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


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

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


Assessment and Collection of Regulatory Fees For Fiscal Year 1997

AGENCY: Federal Communications Commission.

ACTION: Notice of Proposed Rulemaking.

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

[[Page 10794]]

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

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

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

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

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

TABLE OF CONTENTS

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

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

I. Introduction

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

II. Background

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

[[Page 10795]]

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

III. Discussion

A. Summary of FY 1997 Fee Methodology

    8. As noted above, Congress has required that the Commission 
recover $152,523,000 for FY 1997 through the collection of regulatory 
fees, representing the costs applicable to our enforcement, policy and 
rulemaking, international, and user information activities. 47 U.S.C. 
Sec. 159(a). Congress' increase does not fall equally on all payers due 
to revised payment units and revenue requirement allocations resulting 
from the cost accounting system.
    9. In developing our proposed FY 1997 fee schedule, we first 
estimated payment units 1 for FY 1997 in order to determine the 
aggregate amount of revenue we would collect without any revision to 
our FY 1996 fees. Next, we compared this revenue amount to the 
$152,523,000 that Congress has required us to collect in FY 1997 and 
pro-rated the shortfall among all the existing fee categories. We then 
adjusted the projected revenue requirements so that they equaled the 
actual costs of each service, using data generated by our cost 
accounting system, described infra, to ensure that revenues equaled our 
regulatory costs for each fee category.
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    \1\ Payment units are the number of subscribers, mobile units, 
pagers, cellular telephones, licenses, call signs, adjusted gross 
revenue dollars, etc. which represent the base volumes against which 
fee amounts are calculated.
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    10. We next examined the impact of using actual costs to establish 
regulatory fees for each class of regulatees to determine whether any 
regulatees experienced an unduly large fee increase. We found that, in 
many cases, cost-based fees result in fee payments dramatically higher 
in FY 1997 than they were in FY 1996. Therefore, rather than proposing 
fully cost-based fees for FY 1997, we are proposing to phase in full 
reliance on cost-based fees and, for FY 1997, to establish a revenue 
ceiling in each service no higher than 25 percent above the revenue 
that payers within a fee category would have paid if FY 1997 fees had 
remained at FY 1996 levels adjusted only for changes in volume and the 
increase required by Congress. Our proposed methodology would reduce 
fees for services whose regulatory costs have declined while increasing 
fees for services experiencing higher regulatory costs in order to 
begin eliminating disparities disclosed by our cost accounting system 
between a service's current costs and fees ascribed to these services 
in prior fiscal years.
    11. Once we established our tentative FY 1997 fees, we evaluated 
various proposals made by Commission staff concerning other adjustments 
to the Fee Schedule and to our collection procedures. The proposals are 
discussed in Paragraphs 20-40 and are factored into our proposed FY 
1997 Schedule of Regulatory Fees, set forth in Attachment F.
    12. Finally, we have incorporated, as Attachment H, proposed 
Guidance containing detailed descriptions of each fee category, 
information on the individual or entity responsible for paying a 
particular fee and other critical information designed to assist 
potential fee payers in determining the extent of their fee liability, 
if any, for FY 1997.2 In the following paragraphs, we describe in 
greater detail our methodology for establishing our FY 1997 regulatory 
fees.
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    \2\ We also will incorporate a similar Attachment in the Report 
and Order concluding this rulemaking. That Attachment will contain 
updated information concerning any changes made to the proposed fees 
adopted by the Report and Order.
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B. Development of FY 1997 Fees

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

[[Page 10796]]

