[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Rules and Regulations]
[Pages 34902-34904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16375]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 94-19; FCC 95-257]
FY 1994 Regulatory Fees
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In June 1994, the Commission adopted rules to implement
Section 9 of the Communications Act to provide for the assessment and
collection of regulatory fees to recover the cost of the Commission's
enforcement, policy and rulemaking, user information and international
activities. This MO&O is responding to petitions for reconsideration
and clarification of the FY 1994 Report and Order. This MO&O clarifies
the standards under which waivers, reductions or exemptions will be
granted and the rule adopted broadens the scope of the exemptions for
nonprofit entities. The intended effect of this MO&O is to provide
guidance to the public and avoid any potential uncertainty.
EFFECTIVE DATE: September 5, 1995.
FOR FURTHER INFORMATION CONTACT: Jerome D. Remson, Office of General
Counsel, (202) 418-1780.
SUPPLEMENTARY INFORMATION: A summary of the Commission's Memorandum
Opinion and Order (MO&O), adopted June 15, 1995 and released June 22,
1995, is set forth below. The full text of this document is available
for inspection and copying during normal business hours in the
Administrative Law Division, Office of General Counsel (Rm. 616), 1919
M Street, N.W., Washington, D.C. The full text may also be purchased
from the Commission's copy contractor, International Transcription
Service, Inc. (ITS), 2100 M Street, N.W., Suite 140, Washington, D.C.
20037.
Summary of Memorandum Opinion and Order
1. Introduction. In the Implementation of Section 9 of the
Communications Act, 59 FR 30984 (June 16, 1994), 9 FCC Rcd 5333 (1994)
(FY 1994 Report and Order), the Commission adopted rules to implement
Section 9 of the Communications Act, as amended, 47 U.S.C. 159. Those
rules provide for the assessment and collection of regulatory fees to
recover the cost of the Commission's enforcement, policy and
rulemaking, user information and international activities. 47 U.S.C.
159(a). Now before the Commission are petitions for reconsideration and
clarification of the FY 1994 Report and Order. A list of the parties
filing petitions for reconsideration are set forth in Appendix A. We
also considered several issues arising from petitions for waiver,
reduction or exemption of the regulatory fees assessed for the 1994
fiscal year (FY 94).
2. Discussion. Small Entities. We properly rejected Fireweed's
contention that our efforts to distribute the NPRM to small businesses
were inadequate. As noted in the FY 1994 Report and Order, 9 FCC Rcd at
5337 n.6, 5 U.S.C. 609 requires that we ``assure that small entities
have been given an opportunity to participate in the rulemaking.''
Although the statute lists appropriate measures which the Commission
may use to ensure that the small entities have such an opportunity to
participate, the Act does not require the Commission to follow any
specific procedure.
3. We also rejected Fireweed's contention that our rules are biased
against small entities. To the contrary, in implementing the fee
schedule, we have expressly adopted procedures for payment of fees that
are designed to minimize the burden on small entities, in accordance
with congressional intent. Congress provided that the Commission may
grant individual waivers of the fees, and it is our policy to grant
individual waivers where imposition of the regulatory fee would be
inequitable or would impinge on a regulatee's ability to serve the
public. To the extent that Fireweed objects to specific fees, the fees
for FY 1994 were adopted by Congress, and we did not depart from the
fee schedule for FY 1994.
4. Nonprofit Entities. Section 9(h) exempts nonprofit entities from
the regulatory fee requirement. 47 U.S.C. 159(h). In the FY 1994 Report
and Order, we held that the nonprofit exemption will be available only
to those regulatees who establish their nonprofit status under section
501 of the Internal Revenue Code. 26 U.S.C. 501. 9 FCC Rcd at 5340
para.17. We have received requests for exemptions from the regulatory
fees from regulatees that have been certified as nonprofit entities by
state agencies (i.e., they hold nonprofit status at the state level)
but which do not possess Section 501 IRS Certification. Thus, there are
instances where bona fide nonprofit entities should be accorded
exemptions under Section 9(h) event though they have not established
their tax exempt status
[[Page 34903]]
under Section 501. Therefore, while we will continue to grant an
automatic exemption for nonprofit status to all Section 501 tax exempt
organizations, we are amending our rules to allow entities to
demonstrate nonprofit status by certification from a state or other
government entity. See 47 CFR 1.1162(c).
