By the Commission:

1. In this Notice of Proposed Rulemaking (NPRM) , we propose to collect $280,098,000 in regulatory fees for Fiscal Year (FY) 2005. These fees are mandated by Congress and are collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities. 1

2. Each fiscal year, the Commission proportionally allocates the total amount that must be collected via regulatory fees (Attachment C). 2 For FY 2005, this allocation was done using FY 2004 revenues as a base. From this base, a revenue amount for each fee category was calculated. Each fee category was then adjusted upward by 2.6 percent to reflect the increase in regulatory fees from FY 2004 to FY 2005. These FY 2005 amounts were then divided by the number of payment units in each fee category to determine the unit fee. 3 In instances of small fees, such as licenses that are renewed over a multiyear term, the resulting unit fee was also divided by the term of the license. These unit fees were then rounded in accordance with 47 U.S.C. 159(b)(2).

3. In calculating the FY 2005 regulatory fees proposed in Attachment D, we further adjusted the FY2004 list of payment units (Attachment B) based upon licensee databases and industry and trade group projections. Whenever possible, we verified these estimates from multiple sources to ensure the accuracy of these estimates. In some instances, Commission licensee databases were used, while in other instances, actual prior year payment records and/or industry and trade association projections were used in determining the payment unit counts. 4 Where appropriate, we adjusted and/or rounded our final estimates to take into consideration variables that may impact the number of payment units, such as waivers and/or exemptions that may be filed in FY 2005, and fluctuations in the number of licensees or station operators due to economic, technical or other reasons. Therefore, when we note that our estimated FY 2005 payment units are based on FY 2004 actual payment units, we may have rounded the number for FY 2005 or adjusted it slightly to account for these variables.

4. Additional factors are considered in determining regulatory fees for AM and FM radio stations. These factors are facility attributes and the population served by the radio station. The calculation of the population served is determined by coupling current U.S. Census Bureau data with technical and engineering data, as detailed in Attachment E. Consequently, the population served, as well as the class and type of service (AM or FM), determines the regulatory fee amount to be paid.

5. In our FY 2003 Report & Order (68 FR 48445, August 13, 2003), we noted that in recent years there has been a significant decline in the number of CMRS Messaging units—from 40.8 million in FY 1997 to 19.7 million in FY 2003—a decline of 51.7 percent. 5 This trend is continuing. For example, in the FY 2004 regulatory fee cycle, the number of CMRS Messaging units for which regulatory fees were paid declined to 13.5 million. This is consistent with our Ninth Annual CMRS Competition Report, which estimates the number of paging-only subscribers at the end of 2003 to be 11.2 million units. 6 We also note that in recent years there have been no significant changes in the level of regulatory oversight for this fee category. For these reasons, we propose to continue our policy of maintaining the CMRS Messaging subscriber regulatory fee at the rate calculated in FY 2003 and FY 2004 to avoid further contributing to the financial hardships associated with a declining subscriber base.

6. In the FY 2004 NPRM , 7 we again sought comment on the appropriate fee classification for LMDS. 8 Commenters urged the Commission to classify LMDS as a microwave service, arguing that LMDS is operationally, functionally, and legally similar to 24 and 39 GHz services in the microwave fee category. We rejected this argument because LMDS licenses are, as a factual matter, quite different than other Part 101 fixed microwave services in the upper frequency bands (above 15 GHz). While these three services are licensed on a geographic basis allowing licensees to place multiple stations within the authorized service areas, most microwave stations are currently licensed on a site-by-site basis thereby requiring, depending on the frequency band, multiple individual licenses to serve a particular geographic area or multiple points therein. 9 Even when the fees for LMDS licensees are compared with the fees for licensees in the 24 and 39 GHz bands, we did not find current fee assessments to impose a disproportionate burden on LMDS licensees.

7. However, we did identify an anomaly in FY 2004 between LMDS Block A and LMDS Block B licenses. Block A licenses are authorized for 1150 MHz of spectrum, more than seven times the amount of spectrum authorized for Block B licenses (150 MHz). Currently, LMDS regulatory fees are assessed on a per-license basis. Using the authorized bandwidth for each license as the basis for comparison, we noted that the LMDS fee for Block A licenses in FY2004 was significantly lower on a per megahertz basis than the fee for Block B licenses. For example, on a per MHz basis, Block B licenses, which are authorized for 150 MHz in the 31,000-31,075/31,225-31,300 MHz bands, paid $1.80 per MHz in FY2004, whereas Block A licenses authorized for 1150 MHz of spectrum paid $0.24 per MHz. Because this anomaly appears to create a disproportionate fee obligation on LMDS Block B licenses, on our own motion we propose in FY 2005 to exercise our authority pursuant to section 9(b)(3) and amend the fee schedule to assess LMDS regulatory fees on a per megahertz basis. This proposed action would thereby place fee assessments on Block A and Block B licenses more in line with the benefits received under the respective licenses in terms of their authorized bandwidth, which varies substantially, as noted above.

8. Following auctions 17 and 23, half of all of the licenses were Block A licenses and half were Block B licenses. Since then, some of the original licenses have been divided among other licensees pursuant to the Commission's license disaggregation and partitioning policies and procedures and others have been surrendered back to the FCC. Based on the FY 2005 revenue amount to be collected from the LMDS fee category ($94,050), 10 the per megahertz per unit fee is $0.44, which is based on a total authorized bandwidth of 1,300 MHz and estimated units of 165 Block A units and 165 Block B units. 11 This methodology of calculating LMDS regulatory fees incorporates the differences in bandwidth use between Block A and Block B licenses, as well as differences in the number of units between Block A and Block B licenses. Using the per MHz per unit fee of $0.44, the regulatory fee for LMDS Block A licenses is calculated to be $505 per license, and the regulatory fee for LMDS Block B licenses is calculated to be $65 per license. 12

9. We seek comment on our proposal to use the above methodology for calculating regulatory fees for LMDS. We are aware of the dramatic one-year increase in regulatory fees that would result for Block A licensees if we were to adopt the above per-MHz methodology. Therefore, so as to minimize the impact of the fee increase, we seek comment on whether we should graduate the increase in increments over a brief period of years.