timeliness of cost information, accumulates both personnel and non-
personnel costs on a service-by-service basis.
    16. In order to utilize actual costs for fee development purposes, 
we first had to add indirect support costs to the direct costs 4 
and then adjust the results to approximate the amount of revenue that 
Congress requires us to collect in FY 1997 ($152,523,000).5 Thus, 
we adjusted the actual cost data pertaining to regulatory fee 
activities recorded for the period October 1, 1995 through September 
30, 1996 proportionally among the fee categories so that total costs 
approximated $152,523,000. For fee categories where fees are further 
differentiated by class or market (e.g., Markets 1-10 under the general 
VHF and UHF Commercial Television fee category), we distributed the 
costs to the class or market group by maintaining the same ratios 
between the classes or market groups as between the fees in the FY 1996 
schedule.6 The results of these calculations are shown in detail 
in Attachment D and represent our best estimate of actual total 
attributable costs relative to each fee category for FY 1997.7
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    \4\ One feature of the cost accounting system is that it 
separately identifies direct and indirect costs. Direct costs 
include salary and expenses for (a) staff directly assigned to our 
operating Bureaus and performing regulatory activities and (b) staff 
assigned outside the operating Bureaus to the extent that their time 
is spent performing regulatory activities pertinent to an operating 
Bureau. These costs include rent, utilities and contractual costs 
attributable to such personnel. Indirect costs include support 
personnel assigned to overhead functions such as field and 
laboratory staff and certain staff assigned to the Office of 
Managing Director. The combining of direct and indirect costs is 
accomplished on a proportional basis among all fee categories as 
shown on Attachment D.
    \5\ Congress' estimate of costs to be recovered through 
regulatory fees is generally determined twelve months before the end 
of the fiscal year to which the fees actually apply. As such, year-
end actual activity costs for FY 1996 do not equal exactly the 
amount Congress designated for collection for FY 1997.
    \6\ While some might argue that the Commission should further 
distinguish our work activities by fee category (e.g., television 
markets or radio classes), it would not be practical to use small, 
time-consuming incremental breakouts of work time.
    \7\ For example, under the FM Radio fee classification, the 
actual costs attributable to FM radio are $8,452,323. This amount is 
allocated to FM Classes C,C1,C2,B; Classes A,B1,C3; and FM 
Construction Permits (CP) as follows:
    (1) First we determine the relationships between the three 
categories by dividing the smallest of the FY 1996 FM fees into each 
of the FY 1996 FM fees to determine the appropriate ratios for 
allocation of the revenue requirement.
    (a) FY 1996 FM CP fee=$690
    FY 1996 FM Classes A, B1, and C3=$830
    FY 1996 FM Classes C, C1, C2, and B=$1,250
    (b) FM CP ratio is $690 divided by $690=1:1
    FM Classes A, B1, and C3 ratio is $830 divided by $690=1:1.2
    FM Classes C, C1, C2, and B ratio is $1,250 divided by 
$690=1:1.8
    (2) Next we add the three ratios and divide the sum into the 
total revenue requirement for FM to determine the amount 
corresponding to the ratio of 1.
    (a) 1+1.2+1.8=4
    (b) $8,452,323 divided by 4=$2,113,081
    (3) Finally, we determine the fee for each of the three by 
multiplying the amount calculated in step (2)(b) by each of the 
ratios.
    FM CP revenue requirement=1 times $2,113,081=$2,113,081
    FM Classes A, B1, and C3 revenue requirement=1.2 times 
$2,113,081=$2,535,697
    FM Classes C, C1, C2, and B revenue requirement=1.8 times 
$2,113,081=$3,803,546
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4. Establishment of 25% Revenue Ceiling
    17. Our next step was to determine whether reliance on actual costs 
to develop FY 1997 regulatory fees would result in fees which are too 
disparate from corresponding FY 1996 fees. As a result of this 
analysis, we are proposing to establish a ceiling of 25 percent on the 
increase in the revenue requirement of any service over and above the 
Congressionally mandated increase in the overall revenue requirement 
and the difference in unit counts.8 Because Congress has increased 
our overall fee collection requirement, we are already required to 
collect substantially more than we collected in FY 1996. Nevertheless, 
capping each service's revenue requirement at no more than a 25 percent 
increase enables us to begin the process of reducing fees for services 
with lower costs and increasing fees for services with higher costs in 
order to close the gap between actual costs and fees designed to 
recover these costs. We are not suggesting that fee increases be 
limited to a 25 percent increase over the FY 1996 fees. The 25 percent 
increase is over and above the revenue which would be required after 
adjusting for the projected FY 1997 payment units and the proportional 
share of the 21 percent increase in the amount that Congress requires 
us to collect. Thus, FY 1997 fees may increase more than 25 percent 
over FY 1996 fees depending upon the number of payment units.
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    \8\ For example, the regulatory cost associated with the 
Aviation (Aircraft) service is $933,492. If no change were made to 
this service's FY 1996 regulatory fee ($3 per year), the total 
revenue collected from licensees in this service would be only 
$117,327 in FY 1997, a shortfall of $816,165. Application of the 
proposed 25 percent revenue ceiling to this service results in a 
capped revenue ceiling of $146,659 ($117,327 x 125%).
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    18. An important consideration in proposing the establishment of a 
revenue ceiling is the impact on other fee payers. Because the 
Commission is required to collect a full $152,523,000 in FY 1997 
regulatory fees, the additional revenue ($28,024,533) that would have 
been collected from classes of licensees subject to the revenue ceiling 
had there been no ceiling, needs to be collected instead from licensees 
not subject to the ceiling. This results in a certain amount of 
subsidization between fee payer classes.9 We believe, however, 
that the public interest is best served by adopting our proposed 
revenue ceiling methodology. To do otherwise would subject several 
entities to unexpected major increases which would severely impact the 
economic well being of certain licensees who will not be able to adjust 
their business plans accordingly. Attachment E displays the step-by-
step process we used to calculate adjusted revenue requirements for 
each fee category for FY 1997, including the reallocation of revenue 
requirements resulting from the application of our proposed revenue 
ceilings.10 We invite comments on our proposed methodology to 
incorporate actual costs into the computation of regulatory fees and to 
establish the 25% revenue ceiling.
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    \9\ Revenues from current fee payers already offset costs 
attributable to regulatees exempt from payment of a fee or otherwise 
not subject to a fee pursuant to section 9(h) of the Act or the 
Commission's rules. For example, CB and ship radio station users, 
amateur radio licensees, governmental entities, licensees in the 
public safety radio services, and all non-profit groups are not 
required to pay a fee. The costs of regulating these entities is 
borne by those regulatees subject to a fee requirement.
    \10\ Application of the 25% ceiling was accomplished by choosing 
a ``target'' fee revenue requirement for each individual fee 
category. This ``target'' was either the actual calculated revenue 
requirement (for those categories at or below the 25% ceiling) or, 
in the case where the calculated revenue exceeded the ceiling, an 
amount equal to the ceiling. The shortfall created by reducing the 
revenue requirement of those whose revenue requirement exceeded the 
revenue ceiling was proportionately spread among those fee 
categories whose revenue requirements were below the ceiling. This 
computation required more than one round of adjustment because the 
allocation of this revenue, in a few instances, caused the new 
revenue requirement amount to exceed the 25% ceiling. After two 
iterations (rounds), all the revenue requirements were at or below 
the revenue ceiling. See Attachment E.
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5. Recalculation of Fees
    19. Once we determined the amount of fee revenue necessary to 
collect from each class of licensee, we divided the revenue requirement 
by the number of payment units (and by the license term, if applicable, 
for ``small'' fees) to obtain actual fee amounts for each fee category. 
These calculated fee amounts were then rounded in accordance with 
Section 9(b)(3) of the Act. See Attachment E.
6. Other Proposed Change--Consolidation of Private Microwave & Domestic 
Public Fixed Fee Categories
    20. We examined the results of our calculations made in Paragraphs 
15-19

[[Page 10797]]

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

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

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

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

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

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

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

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

[[Page 10798]]

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

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

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

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

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

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

[[Page 10799]]

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

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


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

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

[[Page 10800]]

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

D. Procedures for Payment of Regulatory Fees

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

[[Page 10801]]

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

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

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

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

E. Schedule of Regulatory Fees

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

IV. Procedural Matters

A. Comment Period and Procedures

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

B. Ex Parte Rules

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

C. Initial Regulatory Flexibility Analysis

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

D. Paperwork Reduction Act Compliance

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

[[Page 10802]]