5. Confidentiality. The FY 1994 Report and Order, 9 FCC Rcd at
5372, para.110, denied a request to amend Section 0.457 of the rules to
protect the confidentiality of data submitted with regulatory fee
payments. We noted that regulatees could request confidentiality for
such data when they submitted their fee payments. NYNEX and Cellular
Telecommunications Industry Association (CTIA) now request the
Commission to reconsider this determination. For FY 1994, common
carrier fee calculations were based on the number of a carrier's
presubscribed lines, access lines, or subscribers. The carriers argue
that this information should be regarded as confidential because it can
be used by competing carriers to determine the extent of market
penetration and thereby gain a competitive advantage. Thus, the
carriers conclude that the Commission should amend Section 0.457 of the
rules to protect the confidentiality of the fee calculations.
6. The requests to amend the rules will be denied. There has been
no convincing showing of a need to modify the rules. We are unaware of
any FOIA requests for access to fee data. Moreover, if any regulatee
perceives a need to protect information filed with the Commission from
public disclosure, they can request confidential protection pursuant to
47 CFR 0.459 when they file information with the Commission.
7. Bearer circuits: Sprint Corporation (Sprint) filed a petition
requesting reconsideration of the language in the FY 1994 Report and
Order, 9 FCC Rcd at 5367 para.98, which reads:
The fee is to be paid by the facilities-based common carrier
activating the circuit in any transmission facility for the purpose
of service to an end user or resale carrier. Private submarine cable
operators also are to pay fees for circuits sold on an indefeasible
right of use (IRU) basis or leased in their private submarine cables
to any customer of the private cable operator.
Sprint asserts that this language applies the regulatory fees for
active 64 Kilobyte per second international circuits to both the
operators of private submarine cable systems and to the common carriers
who use circuits on such systems to provide international
telecommunication services. This policy results in Sprint paying two
regulatory fees for the PTAT-1 cable circuits used by Sprint
Communications Co. L.P. for common carrier services. Sprint complains
that this results in it being double charged as both the international
carrier and the private cable operator for the same private cable
circuits. Sprint points out that there is no similar double charge for
other common carrier cable systems, and that the double charges place
it at a severe and unjustified competitive disadvantage.
8. We agree with Sprint, and we will eliminate the double charge
assessments for private submarine cable system circuits used by
international common carriers. We will modify the above quoted language
to read:
Private submarine cable operators also are to pay fees for
circuits sold on an indefeasible right of use (IRU) basis or leased
to any customer other than an international common carrier
authorized by the Commission to provide U.S. international common
carrier services.
9. Waiver Issues. In the FY 1994 Report and Order, 9 FCC Rcd at
5344 para.29, we stated that we would waive the regulatory fees ``on a
case by case basis in extraordinary and compelling circumstances upon a
showing that a waiver * * * would override the public interest in
reimbursing the Commission for its regulatory costs.'' However, the FY
1994 Report and Order did not establish specific standards for waivers
of the fees or define with specificity what information would be
required.
10. We will grant waivers of the fees on a sufficient showing of
financial hardship. Mere allegations or documentation of financial
loss, standing alone, will not support a waiver request. Rather, we
will grant a waiver only when the impact of the regulatory fee will
affect a regulatee's ability to serve the public. It will be incumbent
upon each regulatee to fully document its financial position and show
that it lacks sufficient funds to pay the regulatory fees and to
maintain its service to the public. Regulatees may be asked to provide
information such as a balance sheet and profit and loss statement
(audited if available), a cash flow projection for the next twelve
months (with an explanation of how it is calculated), a list of their
officers and their individual compensation, together with a list of
their highest paid employees, other than officers, and the amount of
their compensation, or similar information.
11. Evidence of bankruptcy or receivership is sufficient to
establish financial hardship. Moreover, where a bankruptcy trustee,
receiver, or debtor in possession is negotiating a possible transfer of
a license, the regulatory fee could act as an impediment to the
negotiations and the transfer of the station to a new licensee. Thus,
we will waive the regulatory fees for licensees whose stations are
bankrupt, undergoing Chapter 11 reorganizations or are in receivership.
12. We will also grant petitions for waivers of the regulatory fees
on grounds of financial hardship from licensees of broadcast stations
which are dark (not operating). When a station is dark, it generally is
either without or with greatly reduced revenues. Moreover, broadcast
stations which are dark must request permission to suspend operation
pursuant to Section 73.1740(a)(4) of the Rules. 47 CFR 73.1740(a)(4).
Petitions to go dark are generally based on financial hardship. Under
these circumstances, imposition of the regulatory fees could be an
impediment to the restoration of broadcast service, and it is
unnecessary to require a licensee to make a further showing of
financial hardship.