10. Additionally, we seek general comment on applying the per-MHz methodology to LMDS Block A and Block B licenses that have been partitioned and disaggregated. We also seek comment on whether to continue to use a fee calculation process that does not distinguish between LMDS Block A and LMDS Block B licenses. A fee calculation process that does not distinguish between Block A and Block B licenses would result in a regulatory fee of $285 per LMDS license. 13 Finally, we seek comment on other proposals to address the assessment of regulatory fees for LMDS.

11. The Commission currently assesses regulatory fees on international carriers based on the number of active international bearer circuits the carrier had the previous year. 14 In response to our FY 2004 NPRM , several commenters requested that the Commission change the regulatory fee regime for international carriers. 15 In the FY 2004 Report and Order we found that we needed a more complete record on these issues and stated that we would seek comment on them in our 2005 regulatory fees proceeding.

12. In this proceeding we seek comment on possible changes to the regulatory fees assessed on international carriers. Specifically we seek comment on possible bases, other than active circuits, for assessing regulatory fees on international carriers. 16

13. Several carriers raised concerns with the use of international bearer circuits as the basis for assessing regulatory fees in the 2004 regulatory fee proceeding. They argued that basing fees on the number of active circuits an international carrier has favors older, lower-capacity systems to the detriment of newer, higher-capacity systems. Specifically the commenters argued that (1) the Commission's present methodology does not take into account the reduced regulation of non-common carrier (also known as “private”) submarine cable operators, and (2) imposing fees based on a company's “lit and sold” (also known as “active”) bearer circuit capacity is at odds with how non-common carrier submarine cable operators actually sell capacity, thereby requiring operators to spend time determining if regulatory fees are applicable based on the Commission's definition of “active.”

14. Tyco proposed the following changes be made to the regulatory regime: (1) Separate the non-common carrier submarine cable operator subcategory from the existing international bearer circuit fee category by creating a new non-common carrier submarine cable operator category; (2) allocate the current revenue requirement for the bearer circuit fee category between two new fee categories based on the regulatory burden of each new category; and (3) adopt a flat, per-cable-landing-license fee for non-common carrier submarine cable operators. Several commenters supported Tyco's position. Several commenters also noted that satellite operators provide international bearer circuits on a non-common carrier basis, and that circuit fees should include both non-common carriers as well as private submarine cable providers.

15. The Commission concluded in the FY 2004 Report and Order that these arguments warranted further consideration, and that a fee system based on cable landing licenses and international section 214 authorizations, rather than international bearer circuits, would be administratively simpler for both the Commission and carriers. 17 The Commission also noted that a fee system based on licenses/authorizations could provide an incentive for carriers to initiate new services and to use new facilities more efficiently. 18

16. The assessment of regulatory fees on international carriers based on active international circuits is set out in the fee schedule in section 9 of the Communications Act. 19 The statute provides the Commission with the authority to amend the fee schedule. 47 U.S.C. 159(b)(3). Section 9(b)(3) requires the Commission to amend the schedule if the Commission determines that amendment is necessary to comply with the general fee authority set forth in section 9(b)(1)(A) of the Communications Act. Section 9(b)(3) also grants the Commission authority to “add, delete, or reclassify service in the Schedule to reflect additions, deletions, or changes in the nature of its services as a consequence of Commission rulemaking proceedings or changes in the law.”  20 We seek comment on whether a change to the computation of fees for the international bearer circuit category or a reclassification of the category is warranted in light of the Commission's authority to amend the fee schedule. 21 If a reclassification of the category is proposed, commenters should specifically address the Commission rulemakings or changes in law that justify the reclassification.

17. Commenters should address possible alternative methods of assessing regulatory fees on international carriers, for example whether regulatory fees should be assessed based on the holding of an international section 214 authorization or a cable landing license. As noted above, Tyco proposed to separate the non-common carrier submarine cable operator subcategory from the existing international bearer circuit fee category, thereby creating a new non-common carrier submarine cable operator category. We seek comment on the Tyco proposal. Commenters should address how to allocate the current international bearer circuit revenue requirement between non-common carrier submarine cable operators and the remaining circuit fee category.

18. In 2002 the Commission established the Multichannel Video Distribution and Data Service (MVDDS) in the 12.2-12.7 GHz band (12 GHz band), 22 totaling 500 megahertz of contiguous spectrum that is licensed by 214 service areas (“MVDs”). MVDDS spectrum is used to facilitate the delivery of new video and broadband communications services, such as local television programming and high-speed Internet access. 23 The technical rules reflect a carefully crafted balance in which the Commission affords protection to the Direct Broadcast Satellite (DBS) service and the non-geostationary satellite orbit (NGSO) fixed-satellite service (FSS) while allowing the entrance of MVDDS. 24

19. The Commission established MVDDS because it had concluded that a fourth provider in the MVPD marketplace would generate significant public interest benefits, such as lower prices, improved service quality, increased innovation, and increased service to unserved or underserved rural areas. 25 However, the Commission found that “open eligibility for in-region cable operators [would] pose a significant likelihood of substantial competitive harm” because “cable operators have a strong incentive to prevent entry by new MVPD providers.” 26 Therefore, cable operators and entities holding attributable interests in cable operators must divest these interests within ninety days of being granted an MVDDS license whose geographic service area significantly overlaps the cable operator's service area. 27

20. On January 27, 2004, the Commission completed the auction of the 214 MVDDS licenses (“Auction No. 53”), raising (in net bids) a total of $118,721,835. In this auction, ten winning bidders won a total of 192 MVDDS licenses, which the Commission issued later in 2004. 28 MVDDS licenses are issued for a ten-year term beginning on the date the initial authorization is granted. 29 Licensees must provide “substantial service” within five years of the grant, which must be documented at license renewal time. 30 As of the third quarter 2004, MVDDS equipment was still under development. Because MVDDS spectrum can be used to provide non-video, i.e. , broadband data services, 31 the Commission concluded that MVDDS does not fall within the Cable Television and DBS Subscribers regulatory fee category, which raises the question of whether MVDDS should be established as a new regulatory fee category.

21. Since MVDDS equipment is still under development, we propose to not establish regulatory fees for MVDDS as a new regulatory fee category in FY 2005. We seek comment on this proposal. In the alternative, if the Commission were to establish regulatory fees for MVDDS in FY 2005, we seek comment on equitable ways to assess fees for MVDDS based on the nature of this service, such as whether the fee should be flat or be set on a per-MHz basis. We also seek comment on whether the Commission should collect the fee on an annual basis, or whether we should collect it in advance to cover the term of the license fee when the application for license is filed.