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

E. Authority and Further Information

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

List of Subjects in 47 CFR Part 1

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

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

Attachment A--Initial Regulatory Flexibility Analysis

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

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

I. Need for and Objectives of the Proposed Rule

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

II. Legal Basis

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

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

    4. The RFA generally defines ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction'' and ``the same meaning as the term 
`small business concern' under the Small Business Act unless the 
Commission has developed one or more definitions that are appropriate 
for its activities.21 A small business concern is one which: (1) 
is independently owned and operated; (2) is not dominant in its field 
of operation; and (3) satisfies any additional criteria established by 
the Small Business Administration (SBA).22 The Small Business 
Enforcement Fairness Act of 1996 (SBREFA) provision of the RFA also 
applies to nonprofit organizations and to governmental organizations 
such as governments of cities, counties, towns, townships, villages, 
school districts, or special districts with populations of less than 
50,000.23 There are 85,006 governmental entities in the United 
States.24 5 U.S.C. Sec. 601(3) (incorporating by reference the 
definition of ``small business concern'' in 15 U.S.C. Sec. 632). 
Pursuant to 5 U.S.C. Sec. 601(3), the statutory definition of a small 
business applies ``unless an agency after consultation with the Office 
of Advocacy of the Small Business Administration and after opportunity 
for public comment, establishes one or more definitions of such term 
which are appropriate to the activities of the agency and publishes 
such definition(s) in the Federal Register.''
---------------------------------------------------------------------------

    \21\ 5 U.S.C. Sec. 601(3) (incorporating by reference the 
definition of ``small business concern'' in 15 U.S.C. Sec. 632). 
Pursuant to 5 U.S.C. Sec. 601(3), the statutory definition of a 
small business applies ``unless an agency after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \22\ Small Business Act, 15 U.S.C. Sec. 632 (1996).
    \23\ 5 U.S.C. Sec. 601(5).
    \24\ United States Dept. of Commerce, Bureau of the Census, 1992 
Census of Governments (1992 Census).
---------------------------------------------------------------------------

Cable Services or Systems

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

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

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

[[Page 10803]]

small cable system operators at the end of 1995.28 Since then, 
some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, we 
estimate that there are fewer than 1,439 small entity cable system 
operators.
---------------------------------------------------------------------------

    \27\ 47 CFR Sec. 76.901(e). The Commission developed this 
definition based on its determination that a small cable system 
operator is one with annual revenues of $100 million or less. 
Implementation of Sections of the 1992 Cable Act: Rate Regulation, 
Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC 
Rcd 7393 (1995), 60 FR 10534 (February 27, 1995).
    \28\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for December 30, 1995).
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    7. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' 29 The Commission has determined that there are 
61,700,000 subscribers in the United States. Therefore, we found that 
an operator serving fewer than 617,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate.30 Based on available data, we find that the number 
of cable operators serving 617,000 subscribers or less totals 
1,450.31 We do not request nor do we collect information 
concerning whether cable system operators are affiliated with entities 
whose gross annual revenues exceed $250,000,000,32 and thus are 
unable at this time to estimate with greater precision the number of 
cable system operators that would qualify as small cable operators 
under the definition in the Communications Act. It should be further 
noted that recent industry estimates project that there will be a total 
65,000,000 subcribers, and we have based our fee revenue estimates on 
that figure.
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    \29\ 47 U.S.C. Sec. 543(m)(2).
    \30\ 47 CFR Sec. 76.1403(b).
    \31\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
    \32\ We do receive such information on a case-by-case basis only 
if a cable operator appeals a local franchise authority's finding 
that the operator does not qualify as a small cable operator 
pursuant to section 76.1403(b) of the Commission's rules. See 47 CFR 
Sec. 76.1403(d).
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    8. Other Pay Services. Other pay television services are also 
classified under SIC 4841, which includes cable systems operators, 
closed circuit television services, direct broadcast satellite services 
(DBS),33 multipoint distribution systems (MDS),34 satellite 
master antenna systems (SMATV), and subscription television services.
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    \33\ Direct Broadcast Services (DBS) are discussed in depth with 
the international services infra.
    \34\ Multipoint Distribution Services (MDS) are discussed in 
depth with the mass media services infra.
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Common Carrier Services and Related Entities

    9. According to the Telecommunications Industry Revenue: 
Telecommunications Relay Service Fund Worksheet Data (TRS Worksheet), 
there are 2,847 interstate carriers. These carriers include, inter 
alia, local exchange carriers, wireline carriers and service providers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, providers of telephone toll 
service, providers of telephone exchange service, and resellers.
    10. The SBA has defined a small business for Radiotelephone 
Communications (SIC 4812) and Telephone Communications, Except 
Radiotelephone (4813), to be small entities when they have fewer than 
1,500 employees.35 We first discuss generally the total number of 
small telephone companies falling within both of those SIC categories. 
Then, we discuss the number of small businesses within the two 
subcategories, and attempt to refine further those estimates to 
correspond with the categories of telephone companies that are commonly 
used under our rules.
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    \35\ 13 CFR Sec. 121.201.
---------------------------------------------------------------------------

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

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

[[Page 10804]]

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

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

    14. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange services 
(LECs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies.\42\ The most reliable source of information regarding the 
number of LECs nationwide is the data that we collect annually in 
connection with the TRS Worksheet. According to our most recent data, 
1,347 companies reported that they were engaged in the provision of 
local exchange services.\43\ We do not have information on the number 
of carriers that are not independently owned and operated, nor what 
carriers have more than 1,500 employees, and thus are unable at this 
time to estimate with greater precision the number of LECs that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 1,347 small 
incumbent LECs.
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    \42\ 13 CFR Sec. 121.201, SIC Code 4813.
    \43\ Federal Communications Commission, CCB, Industry Analysis 
Division, Telecommunications Industry Revenue: TRS Fund Worksheet 
Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by 
Class of Carrier) (December 1996) (TRS Worksheet).
---------------------------------------------------------------------------

    15. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for telephone communications 
companies except radiotelephone (wireless) companies.\44\ The most 
reliable source of information regarding the number of IXCs nationwide 
is the data that we collect annually in connection with the TRS 
Worksheet. According to our most recent data, 130 companies reported 
that they were engaged in the provision of interexchange services.\45\ 
We do not have information on the number of carriers that are not 
independently owned and operated, nor have more than 1,500 employees, 
and thus we are unable at this time to estimate with greater precision 
the number of IXCs that would qualify as small business concerns under 
the SBA's definition. Consequently, we estimate that there are fewer 
than 130 small entity IXCs.
---------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

