[Federal Register Volume 62, Number 133 (Friday, July 11, 1997)]
[Rules and Regulations]
[Pages 37408-37446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17240]



[[Page 37407]]

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Part III





Federal Communications Commission





_______________________________________________________________________



47 CFR Part 1



Assessment and Collection of Regulatory Fees for Fiscal Year 1997; 
Final Rule

  Federal Register / Vol. 62, No. 133 / Friday, July 11, 1997 / Rules 
and Regulations  

[[Page 37408]]



FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 96-186; FCC 97-215]


Assessment and Collection of Regulatory Fees for Fiscal Year 1997

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has revised 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 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.

EFFECTIVE DATE: September 15, 1997.

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: June 16, 1997; Released: June 26 , 1997

    By the Commission:

                            Table of Contents                           
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                                                              Paragraph 
                           Topic                                number  
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I. Introduction............................................            1
II. Background.............................................            4
III. Discussion:...........................................             
    A. Summary of FY 1997 Fee Methodology..................            7
    B. Cost-Based Fee Methodology..........................           12
    C. Relationship of Cost of Service to Revenue                       
     Requirements..........................................           21
    D. Application of Cost-Based Methodology To Determine               
     Fee Amounts...........................................             
        1. Adjustment of Payment Units.....................           31
        2. Calculation of Revenue Requirements.............           32
        3. Calculation of Regulatory Costs.................           33
        4. Establishment of 25 Percent Revenue Ceiling.....           35
        5. Calculation of Fees.............................           42
    E. Other Changes.......................................           43
        1. Consolidation of Private Microwave and Domestic              
         Public Fixed Fee Categories.......................           44
        2. Commercial AM/FM Radio..........................           47
        3. Personal Communications Service (PCS)...........           57
        4. Commercial Mobile Radio Services (CMRS).........           58
        5. Intelsat & Inmarsat Signatories.................           65
        6. Non-Common Carrier International Bearer Circuits           66
        7. Low Earth Orbit Satellite Systems...............           73
        8. Broadcast Auxiliary Services....................           76
        9. Amateur Vanity Call Signs.......................           77
        10. Interstate Common Carriers.....................           78
        11. New Filing Requirements........................           79
    F. Schedule of Regulatory Fees.........................           80
    G. Effect of Revenue Redistributions on Major                       
     Constituencies........................................           81
    H. Procedures for Payment of Regulatory Fees...........             
        1. Installment Payments for Large Fees.............           82
        2. Annual Payments of Standard Fees................           84
        3. Advance Payment of Small Fees...................           85
        4. Standard Fee Calculations and Payment Dates.....           86
        5. Minimum Fee Payment Liability...................           88
IV. Ordering Clause........................................           89
V. Authority and Further Information.......................           90
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Rule Changes

Attachments to Preamble:
    Attachment A--Final Regulatory Flexibility Analysis
    Attachment B--Sources of Payment Unit Estimates for FY 1997
    Attachment C--Calculation of Revenue Requirements
    Attachment D--Calculation of Regulatory Costs
    Attachment E--Calculation of FY 1997 Regulatory Fees
    Attachment F--FY 1997 Schedule of Regulatory Fees
    Attachment G--Comparison Between FY 1996 & FY 1997 Proposed & 
Final Regulatory Fees
    Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees
    Attachment I--Description of FCC Activities
    Attachment J--FCC Cost Accounting Activity and Project Codes
    Attachment K--AM/FM Fees
    Attachment L--Parties Filing Comments and Reply Comments

I. Introduction

    1. By this Report and Order, the Commission concludes its 
rulemaking 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. 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. 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

[[Page 37409]]

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 revising our fees in order to collect the increased amount that 
Congress has required that we collect. Additionally, we are amending 
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. 159(b)(3).
    3. In revising our fees, we have 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 including the 
establishment of a procedure to limit the maximum increase in a fee for 
any individual fee category. The current Schedule of Regulatory Fees is 
set forth in Secs. 1.1152 through 1.1156 of the Commission's rules. 47 
CFR 1.1152 through 1.1156. See rule changes and Attachment F for our 
revised fee schedule for FY 1997.

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. See 47 U.S.C. 159(a). 
See Attachment I for definitions of these and other activities of the 
Commission. 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. 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 decisions, we amended certain rules governing our 
regulatory fee program based upon our experience administering the 
program in prior years. See 47 CFR 1.1151 et seq.
    5. For fiscal years after FY 1994, Sections 9(b) (2) and (3), 
respectively, provide for ``Mandatory Adjustments'' and ``Permitted 
Amendments'' to the Schedule of Regulatory Fees. 47 U.S.C. 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. 159(b)(2). 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 benefits provided 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. 159(b)(3).
    6. Section 9(i) requires that we develop accounting systems 
necessary to adjust our fees when making permitted amendments to the 
Fee Schedule and for other purposes and that we provide interested 
persons with an opportunity to comment concerning the allocation of our 
regulatory costs. 47 U.S.C. 9(i). 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. 159(b)(4)(B).

III. Discussion

A. Summary of FY 1997 Fee Methodology

    7. As noted above, Congress has required that we recover 
$152,523,000 for FY 1997 through the collection of regulatory fees, 
reflecting its determination of the costs of our enforcement, policy 
and rulemaking, international, and user information 
activities.1 47 U.S.C. 159(a).
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    \1\ The impact of regulatory fees on the FCC's appropriation is 
substantial. For example, without regulatory fees to offset the 
Commission's costs, the FCC would require a Congressional 
appropriation of $189 million for FY 1997. When offsetting 
regulatory fees are taken into consideration, only $37 million must 
be appropriated from tax receipts to fund the Commission. Thus, 
taxpayers are spared the expense of funding almost 80% of the 
Commission's annual budget. Funds collected as application or filing 
fees pursuant to Section 8 of the Act are deposited into the General 
Fund of the U.S. Treasury as reimbursement to the United States but, 
unlike Section 9 regulatory fees, do not offset funds appropriated 
to the Commission. 47 U.S.C. 158(a)
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    8. In our FY 1997 NPRM we developed our proposed FY 1997 fee 
schedule by first estimating payment units 2 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 of $15,188,635 among all 
the existing fee categories. We then adjusted the projected revenue 
requirements of each category of service so that it equaled the actual 
cost of each service, using data accumulated by our cost accounting 
system to ensure that revenues from each category of service 
approximated, to the extent possible, our regulatory costs for each fee 
category.
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    \2\ 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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    9. We next examined the impact on each class of regulatees of using 
actual costs to establish regulatory fees in order to determine whether 
any regulatees would experience an unduly large fee increase. Our 
review disclosed that cost-based fees would result in fee payments 
dramatically higher for regulatees in many service categories in FY 
1997 compared with their fees in FY 1996. Therefore, rather than 
proposing fully cost-based fees for FY 1997, we proposed 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 
payment unit volumes and the overall increase required by Congress.
    10. 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. We discussed 
these proposals in Paragraphs 20-40 of the NPRM and factored them into 
our proposed FY 1997 Schedule of Regulatory Fees, set forth in 
Attachment F of the NPRM.
    11. Finally, we incorporated, as Attachment H of the NPRM, 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.

B. Cost-Based Fee Methodology

    12. In our NPRM, we announced that we had implemented our new cost 
accounting system and that we would rely on the cost accounting system 
to

[[Page 37410]]

assist us in determining our costs of regulation of those services 
subject to a fee for FY 1997. In response, several interested parties, 
including the Personal Communications Industry Association (PCIA), 
Century Cellunet, Inc. (Century), and PanAmSat Corporation (PanAmSat), 
contend that we failed to explain the accounting system sufficiently to 
permit interested parties to determine how the system distributes costs 
among our various services. Comsat argues that we merely disclosed the 
results of the cost accounting system and, therefore, interested 
parties cannot evaluate our cost accounting system or suggest 
improvements. In addition, PCIA, Arch Communications Group, Inc. (Arch) 
and Columbia Communications Corporation (Columbia), among others, argue 
that without more data concerning our assignment of costs, they cannot 
determine whether the costs attributed to their services are reasonable 
estimates of our actual costs of regulating their services.
    13. We are satisfied that our NPRM provided sufficient information 
describing the accounting system to afford interested parties the 
opportunity to comment. Our NPRM made it clear that our cost accounting 
system relied upon information derived from our personnel/payroll 
system and our fiscal accounting system as the basis for recording 
direct and indirect costs, separately and combined, for every major 
category of service subject to a fee. Also, we stated that the cost 
accounting system was designed to generate useful data for identifying 
the actual costs of our regulation by category of service and that this 
information, combined with other information,3 would yield 
fees more closely reflecting our cost of service. We stated that the 
system was integrated with our personnel/payroll system and collected 
both personnel and payroll information by category of service to insure 
accurate and timely production of cost of service information. In sum, 
the system we developed for distributing costs is a derivative of our 
payroll and accounting systems with the added feature that it collects 
cost of service information on an employee-by-employee basis.
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    \3\ Specifically, information pertaining to payment units and 
total amounts required to be collected.
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    14. Moreover, we are confident that our NPRM provided sufficient 
detail concerning not only our manner of distributing costs of 
personnel directly assigned to regulatory activities, but other costs 
included in our determination of regulatory costs. We stated that the 
system separately identifies direct costs, including salary and 
expenses for staff directly assigned to our operating Bureaus, and 
other costs, such as rent, utilities and contracts, directly 
attributable to such personnel. Also, we stated that we included as 
indirect costs those costs attributable to personnel assigned to 
overhead functions, including such functions as field and laboratory 
staff, on a proportional basis; i.e., spread among all categories of 
service subject to a fee according to their share of direct costs. 
Finally, in Attachment D of the NPRM, we provided a precise calculation 
of the regulatory costs, including separate discussions of the cost 
accounting system's accumulation of the direct, indirect and total 
actual costs for each major category of service. Thus, we are satisfied 
that our NPRM, consistent with Section 9(i) of the Act, sufficiently 
described our cost accounting system, including how it distributes 
actual costs among the various categories of service, affording parties 
an understanding of the system sufficient for them to submit comments 
on how the system allocated costs among those services subject to a 
regulatory fee. 47 U.S.C. 159(i).
    15. Nevertheless, in consideration of the increased amount that 
Congress has required that we recover through regulatory fees in FY 
1997, we believe that we should describe our cost accounting system in 
further detail so that interested parties may be reassured about the 
integrity of the system and its unbiased distribution of costs.
    16. Our cost accounting system was developed under contract by 
American Management Systems, Inc (AMS) in FY 1995. From its inception, 
the system has been integrated with the Commission's bi-weekly payroll 
and fiscal accounting systems and, as such, its procedures conform to 
generally accepted cost accounting principles and standards as mandated 
by the General Accounting Office (GAO) and by the U.S. Treasury 
Department. The cost accounting system contains built-in safeguards and 
internal controls designed to ensure data integrity. For example, 
employees are required to certify the accuracy of the service category 
codes they designate on their time and attendance reports, timekeepers 
must enter data according to procedures established in system 
guidelines, and supervisors are required to review and attest by their 
signature that coding appears to be appropriate. Additionally, 
standards are in place which prevent employees from altering their own 
cost accounting data in the automated payroll system. Standardized 
system follow-up reports are also periodically provided to Bureau/
Office administrative and management officials for their review to 
ensure that staff are following system guidelines.
    17. Additionally, as official financial records, employee cost 
accounting code sheets are associated with formal time and attendance 
records and maintained in accordance with prescribed GAO standards. As 
with all financial systems, criminal and/or administrative penalties 
apply should any fraudulent or coercive actions associated with either 
the payroll or cost accounting system be discovered. To date, no known 
deficiencies of this nature have been identified or alleged.
    18. As we have noted, the actual accumulation of cost of service 
information is derived from our automated personnel/payroll system. In 
order to collect cost of service information, the cost accounting 
system requires that each Commission employee select or designate a 
particular cost code or multiple codes when completing bi-weekly 
payroll sheets.4 Cost codes consist of a two digit code 
designating the proper ``Activity'' (e.g., Authorization of Service, 
Policy & Rulemaking, Enforcement, Public Information) together with a 
three digit code designating the ``program'' or fee 
category.5 The Commission has utilized its basic 
``activity'' definitions for Office of Management and Budget (OMB) and 
Congressional Budget purposes and for fiscal accounting reporting 
requirements for many years, with agency employees generally well 
acquainted with the distinction between feeable (i.e., Policy & 
Rulemaking, Enforcement, Public Information, International) and non-
feeable (i.e., Authorization of Service) activities. The selection of 
``program codes'' used for accumulating regulatory fee costs by service 
category, on the other hand, were newly established for the cost 
accounting system. 6 7 To ensure