22. On June 10, 2004, we adopted a Report & Order and Further Notice of Proposed Rulemaking (R&O and FNPRM), 69 FR 72048 (December 10, 2004), and also referred to as the BRS/EBS proceeding)  32 that takes important steps to transform our rules and policies governing the licensing of the Instructional Television Fixed Service (ITFS), the Multipoint Distribution Service (MDS), and the Multichannel Multipoint Distribution Service (MMDS) in the 2500-2690 MHz band. 33 The actions taken in this proceeding initiated a fundamental restructuring of the band that will provide both existing ITFS and MDS licensees and potential new entrants with greatly enhanced flexibility in order to encourage the highest and best use of spectrum domestically and internationally, and the growth and rapid deployment of innovative and efficient communications technologies and services. 34 The R&O renamed the MDS service as the “Broadband Radio Service” (BRS). This new designation connotes a more accurate description of the services we anticipate will develop in the band.The R&O also renamed the ITFS service as the Educational Broadband Service” (EBS), which more accurately describes the kinds of the services that we anticipate will develop in the band. 35 The R&O, among other things, implemented geographic area licensing for all licensees in the band, which gives licensees increased flexibility while greatly reducing administrative burdens on both licensees and the Commission. We note that geographic area licensing will reduce the total number of BRS licenses because, in most cases, separate licenses will no longer be necessary for each transmitter a licensee places in service.

23. In the FNPRM, we sought comment on issues relating to regulatory fees. 36 We note that, other than renaming our MDS/MMDS regulatory fee category to BRS and adjusting its estimated number of payment units, any other changes to the regulatory fee rules we adopt in the BRS/EBS proceeding will not be adopted in time to take effect in FY 2005. If new regulatory fee rules are adopted in the BRS/EBS proceeding, the Commission will make appropriate adjustments in the appropriate regulatory fee cycle, which will presumably be the cycle for FY 2006 or beyond.

24. At the inception of our regulatory fee program in FY 1994, the regulatory fee amount for construction permits was set at an amount that, when compared to licensed stations, was commensurate to the limited nature of station operations under the terms of a construction permit. Each year since FY 1994, the unit fee for AM, FM, and full-service VHF and UHF television construction permits was calculated by determining the proportion of the amount to be collected by each respective fee category, divided by the number of estimated units, as illustrated in Attachment C. However, since the inception of the program in FY 1994, the amount of fees that we have been directed to collect each year has steadily increased, while the number of estimated payment units for these construction permits has steadily decreased. This combination of increasing expected revenue and decreasing payment units for these construction permits has resulted in a regulatory unit fee that is higher than that of some licensed stations.

25. To rectify this situation, we propose beginning in FY 2005 to set the AM, FM, VHF, and UHF construction permit fee to be no higher than the regulatory fee associated with the lowest licensed station for that fee category. Because there are unit and revenue variables in assessing the per-unit regulatory fee, thereby causing the fee to change each fiscal year, it may be necessary to make revenue adjustments each fiscal year to keep the per unit regulatory fee for construction permits at the level of the lowest licensed fee for AM, FM, VHF, and UHF stations. We seek comment on whether construction permit fees should be held at the level of the lowest licensed fee for their respective fee categories ( e.g. AM, FM, VHF, and UHF stations), and whether any adjustments that have to be made to hold the construction permit fee at the level of the lowest respective licensed fee should be spread across only a narrow group of fee categories, such as AM, FM, VHF, and UHF stations, or across all fee categories.

26. Pursuant to 47 CFR 1.1162, the Commission does not establish regulatory fees for applicants, permittees and licensees who qualify as government entities or non-profit entities. Despite the language of 47 CFR 1.1162, we still encounter frequent uncertainty and comments from parties with respect to our fee exemption policies. Therefore, we believe it would be helpful for us to provide clarification of these policies. 37

27. Determination of Fee Code for a Facility: The fee code is determined by the operational status of the facility as of October 1 of each year. This involves factors such as whether the facility is in construction permit status or licensed status and a variety of other factors. Every facility has a fee code. There is no prorating of regulatory fees. For example, if a facility is in construction permit status as of the close of business October 1, but a license is granted on or after October 2, that facility is considered to be in construction permit status for the entire year. Other facility changes during the course of the year, such as technical changes, are treated in the same manner.

28. Establishment of Exempt Status: State, local, and federal government agencies and IRS-certified not-for-profit entities are generally exempt from payment of regulatory fees. The Commission requires that each exempt entity have on file a valid IRS Determination Letter or certification from a government authority documenting its exempt status. In instances where there is a question regarding the exempt status of an entity, the FCC may request, at any time, for the entity to submit an IRS Determination Letter or certification from a government authority that documents its exempt status.

29. Subsidiaries of Exempt Entities: The licensee of a facility may be distinct from the ultimate owner. Exempt entities may hold one or more licenses for media facilities directly and/or through subsidiaries. Facilities licensed directly to an exempt entity and its exempt subsidiaries are excused from the regulatory fee obligation. However, licensees that are for-profit subsidiaries of exempt entities are subject to regulatory fees regardless of the exempt status of the ultimate owner.

30. Responsible Party, and the Effects of Transfers of Control: The entity holding the license for a facility as of the Fee Due Date is responsible for the regulatory fee for that facility. Eligibility for a regulatory fee exemption is determined by the status of the licensee as of the Fee Due Date, regardless of the status of any previous licensee(s).

31. Our current schedule of regulatory fees does not include service categories for digital broadcasters. Licensees in the broadcast industry pay regulatory fees based on their analog facilities. For licensees that broadcast in both the analog and digital formats, the only regulatory fee obligation at present is for their analog facility. Moreover, a licensee that has fully transitioned to digital broadcasting and has surrendered its analog spectrum would have no regulatory fee obligation.

32. At this time, we regard it as premature to establish regulatory fee obligations for digital broadcasters. However, recognizing the Commission's initiatives to transition analog broadcasters to digital spectrum, we wish to begin to address these issues from a regulatory fee perspective, so that both the Commission and licensees can prepare for fee policy changes that may need to occur.

33. Therefore we seek comment on whether and when we should establish regulatory fee service categories for digital broadcasters. In particular, we seek comment on ways that we could most efficiently and seamlessly adjust our schedule of regulatory fees to account for the collection of fee revenue from digital broadcasters without harming early transitioners to digital spectrum or late transitioners from analog spectrum.