[[Page 10805]]

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

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

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

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

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

Mass Media Services

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

[[Page 10806]]

commercial, religious, educational, and other television stations. 
62 Also included are establishments primarily engaged in 
television broadcasting and which produce taped television program 
materials. 63 Separate establishments primarily engaged in 
producing taped television program materials are classified under 
another SIC number. 64 There were 1,509 television stations 
operating in the nation in 1992. 65 That number has remained 
fairly constant as indicated by the approximately 1,550 operating 
television broadcasting stations in the nation as of August, 1996. 
66 For 1992, 67 the number of television stations that 
produced less than $10.0 million in revenue was 1,155 establishments. 
68 Only commercial stations are subject to regulatory fees.
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    \59\ We tentatively conclude that the SBA's definition of 
``small business'' greatly overstates the number of radio and 
television broadcast stations that are small businesses and is not 
suitable for purposes of determining the impact of the proposals on 
small television and radio stations. However, for purposes of this 
Policy Statement, we utilize the SBA's definition in determining the 
number of small businesses to which the proposed rules would apply, 
but we reserve the right to adopt a more suitable definition of 
``small business'' as applied to radio and television broadcast 
stations or other entities subject to this Policy Statement and to 
consider further the issue of the number of small entities that are 
radio and television broadcasters or other small media entities in 
the future. See Report and Order in MM Docket No. 93-48 (Children's 
Television Programming), 11 FCC Rcd 10660, 10737-38 (1996), 61 FR 
43981 (August 27, 1996), citing 5 U.S.C. 601(3). We have pending 
proceedings seeking comment on the definition of and data relating 
to small businesses. In our Notice of Inquiry in GN Docket No. 96-
113 (Section 257 Proceeding to Identify and Eliminate Market Entry 
Barriers for Small Businesses), FCC 96-216, released May 21, 1996, 
we requested commenters to provide profile data about small 
telecommunications businesses in particular services, including 
television, and the market entry barriers they encounter, and we 
also sought comment as to how to define small businesses for 
purposes of implementing Section 257 of the Telecommunications Act 
of 1996, which requires us to identify market entry barriers and to 
prescribe regulations to eliminate those barriers. Additionally, in 
our Order and Notice of Proposed Rule Making in MM Docket No. 96-16 
(In the Matter of Streamlining Broadcast EEO Rule and Policies, 
Vacating the EEO Forfeiture Policy Statement and Amending Section 
1.80 of the Commission's Rules to Include EEO Forfeiture 
Guidelines), 11 FCC Rcd 5154 (1996), 61 FR 9964 (March 12, 1996), we 
invited comment as to whether relief should be afforded to stations: 
(1) based on small staff and what size staff would be considered 
sufficient for relief, e.g., 10 or fewer full-time employees; (2) 
based on operation in a small market; or (3) based on operation in a 
market with a small minority work force.
    \60\ 13 CFR 121.201, SIC 4833.
    \61\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce, 1992 Census of Transportation, 
Communications and Utilities, Establishment and Firm Size, Series 
UC92-S-1, Appendix A-9 (1995).
    \62\ Id. See Executive Office of the President, Office of 
Management and Budget, Standard Industrial Classification Manual 
(1987), at 283, which describes ``Television Broadcasting Stations'' 
(SIC Code 4833) as:
    Establishments primarily engaged in broadcasting visual programs 
by television to the public, except cable and other pay television 
services. Included in this industry are commercial, religious, 
educational and other television stations. Also included here are 
establishments primarily engaged in television broadcasting and 
which produce taped television program materials.
    \63\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce, 1992 Census of Transportation, 
Communications And Utilities, Establishment and Firm Size, Series 
UC92-S-1, Appendix A-9 (1995).
    \64\ Id. SIC 7812 (Motion Picture and Video Tape Production); 
SIC 7922 (Theatrical Producers and Miscellaneous Theatrical 
Services) (producers of live radio and television programs).
    \65\ FCC News Release No. 31327, January 13, 1993; Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce.
    \66\ FCC News Release No. 64958, September 6, 1996.
    \67\  Census for Communications' establishments are performed 
every five years ending with a ``2'' or ``7''. See Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce.
    \68\ The amount of $10 million was used to estimate the number 
of small business establishments because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No 
category for $10.5 million existed. Thus, the number is as accurate 
as it is possible to calculate with the available information.
---------------------------------------------------------------------------

    33. Additionally, the Small Business Administration defines a radio 
broadcasting station that has $5 million or less in annual receipts as 
a small business. 69 A radio broadcasting station is an 
establishment primarily engaged in broadcasting aural programs by radio 
to the public. 70 Included in this industry are commercial, 
religious, educational, and other radio stations. 71 Radio 
broadcasting stations which primarily are engaged in radio broadcasting 
and which produce radio program materials are similarly included. 
72 However, radio stations which are separate establishments and 
are primarily engaged in producing radio program material are 
classified under another SIC number. 73 The 1992 Census indicates 
that 96 percent (5,861 of 6,127) radio station establishments produced 
less than $5 million in revenue in 1992. 74 Official Commission 
records indicate that 11,334 individual radio stations were operating 
in 1992. 75 As of August 1996, official Commission records 
indicate that 12,088 radio stations were operating. 76 Only 
commercial stations are subject to regulatory fees.
---------------------------------------------------------------------------