[[Page 37411]]

smooth implementation, extensive training was provided to timekeepers 
and each Commission employee was provided with detailed instructions 
pertaining to use of the cost accounting system prior to system 
implementation.
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    \4\ Some employees who routinely work on the same activities 
each pay period may use default codes which reduce the need to enter 
new codes each pay period. These employees have the option of 
changing codes as dictated by the work they perform.
    \5\ Although the Commission collects cost data for Authorization 
of Service activities and for reimbursable activities, these costs 
are not used in developing annual regulatory fees.
    \6\ See Attachment J for a list of all cost accounting codes.
    \7\ The Commission's cost accounting system was designed to 
provide the flexibility to add or delete cost codes not only at the 
beginning (or end) of a fiscal year, but during the course of the 
fiscal year as well. This increases the accuracy of cost allocation 
by allowing the agency to quickly begin accumulating costs when 
required for operational or fee development purposes without waiting 
weeks or months to do so. In June 1996, two new codes were added to 
the cost code structure in place at the beginning of FY 1996. One of 
the codes was for accumulating costs relative to LEOs and the other 
was for accumulating costs associated with Signatory activities. 
Prior to establishment of these new codes, International Bureau 
staff were only able to allocate their work time to existing fee 
categories (i.e., space stations, earth stations, international 
public fixed radio, international HF radio stations and 
international bearer circuits). To obtain an approximation of full-
year costs in these situations, the standard mathematical procedure 
would normally be to ``annualize'' the partial year costs. 
Annualization is a simple predictive process which estimates what 
accumulated costs would be for a full year based on partial year 
data. It assumes that costs for similar periods during the fiscal 
year would mirror the costs accumulated in the partial year period. 
For example, if $500 in costs were accumulated for three months of a 
fiscal year, the annualized cost accumulation would total $2000 
($500/3 months times 12 months). Unfortunately, due to 
administrative oversight, many employees actually working on 
activities related to LEOs and signatory activities were not made 
aware of the new cost codes and, therefore, the time allotted by 
employees to these two activities was inadvertently less than the 
time actually spent by employees on these two activities. To correct 
this imbalance, the International Bureau reviewed its actual FY 1996 
FTE usage to identify by Activity and fee category where it had 
actually been spending its finite staff resources during FY 1996. 
This breakout of staff time was then used to allocate actual 
International Bureau costs to its several fee categories as shown on 
Attachment D.
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    19. As noted, the program cost codes that we designated for 
regulatory fee development correspond to the major fee categories 
contained in the Commission's Schedule of Fees. Every pay period, each 
employee completes a time and attendance form and verifies with his or 
her initials the accuracy of the distribution of worktime among the 
various Commission programs, including those programs covered by 
regulatory fees.8 In turn, the employee's supervisor is 
required to review and to certify the accuracy of the employee's 
entries before the details of the employee's work statement are key-
entered into our automated payroll system (operated by the Department 
of Agriculture's National Finance Center) along with all other bi-
weekly payroll data by time and attendance clerks. Built-in system 
checks and detailed follow-up reports are distributed to all Bureaus/
Offices to insure that data entry is completed in an accurate manner 
and that resulting reports are accurate.9 During FY 1996, 
senior administrative staff were assigned to carefully monitor the new 
cost accounting system to insure system integrity. Although the 
government-wide furlough in early FY 1996 hindered the resolution of 
minor problems pertaining to integration of the new program codes at 
the onset of system implementation, these problems were subsequently 
corrected and cost accounting data for FY 1996 used in the formulation 
of FY 1997 fees do not contain any known omissions or erroneous data.
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    \8\ As noted in the NPRM, it is impractical to require employees 
to allocate their time into very small increments. However, most 
employees do allocate their time in increments of one hour.
    \9\ The Commission's cost accounting system also accumulates 
detailed FTE data. Prior to implementation of the cost accounting 
system, FTEs used in budget and fee development were estimated by 
agency program managers.
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    20. In addition to personnel costs, which make up about 80% of the 
Commission's overall costs, the agency's cost accounting system also 
accumulates non-personnel costs. These are the costs of office rental, 
equipment, travel, information technology, supplies, contracts and 
telecommunications services. Non-personnel costs are generally accrued 
on an actual basis at the time the Commission obligates itself to pay 
for these materials and services. Some costs, such as annual and sick 
leave costs, and other obligations such as rental of space and 
telecommunications, are not logically chargeable to a specific fee 
category at the time they are incurred. In these situations, they are 
allocated at month-end to all fee categories based on how direct costs 
were incurred during the reporting period. For example, costs for 
annual and sick leave are allocated on a pro-rated basis to fee 
categories incurring direct costs during the accounting period. In an 
effort to report costs as accurately as possible, the allocation is 
limited to the organizations where the leave was taken, rather than 
across all organizations. Costs for office space rental and 
telecommunications, on the other hand, are allocated to each fee 
category--FCC-wide--that incurred direct costs during the month. At the 
end of each accounting period, the cost accounting system combines the 
non-personnel costs with the Commission's salary and benefits (payroll) 
costs and then distributes various overhead costs to specific fee 
categories based on pre-determined allocation formulas.10 
11
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    \10\ Overhead costs include a number of components: (a) The time 
of employees whose functional activities cannot logically be 
designated or allocated to a single or even several fee categories 
(e.g., Commissioners and their immediate staffs, staff supporting 
all Commission organizations); and (b) subsidized activities 
specifically excluded from fee assessment (e.g., amateur radio, 
public safety and government licensee oversight, non-commercial 
radio and TV licensees, CB, ship and aircraft radio users and non-
profit organizations). Together these costs are estimated to total 
nearly 40% of the Commission activity costs covered by regulatory 
fees. As noted elsewhere in this Report and Order, additional 
allocations are made proportionally to all the fee categories in 
order to bring total accumulated costs up to the total amount 
Congress requires us to collect. Additionally, actual costs at any 
point in time, including the end of a fiscal year, will not exactly 
equal the amount Congress requires us to collect because Congress' 
estimate of costs to be recovered through regulatory fees is 
generally determined at least twelve months before the end of the 
fiscal year to which the fees actually apply. As such, year-end 
actual activity costs will not equal exactly the amount Congress 
designates for collection in a particular fiscal year.
    \11\ Leave costs, indirect costs related to centralized services 
and bureau-specific support costs are distributed among the various 
fee categories that a particular organization supports. The costs 
are distributed on a pro-rata basis to only those fee categories 
that incurred direct costs during the accounting period. As a final 
step, executive direction and related support costs are distributed 
FCC-wide to all fee categories incurring direct costs during the 
accounting period.
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C. Relationship of Cost of Service to Revenue Requirements

    21. PCIA and other commenters contend that there is no basis for or 
relationship between the revenue that the Commission is proposing to 
collect from a particular fee group and the amount of regulatory work 
or oversight associated with that fee group. As discussed in Paragraph 
2, the Commission, by statute, must collect annually from its licensees 
and regulatees the amount specified by Congress. Further, in Paragraph 
14, we stated that the direct costs of our regulatory oversight 
comprise only a portion of the overall costs we are required to recover 
through regulatory fees. 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. Indirect costs include 
costs of support personnel assigned to overhead functions such as field 
and laboratory staff and certain staff assigned to the Office of 
Managing Director. Support costs, for both direct and indirect staff, 
also must be recovered. These costs include rent, utilities, equipment 
and

[[Page 37412]]

contractual costs attributable to regulatory oversight.
    22. Our fees also recover costs attributable to regulatees that 
Congress, in Section 9(h) of the Act, has exempted from payment of a 
fee and those regulatees that obtain a waiver or reduction of their fee 
payment pursuant to Section 9(d) of the Act. 47 U.S.C. 159 (d), (h). 
Fee payers must also offset other costs attributable to regulatees 
whose fees have been eliminated or reduced through permitted amendments 
in accordance with Section 9(b)(3) of the Act. For example, Citizen's 
Band Radio and most recreational ship and aircraft radio station 
operators, 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, with no direct 
measurable benefit accruing to such fee payers. We recover our costs of 
regulation for exempt entities by allocating our regulatory costs 
attributable to them on a proportional basis across all fee categories 
so as to not unduly impact any particular category of fee payers.
    23. Thus, in direct response to PCIA, our fees are designed to 
recover the amount that Congress has required us to collect and, 
although based upon the cost of service of each category of regulatee, 
include costs that are not directly related to those entities subject 
to a fee. Therefore, a particular fee and resulting revenue collection 
will invariably exceed the service's direct regulatory costs because 
the revenue requirement for any of our services, and thus the fees 
assessed upon fee payers in those services, will be higher than their 
actual cost of service, notwithstanding that actions by Congress and 
the Commission to deregulate would appear to warrant a lower fee.
    24. Several commenters also allude to our proposal to use actual FY 
1996 regulatory costs as the basis for determining FY 1997 costs and 
question whether FY 1997 costs will approximate FY 1996 costs. For 
example, PCIA contends that we have not demonstrated that our FY 1996 
costs are sufficiently related to our FY 1997 costs to rely our FY 1996 
costs to establish our fees for FY 1997.
    25. Clearly, the Commission cannot determine actual FY 1997 costs 
until well after the close of FY 1997, several weeks after the 
collection of FY 1997 fees must be completed. Moreover, even though we 
could have estimated our FY 1997 costs per service in our NPRM, that 
estimate would have been based on only three months of FY 1997 data. 
Also, any method for estimating future FY 1997 costs would become a 
point of controversy and contention because it is difficult, if not 
impossible, to predict with any certainty the regulatory costs per 
service in view of today's dynamic telecommunications regulatory 
environment. Under our proposal to base our fees on the previous year's 
actual costs of regulation, we eliminated the need to rely on estimated 
costs. Because we foresee no lessening in the dynamic pace of 
technological development and innovation in the communications 
regulatory environment, we are reluctant to continue to rely on 
estimated future costs when actual costs for a prior year are 
available. Therefore, we shall not rely on estimates of future costs, 
and, henceforth, will develop our fees based on historic cost data. We 
note that even if FY 1997 costs were ultimately to differ from those 
based on FY 1996 data, our proposed methodology would effectively 
adjust FY 1998 fees to take into account actual FY 1997 costs.
    26. Several of the parties contend that their fees bear little or 
no relationship to their costs of regulation or to the benefits they 
receive from our regulation. These parties contend that our fees should 
be calculated to recover an amount reflecting the cost of the services 
performed and the value conferred on the payor pursuant to Section 
9(b)(1)(A) of the Act. 47 U.S.C. 159(b)(1)(A).
    27. We again reject the arguments that our proposed fees are 
inconsistent with the statute or otherwise unlawful because they are 
not completely cost-based or do not reflect the benefits received by 
entities subject to a fee payment. Section 9(a) requires that we 
recover our costs ``in the total amounts required in Appropriations 
Acts.'' 47 U.S.C. 159(a). Section 9(a) does not require that we base 
our fees solely on benefits to regulatees or that the fees recover from 
an entity only its particular cost of regulation. In our FY 1995 Report 
and Order, we stated that we are not limited to setting regulatory fees 
only in the amount that reflects services received by regulated 
entities. 10 FCC Rcd at 13521, citing Skinner v. Mid-America Pipe Line 
Co., 490 U.S. 212, 224 (1989). Rather, once Congress, as in Section 9, 
has made a proper delegation of authority to raise funds, ``so long as 
the fees in question are within the scope of Congress' lawful 
delegation of authority in Section 9, they are constitutional.'' Id. 
Thus, as we noted in our FY 1995 Report and Order, we ``can collect 
fees from regulatees for their use of frequencies and for the potential 
benefits of [our] regulatory activities, even if they do not utilize 
these activities.'' See 60 FR 34008 (June 29, 1995), citing United 
States v. Sperry Corp., 493 U.S. 52, 63. Moreover, no requirement 
exists that the fees we establish be designed to recover only the costs 
of those benefits directly received by an entity.
    28. Arch and PCIA point out that our NPRM did not provide actual FY 
1996 fee collection data, including the number of actual payment units 
and the actual amount of fees collected in certain fee categories. 
These commenters contend that such information is essential to its 
evaluation of Commission fee proposals for FY 1997. We recognize that 
we did not provide a detailed listing of actual FY 1996 collections 
data in the NPRM. However, Attachment B of the NPRM contained a 
service-by-service explanation of the basis for our estimated FY 1997 
payment units. Several of these are based on actual FY 1996 payments. 
Others are based on estimates obtained from Commission program experts 
or from regulated industries. In any case, as we noted in the NPRM, we 
consider as one factor in estimating payment units the actual number of 
payment units recorded in our fees collection system for FY 1996. These 
payment unit estimates use ``as of'' dates corresponding to the 
beginning of the current fiscal year or, for some fee categories, at 
the end of the previous calendar year. We believe that this reliance 
upon actual ``historical'' or retrospective FY 1996 data provides us a 
much greater confidence level than would an estimate of payment units 
made prospectively. Finally, from the inception of the regulatory fee 
collection program, actual historical payment units and collection 
amounts for the various categories of services have been routinely 
available for inspection to interested persons upon request. In sum, we 
cannot find that there is a basis for concluding that these commenters 
could not fairly evaluate our proposed fees for FY 1997 given the 
information pertaining to payment units contained in the NPRM and 
detailed collections data readily available from the Commission. 
Additionally, we note that no interested party proposed alternative 
payment units for any category of service for FY 1997.
    29. Finally, PCIA, Century, Columbia and other interested parties 
are concerned about the amount of our proposed increase in their 
revenue requirements and in their fee amounts for FY 1997 compared with 
those established for FY 1996. They question how estimates of actual 
costs for FY