34. AM Expanded Band Radio Station: We are aware of uncertainty among licensees as to whether or not regulatory fees are owed for AM Expanded Band radio stations. The concept of the AM Expanded Band has its basis in the Commission's rules regarding experimental stations. 38 The AM Expanded Band was created to reduce interference in the upper standard band portion of the AM spectrum band by allowing stations to voluntarily move their broadcasts from the standard band to a point above 1605 kHz. 39

35. Uncertainty about the fee status of AM Expanded Band stations may exist because AM Expanded Band radio service is not among our categories for general exemptions from regulatory fees, as defined in 47 CFR 1.1162. While not fitting a general exemption, we clarify here that, at this time, licensees of AM Expanded Band radio stations—stations authorized for broadcast in the 1605-1705 kHz range—are not required to pay regulatory fees for such stations. Licensees that operate a standard band AM station (540-1600 kHz) that is linked to an AM Expanded Band station are subject to regulatory fees for their standard band station only.

36. We also note that our decision not to require regulatory fee payments for AM Expanded Band stations is not synonymous with giving AM Expanded Band radio service a general exemption from regulatory fees. Because the movement to the expanded band is voluntary and helps to reduce interference in the standard bandwidth, we wish to continue our policy of not subjecting this relatively small group of stations to regulatory fees. However, at some future point when the migration of standard band broadcasters to the Expanded Band has advanced, we will consider establishing regulatory fee requirements for AM Expanded Band stations.

37. The first eleven fee categories in our Attachment D, Schedule of Regulatory Fees, constitute a general fee category known as multi-year wireless fees. Regulatory fees for this category are generally paid in advance, and for the amount of the entire 5-year or 10-year term of the license. Because payment of these regulatory fees is linked to the date of license renewal (or at the time of a new application), these fees can be paid at any time during the fiscal year. As a result, there has been some confusion as to the regulatory fee rate that should apply at the time of license renewal. Current fiscal year regulatory fees generally become effective 30 or 60 days after publication of the fees Report & Order in the Federal Register , or in some instances, 90 days after delivery of the Report & Order to Congress. Because current fiscal year regulatory fees have an effective date, only licensees (including new licensees) whose license renewal dates fall on or after this effective date pay regulatory fees at the new rate. Licensees whose license renewal dates fall before the current year effective date pay regulatory fees at the prior year rate, which, in other words, is the rate currently in effect before the new rate becomes effective.

38. Each year, we generate public notices and fact sheets that notify regulatees of the fee payment due date and provide additional information regarding regulatory fee payment procedures. In prior years, we disseminated these notices and fact sheets to regulatees through surface mail. We discontinued this practice two years ago, informing regulatees that with the widespread use of the Internet, sending public notices by surface mail was not an efficient use of our time and resources. We stated that we can better serve the public by providing these general notices on our website, while exploring ways to disseminate specific regulatory fee bills or assessments through surface mail.

39. Accordingly, in FY 2005 we will provide our public notices, fact sheets and all other relevant materials on our web site at http://www.fcc.gov/fees/regfees.html, just as we have done for the past several years. As a general practice, we will not send such information through surface mail. However, in the event that regulatees do not have access to the Internet, we will mail public notices and other relevant materials upon request. Regulatees and the general public may request such information by contacting the FCC CORES Help Desk at (877) 480-3201, Option 4.

40. Although last year we did not send public notices and fact sheets to regulatees en masse, we did send specific regulatory fee assessments or bills by surface mail to a select group of fee categories. Here, we believe that it is important to clarify the distinction between an assessment and a bill. An assessment is a proposed statement of the amount of regulatory fees owed by an entity to the Commission (or proposed subscriber count to be ascribed for purposes of setting the entity's regulatory fee) but it is not entered into the Commission's accounts receivable system as a current debt. A bill is distinct from an assessment in that it is automatically entered into our financial records as a debt owed to the Commission. Bills reflect the amount owed and have a due date of the last day of the fee payment window. Consequently, if a bill is not paid by the due date, it becomes delinquent and is subject to our debt collection procedures. 40

41. We are pursuing our billing initiatives as part of our effort to modernize our financial practices. Eventually, we intend to expand our billing initiatives to include all regulatory fee service categories. For now, based on the results of our assessment and billing initiatives from last year, and the resources currently available to us, we propose to proceed with our various FY 2005 initiatives as follows.

42. In FY 2001, we began sending pre-completed FCC Form 159-W assessments to carriers in an effort to assist them in paying the Interstate Telecommunications Service Provider (ITSP) regulatory fee. 41 The fee amount on FCC Form 159-W was calculated from the FCC Form 499-A report, which carriers are required to submit by April 1st of each year. Throughout FY 2002 and FY 2003, we refined the FCC Form 159-W to simplify the regulatory fee payment process. 42 In FY 2004, we generated and mailed the same pre-completed FCC Form 159-W's to carriers under the same dissemination procedures, but we informed them that we will be treating the amount due on Form 159-W as a bill, rather than as an assessment. Other than the manner in which Form 159-W payments were entered into our financial system, carriers experienced no procedural changes regarding the use of the FCC Form 159-W when submitting payment of their FY 2004 ITSP regulatory fees.

43. For FY 2005, we propose to continue our Form 159-W billing initiative for ITSPs. We seek comment on this proposal and on ways that we could improve our billing initiative for ITSPs.

44. Last year, for the first time, we mailed regulatory fee bills through surface mail to all licensees in our two satellite space station service categories. Specifically, geostationary orbit space station (“GSO”) licensees received bills requesting regulatory fee payment for satellites that (1) were licensed by the Commission and operational on or before October 1, 2003; and (2) were not co-located with and technically identical to another operational satellite on October 1, 2003 ( i.e. , were not functioning as a spare satellite). Non-geostationary orbit space station (“NGSO”) licensees received bills requesting regulatory fee payment for systems that were licensed by the Commission and operational on or before October 1, 2003.

45. For FY 2005, we propose to continue our billing initiative for our two satellite space station categories: GSOs and NGSOs.