13. We will waive the regulatory fee for community-based
translators if the licensee: (1) Is not licensed to, in whole or in
part, and does not have common ownership with, the licensee of a
commercial broadcast station; (2) does not derive income from
advertising; and (3) is dependent on subscriptions or contributions
from the members of the community served for support. Waivers will also
ease the regulatory burden on these regulatees. However, the burden
will remain on the translator licensees to document their eligibility
for the waiver.
14. Congress in adopting the Schedule of Fees of FY 1994 did not
distinguish between the fees for full service and satellite television
stations. Thus, licensees with a full-service station and satellite
stations, may be assessed with separate but identical fees for their
full service stations and each of their supporting satellite stations.
We find, however, that the regulatory fees can be particularly
inequitable for licensees operating satellite stations. Thus, for those
licensees that have timely filed petitions for reconsideration or for
waiver or reduction of the regulatory fees for satellite stations, we
will grant partial waivers and reduce the fees for licensees operating
satellite stations so each set of parent and satellite stations will
pay a regulatory fee based on the total number of television households
served, and will be assessed a single regulatory fee comparable to the
fee assessed stations serving markets with the same number of
television households.
15. Withers Broadcasting Company of Texas also argues that the
Commission
[[Page 34904]]
should reduce the regulatory fees for certain television stations
operating in large markets, but which are part of that market only
because the residents in the station's service area primarily view the
market's principle city's stations. These stations are generally UHF
stations, they lack network affiliations, and are located outside of
the principle city's metropolitan area and do not provide a Grade B
signal to a substantial portion of the market's metropolitan areas.
Often these stations are not carried by cable systems serving the
principal metropolitan areas. These stations will be assessed a fee
based on the number of television households served, and will be
charged the same fee as stations serving markets with the same number
of television households. For example, stations that do not serve the
principal metropolitan areas within their assigned markets and serve
fewer than 242,000 television households will be assessed the same
regulatory fee as stations not located in the top-100 markets. We will
entertain requests for reductions in the regulatory fee assessments
from those licensees that have filed timely petitions for waiver or
reduction of the regulatory fee.
16. COMSAT General Corporation (COMSAT) petitioned the Commission
to either reduce or waiver the regulatory fee for FY 1994 for its D-2
satellite. COMSAT deorbited its D-2 satellite on December 16, 1993, and
inter alia, it urges the Commission to reduce proportionally the
regulatory fee to reflect the limited period in which it was in
operation. Fees are assessed on an annual basis and the Commission,
will not issue pro rata refunds. COMSAT's request for a proportional
reduction of the regulatory fee is denied. However, COMSAT's request
for a waiver of the fee, as well as other requests for waivers
discussed here, will be considered by the Office of Managing Director
pursuant to its delegated authority to rule upon requests to waive,
reduce or defer regulatory fees. 47 CFR 1.1166(a).
Ordering Clauses
17 Accordingly, it is ordered that the Petitions for
Reconsideration identified in Appendix are granted to the extent
indicated in the full text and in all other respects are denied.
18. It is further ordered that the rule changes as specified above
and below are adopted.
19. It is further ordered that the rule changes made herein will
become effective 60 days after publication in the Federal Register.
This action is taken pursuant to Section 4(i), 4(j), 9 and 303(r) of
the Communications Act, as amended, 47 U.S.C. 154(i), 154(j), 159 and
303(r).
Federal Communications Commission.
William F. Caton,
Acting Secretary.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure.
Appendix
Petitions for Reconsideration were filed by:
Dennis C. Brown & Robert H. Schwaninger
Cellular Telecommunications Industry Association
Fant Broadcasting Company
Fireweed Communications
National Association of Broadcasters
NYNEX Corporation
Southwestern Bell Telephone Company
Sprint Corporation
Withers Broadcasting Company of Texas
Rule Change
Part 1 of Chapter I of Title 47 of the Code of Federal Regulations
is amended as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for Part 1 continues to read:
Authority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise
noted.
2. Section 1.1162 is amended by revising paragraph (c) to read as
follows:
Sec. 1.1162 General exemptions from regulatory fees.
* * * * *
(c) Applicants and permittees who qualify as nonprofit entities.
For purposes of this exemption, a nonprofit entity is defined as: an
organization duly qualified as a nonprofit, tax exempt entity under
section 501 of the Internal Revenue Code, 26 U.S.C. 501; or an entity
with current certification as a nonprofit corporation or other
nonprofit entity by state or other governmental authority.
* * * * *
[FR Doc. 95-16375 Filed 7-3-95; 8:45 am]
BILLING CODE 6712-01-M