[[Page 37413]]

1996 and FY 1997 could differ so significantly from one year to the 
next in certain fee categories. The most obvious reason for major 
differences, as we have noted elsewhere, is that Congress has increased 
the total amount we are to collect by more than 20% in FY 1997 compared 
to FY 1996. Also, we must recover our indirect and overhead costs as 
well as direct costs of regulating services and also must recover our 
regulatory costs generated by regulatees not subject to a regulatory 
fee. Our fees for FY 1996 were developed using existing FY 1995 fee 
amounts adjusted for changes in payment units. These fees were 
developed without the benefit of actual cost data and were essentially 
based on (a) the Congressionally established relationships between fees 
contained in Section (g) of the Act, and (b) subsequent adjustments 
based on estimated changes in FTE levels and payment units. By 
contrast, for FY 1997, we proposed to rely upon actual cost accounting 
data as the basis for determining revenue requirements and fee amounts. 
Thus, there are few, if any, grounds for comparison between FY 1996 
fees and revenue requirements and corresponding fees and revenue 
requirements for FY 1997. Accordingly, the amount that FY 1997 fees 
rise or fall relative to FY 1996 fees is essentially unrelated to any 
change in actual costs, but instead to the application of different 
methodologies and an increasing revenue requirement mandated by the 
Congress.
    30. After taking into consideration the comments received in this 
proceeding concerning our regulatory costs and our cost accounting 
system, we have decided to adopt the overall cost-based methodology 
proposed in the NPRM for developing FY 1997 fees. As discussed in the 
preceding paragraphs, we believe adoption of this methodology will best 
insure the fairest allocation of costs and resultant fees among the 
Commission's regulatees in FY 1997.

D. Application of Cost-Based Methodology To Determine Fee Amounts

1. Adjustment of Payment Units
    31. 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.\12\ Attachment B provides a summary of how payment units 
were estimated for each fee category.
---------------------------------------------------------------------------

    \12\ Certain payment unit estimates have been revised since 
release of the NPRM due to additional or updated information 
obtained by the Commission. This may result in changed fee amounts 
from those proposed in the NPRM. It is also important to note that 
Congress' required revenue increase in regulatory fee payments of 
approximately 21 percent in FY 1997 will not fall equally on all fee 
payers due to differences in payment unit estimates between FY 1996 
and FY 1997.
---------------------------------------------------------------------------

2. Calculation of Revenue Requirements
    32. 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 in FY 1997 without any change to the existing 
Schedule of Regulatory Fees. The amount of revenue we would collect is 
approximately $137.3 million.\13\ This amount is approximately $15.2 
million less than the amount the Commission is required to collect in 
FY 1997. We therefore adjusted the 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 necessary to collect the $152,523,000 amount required by 
Congress for FY 1997. Attachment C provides detailed calculations 
showing how we determined the revised revenue amount for each service.
---------------------------------------------------------------------------

    \13\ This revenue amount has changed since release of the NPRM 
due to changed estimates of payment units.
---------------------------------------------------------------------------

3. Calculation of Regulatory Costs
    33. On October 1, 1995, the Commission implemented, in accordance 
with 47 U.S.C. 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.
    34. In order to utilize actual costs derived from our cost 
accounting system for fee development purposes, indirect support costs 
contained in the cost accounting system have to be added to direct 
costs \14\ and the results adjusted further to approximate the amount 
of revenue that Congress requires us to collect in FY 1997 
($152,523,000).\15\ Thus, we proportionally adjusted the actual cost 
data related to regulatory fee activities recorded for the period 
October 1, 1995 through September 30, 1996 among the fee categories so 
that total costs approximated $152,523,000. 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 and sub-category for FY 1997. For fee categories 
differentiated by class or market (e.g., VHF and UHF Commercial 
Television), we distributed the costs to the class or market group by 
maintaining the relationships between class or market revenue 
requirements shown on Attachment C.\16\ \17\
---------------------------------------------------------------------------

    \14\ 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.
    \15\ Congress' estimate of costs to be recovered through 
regulatory fees is generally determined at least twelve months 
before the end of the fiscal year to which the fees actually apply. 
As such, year-end actual activity costs will not equal exactly the 
amount Congress designates for collection in a particular fiscal 
year.
    \16\ While some might argue that the Commission's cost 
accounting system should further distinguish our work activities to 
the television market or radio class level, it would not be 
practical to record employee work time in such small incremental 
breakouts.
    \17\ In the NPRM we erroneously distributed these costs by 
maintaining the relationship between fees contained in the FY 1996 
Fee Schedule. As commenters pointed out, we should have made these 
distributions by maintaining the relationship between FY 1996 
revenue requirements for these fee categories. The following example 
illustrates the allocation process:
    Under the FM Radio fee classification, the actual costs 
attributable to FM radio are $8,465,118. 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 (see Attachment C) by dividing the smallest of the pro-
rated FY 1997 FM revenue requirements into the sum of the pro-rated 
FY 1997 FM revenue requirements to determine the appropriate ratios 
for allocation of the revenue requirement.
    (a) Pro-rated FY 1997 FM CP revenue requirement = $235,258
      Pro-rated FY 1997 FM Classes A, B1, and C3 revenue requirement 
= $2,546,006
      Pro-rated FY 1997 FM Classes C, C1, C2, and B revenue 
requirement = $3,621,944
      Sum = $6,403,208
    (b) FM CP percentage is $235,258 divided by $6,403,208 = 0.0367
      FM Classes A, B1, and C3 percentage is $2,546,006 divided by 
$6,403,208 = 0.3976
      FM Classes C, C1, C2, and B percentage is $3,621,944 divided 
by $6,403,208 = 0.5656
    (2) Finally, we determine the new revenue requirement for each 
of the three by multiplying the cost-based revenue requirement for 
all of FM by each of the percentages calculated in (1)(b).
      FM CP revenue requirement = 0.0367 times $8,465,118 = $310,670
      FM Classes A, B1, and C3 revenue requirement = 0.3976 times 
$8,465,118 = $3,365,731
      FM Classes C, C1, C2, and B revenue requirement = 0.5656 times 
$8,465,118 = $4,787,871
    (3) The revenue requirements calculated in (2) are inserted in 
Attachment D for the three FM categories.

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

[[Page 37414]]

4. Establishment of 25 Percent Revenue Ceiling
    35. Our next step was to determine whether reliance on actual costs 
to develop FY 1997 regulatory fees would result in fees which were too 
disparate from corresponding FY 1996 fees. As a result of this 
analysis, we proposed establishing a ceiling of 25 percent on the 
increase in the revenue requirement of any service over and above the 
Congressionally mandated overall increase in the revenue requirement 
and after taking into consideration changes in payment unit counts.\18\
---------------------------------------------------------------------------

    \18\ For example, the regulatory cost associated with the 
Aviation (Aircraft) service is $934,905. 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 
$70,634 in FY 1997, a shortfall of $864,271. Application of the 
proposed 25 percent revenue ceiling to this service results in a 
capped revenue ceiling of $88,293 ($70,634  x  125%).
---------------------------------------------------------------------------

    36. 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 would enable us to 
begin the process of realigning fees to account for differences in 
regulatory costs. As we noted in the NPRM, we are not suggesting that 
FY 1997 fee increases be limited to a 25 percent increase over FY 1996 
fees. The 25 percent increase would be 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 could 
increase by more than 25 percent over FY 1996 fees. Under this 
methodology, fees could actually increase by as much as 40% or more.
    37. An important consideration in establishing a revenue ceiling is 
the impact on other fee payers. Because the Commission is required to 
collect $152,523,000 in FY 1997 regulatory fees, the additional revenue 
that would have been collected from classes of licensees subject to a 
revenue ceiling, instead needs to be collected from licensees not 
subject to the ceiling. This results in a certain amount of 
subsidization between fee payer classes.\19\ We believe, however, that 
the public interest would best be served by adopting a revenue ceiling 
because, otherwise, several entities would be subjected to unexpected, 
substantial increases which could severely impact the economic well 
being of these licensees.\20\
---------------------------------------------------------------------------

    \19\ Revenues from current fee payers already offset significant 
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.
    \20\ For example, the following illustrate the annual fees that 
would be in effect if fees were cost-based without application of a 
revenue ceiling:
      LEOS--$2,412,025
      International Public Fixed Radio Stations--$6,750
      MDS/MMDS--$1,025
      International Bearer Circuits--$25
      Marine Coast & Ship Stations--$30 (Total upfront payment=$300)
      Aircraft--$45 (Total upfront payment=$450)
---------------------------------------------------------------------------

    38. SBC Communications Inc. and Ameritech submit that the 
subsidization resulting from application of the 25% revenue ceiling is 
unfair and that the phased-in methodology proposed by the Commission 
has the effect of moving revenues further from actual costs than they 
would be without the ceiling, contrary to the goal of eventually having 
revenue requirements approximate actual costs. Both suggest that the 
Commission abandon the revenue ceiling concept, with SBC proposing that 
the Commission merely apply a uniform 21% increase to all regulatees' 
fees.
    39. Regulation of interstate telephone service providers accounts 
for approximately 36% of all Commission costs. Therefore, any 
methodology which employs a subsidization feature, such as our proposed 
revenue ceiling, will impact these regulatees to a greater extent than 
others, at least in the short term. As other fee payers' fees approach 
amounts that bring their revenues closer to actual costs, as our 
phased-in revenue ceiling technique would do, the amount of 
subsidization required of fee payers below their revenue ceilings (such 
as those common carriers providing interstate telephone service) will 
steadily decrease. Thus, in the long term, subsidization will decrease 
and revenue requirements for all services will approach actual costs 
(assuming other factors, such as the total amount that Congress 
requires us to collect, remain constant).
    40. Additionally, although SBC and Ameritech are correct that the 
revenue requirement proposed for FY 1997 for telephone companies 
providing interstate toll services is higher than the total costs 
attributable to these companies, revenues are only up 6.5% from what 
they would be if FY 1996 fees remained in place. Further, proposed 
revenues from these carriers would increase 23% over the applicable FY 
1996 revenue requirement for these entities, comparing well with the 
overall 21% increase in fee collections ordered by the Congress for FY 
1997. Additionally, SBC's proposal to set fees at amounts 21% over FY 
1996 fee amounts is not mathematically sound. As we note elsewhere in 
this item, changes to payment units from FY 1996 to FY 1997 must be 
taken into consideration when determining the amount of revenue that 
would be collected from one year to the next. Overall increases to 
payment unit estimates from one year to the next, even without changes 
to previous year fee amounts, provides additional revenue, offsetting 
to some extent, any required increase to overall collections. On the 
other hand, any reduction in payment units requires higher fees to 
offset the resultant loss of revenue. The application of a percentage 
increase to either prior year fee amounts or prior year revenue 
requirements, as proposed by SBC, would therefore not provide any 
benefit and is rejected as non-workable in concept.
    41. For the reasons discussed above, we will adopt the 25% revenue 
ceiling proposed in the NPRM. Attachment E contains a description of 
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 revenue ceiling.21
---------------------------------------------------------------------------

    \21\ 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 cases 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.
---------------------------------------------------------------------------

5. Calculation of Fees
    42. Once we determined the amount of fee revenue needed to be 
collected from each class of licensee, we divided the individual 
revenue requirements by the number of associated payment units (and by 
the license term, if applicable,

[[Page 37415]]

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.