46. Finally, we emphasize that the bills that we propose to generate for our GSO and NGSO licensees will be only for the satellite or system aspects of their respective operations. GSO and NGSO licensees typically have regulatory fee obligations in other service categories (such as earth stations, broadcast facilities, etc.), and we expect satellite operators to meet their full fee payment obligations for their entire portfolio of FCC licenses. We seek comment on our proposal to generate regulatory fee bills for our two satellite space station service categories.

47. In FY 2003 and FY 2004, we mailed fee assessment postcards to media services entities on a per-facility basis. The postcards served to notify licensees of the date when fee payments are due, the assessed fee amount for the facility, as well as other data attributes that we used in determining the fee amount. 43 We propose to continue our assessment initiative for media services licensees this year in a similar fashion.

48. As was the case last year, we propose to mail a single round of postcards to licensees and their other known points of contact listed in CDBS (Consolidated Database System) and in CORES (Commission Registration System), the Commission's two official databases for media services. By doing so, licensees and their other points of contact will all be furnished with the same information for each facility in question so that they can designate among themselves the payer of this year's fee. Mailing postcards to all interested parties at different addresses on file for each facility also encourages all parties to visit our Commission-authorized web site to update or correct information regarding the station, or to certify their fee-exempt status, if appropriate. The web site will be available again on-line throughout this summer. 44 In addition to using the postcards to direct parties to our authorized web site for updates and corrections, the postcards will also direct licensees to the telephone number of our FCC CORES Help Desk at (877) 480-3201, Option 4, where licensees can call to obtain clarification on procedures. We seek comment on our proposal to generate fee assessment postcards for media services entities.

49. Under our proposal, media services licensees would still be required to submit a completed Form 159 with their fee payments, despite having received an assessment postcard. We cannot guarantee that your regulatory fees will be posted accurately against your account if a Form 159 is not returned with your fee payment. We emphasize that the assessment postcards that we propose to mail to media services licensees are not to be used as a substitute to completing Form 159. Rather, we hope licensees will use the postcards as a tool to help them complete their Form 159.

50. We also emphasize that the most important data element that media services licensees need to include on their Form 159 is their station's facility ID. The facility ID is a unique identifier that never changes over the course of a station's existence. Despite the fact that we prominently display a station's facility ID on the station's assessment postcard, and Form 159 filing instructions call for each station's facility ID and call sign to be provided, we typically receive many incomplete Form 159s that do not provide the facility ID of the station whose fee is being paid.

51. In our FY2004 NPRM, we proposed to mail assessments to Commercial Mobile Radio Services (CMRS) cellular and mobile service providers using information from the Numbering Resource Utilization Forecast (NRUF) form. 45 We proposed that subscriber data from the NRUF form and the Local Number Portability (LNP) database be used to compute and assess a regulatory fee obligation. Upon the suggestion of some of our commenters to our NPRM, we decided to provide entities who filed an NRUF form an opportunity to revise their subscriber counts before making a regulatory fee payment. 46 We propose to continue our procedure of giving entities an opportunity to revise their subscriber counts again this year by sending two rounds of assessment letters, an initial assessment and a final assessment letter. If this exercise again proves to be successful, we will be sending these letters next year as “bills”, which will have Debt Collection Improvement Act (DCIA) implications if the assessment fee based on these subscriber counts is not paid by the due date of next year's regulatory fees.

52. As in FY 2004, we again propose to send an assessment letter that is based on NRUF data  47 that includes a list of the carrier's Operating Company Numbers (OCNs) upon which the assessment is based. The letters will not include assigned number counts by OCNs, but rather an aggregate of assigned numbers for each carrier. If the number of subscribers on the initial assessment letter differs from the subscriber count they provided on the NRUF form, CMRS cellular and mobile service providers can amend their initial assessment letter to correctly identify their subscriber count as of December 31, 2004. Assessment letters that are amended should indicate the specific reason for the change, such as the purchase or the sale of a subsidiary, the date of the transaction, and any other information that will help to justify a reason for the change. If we receive no response to our initial assessment letter, we will assume that the initial assessment is correct and will expect the fee payment to be based on the number of subscribers listed on the initial assessment. We will review all responses and determine whether a change in the number of subscribers is warranted. As in previous years, operators will certify their subscriber counts in Block 30 of the FCC Form 159 Remittance Advice when making their regulatory fee payments.

53. Although two assessment letters will be mailed to carriers that have filed an NRUF form, it is conceivable that some carriers will not be sent any letters of assessment because they did not file the NRUF form. For these carriers, we again propose to use the methodology  48 that is currently in place for CMRS Wireless services. They should use their subscriber count as of December 31, 2004 and submit payment accordingly on FCC Form 159. However, whether a carrier receives a letter of assessment or computes the subscriber count itself, the Commission reserves the right, under the Communications Act, to audit the number of subscribers upon which regulatory fees are paid. In the event that the Commission determines that the number of subscribers is inaccurate or that an insufficient reason is given for making a correction on the initial assessment letter, we again propose that we reserve the right to assess the carrier for the difference between what was paid and what should have been paid.

54. After having the benefit of using NRUF data last year, we will clarify some of the issues raised last year. First, we propose to derive the subscriber count from NRUF data based on “assigned” number counts that have been adjusted for porting to net Type 0 ports (“in” and “out”), which should reflect a more accurate subscriber count. Second, as a result of number pooling, many wireless carriers receive their new numbers as thousand-number blocks and that, within each block, up to 100 numbers can be retained by the donating carrier. Because retained numbers are reported on the NRUF form as “assigned” to the holder of the thousand block, a concern was raised last year that this anomaly would result in a lower count for the donating carrier and a higher count for the recipient carrier. Although we are unable to correct this anomaly at this time, we believe our proposal to give carriers an opportunity to revise their subscriber count should alleviate any potential harm resulting from this phenomenon. And finally, because we are requiring carriers to confirm their subscriber counts on an aggregate basis, a carrier should be able to identify its subscriber count accurately as of December 31, 2004, regardless of whether the carrier uses data in the NRUF report, a Securities and Exchange (SEC) filing, the 477 report, or some other certified financial statement. Because we have found subscriber counts reported by carriers on the NRUF form to be very accurate, we propose to continue to use the NRUF report  49 as the basis for our CMRS cellular/mobile provider assessments.