    \69\ 13 CFR 121.201, SIC 4832.
    \70\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce.
    \71\ Id.
    \72\ Id.
    \73\ Id.
    \74\ The Census Bureau counts radio stations located at the same 
facility as one establishment. Therefore, each co-located AM/FM 
combination counts as one establishment.
    \75\ FCC News Release No. 31327, January 13, 1993.
    \76\ FCC News Release No. 64958, September 6, 1996.
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    34. Thus, the NPRM adopted today will affect approximately 1,550 
full power television stations; approximately 1,194 of those stations 
are considered small businesses, 77 and 12,088 full power radio 
stations, approximately 11,605 of which are small businesses. 78 
These estimates may overstate the number of small entities since the 
revenue figures on which they are based do not include or aggregate 
revenues from non-television or non-radio affiliated companies. There 
are also 1,954 low power television stations (LPTV). 79 Given the 
nature of this service, we will presume that all LPTV licensees qualify 
as small entities under the SBA definition.
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    \77\ We use the 77 percent figure of TV stations operating at 
less than $10 million for 1992 and apply it to the 1996 total of 
1550 TV stations to arrive at 1,194 stations categorized as small 
businesses.
    \78\ We use the 96% figure of radio station establishments with 
less than $5 million revenue from the Census data and apply it to 
the 12,088 individual station count to arrive at 11,605 individual 
stations as small businesses.
    \79\ FCC News Release, Broadcast Station Totals as of December 
31, 1996, No. 71831, January 21, 1997.
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Alternative Classification of Small Stations

    35. An alternative way to classify small radio and television 
stations is the number of employees. The Commission currently applies a 
standard based on the number of employees in administering its Equal 
Employment Opportunity Rule (EEO) for broadcasting.80 Thus, radio 
or television stations with fewer than five full-time employees are 
exempted from certain EEO reporting and record keeping 
requirements.81 We estimate that the total number of broadcast 
stations with 4 or fewer employees is approximately 4,239.82
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    \80\ The Commission's definition of a small broadcast station 
for purposes of applying its EEO rules was adopted prior to the 
requirement of approval by the SBA pursuant to Section 3(a) of the 
Small Business Act, 15 U.S.C. Sec. 632 (a), as amended by Section 
222 of the Small Business Credit and Business Opportunity 
Enhancement Act of 1992, Public Law 102-366, Sec. 222(b)(1), 106 
Stat. 999 (1992), as further amended by the Small Business 
Administration Reauthorization and Amendments Act of 1994, Public 
Law 103-403, Sec. 301, 108 Stat. 4187 (1994). However, this 
definition was adopted after the public notice and the opportunity 
for comment. See Report and Order in Docket No. 18244, 23 FCC 2d 430 
(1970), 35 FR 8925 (June 6, 1970).
    \81\See, e.g., 47 CFR Sec. 73.3612 (Requirement to file annual 
employment reports on Form 395 applies to licensees with five or 
more full-time employees); First Report and Order in Docket No. 
21474 (Amendment of Broadcast Equal Employment Opportunity Rules and 
FCC Form 395), 70 FCC 2d 1466 (1979), 50 FR 50329 (December 10, 
1985). The Commission is currently considering how to decrease the 
administrative burdens imposed by the EEO rule on small stations 
while maintaining the effectiveness of our broadcast EEO 
enforcement. Order and Notice of Proposed Rule Making in MM Docket 
No. 96-16 (Streamlining Broadcast EEO Rule and Policies, Vacating 
the EEO Forfeiture Policy Statement and Amending Section 1.80 of the 
Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd 
5154 (1996), 61 FR 9964 (March 12, 1996). One option under 
consideration is whether to define a small station for purposes of 
affording such relief as one with ten or fewer full-time employees.
    \82\ Compilation of 1994 Broadcast Station Annual Employment 
Reports (FCC Form 395B), Equal Opportunity Employment Branch, Mass 
Media Bureau, FCC.
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Auxiliary, Special Broadcast and Other Program Distribution Services

    36. This service involves a variety of transmitters, generally used 
to relay broadcast programming to the public (through translator and 
booster stations) or within the program distribution chain (from a 
remote news gathering unit back to the station). The Commission has not 
developed a definition of small entities applicable to broadcast 
auxiliary licensees. Therefore, the applicable definition of small 
entity is the definition under the Small Business Administration (SBA) 
rules applicable to radio broadcasting stations (SIC 4832) and 
television broadcasting stations (SIC 4833).
    37. There are currently 2,720 FM translators and boosters, 4,952 TV 
translators.83 The FCC does not collect financial information on 
any broadcast facility and the Department of Commerce does not collect 
financial information on these auxiliary broadcast facilities. We 
believe, however, that most, if not all, of these auxiliary facilities 
could be classified as small

[[Page 10807]]

businesses by themselves. We also recognize that most translators and 
boosters are owned by a parent station which, in some cases, would be 
covered by the revenue definition of small business entity discussed 
above. These stations would likely have annual revenues that exceed the 
SBA maximum to be designated as a small business (either $5 million for 
a radio station or $10.5 million for a TV station). Furthermore, they 
do not meet the Small Business Act's definition of a ``small business 
concern'' because they are not independently owned and operated.84
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    \83\ FCC News Release, Broadcast Station Totals as of December 
31, 1996, No. 71831, January 21, 1997.
    \84\ 15 U.S.C. Sec. 632.
---------------------------------------------------------------------------

    38. Multipoint Distribution Service (MDS). This service involves a 
variety of transmitters, which are used to relay programming to the 
home or office, similar to that provided by cable television 
systems.85 In connection with the 1996 MDS auction the Commission 
defined small businesses as entities who had annual average gross 
revenues for the three preceding years not in excess of $40 
million.86 This definition of a small entity in the context of MDS 
auctions has been approved by the SBA.87 These stations were 
licensed prior to implementation of Section 309(j) of the Act. Licenses 
for new MDS facilities are now awarded to auction winners in Basic 
Trading Areas (BTAs) and BTA-like areas.88 The MDS auctions 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 BTAs. Of the 67 auction winners, 61 meet the definition of a small 
business. There are 1,573 previously authorized and proposed MDS 
stations currently licensed. Thus, we conclude that there are 1,634 MDS 
providers that are small businesses as deemed by the SBA and the 
Commission's auction rules. It is estimated, however, that only 1,145 
MDS licensees are subject to regulatory fees and the number which are 
small businesses is unknown.
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    \85\ For purposes of this item, MDS also includes single channel 
Multipoint Distribution Service (MDS) and Multipoint Distribution 
Service (MMDS) application and authorizations collectively.
    \86\ See 47 CFR Sec. 1.2110 (a)(1).
    \87\ Amendment of Parts 21 and 74 of the Commission's Rules with 
Regard to Filing Procedures in the Multipoint Distribution Service 
and in the Instructional Television Fixed Service and Implementation 
of Section 309(j) of the Communications Act--Competitive Bidding, 10 
FCC Rcd 9589 (1995), 60 FR 36524 (July 17, 1995).
    \88\ Id. A Basic Trading Area (BTA) is the geographic area by 
which the Multipoint Distribution Service is licensed. See Rand 
McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition, 
pp. 36-39.
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Wireless and Commercial Mobile Services