E. Other Changes

    43. In our NPRM, we proposed several adjustments to our fees and/or 
changes to payment procedures based upon the public interest and other 
criteria established in 47 U.S.C. 159(b)(3). Additionally, we received 
several comments and suggestions unrelated to our specific proposals 
contained in the NPRM.
1. Consolidation of Private Microwave and Domestic Public Fixed Fee 
Categories
    44. In our prior fee schedules, we required Private Microwave 
licensees to pay ``small'' regulatory fees, in advance, for an entire 
license term at the time of filing an initial, renewal or reinstatement 
application. Congress established this requirement in its statutory fee 
schedule. 47 U.S.C 159(g). In contrast, our fee schedules and the 
statutory fee schedule have required licensees in the Domestic Public 
Fixed Service category to file an annual ``standard'' regulatory fee. 
Private Microwave licensees include systems authorized under Part 101 
of the Commission's rules to provide point-to-point telecommunications 
services to private parties. The Domestic Public Fixed Service 
comprises several commercial microwave services, including microwave 
multiple address, microwave common carrier fixed, microwave digital 
electronic message, and microwave local TV transmission.22
---------------------------------------------------------------------------

    \22\ 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.
---------------------------------------------------------------------------

    45. In our NPRM at Paragraph 23, we stated that many microwave 
licensees had expressed confusion concerning whether to submit a small 
fee or a standard fee. We noted that the operational and technical 
characteristics of private microwave and commercial microwave systems 
are similar. Thus, we proposed to consolidate these fee categories into 
a single Microwave category for FY 1997. Only one interested party, IXC 
Carrier, Inc. (IXC), commented on our proposal. IXC supports our 
proposal, stating that not only are these services similar in their 
operational and technological characteristics, but that our regulatory 
oversight of these services is identical.
    46. Accordingly, we are adopting our proposal to establish in our 
fee schedule a single fee category covering licensees in both the 
Domestic Public Fixed Service and the Private Microwave Service. As we 
have noted, these services are operationally and technologically 
similar, and we agree with IXC that our regulation is essentially the 
same for these services. Thus, these payers would be subject to payment 
of a single ``small'' fee, payable in advance for the entire term of 
their license when filing an initial, renewal, or reinstatement 
application. Those licensees that paid the standard ``annual'' 
regulatory fee per station in FY 1996 are not subject to a fee payment 
for FY 1997 unless they file a new, renewal or reinstatement 
application. The regulatory fee for Microwave licensees for FY 1997 
will be $10 per license.
    This new fee is calculated as follows:

(a) From Attachments C and E:
    (1) 5,350 private microwave stations (units) (Revenue requirement = 
$535,000)
    (2) 18,845 commercial microwave/public fixed stations (units) 
(Revenue requirement = $94,225)
(b) Converting from annual payment (``standard 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) (($535,000 + $94,225) divided by (5,350 + 1,885)) divided by 10 
years = $8.70.
(d) Round fee to the nearest five dollars = $10 (47 U.S.C 159(b)(2)).
2. Commercial AM/FM Radio
    47. In our NPRM to establish regulatory fees for FY 1996, we stated 
that we ``were particularly interested in a proposal which would 
associate population density and service area contours with license 
data'' and we requested interested parties to propose alternatives 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, the Montana 
Broadcaster's Association (Montana) filed comments proposing an AM and 
FM fee structure based on class of station and relative market size. 
However, we decided not to take any action on Montana's proposal until 
we had an opportunity to more extensively evaluate its impact on AM and 
FM licensees. 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).
    48. We issued a Notice of Inquiry (NOI) to determine if it would be 
feasible to utilize both market size and class of station to assess 
annual regulatory fees on commercial AM and FM broadcast radio 
stations. 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). In 
response to the NOI, Montana filed a proposal which would group radio 
markets by Arbitron market size, with the fee for each market group 
predicated on the ratios that Congress initially established in Section 
9(g) of the Act (47 U.S.C. 159(g)) for assessing fees for licensees of 
television stations serving different sized markets. The National 
Association of Broadcasters (``NAB'') also submitted a proposal under 
which stations would pay a fee determined not only by class, but by 
population served, irrespective of the market in which they are 
located. However, we identified several problems with each proposal 
that needed to be resolved, and our FY 1997 NPRM invited interested 
parties to comment on the NAB and Montana proposals, as well as on any 
alternative method for assessing radio station fees. All relevant 
comments received by the Commission in response to the NPRM support the 
NAB or Montana proposal or some variation thereof. As discussed below, 
the fee mechanism we are adopting utilizes the best features of the NAB 
proposal, while correcting its defects.
    49. Neither the Montana nor the NAB proposal provide an ideal 
method of assessing radio station fees. For example, the Arbitron 
rankings, relied on by Montana, are incomplete for several markets. 
Markets are only ranked if a sufficient number of stations located 
within the market subscribe to the Arbitron service, and a station may 
be placed in a market if it competes with market stations even though 
it may not be physically located in a major metropolitan area within 
the market, or it may be placed in a market based on data collected 
during a promotional programming period which is not reflective of 
normal operations. Similarly, NAB's proposal is flawed because the 
database on which NAB's fee schedule is based contains more than 800 
errors, ommissions, erroneous

[[Page 37416]]

station classes, duplicate records, non-profit or non-commercial 
stations (which are exempt from payment of regulatory fees), incorrect 
call letters, ``silent'' stations, and Canadian stations.
    50. Nevertheless, we fully agree that using population to assess 
radio station fees is an improvement over the current method for 
assessment of AM and FM fees, assuming a systematic schedule can be 
developed using accurate population class of station data. The NAB 
proposal to use population within a station's area of coverage offers 
greater specificity and flexibility than our current method of 
assessing these fees.23 To obtain an accurate data base to 
implement such an improved fee methodology, we corrected NAB's 
database, using the Commission's own records, including official 
station files. The resulting compilation of stations, based on official 
Commission records and the population coverage data provided to the 
Commission by NAB, provided an accurate starting point for developing 
the improved AM/FM fee schedule.
---------------------------------------------------------------------------

    \23\ DataWorld MediaXpert Service prepared for NAB a calculation 
of the signal coverage for each station, and overlaid this data onto 
1990 decennial census population data to estimate the population 
contained within each station's signal coverage area. For each AM 
station, estimated soil conductivity data was retrieved for each of 
360 radial azimuths around the transmitter site, the standard 
horizontal plane radiation pattern was calculated and any pertinent 
pattern augmentations applied, and the distance to the 1 mV/m field 
strength contour for each of the 360 radials was calculated using 
the appropriate propagation curves and the FCC equivalent distance 
method. For each FM station, terrain averages were calculated from 
the USGS/DMA 3 arc second terrain database for each of 360 radial 
azimuths, the HAAT was calculated using the height of the center of 
radiation AMSL and processed with FM contour calculation software, 
pertinent directional antenna information was applied, and the 
distance to the 60 dBuV/m contour was calculated using the 
appropriate FCC F[50,50] curves. For both AM and FM, the distance to 
contour data was applied to population counting software using 1990 
census data to determine the total population within each station's 
coverage area.
---------------------------------------------------------------------------

    51. We next calculated the individual revenue requirements and 
resultant fees for each class of station (e.g., AM Class A or FM 
Classes C, C1, C2 & B) under our existing methodology for assessing 
radio station fees as shown in Attachment E. In order to consider both 
population and class of station, we then multiplied that fee by the 
population served to determine the weighted population. The weighted 
approach also streamlines the schedule by allowing us to combine AM and 
FM stations into a single ``radio'' category. The following table is a 
representative illustration of how we determined the weighted 
population for each station.

                                                                                                                
                                                                                  1990 census                   
                                                                   Computed FY    population                    
                                                                     1997 fee    coverage (not      Weighted    
                             Station                                  (from      actual data--   population  (b)
                                                                    attachment        for           times (c)   
                                                                        E)       illustration                   
                                                                                     only)                      
(a)                                                                        (b)             (c)               (d)
----------------------------------------------------------------------------------------------------------------
#1--AM Class A...................................................       $1,725       1,000,000     1,725,000,000
#2--AM Class A...................................................        1,725          50,000        86,250,000
#3--AM Class B...................................................          950       1,000,000       950,000,000
#4--AM Class C...................................................          390          50,000        19,500,000
#5--AM Class D...................................................          480         100,000        48,000,000
#6--FM Group I...................................................        1,725       5,000,000     8,625,000,000
#7--FM Group II..................................................        1,150       7,500,000     8,625,000,000
#8--FM Group II..................................................        1,150           5,000         5,750,000
----------------------------------------------------------------------------------------------------------------

    52. Our next step was to sort the data by compiling a list of every 
AM and FM station in descending order by weighted population. The 
following illustration indicates how the stations represented by each 
group in the above chart would be ranked by weighted average:

                                                                                                                
                                                                                  1990 census                   
                                                                   Computed FY    population                    
                                                                     1997 fee    coverage (not   Sorted weighted
                             Station                                  (from      actual data--   population (b) 
                                                                    attachment        for           times (c)   
                                                                        E)       illustration                   
                                                                                     only)                      
(a)                                                                        (b)             (c)               (d)
----------------------------------------------------------------------------------------------------------------
#6--FM Group I...................................................       $1,725       5,000,000     8,625,000,000
#7--FM Group II..................................................        1,150       7,500,000     8,625,000,000
#1--AM Class A...................................................        1,725       1,000,000     1,725,000,000
#3--AM Class B...................................................          950       1,000,000       950,000,000
#2--AM Class A...................................................        1,725          50,000        86,250,000
#5--AM Class D...................................................          480         100,000        48,000,000
#4--AM Class C...................................................          390          50,000        19,500,000
#8--FM Group II..................................................        1,150           5,000         5,750,000
----------------------------------------------------------------------------------------------------------------

    53. Next, we determined actual fees for each station. The simplest 
method appeared to be one which used a ``per population'' average cost 
applied to the weighted populations. To test this approach, we divided 
the sum of all the individual revenue requirements (from Attachment E 
as applied to each station like the ones in column (b) in the table 
above) by the sum of all the individual populations. This ``per pop'' 
cost factor was then multiplied by each weighted population to 
calculate a unique fee for each station. Unfortunately, this particular 
methodology resulted in an unwieldy and unacceptable range of fees. On 
a pure per weighted population basis, fees would range from a high of 
$34,435 for a Class B FM station in New York, with the highest weighted 
population, to a low of $0.06 for a Class

[[Page 37417]]

A FM station in Ludlow, CA, with the lowest weighted population.
    54. Therefore, as an alternative to a pure weighted population fee 
assessment methodology, we designed a schedule, similar to the Montana 
and NAB proposals, which would place stations in wide bands with 
different fees for each band. We established the ranges for the 
schedule by first deciding on minimum and maximum fee amounts. In 
setting a minimum fee, we decided that it should be no less than the AM 
Construction Permit fee which we calculated in Attachment E to be $195. 
Therefore, we set the lowest radio fee at $200. In setting a maximum 
fee, we compared the maximum radio fee contained in Public Law 103-66 
for FY 1994 ($900) and the total revenue requirement for FY 1994 ($60.4 
million) to the current FY 1997 revenue requirement ($152.5 million), 
and calculated that a station which paid $900 in 1994 would now be 
subject to a fee of $2,272. Because this would represent an 
unacceptably large increase in fees for many fee payers, we decided to 
limit the maximum fee to $2,000. At the same time, we decided to expand 
the number of actual fee classifications from the existing six (four AM 
and two FM) to ten. This allowed us to establish fee classifications in 
$200 increments, with each increment containing the same number of 
stations, resulting in a more equitable fee schedule while keeping the 
size of the schedule relatively manageable.24 The resulting 
schedule of regulatory fees for radio stations (both AM and FM) is:
---------------------------------------------------------------------------

    \24\ The number of stations is not exactly divisible by 10, 
leaving group 10 with one less station than the other groups.

------------------------------------------------------------------------
                                                 Number of              
             Classification group                 stations       Fee    
------------------------------------------------------------------------
1.............................................         1019       $2,000
2.............................................         1019        1,800
3.............................................         1019        1,600
4.............................................         1019        1,400
5.............................................         1019        1,200
6.............................................         1019        1,000
7.............................................         1019          800
8.............................................         1019          600
9.............................................         1019          400
10............................................         1018          200
------------------------------------------------------------------------