55. Last year, we generated regulatory fee assessment letters for that segment of the cable television industry that was listed in selected publicly available data sources. The data sources that we selected for reference were the Broadcasting and Cable Yearbook 2003-2004 (“Yearbook”)  50 and industry statistics published by the National Cable and Telecommunications Association (“NCTA”). 51 We also permitted cable operators for the first time, regardless of whether or not they were listed in the selected data sources, to make regulatory fee payments based on their companies' aggregate subscriber counts, rather than requiring them to sub-report subscriber counts on a per community unit identifier (“CUID”) basis.

56. We generated assessment letters for each of the cable operators listed in the Yearbook, as well as the 25 largest multiple-system operators (“MSOs”), as listed on NCTA's web page. The cable operators that received assessment letters were given the opportunity to respond to the Commission to rectify their subscriber counts before making their fee payments. The remainder of the cable television industry did not receive assessment letters. Regardless of whether or not a company was listed in the Yearbook or on NCTA's web page, all cable operators were instructed to base their fee obligations on their basic subscriber counts as of December 31, 2003, with the understanding that we would corroborate the counts with other publicly available data sources.

57. This year, we propose to conduct a similar assessment initiative, but with different procedures. Specifically, we will generate fee assessment letters for the cable operators who are on file as having paid regulatory fees last year for their basic cable subscribers. Under our proposal, our letter to each operator would announce the due date for payment of FY 2005 regulatory fees; reflect the subscriber count for which the operator paid FY 2004 regulatory fees; and request that the operator access a Commission-authorized web site to provide its aggregate count of basic cable subscribers as of December 31, 2004—the date that the Commission requires operators to use as the basis for determining their regulatory fee obligations for basic cable subscribers. If the number of subscribers as of December 31, 2004 differs from the amount paid for last year, operators would be required to provide a brief explanation for the differing subscriber counts and indicate when the difference occurred. Cable operators who do not have access to the Internet would be able to contact the FCC CORES Help Desk at (877) 480-3201, Option 4, to provide their subscriber count as of December 31, 2004. We seek comment on our proposed assessment initiative.

58. Some cable operators may not have made regulatory fee payments last year. For example, a new company may have become operational after the first day of the fiscal year and therefore they did not have a regulatory fee obligation in FY 2004; or an existing company did not make a payment because it filed a petition for waiver of regulatory fees for FY 2004 based on financial hardship. Regardless of the circumstance, we emphasize that not receiving a regulatory fee assessment letter in FY 2005 would not excuse an operator from the obligation to pay FY 2005 regulatory fees. We expect payment from all non-exempt cable operators, not just those that made FY2004 payments and/or received assessment letters for FY2005 fees.

59. Actual payment procedures for cable operators would be the same as they were in previous years. Operators would continue to complete the FCC Form 159 Remittance Advice when making their payment, and would continue to certify their December 31, 2004 subscriber count in Block 30 of the Form 159.

60. Finally, we seek comment on a proposal to require the cable industry to annually report their basic subscriber counts to the Commission prior to paying regulatory fees for the fiscal year in question. For example, by June 1st of a given fiscal year, we would require that operators report the number of subscribers on December 31st of the preceding year. The Commission would then use the subscriber counts received on June 1st to audit regulatory fee payments that are collected later in the fiscal year.

61. Currently, subscriber counts are self-reported and certified by cable operators when they make their regulatory fee payments to the Commission at the end of each fiscal year. Self-reporting and certifying subscriber counts does not furnish us with data that we can use to audit regulatory fee payments. Therefore, we believe that a cable industry reporting requirement specific to regulatory fees may be necessary and we are therefore seeking comment on the proposal. We do not intend to implement any such reporting requirement for the collection of FY 2005 regulatory fees.

62. We continue to welcome comments on a broad range of options concerning our commitment to reviewing, streamlining and modernizing our statutorily required fee-assessment and collection procedures. Our areas of particular interest included: (1) The process for notifying licensees about changes in the annual regulatory fee schedule and how it can be improved; (2) the most effective way to disseminate regulatory fee assessments and bills, i.e. through surface mail, e-mail, or some other mechanism; (3) the fee payment process, including how the agency's electronic payment system can be improved; and (4) the timing of fee payments, including whether we should alter the existing fee payment “window” in any way.

63. As in the past, regulatees whose total FY 2005 regulatory fee liability, including all categories of fees for which payment is due by an entity, amounts to less than $10 will be exempted from payment of FY 2005 regulatory fees.

64. Licensees are reminded that, under our current rules, the responsibility for payment of fees by service category is as follows:

(a) Media Services: The responsibility for the payment of regulatory fees rests with the holder of the permit or license as of October 1, 2004. However, in instances where a license or permit is transferred or assigned after October 1, 2004, responsibility for payment rests with the holder of the license or permit at the time payment is due.

(b) Wireline (Common Carrier) Services: Fees must be paid for any authorization issued on or before October 1, 2004. However, where a license or permit is transferred or assigned after October 1, 2004, responsibility for payment rests with the holder of the license or permit at the time payment is due.

(c) Wireless Services: Commercial Mobile Radio Service (CMRS) cellular, mobile, and messaging services (fees based upon a subscriber, unit or circuit count): Fees must be paid for any authorization issued on or before October 1, 2004. The number of subscribers, units or circuits on December 31, 2004 will be used as the basis from which to calculate the fee payment. For small multi-year wireless services, the regulatory fee will be due at the time of authorization or renewal of the license, which is generally for a period of five or ten years and paid throughout the year.

(d) Multichannel Video Programming Distributor Services (basic cable television subscribers and CARS licenses): The number of subscribers on December 31, 2004 will be used as the basis from which to calculate the fee payment. 52 For CARS licensees, fees must be paid for any authorization issued on or before October 1, 2004. The responsibility for the payment of regulatory fees for CARS licenses rests with the holder of the permit or license on October 1, 2004. However, in instances where a CARS license or permit is transferred or assigned after October 1, 2004, responsibility for payment rests with the holder of the license or permit at the time payment is due.

(e) International Services: For earth stations and geostationary orbit space stations, payment is calculated on a per operational station basis. For non-geostationary orbit satellite systems, payment is calculated on a per operational system basis. The responsibility for the payment of regulatory fees rests with the holder of the permit or license on October 1, 2004. However, in instances where a license or permit is transferred or assigned after October 1, 2004, responsibility for payment rests with the holder of the license or permit at the time payment is due. For international bearer circuits, payment is calculated on a per active circuit basis as of December 31, 2004.