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

    \89\ Federal Communications Commission. CCB industry Analysis 
Division, Telecommunication Industry Revenue: TRS Worksheet Data, 
Tbl. 1 (Average Total Telecommunication Revenue Reported by Class of 
Carrier) (December 1996) (TRS Worksheet).
    \90\ Id.
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    40. 220 MHz Radio Services. Since the Commission has not yet 
defined a small business with respect to 220 MHz radio services, we 
will utilize the SBA's definition applicable to radiotelephone 
companies--i.e., an entity employing less than 1,500 persons.91 
With respect to the 220 MHz services, the Commission has proposed a 
two-tiered definition of small business for purposes of auctions: (1) 
For Economic Area (EA) licensees,92 a firm with average annual 
gross revenues of not more than $6 million for the preceding three 
years; and (2) for regional and nationwide licensees, a firm with 
average annual gross revenues of not more than $15 million for the 
preceding three years.93 Since this definition has not yet been 
approved by the SBA, we will utilize the SBA's definition applicable to 
radiotelephone companies. Given the fact that nearly all radiotelephone 
companies employ fewer than 1,500 employees,94 with respect to the 
approximately 3,800 incumbent licensees in this service, we will 
consider them as small businesses under the SBA definition.
---------------------------------------------------------------------------

    \91\ 13 CFR Sec. 121.201, SIC 4812.
    \92\ Economic Area (EA) licenses refer to the 60 channels in the 
172 geographic areas as defined by the Bureau of Economic Analysis, 
Department of Commerce. See Amendment of Part 90 of the Commission's 
Rules to Provide for the Use of the 220-222 MHz Band by the Private 
Land Mobile Radio Service, Second Memorandum Opinion and Order and 
Third Notice of Proposed Rule Making, GN Docket 93-252, 10 FCC Rcd 
6880 (1995), 60 FR 26861 (May 19, 1995).
    \93\ Id.
    \94\ See U.S. Bureau of the Census, U.S. Department of Commerce, 
1992 Census of Transportation, Communications, and Utilities, UC92-
S-1, Subject Series, Establishment and Firm Size, Tbl. 5, Employment 
Size of Firms; 1992, SIC 4812 (issued May 1995).
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    41. Private and Common Carrier Paging. The Commission has proposed 
a two-tier definition of small businesses in the context of auctioning 
licenses in the Common Carrier Paging and exclusive Private Carrier 
Paging services. Under the proposal, a small business will be defined 
as either (1) an entity that, together with its affiliates and 
controlling principals, has average gross revenues for the three 
preceding years of not more than $3 million, or (2) an entity that, 
together with affiliates and controlling principals, has average gross 
revenues for the three preceding calendar years of not more than $15 
million. Since the SBA has not yet approved this definition for paging 
services, we will utilize the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing fewer than 1,500 
persons.95 At present, there are approximately 24,000 Private 
Paging licensees and 74,000 Common Carrier Paging licensees. We 
estimate that the majority of private and common carrier paging 
providers would qualify as small businesses under the SBA definition.
---------------------------------------------------------------------------

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

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

[[Page 10808]]

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

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

    43. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years.97 For Block F, an additional classification for 
``very small business'' was added and is defined as an entity that, 
together with their affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.98 These 
regulations defining ``small entity'' in the context of broadband PCS 
auctions have been approved by the SBA. No small businesses within the 
SBA-approved definition bid successfully for licenses in Blocks A and 
B. There were 90 winning bidders that qualified as small entities in 
the Block C auctions. A total of 93 small and very small business 
bidders won approximately 40% of the 1,479 licenses for Blocks D, E, 
and F.99 However, licenses for blocks C through F have not been 
awarded fully, therefore there are few, if any, small businesses 
currently providing PCS services. Based on this information, we 
conclude that the number of small broadband PCS licensees will include 
the 90 winning C Block bidders and the 93 qualifying bidders in the D, 
E, and F blocks, for a total of 183 small PCS providers as defined by 
the SBA and the Commission's auction rules.
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    \97\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, Report and Order, FCC 96-278, WT Docket 
No. 96-59, paras. 57-60 (released June 24, 1996), 61 FR 33859 (July 
1, 1996); see also 47 CFR Sec. 24.720(b).
    \98\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commerical Mobile 
Radio Service Spectrum Cap, Report and Order, FCC 96-278, WT Docket 
No. 96-59, para. 60 (1996), 61 FR 33859 (July 1, 1996).
    \99\ FCC News, Broadband PCS, D, E and F Block Auction Closes, 
No. 71744 (released January 14, 1997).
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    44. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition. At present, there 
have been no auctions held for the major trading area (MTA) and basic 
trading area (BTA) narrowband PCS licenses. The Commission anticipates 
a total of 561 MTA licenses and 2,958 BTA licenses will be awarded in 
the auctions. Those auctions, however, have not yet been scheduled. 
Given the facts that nearly all radiotelephone companies have fewer 
than 1,500 employees and that no reliable estimate of the number of 
prospective MTA and BTA narrowband licensees can be made, we assume, 
that all of the licenses will be awarded to small entities, as that 
term is defined by the SBA.
    45. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small business specific to the Rural Radiotelephone 
Service, which is defined in Section 22.99 of the Commission's 
Rules.100 A significant subset of the Rural Radiotelephone Service 
is BETRS, or Basic Exchange Telephone Radio Systems (the parameters of 
which are defined in Sections 22.757 and 22.759 of the Commission's 
Rules). Accordingly, we will use the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing fewer than 1,500 
persons. There are approximately 1,000 licensees in the Rural 
Radiotelephone Service, and we estimate that almost all of them qualify 
as small under the SBA's definition of a small business.101
---------------------------------------------------------------------------