    55. This schedule, which we adopt today, results in: (1) Same class 
stations in different size cities generally having different fees, (2) 
different class stations in the same city generally having different 
fees, and (3) same class stations in the same city generally having the 
same fee. In addition, it is generally true that in using this 
methodology: (1) Larger stations and those located in larger 
metropolitan areas tend to be assessed higher fees and (2) small 
stations and those located in rural areas tend to be assessed lower 
fees. This fee schedule we have adopted thus achieves the objectives of 
both the NAB and Montana proposals by assessing fees based on class of 
station and populations served, thereby providing a fair and equitable 
means of distinguishing between stations located in metropolitan areas 
and those located in rural areas. Moreover, if a licensee believes that 
it has been improperly placed in a particular fee classification group 
or that it will suffer undue financial hardship from the fee 
assessment, our rules provide for waiver, reduction or deferral of a 
fee as described in Sec. 1.1166 of our rules. 47 U.S.C 1.1166.
    56. This methodology also requires that the Commission inform radio 
station licensees as to their exact fee obligation. A Public Notice 
listing each station's call letters, location, population, and the 
required fee will be mailed to each licensee. The same information will 
also be available at our internet web site (http://www.fcc.gov). 
Interested parties may also obtain their applicable fee amount for FY 
1997 by calling the FCC's National Call Center at 1-888-225-5322. We 
have also provided detailed payment information for each radio station 
as Attachment K to this Report and Order and will publish this list in 
the Federal Register upon completion of this rulemaking.
3. Personal Communications Service (PCS)
    57. Our FY 1996 Report and Order deferred assessing a regulatory 
fee upon licensees in the Personal Communications Service (``PCS'') 
because PCS was in a very early start-up phase of operations. See FY 
1996 Report and Order at Appendix F, Paragraph 15. However, in our 
NPRM, at Paragraph 38, we proposed to initiate the PCS fee since 
sufficient PCS systems are now in operation to justify inclusion of PCS 
licensees among those licensees assessed a Commercial Mobile Radio 
Services (CMRS) fee for FY 1997. We received no comments specifically 
addressing whether or not PCS licensees should be subject to a 
regulatory fee for FY 1997. Since PCS systems now are in operation, we 
have decided to require PCS licensees to submit regulatory fees in FY 
1997, as described below.
4. Commercial Mobile Radio Services (CMRS)
    58. In our FY 1996 Report and Order, we discussed a proposal 
submitted by Destineer, Inc., a PCS licensee, that we establish a CMRS 
Messaging Service fee category to replace our CMRS One-Way Paging fee 
category. See FY 1996 Report and Order at Paragraph 22. 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 invited interested 
parties to file comments on Destineer's proposal or to propose 
alternative methods to assess CMRS fees for FY 1997. We were 
particularly interested in the number of estimated payment units 
associated with any alternative proposal and the impact the proposed 
change would have on projected revenues. See FY 1997 NPRM at Paragraph 
39.
    59. In its comments, RAM Mobile Data USA Limited Partnership (RMD) 
supports establishing a new CMRS Messaging Service fee category and 
urges that the distinction between our CMRS fee categories rest on 
whether the licensee provides voice services or non-voice services. 
Paging Network, Inc. (PageNet) also supports establishing a CMRS 
Messaging Service, recommending that narrowband PCS services be 
included in the new fee category along with paging and similar 
services. The Personal Communications Industry Association (PCIA), 
supported by Arch Communications Group, Inc. (Arch), requests that two-
way paging and other services similar to paging services be assessed 
the same regulatory fee as one-way paging. No party submitted estimates 
of the number of payment units subject to a CMRS fee.
    60. We are persuaded from the comments that a revision of our CMRS 
fee categories to distinguish broadband mobile services from narrowband 
services would serve the public interest. Therefore, we will amend our 
fee schedule to replace our CMRS One-Way Paging fee category with a new 
CMRS Messaging Services fee category. The distinguishing characteristic 
between the CMRS Mobile Services fee category and the CMRS Messaging 
Services fee category will be the amount of bandwidth that we have 
authorized. Our bandwidth distinction is consistent with the fee 
schedule enacted by Congress and by our own prior fee schedules that 
assess fees based upon the quality of the channels provided to 
licensees. See 47 U.S.C. 159(g).
    61. Specifically, Congress in its statutory fee schedule 
distinguished between licensees that we authorized to provide exclusive 
use services and those we authorized to provide only shared

[[Page 37418]]

use services. Section (g) assesses a higher fee upon licensees of 
exclusive use spectrum than upon licensees of less valuable shared use 
spectrum. Similarly, the statutory fee schedule established fees for 
broadcast licensees that consider the type of service and class of 
service authorized. Moreover, since we established the fee program, our 
fee schedules have adhered to Congress' principle that our fee 
categories are to be based on the authorization provided to a licensee 
rather than the use a particular licensee makes of its authorized 
spectrum. As such, our fee schedule for CMRS will not consider the 
particular use made of a licensee's spectrum and will consider the 
nature of services offered only to the extent that services offered on 
broadband spectrum and services offered on narrowband spectrum will be 
subject to different categories of fee payment. Thus, licenses 
authorizing operations on broadband spectrum will be subject to the 
CMRS Mobile Services fee, regardless of the services offered on that 
spectrum by the licensee. Further, licenses authorizing the provision 
of services on narrowband spectrum will be subject to the CMRS 
Messaging Services fee, regardless of the services offered on that 
spectrum. It should also be noted that our NPRM inadvertantly placed 
CMRS licensees operating in the 220-222 MHz and interconnected Business 
Radio Services in the CMRS Mobile Services fee category. Both should be 
included in the CMRS Messaging Services fee category. See Attachment H, 
paragraph 15.
    62. In implementing this revision, we must recompute the revenue 
requirements and fees attributable to the two CMRS categories. Revenue 
required from narrowband services (PCS and two-way paging) must be 
subtracted from the CMRS Mobile Services category and added to the one-
way paging category (to be renamed the CMRS Messaging Services 
category). The required calculations to achieve this result are shown 
below:

(1) Determination of revised payment unit estimates
    (a) CMRS Mobile Services payment units (from Attachment C) = 
47,300,000
    Subtract: Reclassified Narrowband PCS/Two-way Paging payment units 
= 150,000 25
---------------------------------------------------------------------------

    \25\ Based on Commission estimates.
---------------------------------------------------------------------------

    Equals: Revised CMRS Mobile Services payment units = 47,150,000
    (b) CMRS One-Way Paging payment units (from Attachment C) = 
40,850,000
    Add: Reclassified Narrowband PCS/Two-way Paging payment units = 
150,000
    Equals: Revised CMRS Messaging Services payment units = 41,000,000
(2) Determination of revised revenue requirements
    (a) CMRS Mobile Services revenue requirement (from Attachment E) = 
$11,352,000
    Subtract: Reclassified Narrowband PCS/Two-way Paging revenue 
requirement (150,000 payment units x $ .24) = $36,000
    Equals: Revised CMRS Mobile Services revenue requirement = 
$11,316,000
(b) CMRS One-way Paging revenue requirement (from Attachment E) = 
$1,225,500
    Add: Reclassified Narrowband PCS/Two-way Paging revenue requirement 
(from 2(a) above) = $36,000
    Equals: Revised CMRS Messaging Services revenue requirement = 
$1,261,500
(3) Determination of revised fee amount
    (a) CMRS Mobile Services fee = revised revenue requirement/revised 
payment units (i.e., $11,316,000/47,150,000 units) = $ .24/unit (no 
change in fee)
    (b) CMRS Messaging Service fee = revised revenue requirement/
revised payment units (i.e., $1,261,500/41,000,000 units) = $ .03/unit 
(no change in fee)

    63. Finally, RMD, Pagenet and PCIA contend that CMRS licensees that 
have converted from private to commercial service should not be 
required to pay regulatory fees twice for the same time period, once as 
a PMRS licensee and again as a CMRS licensee. The parties note that our 
NPRM did not address the issue of refunds and ask for clarification in 
order to avoid double payments by certain CMRS licensees.
    64. In our FY 1996 Report and Order at Paragraph 21, we stated that 
our rules provide that a licensee is entitled to a refund of an advance 
payment, upon request, whenever we ``adopt new rules that nullify a 
license or other authorization.'' 47 CFR 1.1159(2)(i). Therefore, any 
licensee that has converted from PMRS to CMRS and has paid fees in 
advance for a period of years may file a request for refund, pro-rated 
for the number of remaining years in the initial PMRS license term. 
Detailed refund procedures will be issued separately by public notice, 
by the Managing Director pursuant to delegated authority.
5. Intelsat and Inmarsat Signatories
    65. In our NPRM, we proposed to charge a Signatory fee to cover the 
costs for FY 1997 of Commission regulatory activities associated with 
Comsat's role as U.S. Signatory to INTELSAT and INMARSAT. On May 30, 
1997, the United States Court of Appeals for the District of Columbia 
vacated our decision to charge Comsat a Signatory fee for FY 1996. 
COMSAT Corporation v. Federal Communications Commission, Case No. 96-
1325 (May 30, 1997 D.C. Cir.). Accordingly, we will not, at this time, 
assess a fee to recover the costs of our regulatory activities in 
connection with Comsat's role as U.S. Signatory. 26
---------------------------------------------------------------------------

    \26\ Signatory oversight activities represent approximately 7.8% 
of all international costs.
---------------------------------------------------------------------------

6. Non-Common Carrier International Bearer Circuits
    66. International bearer circuit fees have been 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 bearer circuits directly to 
end users. In our FY 1996 Report and Order, we declined to expand 
collection of international bearer circuit fees to these entities 
because we lacked appropriate data required to calculate a fee 
applicable to bearer circuits provided directly to end users over non-
common carrier domestic and international facilities. We, therefore, 
proposed in our FY 1997 NPRM to assess the international bearer circuit 
fee only on domestic and international common carriers in FY 1997. 
However, we invited interested parties to comment on Comsat's proposal. 
We were especially interested in information concerning the number of 
bearer circuits provided directly to end users over non-common carrier 
domestic and international facilities.
    67. We received comments from Comsat, Columbia and PanAmSat 
concerning Comsat's proposal to extend the bearer circuit fee to all 
non-common carriers providing international bearer circuits to end 
users. Comsat argues that the circuits provided by non-common carrier 
satellites are functionally identical to those provided by common 
carriers. Comsat further argues that the bearer circuit fee is not 
intended to recover the costs of benefits received by particular 
entities, but to recover the costs of the FCC's regulatory activities. 
As such, the non-common carriers should be required to contribute their

[[Page 37419]]

share to the recovery of such costs. PanAmSat, on the other hand, 
argues that, whether or not non-common carrier bearer circuits are 
identical to common carrier circuits as a technical matter, they do not 
impose equivalent regulatory burdens because they are not subject ``to 
the full panoply of Title II regulation.'' Similarly, Columbia argues 
that non-common carriers are not regulated and do not impose 
administrative costs on the Commission. As a result, Columbia argues 
that it is ``axiomatic'' that regulatory fees cannot be charged for 
activities that are not subject to the full range of Title II 
regulation that applies to common carriers. None of the respondents 
provided information concerning the number of circuits the non-common 
carriers provided directly to end users.
    68. We agree with Comsat that international bearer circuits 
provided by non-common carriers are technically identical to bearer 
circuits provided by common carriers. We also agree with PanAmSat and 
Columbia that the offerings of non-common carrier satellite providers 
are not subject to Title II regulation. The same, however, can be said 
of operators of non-common carrier undersea cable systems, which are 
also exempted from Title II regulation, and even of non-dominant common 
carriers that we have exempted from many Title II regulations. Yet non-
common carrier undersea cable operators and non-dominant common 
carriers have been subject to the bearer circuit fee since we 
established our regulatory fee program. See FY 1994 Report and Order at 
Paragraph 98. In addition, regulatory fees, such as the international 
bearer circuit fees, are not intended to recover only the costs of 
Title II regulation. Those Title II costs are recovered, in part, by 
separate fees which recover the costs of processing applications to 
provide common carrier services pursuant to Section 214 of the Act and 
the costs of our review of tariff filings imposed under Section 8 of 
the Communications Act.27 In contrast, Section 9 regulatory 
fees, of which the bearer circuit fee is an example, recover the costs 
of our enforcement, policy and rulemaking, user information and 
international activities.
---------------------------------------------------------------------------

    \27\ 47 U.S.C. 158 (1996).
---------------------------------------------------------------------------

    69. It is necessary for the Commission to maintain these activities 
as part of its overall mission and, under Section 9 of the Act, it is 
necessary for the Commission to assess regulatory fees to recover the 
cost of those activities. For example, the international bearer circuit 
fee is designed to recover many of the costs of the Commission's 
International Bureau's enforcement, rulemaking and representation 
activities. All entities that engage in international 
telecommunications benefit from the fact that the Commission maintains 
an enforcement mechanism to protect them from those who violate the 
Communications Act. Similarly, all entities that engage in 
international telecommunications benefit from the Commission's 
rulemaking, public information and international representation 
activities. And each must help to defray the Commission's costs in 
maintaining the capability to carry out those activities, even though 
it is not easy to predict in advance who will specifically benefit from 
those activities.
    70. It is now appropriate to begin to collect the fee from such 
entities. Although non-common carrier systems have not been subject to 
Title II regulation, their provision of bearer circuits have imposed, 
particularly in recent years, far greater regulatory burdens on the 
Commission. We initially exempted non-common carrier satellite 
operators from Title II regulation because their proposed service 
offerings were sufficiently different from those of common carriers 
that they could, in some sense, be said not to be in direct 
competition. For example, they proposed not to offer voice services, 
but only bearer circuits that would not be interconnected with the 
public switched network and that would be offered only on a sale or 
long term lease basis. As a result, their initial license prohibited 
them, or their customers, from connecting circuits provided over non-
common carrier satellite systems with the public switched telephone 
network (PSN).28 In addition, we narrowly limited their 
service offerings to the sale or lease of bulk capacity; that is, the 
right to use capacity for the life of the satellite or leasing them 
capacity for a term of one year or longer--restrictions not imposed on 
common carriers.29 Under such restrictions, we concluded 
that these carriers would require little Commission regulatory 
oversight.
---------------------------------------------------------------------------

    \28\ Establishment of Satellite Systems Providing International 
Communications, 101 F.C.C.2d 1046 (1985)(``Separate Systems 
Decision''), recon., 61 RR2d 649 (1986), further recon., 1 F.C.C. 
Rcd 439 (1986).
    \29\ Establishment of Satellite Systems Providing International 
Communications, 101 F.C.C.2d 1046 (1985)(``Separate Systems 
Decision''), recon., 61 RR2d 649 (1986), further recon., 1 F.C.C. 
Rcd 439 (1986), 51 FR 44478 (December 10, 1986).
---------------------------------------------------------------------------