65. The Commission strongly recommends that entities submitting more than twenty-five (25) Form 159-C's use the electronic Fee Filer program when sending their regulatory fee payment. The Commission will, for the convenience of payers, accept fee payments made in advance of the normal formal window for the payment of regulatory fees.

66. As a reminder to all licensees, section 159(c) of the Communications Act requires us to impose an additional charge as a penalty for late payment of any regulatory fee. As in years past, a late payment penalty of 25 percent of the amount of the required regulatory fee will be assessed on the first day following the deadline date for filing of these fees. Regulatory fee payment must be received and stamped at the lockbox bank by the last day of the regulatory fee filing window, and not merely postmarked by the last day of the window. Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including the provisions set forth in the Debt Collection Improvement Act of 1996 (“DCIA”). We also assess administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and § 1.1940(d) of the Commission's rules. These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. Partial underpayments of regulatory fees are treated in the following manner. The licensee will be given credit for the amount paid, but if it is later determined that the fee paid is incorrect or was submitted after the deadline date, the 25 percent late charge penalty will be assessed on the portion that is submitted after the filing window.

67. Furthermore, we recently amended our regulatory fee rules effective November 1, 2004, to provide that we will withhold action on any applications or other requests for benefits filed by anyone who is delinquent in any non-tax debts owed to the Commission (including regulatory fees) and will ultimately dismiss those applications or other requests if payment of the delinquent debt or other satisfactory arrangement for payment is not made. See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910. Failure to pay regulatory fees can also result in the initiation of a proceeding to revoke any and all authorizations held by the delinquent payer.

68. Pursuant to 47 CFR 1.415, 1.419, interested parties may file comments on or before March 8, 2005, and reply comments on or before March 18, 2005. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. 53

69. Comments filed through the ECFS are sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must submit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To receive filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, “get form <your e-mail address.>” A sample form and directions will be sent in reply.

70. Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appear in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number. Filings can be hand delivered or by messenger delivery, sent by commercial overnight courier, or mailed by first-class mail through the U.S. Postal Service (please note that the Commission continues to experience delays in receiving U.S. Postal Service mail). The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, N.E., Suite 110, Washington DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, Express Mail, and Priority Mail should be addressed to 445 12th Street, SW., Washington, DC 20554. All filings must be addressed to the Commission's Secretary, Marlene H. Dortch, Office of the Secretary, Federal Communications Commission.

71. Parties who choose to file by paper must also submit their comments on diskette. Two copies of the diskettes must be submitted. One copy is to be sent to Qualex International, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. The other copy is to be sent to Office of Managing Director, Federal Communications Commission, 445 12th Street, SW., 1-C848, Washington, DC 20554. These submissions must be in a Microsoft Windows TM -compatible format on a 3.5″ floppy diskette. The diskette should be clearly labeled with the commenter's name, proceeding (including the lead docket number MD Docket No. 04-73), type of pleading (comment or reply comment), date of submission, and the name of the electronic file on the diskette. The label should also include the following phrase “Copy—Not an Original.” Each diskette should contain only one party's pleadings, preferably in a single electronic file.

72. The public may view the documents filed in this proceeding during regular business hours in the FCC Reference Center, Federal Communications Commission, Room CY-A257, 445 12th Street, SW., Washington, DC 20554, and through the Commission's Electronic Comment Filing System (ECFS) http://www.gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi. Those seeking materials in alternative formats (computer diskette, large print, audio recording, and Braille) should contact Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY, or bmillin@fcc.gov.

73. This is a permit-but-disclose 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. 54

74. This document contains proposed modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due April 29, 2005. Comments should address: (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 automated collection techniques or other forms of information technology. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

75. As required by the Regulatory Flexibility Act, 55 we have prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible impact on small entities of the proposals suggested in this document. The IRFA is set forth as 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, and must have a separate and distinct heading, designating the comments as responses to the IRFA. The Consumer Information Bureau, Reference Information Center, shall send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the Regulatory Flexibility Act.

76. Authority for this proceeding is contained in sections 4(i) and (j), 8, 9, and 303(r) of the Communications Act of 1934, as amended. It is ordered that this NPRM is adopted. 56 It is further ordered that the Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this NPRM, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

77. As required by the Regulatory Flexibility Act (RFA), 57 the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules in the present Notice of Proposed Rulemaking, In the Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 2004. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments provided in paragraph 75. The Commission will send a copy of the NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. 58 In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register . 59

78. This rulemaking proceeding is initiated to obtain comments concerning the Commission's proposed amendment of its Schedule of Regulatory Fees in the amount of $280,098,000, the amount that Congress has required the Commission to recover. The Commission seeks to collect the necessary amount through its proposed Schedule of Regulatory Fees in the most efficient manner possible and without undue public burden.

79. This action, including publication of proposed rules, is authorized under sections (4)(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended. 60

80. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. 61 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.”  62 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 63 A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. 64

81. Small Businesses. Nationwide, there are a total of 22.4 million small businesses, according to SBA data. 65

82. Small Organizations. Nationwide, there are approximately 1.6 million small organizations. 66

83. Small Governmental Jurisdictions. The term “small governmental jurisdiction” is defined as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.”  67 As of 1997, there were approximately 87,453 governmental jurisdictions in the United States. 68 This number includes 39,044 county governments, municipalities, and townships, of which 37,546 (approximately 96.2%) have populations of fewer than 50,000, and of which 1,498 have populations of 50,000 or more. Thus, we estimate the number of small governmental jurisdictions overall to be 84,098 or fewer.

84. We have included small incumbent local exchange carriers in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard ( e.g. , a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.”  69 The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not “national” in scope. 70 We have therefore included small incumbent local exchange carriers in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

85. Incumbent Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 71 According to Commission data, 72 1,337 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,337 carriers, an estimated 1,032 have 1,500 or fewer employees and 305 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our proposed action.

86. Competitive Local Exchange Carriers (CLECs), Competitive Access Providers (CAPs), “Shared-Tenant Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 73 According to Commission data, 74 609 carriers have reported that they are engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Of these 609 carriers, an estimated 458 have 1,500 or fewer employees and 151 have more than 1,500 employees. In addition, 16 carriers have reported that they are “Shared-Tenant Service Providers,” and all 16 are estimated to have 1.500 or fewer employees. In addition, 35 carriers have reported that they are “Other Local Service Providers.” Of the 35, an estimated 34 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, “Shared-Tenant Service Providers,” and “Other Local Service Providers” are small entities that may be affected by our proposed action.

87. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 75 According to Commission data, 76 133 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 127 have 1,500 or fewer employees and six have more than 1,500 employees. Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by our proposed action.

88. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 77 According to Commission data, 78 625 carriers have reported that they are engaged in the provision of toll resale services. Of these, an estimated 590 have 1,500 or fewer employees and 35 have more than 1,500 employees. Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by our proposed action.

89. Payphone Service Providers (PSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for payphone services providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 79 According to Commission data, 80 761 carriers have reported that they are engaged in the provision of payphone services. Of these, an estimated 757 have 1,500 or fewer employees and four have more than 1,500 employees. Consequently, the Commission estimates that the majority of payphone service providers are small entities that may be affected by our proposed action.

90. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 81 According to Commission data, 82 261 carriers have reported that they are engaged in the provision of interexchange service. Of these, an estimated 223 have 1,500 or fewer employees and 38 have more than 1,500 employees. Consequently, the Commission estimates that the majority of IXCs are small entities that may be affected by our proposed action.

91. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 83 According to Commission data, 84 23 carriers have reported that they are engaged in the provision of operator services. Of these, an estimated 22 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the majority of OSPs are small entities that may be affected by our proposed action.

92. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 85 According to Commission data, 86 37 carriers have reported that they are engaged in the provision of prepaid calling cards. Of these, an estimated 36 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by our proposed action.

93. 800 and 800-Like Service Subscribers. 87 Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. 88 The most reliable source of information regarding the number of these service subscribers appears to be data the Commission collects on the 800, 888, and 877 numbers in use. 89 According to our data, at the end of January, 1999, the number of 800 numbers assigned was 7,692,955; the number of 888 numbers assigned was 7,706,393; and the number of 877 numbers assigned was 1,946,538. We do not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, we estimate that there are 7,692,955 or fewer small entity 800 subscribers; 7,706,393 or fewer small entity 888 subscribers; and 1,946,538 or fewer small entity 877 subscribers.

94. International Service Providers. The Commission has not developed a small business size standard specifically for providers of international service. The appropriate size standards under SBA rules are for the two broad categories of Satellite Telecommunications and Other Telecommunications. Under both categories, such a business is small if it has $12.5 million or less in average annual receipts. 90 For the first category of Satellite Telecommunications, Census Bureau data for 1997 show that there were a total of 324 firms that operated for the entire year. 91 Of this total, 273 firms had annual receipts of under $10 million, and an additional 24 firms had receipts of $10 million to $24,999,999. Thus, the majority of Satellite Telecommunications firms can be considered small.

95. The second category—Other Telecommunications—includes “establishments primarily engaged in * * * providing satellite terminal stations and associated facilities operationally connected with one or more terrestrial communications systems and capable of transmitting telecommunications to or receiving telecommunications from satellite systems.”  92 According to Census Bureau data for 1997, there were 439 firms in this category that operated for the entire year. 93 Of this total, 424 firms had annual receipts of $5 million to $9,999,999 and an additional six firms had annual receipts of $10 million to $24,999,990. Thus, under this second size standard, the majority of firms can be considered small.

96. Wireless Service Providers. The SBA has developed a small business size standard for wireless firms within the two broad economic census categories of “Paging”  94 and “Cellular and Other Wireless Telecommunications.” 95 Under both SBA categories, a wireless business is small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 1997 show that there were 1,320 firms in this category, total, that operated for the entire year. 96 Of this total, 1,303 firms had employment of 999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more. 97 Thus, under this category and associated small business size standard, the great majority of firms can be considered small. For the census category Cellular and Other Wireless Telecommunications, Census Bureau data for 1997 show that there were 977 firms in this category, total, that operated for the entire year. 98 Of this total, 965 firms had employment of 999 or fewer employees, and an additional 12 firms had employment of 1,000 employees or more. 99 Thus, under this second category and size standard, the great majority of firms can, again, be considered small.

97. Internet Service Providers. The SBA has developed a small business size standard for Internet Service Providers. This category comprises establishments “primarily engaged in providing direct access through telecommunications networks to computer-held information compiled or published by others.”  100 Under the SBA size standard, such a business is small if it has average annual receipts of $21 million or less. 101 According to Census Bureau data for 1997, there were 2,751 firms in this category that operated for the entire year. 102 Of these, 2,659 firms had annual receipts of under $10 million, and an additional 67 firms had receipts of between $10 million and $24,999,999. 103 Thus, under this size standard, the great majority of firms can be considered small entities.

98. Cellular Licensees. The SBA has developed a small business size standard for wireless firms within the broad economic census category “Cellular and Other Wireless Telecommunications.”  104 Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census category Cellular and Other Wireless Telecommunications firms, Census Bureau data for 1997 show that there were 977 firms in this category, total, that operated for the entire year. 105 Of this total, 965 firms had employment of 999 or fewer employees, and an additional 12 firms had employment of 1,000 employees or more. 106 Thus, under this category and size standard, the great majority of firms can be considered small. According to the most recent Trends in Telephone Service data, 719 carriers reported that they were engaged in the provision of cellular service, personal communications service, or specialized mobile radio telephony services, which are placed together in the data. 107 We have estimated that 294 of these are small, under the SBA small business size standard. 108

99. Common Carrier Paging. The SBA has developed a small business size standard for wireless firms within the broad economic census categories of “Cellular and Other Wireless Telecommunications.”  109 Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 1997 show that there were 1,320 firms in this category, total, that operated for the entire year. 110 Of this total, 1,303 firms had employment of 999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more. 111 Thus, under this category and associated small business size standard, the great majority of firms can be considered small.

100. In the Paging Second Report and Order, the Commission adopted a size standard for “small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. 112 A small business is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. 113 The SBA has approved this definition. 114 An auction of Metropolitan Economic Area (MEA) licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold. 115 Fifty-seven companies claiming small business status won 440 licenses. 116 An auction of MEA and Economic Area (EA) licenses commenced on October 30, 2001, and closed on December 5, 2001. Of the 15,514 licenses auctioned, 5,323 were sold. 117 One hundred thirty-two companies claiming small business status purchased 3,724 licenses. A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs commenced on May 13, 2003, and closed on May 28, 2003. Seventy-seven bidders claiming small or very small business status won 2,093 licenses. 118