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

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

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

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

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

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

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

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[[Page 10809]]

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

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

    54. Most applicants for individual recreational licenses are 
individuals. Approximately 581,000 ship station licensees and 131,000 
aircraft station licensees operate domestically and are not subject to 
the radio carriage requirements of any statute or treaty. Therefore, 
for purposes of our evaluations and conclusions in this FRFA, we 
estimate that there may be at least 712,000 potential licensees which 
are small businesses, as that term is defined by the SBA. We estimate, 
however, that only 22,250 will be subject to FY 1997 regulatory fees.
    55. Microwave Video Services. Microwave services includes common 
carrier,107 private operational fixed,108 and broadcast 
auxiliary radio services.109 At present, there are 22,015 common 
carrier licensees, approximately 61,670 private operational fixed 
licensees and broadcast auxiliary radio licensees in the microwave 
services. Inasmuch as the Commission has not yet defined a small 
business with respect to microwave services, we will utilize the SBA's 
definition applicable to radiotelephone companies--i.e., an entity with 
less than 1,500 persons.110 As for estimates regarding small 
businesses within the broadcast service, we rely on our estimates as 
discussed under mass media services. Although some of these companies 
may have more than 1,500 employees, we are unable at this time to 
estimate with greater precision the number of microwave service 
providers other than broadcast licensees that would qualify under the 
SBA's definition.
---------------------------------------------------------------------------

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

    56. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.111 There are a total 
of approximately 127,540 licensees within these services. Governmental 
entities as well as private businesses comprise the licensees for these 
services. As we indicated in the introductory paragraph, all 
governmental entities with populations of less than 50,000 fall within 
the definition of a small business.112 There are approximately 
37,566 governmental entities with populations of less than 
50,000.113 All of these licensees are exempt from payment of 
regulatory fees.
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    \111\ With the exception of the special emergency service, these 
services are governed by subpart B of Part 90 of the Commission's 
rules. 47 CFR Secs. 90.15 through 90.27. The police service includes 
26,608 licensees that serve state, county, and municipal enforcement 
through telephony (voice), telegraphy (code) and teletype and 
facsimile (printed material). The fire radio service includes 22,677 
licensees comprised of private volunteer or professional fire 
companies as well as units under governmental control. The local 
government service that is presently comprised of 40,512 licensees 
that are state, county, or municipal entities that use the radio for 
official purposes not covered by other public safety services. There 
are 7,325 licensees within the forestry service which is comprised 
of licensees from state departments of conservation and private 
forest organizations who set up communications networks among fire 
lookout towers and ground crews. The 9,480 state and local 
governments are licensed to highway maintenance service provide 
emergency and routine communications to aid other public safety 
services to keep main roads safe for vehicular traffic. The 1,460 
licensees in the Emergency Medical Radio Service (EMRS) use the 39 
channels allocated to this service for emergency medical service 
communication related to the actual delivery of emergency medical 
treatment. 47 CFR Sec. Sec. 90.15 through 90.27. The 19,478 
licensees in the special emergency service include medical services, 
rescue organizations, veterinarians, handicapped persons, disaster 
relief organizations, school buses, beach patrols, establishments in 
isolated areas, communications standby facilities, and emergency 
repair of public communications facilities. 47 CFR Secs. 90.33 
through 90.55.
    \112\ 5 U.S.C. Sec. 601(5).
    \113\ United States Dept. of Commerce, Bureau of the Census, 
1992 Census of Governments (1992 Census).
---------------------------------------------------------------------------

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

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

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

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

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

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

[[Page 10810]]

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

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

    60. Each licensee must submit the FCC Form 159 to the Commission's 
lockbox bank after computing the number of units subject to the fee. As 
an option, licensees are permitted to file electronically or on 
computer diskette to minimize the burden of submitting multiple copies 
of the FCC Form 159. Although not mandatory, the latter procedure may 
require additional technical skills. Licensees who pay small fees in 
advance supply fee information as part of their application and do not 
need to use the FCC Form 159.
    61. Licensees and regulatees are advised that failure to submit the 
required regulatory fee in a timely manner will subject the licensee or 
regulatee to a late payment fee of an additional 25% in addition to the 
required fee.117 Until payment is received, no new or pending 
applications will be processed, and existing authorizations may be 
subject to rescission.118 Further, in accordance with the Debt 
Collection Improvement Act of 1996, federal agencies may bar a person 
or entity from obtaining a federal loan or loan insurance guarantees if 
that person or entity fails to pay a delinquent debt owed to any 
federal agency.119 Thus, debts owed to the Commission may result 
in a person or entity being denied a federal loan or loan guarantee 
pending before another federal agency until such obligations are 
paid.120
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    \117\ 47 U.S.C. Sec. 1.1164(a).
    \118\ 47 U.S.C. Sec. 1.1164(c).
    \119\ Public Law 104-134, 110 Stat. 1321 (1996).
    \120\ 31 U.S.C. Sec. 7701(c)(2)(B).
---------------------------------------------------------------------------

    62. The Commission's rules currently make provision for relief in 
exceptional circumstances. Persons or entities that believe they have 
been placed in the wrong regulatory fee category or are experiencing 
extraordinary and compelling financial hardship, upon a showing that 
such circumstances override the public interest in reimbursing the 
Commission for its regulatory costs, may request a waiver, reduction or 
deferment of payment of the regulatory fee.121 However, timely 
submission of the required regulatory fee must accompany requests for 
waivers or reductions. This will avoid any late payment penalty if the 
request is denied. The fee will be refunded if the request is granted. 
In exceptional and compelling instances (where payment of the 
regulatory fee along with the waiver or reduction request could result 
in reduction of service to a community or other financial hardship to 
the licensee), the Commission will accept a petition to defer payment 
along with a waiver or reduction request.
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    \121\ 47 U.S.C. Sec. 1.1166.
---------------------------------------------------------------------------

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

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

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

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

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

    68. None.

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

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

[[Page 10811]]

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

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


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Attachment F--FY 1997 Schedule of Regulatory Fees

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

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

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

[[Page 10816]]

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

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

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

[[Page 10817]]