    71. The operations and offerings of the non-common carrier 
satellite providers have in recent years changed significantly, 
however, and we expect that these carriers will propose even further 
expansions of these types of offerings in the future. For example, we 
no longer restrict the number of circuits common carriers can use in 
non-common carrier satellite systems.30 The non-common 
carrier satellite providers have requested and obtained approval for 
the removal of the restriction limiting their provision of capacity on 
a sale or long-term-lease basis.31 Finally, we eased the ban 
on connecting their circuits to the public switched network and, 
effective January 1, 1997, we eliminated the restriction 
altogether.32 The net result of these activities has been a 
greatly increased demand for these services and operations that 
increasingly resemble those of the common carriers with whom they 
compete. Thus, the steady expansion of services offered by the non-
common carrier satellite operators has greatly increased the need for 
our oversight of their commercial activities and imposed a greater 
burden on our staff and other resources. Thus, although we have not in 
the past required these providers to pay the international bearer 
circuit regulatory fees, we conclude that it is now appropriate to 
impose the fee, due to these satellite providers extensive 
participation in services once reserved to the common carriers and 
private undersea cable operators and, in particular, to the important 
role they now play in the provision of international bearer circuits.
---------------------------------------------------------------------------

    \30\ See, e.g., Streamlining the International Section 214 
Authorization Process and Tariff Requirements, 11 FCC Rcd 12884, 
12900-1(1996), 61 FR 15724 (April 9, 1996).
    \31\ See 9 FCC Rcd 1282,1286 (1994).
    \32\ See, e.g., 7 FCC Rcd 2313 (1992), 57 FR 14798 (April 23, 
1992), allowing non-common carrier satellite providers, or their 
customers, to interconnect up to 100 64 KB circuits per satellite to 
the public switched network (PSN) for international switched 
service; see also, 9 FCC Rcd 347 (1994), 59 FR 3100 (January 20, 
1994), increasing the number of circuits that may be interconnected 
to the PSN to 1,250 per satellite; and 11 FCC Rcd 16387 (1996), 
increasing the number to 8,000 per satellite. The Commission's 1992 
Order also established an automatic sunset of any restrictions on 
interconnection to the PSN on January 1, 1997. See 7 FCC Rcd 2313, 
2314 (1992).
---------------------------------------------------------------------------

    72. We have noted in the past that we do not have information 
concerning the exact number of non-common carrier bearer circuits 
offered to the public. Neither Comsat nor the non-common carriers 
offered us such information. We do, however, have available data 
concerning circuits offered directly to end users by satellite 
operators and by Comsat. Based on this information, it appears that 
there were approximately 100,000 active circuits offered by non-common 
carriers in 1996. We propose to incorporate these estimates into our 
payment unit estimates for bearer

[[Page 37420]]

circuits and use them to calculate the bearer circuit regulatory fee 
due from both common carriers and non-common carriers. The applicable 
calculations are as follows:

Number of Active Circuits

Common Carriers--164,000
Non-common carriers--100,000
    Total--264,000

Revenue Requirement

FY 1997 Revenue Requirement (from Attachment E)--$820,000

Fee Computation

Revenue Requirement ($820,000) divided by circuits (264,000) = $3.10
Rounded fee = $5.00
7. Low Earth Orbit Satellite Systems
    73. In our NPRM, we proposed that entities authorized to operate 
Low Earth Orbit Satellite Systems (LEOS) be assessed a regulatory fee 
for any LEO system with one or more satellites upon certification that 
it is operating in compliance with the terms and conditions of its 
authorization pursuant to Sec. 25.120(d) of the Commission's rules. 47 
CFR 25.120(d).
    74. Loral Qualcom, Inc. (L/Q) argues that we should not assess the 
full LEO fee on a LEO system licensee until the system is commercially 
viable, contending that most LEO systems cannot provide commercial 
services with a single operational satellite. Instead, L/Q requests 
that we assess only a portion of our regulatory fee on a LEO System 
until such time that the system initiates actual commercial service. 
According to L/Q, a LEO system with a substantial number of satellites 
in its constellation is unlikely to provide actual commercial services 
prior to launching at least some critical mass of the constellation. L/
Q argues that the requirement to pay the fee once a single space 
station is operating is unfair because some LEO systems will be unable 
to offset payment of the fee with commercial revenue. In this 
connection, L/Q states that a LEO system may require launch of several 
satellites in order to test the reliability of commercial services 
before providing these services.
    75. In response to L/Q's concern, we note that the timing of the 
commercial viability of a particular LEO system is outside our control. 
Also, the amount of revenue required for commercial viability will vary 
from system to system. Since there is no standard time-frame and, as L/
Q maintains, no set number of operational satellites necessary for LEO 
systems to achieve commercial viability, we will not approve L/Q's 
proposal for partial payments of the LEO regulatory fee. Requiring 
payment of the LEO fee following commencement of operations of a 
system's first satellite will assure that we recover our regulatory 
costs related to LEO systems from licensees of these systems as early 
as possible so that other regulatees are not burdened with these costs 
any longer than necessary. Therefore, we will retain our requirement 
that licensees of LEO systems pay the LEO regulatory fee upon their 
certification of operation of a single satellite pursuant to 
Sec. 25.120(d). Licensees of LEO systems may obtain a waiver, reduction 
or deferment of the fee upon a showing of financial hardship pursuant 
to Sec. 1.1160 of the rules. 47 CFR 1.1166.
8. Broadcast Auxiliary Services
    76. NAB, in its comments, suggests that the Commission could 
improve its fee collection process by more specifically identifying the 
broadcast auxiliary licenses for which fees are payable. We are aware 
that certain operators of auxiliary equipment have had difficulty in 
determining their liability for auxiliary fees. We have, therefore, in 
Attachment H, incorporated additional clarifying language to better 
enable licensees of broadcast auxiliary services to determine their fee 
liability. We will also include this additional information in 
materials distributed to broadcasters and other licensees of auxiliary 
equipment.
9. Amateur Vanity Call Signs
    77. In late-filed comments, the American Radio Relay League (ARRL) 
discusses the Commission's implementation of vanity call signs. ARRL 
notes that we have established several ``gates'' for the filing of 
vanity call sign applications. The FY 1997 fee for an amateur vanity 
call sign would result in certain applicants incurring fees, over the 
life of the license, two-thirds higher than other applicants who filed 
their applications in ``gates'' currently open before the effective 
date of the FY 1997 fees. ARRL asks that we suspend implementation of 
the higher FY 1997 fee until after the remaining gates have been opened 
and applicants have been afforded an opportunity to file. In response 
to ARRL's concerns, we expect our remaining vanity call sign ``gates'' 
to open before the effective date of our FY 1997 regulatory fee payment 
requirement. Thus, there should be no impact on new applicants for 
vanity call signs in FY 1997 and no need to delay implementation of the 
FY 1997 fee. However, applicants are expected to pay the fee applicable 
at the time they file.
10. Interstate Common Carriers
    78. SBC, an interstate telephone company, claims that our proposed 
interstate revenue-based fees are unfair to local exchange companies 
because they have no underlying expenses to deduct from gross revenues. 
It appears that SBC misunderstands the purpose of the deductions. Our 
regulatory fee rules allow long distance carriers to deduct from gross 
interstate revenues payments made to underlying carriers where those 
payments would be included in the underlying carrier's revenue base. 
For example, suppose that a customer could obtain an interstate service 
from either SBC or from a reseller for the same price--one dollar. If 
SBC provides the service to the customer, it would pay a regulatory fee 
based on the entire dollar. If the reseller provides the service, SBC 
would pay a regulatory fee only on the portion of the dollar that it 
charged as the wholesale rate to the reseller. The reseller, in turn, 
would pay a fee based on the dollar less its payment to SBC. The same 
total fee would be paid in both circumstances. Thus the fee is 
fundamentally fair and creates no competitive distortions.
11. New Filing Requirements
    79. We will be proposing in a Further Notice of Proposed Rulemaking 
(FNPRM) a revision to our collection procedures relative to non-profit 
entities to require these entities to submit or have on file with us 
their current IRS Determination Letters or other documentation of non-
profit status. The Commission has also found that the verification of 
CMRS fees is very costly and time consuming due to the need to verify 
the number of cellular telephones, PCS units and pagers associated with 
individual companies. Therefore, the FNPRM will also propose changes to 
this process as well as certain additional changes to improve the 
efficiency and accuracy of the fee collection process.

F. Schedule of Regulatory Fees

    80. The Commission's Schedule of Regulatory Fees for FY 1997 is 
contained in Attachment F of this Report and Order.

G. Effect of Revenue Redistributions on Major Constituencies

    81. The chart below illustrates the relative percentages of the 
revenue requirements borne by major constituencies since inception of 
regulatory fees in FY 1994.

[[Page 37421]]



                                Revenue Requirement Percentages by Constituencies                               
----------------------------------------------------------------------------------------------------------------
                                                                FY 1994      FY 1995      FY 1996      FY 1997  
                                                                (actual)     (actual)     (actual)    (proposed)
----------------------------------------------------------------------------------------------------------------
Cable TV Operators (Inc. CARS Licenses).....................         41.4         24.0         33.4         23.3
Broadcast Licensees.........................................         23.8         13.8         14.6         15.2
Satellite Operators (Inc. Earth Stations)...................          3.3          3.6          4.0          3.9
Common Carriers.............................................         25.0         44.5         40.9         45.8
Wireless Licensees..........................................          6.5         14.1          7.1         11.8
                                                             ---------------------------------------------------
    Total...................................................        100.0        100.0        100.0        100.0
----------------------------------------------------------------------------------------------------------------

H. Procedures for Payment of Regulatory Fees

1. Installment Payments for Large Fees
    82. Generally, we are retaining 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. 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.
    83. We proposed in the NPRM 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. However, 
statutory constraints requiring notification to Congress prior to 
actual collection of the fees prevents us from allowing installment 
payments in FY 1997. The payment dates for each regulatory fee category 
will be announced by public notice and published in the Federal 
Register following termination of this proceeding. However, regulatees 
otherwise eligible to make installment payments may pay their fees on 
the last date that fee payments may be submitted, as established in our 
public notice.
2. Annual Payments of Standard Fees
    84. 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. As in the past, all standard fees will be 
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 by public notice and published in the 
Federal Register following termination of this proceeding.
3. Advance Payment of Small Fees
    85. 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 
identified would be subject to advance payments in our FY 1994 Report 
and Order, and to those additional payers set forth 
herein.33 Payers of small fees must 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 of the FY 1997 small fees will be announced 
by public notice and published in the Federal Register following 
termination of this proceeding.
---------------------------------------------------------------------------

    \33\ 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. Standard Fee Calculations and Payment Dates
    86. As noted, the time for payment of standard fees will be 
published in the Federal Register. For licensees, permittees and 
holders of other authorizations in the Common Carrier, Mass Media 
34 and Cable Services, fees should be submitted for any 
authorization held as of October 1, 1996. As in the past, this is the 
date to be used for establishing liability for payment of these fees 
since it is the first day of the federal government's fiscal year.
---------------------------------------------------------------------------

    \34\ Except AM/FM fees.
---------------------------------------------------------------------------

    87. In the case of other 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.35 36 As in the past, 
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.
---------------------------------------------------------------------------

    \35\ 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.
    \36\ For FY 1997, AM/FM fees are assessed on licensees holding 
licenses as of December 31, 1996.
---------------------------------------------------------------------------

    5. Minimum Fee Payment Liability
    88. Regulatees whose total fee liability amounts to less than $10, 
including all categories of fees for which payment is due by an entity, 
are exempted from fee payment in FY 1997.

IV. Ordering Clause

    89. Accordingly, it is ordered that the rule changes specified 
herein are adopted. It is further ordered that the

[[Page 37422]]

rule changes made herein will become effective September 15, 1997, 
which is 90 days from the date of notification to Congress.

V. Authority and Further Information

    90. This action is taken pursuant to Sections 4(i), 4(j), 9 and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154 (i) 
and (j) and 9 and 303(r).
    91. 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 procedure, Communications common 
carriers, Radio, Telecommunications, Television.

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

Rule Changes

    Part 1 of Chapter I of Title 47 of the Code of Federal Regulations 
is amended as follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for Part 1 is revised to read as follows:

    Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j), 
155, 225, and 303(r).

    2. Section 1.1152 is revised to read as follows:


Sec. 1.1152  Schedule of annual regulatory fees and filing locations 
for wireless radio services.

------------------------------------------------------------------------
   Exclusive use services (per                                          
             license)               Fee amount           Address        
------------------------------------------------------------------------
1. Land Mobile (Above 470 MHz,                                          
 Base Station and SMRS)(47 CFR                                          
 Part 90):                                                              
    (a) 800 MHz New, Renewal,           $10.00  FCC, 800 MHz, P.O. Box  
     Reinstatement (FCC 600).                    358235, Pittsburgh, PA 
                                                 15251-5235.            
    (b) 900 MHz New, Renewal,            10.00  FCC, 900 MHz, P.O. Box  
     Reinstatement (FCC 600).                    358240, Pittsburgh, PA 
                                                 15251-5240.            
    (c) 470-512,800,900, 220 MHz,        10.00  FCC, 470-512, P.O. Box  
     220 MHz Nationwide Renewal                  358245, Pittsburgh, PA 
     (FCC 574R, FCC 405A).                       15251-5245             
    (d) Correspondence Blanket           10.00  FCC, Corres., P.O. Box  
     Renewal (470-512,800,900,220                358305, Pittsburgh, PA 
     MHz) (Remittance Advice,                    15251-5305.            
     Correspondence).                                                   
    (e) 220 MHz New, Renewal,            10.00  FCC, 220 MHz, P.O. Box  
     Reinstatement (FCC 600).                    358360, Pittsburgh, PA 
                                                 15251-5360.            
    (f) 470-512 MHz New, Renewal,        10.00  FCC, 470-512, P.O. Box  
     Reinstatement (FCC 600).                    358810, Pittsburgh, PA 
                                                 15251-5810.            
    (g) 220 MHz Nationwide New,          10.00  FCC, Nationwide, P.O.   
     Renewal, Reinstatement (FCC                 Box 358820, Pittsburgh,
     600).                                       PA 15251-5820.         
2. Microwave (47 CFR Part 101):                                         
    (a) Microwave New, Renewal,          10.00  FCC, Microwave, P.O. Box
     Reinstatement (FCC 415).                    358250, Pittsburgh, PA 
                                                 15251-5250.            
    (b) Microwave Renewal (FCC           10.00  FCC, Microwave, P.O. Box
     402R).                                      358255, Pittsburgh, PA 
                                                 15251-5255.            
    (c) Correspondence Blanket           10.00  FCC, Corres., P.O. Box  
     Renewal (Microwave)                         358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
3. Shared Use Services:                                                 
    (a) Land Transportation (LT)          5.00  FCC, Land Trans., P.O.  
     New, Renewal, Reinstatement                 Box 358215, Pittsburgh,
     (FCC 600).                                  PA 15251-5215.         
    (b) Business (Bus.) New,              5.00  FCC, Business, P.O. Box 
     Renewal, Reinstatement (FCC                 358220, Pittsburgh, PA 
     600).                                       15251-5220.            
    (c) Other Industrial (OI)             5.00  FCC, Other Indus., P.O. 
     New, Renewal, Reinstatement                 Box 358225, Pittsburgh,
     (FCC 600).                                  PA 15251-5225.         
    (d) General Mobile Radio              5.00  FCC, GMRS, P.O. Box     
     Service (GMRS) New, Renewal,                358230, Pittsburgh, PA 
     Reinstatement (FCC 574).                    15251-5230.            
    (e) Business, Other                   5.00  FCC, Bus.,OI,LT,GMRS,   
     Industrial, Land                            P.O. Box 358245,       
     Transportation, GMRS Renewal                Pittsburgh, PA 15251-  
     (FCC 574R, FCC 405A).                       5245.                  
    (f) Ground New, Renewal,              5.00  FCC, Ground, P.O. Box   
     Reinstatement (FCC 406).                    358260, Pittsburgh, PA 
                                                 15251-5260.            
    (g) Coast New, Renewal,               5.00  FCC, Coast, P.O. Box    
     Reinstatement (FCC 503).                    358265, Pittsburgh, PA 
                                                 15251-5265.            
    (h) Ground Renewal (FCC 452R)         5.00  FCC, Ground, P.O. Box   
                                                 358270, Pittsburgh, PA 
                                                 15251-5270.            
    (i) Coast Renewal (FCC 452R).         5.00  FCC, Coast, P.O. Box    
                                                 358270, Pittsburgh, PA 
                                                 15251-5270.            
    (j) Ship New, Renewal,                5.00  FCC, Ship, P.O. Box     
     Reinstatement (FCC 506).                    358275, Pittsburgh, PA 
                                                 15251-5275.            
    (k) Aircraft New, Renewal,            5.00  FCC, Aircraft, P.O. Box 
     Reinstatement (FCC 404).                    358280, Pittsburgh, PA 
                                                 15251-5280.            
    (l) Ship Renewal (FCC 405B)..         5.00  FCC, Ship, P.O. Box     
                                                 358290, Pittsburgh, PA 
                                                 15251-5290.            
    (m) Aircraft Renewal (FCC             5.00  FCC, Aircraft, P.O. Box 
     405B).                                      358290, Pittsburgh, PA 
                                                 15251-5290.            
    (n) Correspondence Blanket            5.00  FCC, Corres., P.O. Box  
     Renewal (Bus.,OI,LT,GMRS)                   358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
    (o) Correspondence Blanket            5.00  FCC, Corres., P.O. Box  
     Renewal (Ground) (Remittance                358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
    (p) Correspondence Blanket            5.00  FCC, Corres., P.O. Box  
     Renewal (Coast) (Remittance                 358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
    (q) Correspondence Blanket            5.00  FCC, Corres., P.O. Box  
     Renewal (Aircraft)                          358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
    (r) Correspondence Blanket            5.00  FCC, Corres., P.O. Box  
     Renewal (Ship) (Remittance                  358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
4. Amateur Vanity Call Signs.....         5.00  FCC, Amateur Vanity,    
                                                 P.O. Box 358924,       
                                                 Pittsburgh, PA 15251-  
                                                 5924.                  
5. CMRS Mobile Services (per               .24  FCC, Cellular, P.O. Box 
 unit).                                          358835, Pittsburgh, PA 
                                                 15251-5835.            
6. CMRS Messaging Services (per            .03  FCC, Messaging, P.O. Box
 unit).                                          358835, Pittsburgh, PA 
                                                 15251-5835.            
------------------------------------------------------------------------

    3. Sec. 1.1153 is revised to read as follows:

[[Page 37423]]

Sec. 1.1153  Schedule of annual regulatory fees and filing locations 
for mass media services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
I. Radio [AM and FM] (47 CFR Part                                       
 73:                                                                    
    1. Group 1...................       $2,000  FCC, Radio, P.O. Box    
    2. Group 2...................        1,800   358835, Pittsburgh, PA,
                                                 15251-5835.            
    3. Group 3...................        1,600  ........................
    4. Group 4...................        1,400  ........................
    5. Group 5...................        1,200  ........................
    6. Group 6...................        1,000  ........................
    7. Group 7...................          800  ........................
    8. Group 8...................          600  ........................
    9. Group 9...................          400  ........................
    10. Group 10.................          200  ........................
    11. AM Construction Permits..          195  ........................
    12. FM Construction Permits..          950  ........................
II. TV (47 CFR Part 73) VHF                                             
 Commercial:                                                            
    1. Markets 1 thru 10.........       35,025  FCC, TV Branch, P.O. Box
    2. Markets 11 thru 25........       28,450   358835, Pittsburgh, PA 
                                                 15251-5835.            
    3. Markets 26 thru 50........       18,600  ........................
    4. Markets 51 thru 100.......        9,850  ........................
    5. Remaining Markets.........        2,725  ........................
    6. Construction Permits......        4,800  ........................
III. UHF Commercial:                                                    
    1. Markets 1 thru 10.........       16,850  FCC, UHF Commercial,    
    2. Markets 11 thru 25........       13,475   P.O. Box 358835,       
                                                 Pittsburgh, PA 15251-  
                                                 5835.                  
    3. Markets 26 thru 50........        8,750                          
    4. Markets 51 thru 100.......        4,725                          
    5. Remaining Markets.........        1,350                          
    6. Construction Permits              2,975                          
IV. Satellite UHF/VHF Commercial:                                       
    1. All Markets...............          950  FCC Satellite TV, P.O.  
    2. Construction Permits......          345   Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
V. Low Power TV, TV/FM                     220  FCC, Low Power, P.O. Box
 Translator,& TV/FM Booster (47                  358835, Pittsburgh, PA 
 CFR Part 74).                                   15251-5835.            
VI. Broadcast Auxiliary..........           25  FCC, Auxiliary, P.O. Box
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
VII. Multipoint Distribution.....          215  FCC, Multipoint, P.O.   
                                                 Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
------------------------------------------------------------------------

    4. Sec. 1.1154 is revised to read as follows:


Sec. 1.1154  Schedule of annual regulatory charges and filing locations 
for common carrier services.

------------------------------------------------------------------------
                                   Fee amount            Address        
------------------------------------------------------------------------
I. Radio Facilities:                                                    
    1. Microwave (Domestic          $10         FCC, Common Carrier,    
     Public Fixed).                              P.O. Box 358680,       
                                                 Pittsburgh, PA 15251-  
                                                 5680.                  
II. Carriers:                                                           
    1. Interstate Telephone            .000116  FCC, Carriers, P.O. Box 
     Service Providers, (per                     358835, Pittsburgh, PA.
     dollar contributed to TRS                                          
     Fund).                                                             
------------------------------------------------------------------------

    5. Sec. 1.1155 is revised to read as follows:


Sec. 1.1155  Schedule of regulatory fees and filing locations for cable 
television services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
1. Cable Antenna Relay Service...          $65  FCC, Cable, P.O. Box    
2. Cable TV System (per                    .54   358835, Pittsburgh, PA 
 subscriber).                                    15251-5835.            
------------------------------------------------------------------------

    6. Section 1.1156 is revised to read as follows:


Sec. 1.1156  Schedule of regulatory fees and filing locations for 
international services.

------------------------------------------------------------------------
                                   Fee amount            Address        
------------------------------------------------------------------------
I. Radio Facilities:                                                    
    1. International (HF)              $390     FCC, International, P.O.
     Broadcast.                                  Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
    2. International Public             310     FCC, International, P.O.
     Fixed.                                      Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
II. Space Stations                   97,975     FCC, Space Stations,    
 (Geosynchronous Orbit).                         P.O. Box 358835,       
                                                 Pittsburgh, PA 15251-  
                                                 5835.                  
III. Low Earth Orbit Satellite..    135,675     FCC, Space Stations,    
                                                 P.O. Box 358835,       
                                                 Pittsburgh, PA 15251-  
                                                 5835.                  

[[Page 37424]]

                                                                        
IV. Earth Stations; Transmit/           515     FCC, Earth Station, P.O.
 Receive and Transmit Only (per                  Box 358835, Pittsburgh,
 authorization or registration).                 PA 15251-5835.         
V. Carriers:                                                            
    1. International Bearer               5.00  FCC, International, P.O.
     Circuits (per active 64KB                   Box 358835, Pittsburgh,
     circuit or equivalent).                     PA 15251-5835.         
------------------------------------------------------------------------

    Note: Attachments A through L will not appear in the Code of 
Federal Regulations.

Attachment A--Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act 
(RFA),37 an Initial Regulatory Flexibility Analysis 
(IRFA) was incorporated in the Notice of Proposed Rulemaking In the 
Matter of Assessment and Collection of Regulatory Fees for Fiscal 
Year 1997, 62 FR 10793 (March 10, 1997). The Commission sought 
written public comments on the proposals in its FY 1997 regulatory 
fees NPRM, including on the IRFA. This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA, as 
amended.38
---------------------------------------------------------------------------

    \37\ 5 U.S.C. 603.
    \38\ See 5 U.S.C. 604. The RFA, see 5 U.S.C. 601 et seq., has 
been amended by the Contract with America Advancement Act (CWAAA), 
Public Law 104-121, 110 Stat. 847 (1996). Title II of the CWAAA is 
``The Small Business Regulatory Enforcement Fairness Act of 1996'' 
(SBREFA).
---------------------------------------------------------------------------

I. Need for and Objectives of This Report and Order

    2. This rulemaking proceeding was initiated 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 revised regulatory fees, as contained 
in the attached Schedule of Regulatory Fees, in the most efficient 
manner possible and without undue burden on the public.

II. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    3. The American Mobile Telecommunications Association, Inc. 
(``AMTA'') filed comments in response to the IRFA seeking 
clarification of the definition of small entity Specialized Mobile 
Radio (SMR) licensees who are subject to regulatory fee 
payments.39 AMTA asserts that the IRFA indicates that the 
proposed fees in the NPRM apply only to SMR providers in the 800 MHz 
and 900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations.40
---------------------------------------------------------------------------

    \39\ See comments filed in MD Docket No. 96-186 dated March 25, 
1997.
    \40\ IRFA at paragraph 48.
---------------------------------------------------------------------------

    4. As AMTA points out, this is incorrect. All SMR providers are 
subject to payment of regulatory fees, unless qualified for special 
exemption (e.g., Public Safety). Private Mobile Radio Services 
(PMRS) licensees are subject to ``small'' fees payable in advance 
for the entire license term at the time of application for new, 
modification or renewal licenses. Commercial Mobile Radio Services 
(CMRS) licensees must pay ``standard'' regulatory fees on an annual 
basis. (See paragraph 50 infra.)