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

1. Private Wireless Radio Services

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

a. Exclusive Use Services

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

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

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

b. Shared Use Services

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

[[Page 10818]]

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

c. Amateur Radio Vanity Call Signs

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

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

d. Commercial Wireless Radio Services

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

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

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

2. Mass Media Services

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

a. Commercial AM and FM Radio

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

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

AM Radio

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

FM Radio

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

b. Construction Permits--Commercial AM Radio

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

c. Construction Permits--Commercial FM Radio

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

[[Page 10819]]

d. Commercial Television Stations

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

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

e. Commercial Television Satellite Stations

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

f. Construction Permits--Commercial VHF Television Stations

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

g. Construction Permits--Commercial UHF Television Stations

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

h. Construction Permits--Satellite Television Stations

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

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

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

j. Broadcast Auxiliary Stations

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

k. Multipoint Distribution Service

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

3. Cable Services

a. Cable Television Systems

    28. This category includes operators of Cable Television Systems, 
providing or distributing programming or other services to subscribers 
under Part 76 of the Commission's Rules. For FY 1997, we are proposing 
that Cable Systems will pay a regulatory fee of $.55 per 
subscriber.131 Payments for Cable Systems are to be made on a per 
subscriber basis as of December 31, 1995. Cable Systems should 
determine their subscriber numbers by calculating the number of single 
family dwellings, the number of individual households in multiple 
dwelling units, e.g., apartments, condominiums, mobile home parks, 
etc., paying at the basic subscriber rate, the number of bulk rate 
customers and the number of courtesy or fee customers. In order to 
determine the number of bulk rate subscribers, a system should divide 
its bulk rate charge by the annual subscription rate for individual 
households. See FY 1994 Report and Order, Appendix B at Paragraph 31.
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    \131\ Cable systems are to pay their regulatory fees on a per 
subscriber basis rather than per 1,000 subscribers as set forth in 
the statutory fee schedule. See FY 1994 Report and Order at 
Paragraph 100.
---------------------------------------------------------------------------

b. Cable Antenna Relay Service

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

[[Page 10820]]

annual regulatory fee of $65 per CARS license.

4. Common Carrier Services

a. Domestic Public Fixed Radio Service

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

b. Interstate Telephone Service Providers

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

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

5. International Services

a. Earth Stations

    32. Very Small Aperture Terminal (VSAT) Earth Stations, equivalent 
C-Band Earth Stations and antennas, and earth station systems comprised 
of very small aperture terminals operate in the 12 and 14 GHz bands and 
provide a variety of communications services to other stations in the 
network. VSAT systems consist of a network of technically-identical 
small Fixed-Satellite Earth Stations which often include a larger hub 
station. VSAT Earth Stations and C-Band Equivalent Earth Stations are 
authorized pursuant to Part 25 of the Commission's Rules. Mobile 
Satellite Earth Stations, operating pursuant to Part 25 of the 
Commission's Rules under blanket licenses for mobile antennas 
(transceivers), are smaller than one meter and provide voice or data 
communications, including position location information for mobile 
platforms such as cars, buses, or trucks.132 Fixed-Satellite 
Transmit/Receive and Transmit-Only Earth Station antennas, authorized 
or registered under Part 25 of the Commission's Rules, are operated by 
private and public carriers to provide telephone, television, data, and 
other forms of communications. Included in this category are telemetry, 
tracking and control (TT&C) earth stations, and earth station uplinks. 
For FY 1997, we are proposing that licensees of VSATs, Mobile Satellite 
Earth Stations, and Fixed-Satellite Transmit/Receive and Transmit-Only 
Earth Stations will pay a fee of $515 per authorization or registration 
as well as a separate fee of $515 for each associated Hub Station.
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    \132\ Mobile earth stations are hand-held or vehicle-based units 
capable of operation while the operator or vehicle is in motion. In 
contrast, transportable units are moved to a fixed location and 
operate in a stationary (fixed) mode. Both are assessed the same 
regulatory fee for FY 1997.
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    33. Receive-only earth stations. For FY 1997, we are proposing that 
there be no regulatory fee for receive-only earth stations.

b. Space Stations (Geosynchronous)

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

c. Low Earth Orbit Satellites (LEOs)

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

[[Page 10821]]

d. Signatories

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

e. International Bearer Circuits

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

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

f. International Public Fixed

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

g. International (HF) Broadcast

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

Attachment I--Description of FCC Activities

    Authorization of Service: The authorization or licensing of radio 
stations, telecommunications equipment, and radio operators, as well as 
the authorization of common carrier and other services and facilities. 
Includes policy direction, program development, legal services, and 
executive direction, as well as support services associated with 
authorization activities.133
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    \133\ Although Authorization of Service is described in this 
exhibit, it is not one of the activities included as a feeable 
activity for regulatory fee purposes pursuant to Section 9(a)(1) of 
the Act. 47 U.S.C. Sec. 159(a)(1).
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    Policy and Rulemaking: Formal inquiries, rulemaking proceedings to 
establish or amend the Commission's rules and regulations, action on 
petitions for rulemaking, and requests for rule interpretations or 
waivers; economic studies and analyses; spectrum planning, modeling, 
propagation-interference analyses, and allocation; and development of 
equipment standards. Includes policy direction, program development, 
legal services, and executive direction, as well as support services 
associated with policy and rulemaking activities.
    Enforcement: Enforcement of the Commission's rules, regulations and 
authorizations, including investigations, inspections, compliance 
monitoring, and sanctions of all types. Also includes the receipt and 
disposition of formal and informal complaints regarding common carrier 
rates and services, the review and acceptance/rejection of carrier 
tariffs, and the review, prescription and audit of carrier accounting 
practices. Includes policy direction, program development, legal 
services, and executive direction, as well as support services 
associated with enforcement activities.
    Public Information Services: The publication and dissemination of 
Commission decisions and actions, and related activities; public 
reference and library services; the duplication and dissemination of 
Commission records and databases; the receipt and disposition of public 
inquiries; consumer, small business, and public assistance; and public 
affairs and media relations. Includes policy direction, program 
development, legal services, and executive direction, as well as 
support services associated with public information activities.

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