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

    5. The RFA generally defines ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction.'' 41 In addition, the 
term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act.42 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).43
---------------------------------------------------------------------------

    \41\ 5 U.S.C. 601(6).
    \42\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in Small Business Act, 15 U.S.C. 632). 
Pursuant to 5 U.S.C. 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.''
    \43\ Small Business Act, 15 U.S.C. 632.
---------------------------------------------------------------------------

    6. The RFA also includes nonprofit organizations and small 
governmental entities within the scope of regulatory flexibility 
analysis.44 The definition of a small governmental entity 
is one with a population of fewer than 50,000.45 There 
are approximately 85,006 governmental entities in the 
nation.46 This number includes such entities as states, 
counties, cities, utility districts and school districts. There are 
no figures available on what portion of this number have populations 
of fewer than 50,000. However, this number includes 38,978 counties, 
cities and towns, and of those, 37,566, or 96 percent, have 
populations of fewer than 50,000.47 The Census Bureau 
estimates that this ratio is approximately accurate for all 
governmental entities. Thus, of the approximately 85,006 
governmental entities, we estimate that 96 percent, or 81,600, are 
small entities that may be affected by our rules.
---------------------------------------------------------------------------

    \44\ 5 U.S.C. 601(5).
    \45\ Id.
    \46\ 1992 Census of Governments, U.S. Bureau of the Census, U.S. 
Department of Commerce.
    \47\ Id.
---------------------------------------------------------------------------

Cable Services or Systems

    7. 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.48 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.49
---------------------------------------------------------------------------

    \48\ 13 CFR 121.201, SIC 4841.
    \49\ 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).
---------------------------------------------------------------------------

    8. 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.50 Based on our most 
recent information, we estimate that there were 1,439 cable 
operators that qualified as small cable system operators at the end 
of 1995.51 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.
---------------------------------------------------------------------------

    \50\ 47 CFR 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).
    \51\ Paul Kagan Associates, Inc., Cable TV Investor, February 
29, 1996 (based on figures for December 30, 1995).
---------------------------------------------------------------------------

    9. 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.'' 52 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.53 Based on available data, we find that the 
number of cable operators serving 617,000 subscribers or less totals 
1,450.54 We do not request nor do we collect information 
concerning whether cable

[[Page 37425]]

system operators are affiliated with entities whose gross annual 
revenues exceed $250,000,000,55 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 of 
65,000,000 subscribers, and we have based our fee revenue estimates 
on that figure.
---------------------------------------------------------------------------

    \52\ 47 U.S.C. 543(m)(2).
    \53\ 47 CFR 76.1403(b).
    \54\ Paul Kagan Associates, Inc., Cable TV Investor, February 
29, 1996 (based on figures for December 30, 1995).
    \55\ 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 Sec. 76.1403(b) of the Commission's rules. See 47 CFR 
76.1403(d).
---------------------------------------------------------------------------

    10. 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),56 multipoint distribution systems 
(MDS),57 satellite master antenna systems (SMATV), and 
subscription television services.
---------------------------------------------------------------------------

    \56\ Direct Broadcast Services (DBS) are discussed in depth with 
the international services infra.
    \57\ Multipoint Distribution Services (MDS) are discussed in 
depth with the mass media services infra.
---------------------------------------------------------------------------

Common Carrier Services and Related Entities

    11. 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.
    12. 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.58 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.
---------------------------------------------------------------------------

    \58\ 13 CFR 121.201.
---------------------------------------------------------------------------

    13. 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 entity'' 
and ``small business concerns.'' 59 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.'' 
60
---------------------------------------------------------------------------

    \59\ 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.
    \60\ Id.
---------------------------------------------------------------------------

    14. 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.61 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.'' 62 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.
---------------------------------------------------------------------------

    \61\ 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).
    \62\ 15 U.S.C. 632(a)(1).
---------------------------------------------------------------------------

    15. 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 
1992.63 According to the SBA's definition, a small 
business telephone company other than a radiotelephone company is 
one employing fewer than 1,500 persons.64 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 communications companies other than radiotelephone 
companies.
---------------------------------------------------------------------------

    \63\ 1992 Census, supra, at Firm Size 1-123.
    \64\ 13 CFR 121.201, SIC Code 4812.
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    16. 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.65 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.66 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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    \65\ 13 CFR 121.201, SIC Code 4813.
    \66\ 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).
---------------------------------------------------------------------------

    17. 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.67 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.68 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.
---------------------------------------------------------------------------

    \67\  13 CFR 121.201, SIC 4813.
    \68\  TRS Worksheet.
---------------------------------------------------------------------------

    18. 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.69 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.70 We do not 
have information on the number of carriers that are not 
independently owned and operated,

[[Page 37426]]

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.
---------------------------------------------------------------------------

    \69\ 13 CFR 121.201, SIC 4813.
    \70\ TRS Worksheet.
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    19. 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. 71 
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.72 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.
---------------------------------------------------------------------------

    \71\ 13 CFR 121.201, SIC 4813.
    \72\ Id.
---------------------------------------------------------------------------

    20. 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.73 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.74 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.
---------------------------------------------------------------------------

    \73\  13 CFR 121.201, SIC 4813.
    \74\  TRS Worksheet.
---------------------------------------------------------------------------

    21. 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.75 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.76 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.
---------------------------------------------------------------------------

    \75\ 13 CFR 121.201, SIC 4813.
    \76\ TRS Worksheet.
---------------------------------------------------------------------------

    22. 800 Subscribers.77 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.78 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 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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    \77\ We include all toll-free number subscribers in this 
category, including 888 numbers.
    \78\ Federal Communications Commission, CCB, Industry Analysis 
Division, FCC Releases, Study on Telephone Trends, Tbl. 20 (May 16, 
1996).
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International Services

    23. 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.79 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.80 The Census report does not provide more 
precise data.
---------------------------------------------------------------------------

    \79\ 13 CFR 120.121, SIC Code 4899.
    \80\ 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).
---------------------------------------------------------------------------

    24. 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.
    25. 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.
    26. 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.
    27. 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.
    28. 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 
of the number of VSAT systems that would constitute a small business 
under the SBA definition.
    29. 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.
    30. 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.
    31. 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.
    32. 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.
    33. 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.81 As of December 1996,

[[Page 37427]]

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.
---------------------------------------------------------------------------

    \81\ 13 CFR 121.201, SIC 4841.
---------------------------------------------------------------------------

Mass Media Services

    34. Commercial Radio and Television Services. The proposed rules 
and policies will apply to television broadcasting licensees and 
radio broadcasting licensees.82 The SBA defines a 
television broadcasting station that has $10.5 million or less in 
annual receipts as a small business.83 Television 
broadcasting stations consist of establishments primarily engaged in 
broadcasting visual programs by television to the public, except 
cable and other pay television services.84 Included in 
this industry are commercial, religious, educational, and other 
television stations.85 Also included are establishments 
primarily engaged in television broadcasting and which produce taped 
television program materials.86 Separate establishments 
primarily engaged in producing taped television program materials 
are classified under another SIC number.87 There were 
1,509 television stations operating in the nation in 
1992.88 That number has remained fairly constant as 
indicated by the approximately 1,550 operating television 
broadcasting stations in the nation as of August, 1996.89 
For 1992,90 the number of television stations that 
produced less than $10.0 million in revenue was 1,155 
establishments.91 Only commercial stations are subject to 
regulatory fees.
---------------------------------------------------------------------------

    \82\ 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.
    \83\ 13 CFR 121.201, SIC 4833.
    \84\ 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).
    \85\ 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.
    \86\ 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).
    \87\ Id. SIC 7812 (Motion Picture and Video Tape Production); 
SIC 7922 (Theatrical Producers and Miscellaneous Theatrical 
Services) (producers of live radio and television programs).
    \88\ FCC News Release No. 31327, January 13, 1993; Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce.
    \89\ FCC News Release No. 64958, September 6, 1996.
    \90\ 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.
    \91\ 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.
---------------------------------------------------------------------------

    35. Additionally, the Small Business Administration defines a 
radio broadcasting station that has $5 million or less in annual 
receipts as a small business.92 A radio broadcasting 
station is an establishment primarily engaged in broadcasting aural 
programs by radio to the public.93 Included in this 
industry are commercial, religious, educational, and other radio 
stations.94 Radio broadcasting stations which primarily 
are engaged in radio broadcasting and which produce radio program 
materials are similarly included.95 However, radio 
stations which are separate establishments and are primarily engaged 
in producing radio program material are classified under another SIC 
number.96 The 1992 Census indicates that 96 percent 
(5,861 of 6,127) radio station establishments produced less than $5 
million in revenue in 1992.97 Official Commission records 
indicate that 11,334 individual radio stations were operating in 
1992.98 As of August 1996, official Commission records 
indicate that 12,088 radio stations were operating.99 
Only commercial stations are subject to regulatory fees.
---------------------------------------------------------------------------

    \92\ 13 CFR 121.201, SIC 4832.
    \93\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce.
    \94\ Id.
    \95\ Id.
    \96\ Id.
    \97\ 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.
    \98\ FCC News Release No. 31327, January 13, 1993.
    \99\ FCC News Release No. 64958, September 6, 1996.
---------------------------------------------------------------------------

    36. Thus, the NPRM adopted today will affect approximately 1,550 
full power television stations; approximately 1,194 of those 
stations are considered small businesses,100 and 12,088 
full power radio stations, approximately 11,605 of which are small 
businesses.101 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).102 Given the nature of this 
service, we will presume that all LPTV licensees qualify as small 
entities under the SBA definition.
---------------------------------------------------------------------------

    \100\ 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.
    \101\ 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.
    \102\ 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

    37. 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.103 Thus, radio or television stations with 
fewer than five full-time employees are exempted from certain EEO 
reporting and record keeping requirements.104 We estimate 
that the total

[[Page 37428]]

number of broadcast stations with 4 or fewer employees is 
approximately 4,239.105
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    \103\ 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. 632 (a), as amended by Section 222 of 
the Small Business Credit and Business Opportunity Enhancement Act 
of 1992, Public Law 102-366, section 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, 
section 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).
    \104\ See, e.g., 47 CFR 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.
    \105\ Compilation of 1994 Broadcast Station Annual Employment 
Reports (FCC Form 395B), Equal Opportunity Employment Branch, Mass 
Media Bureau, FCC.
---------------------------------------------------------------------------

Auxiliary, Special Broadcast and Other Program Distribution 
Services

    38. 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).
    39. There are currently 2,720 FM translators and boosters, 4,952 
TV translators.106 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 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.107
---------------------------------------------------------------------------

    \106\ FCC News Release, Broadcast Station Totals as of December 
31, 1996, No. 71831, January 21, 1997.
    \107\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    40. 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.108 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.109 This definition of a small entity in 
the context of MDS auctions has been approved by the 
SBA.110 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.111 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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    \108\ For purposes of this item, MDS also includes single 
channel Multipoint Distribution Service (MDS) and Multipoint 
Distribution Service (MMDS) application and authorizations 
collectively.
    \109\ See 47 CFR 1.2110 (a)(1).
    \110\ 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).
    \111\ Id. A Basic Trading Area (BTA) is the geographic area by 
which the Multipoint Distribution Service is licensed. See Rand 
McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition, 
pp. 36-39.
---------------------------------------------------------------------------

Wireless and Commercial Mobile Services

    41. 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.112 According to the most recent data, 792 
companies reported that they were engaged in the provision of 
cellular services.113 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.
---------------------------------------------------------------------------

    \112\ 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).
    \113\ Id.
---------------------------------------------------------------------------

    42. 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.114 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,115 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.116 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,117 with respect to the approximately 3,800 
incumbent licensees in this service, we will consider them as small 
businesses under the SBA definition.
---------------------------------------------------------------------------

    \114\ 13 CFR 121.201, SIC 4812.
    \115\ Economic Area (EA) licenses refer to the 60 frequencies 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).
    \116\ Id.
    \117\ 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).
---------------------------------------------------------------------------

    43. 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.118 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.
---------------------------------------------------------------------------

    \118\ 13 CFR 121.201, SIC 4812.
---------------------------------------------------------------------------

    44. 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

[[Page 37429]]

services.119 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. Consequently, we estimate that there are 
fewer than 117 small entity mobile service carriers.
---------------------------------------------------------------------------

    \119\ Id.
---------------------------------------------------------------------------

    45. 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.120 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.121 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.122 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.
---------------------------------------------------------------------------

    \120\ 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 24.720(b).
    \121\ 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, para. 60 (1996), 61 FR 33859 (July 1, 1996).
    \122\ FCC News, Broadband PCS, D, E and F Block Auction Closes, 
No. 71744 (released January 14, 1997).
---------------------------------------------------------------------------

    46. 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.
    47. Rural Radiotelephone Service. The Commission has not adopted 
a definition of small business specific to the Rural Radiotelephone 
Service, which is defined in Sec. 22.99 of the Commission's 
Rules.123 A significant subset of the Rural 
Radiotelephone Service is BETRS, or Basic Exchange Telephone Radio 
Systems (the parameters of which are defined in Secs. 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.124
---------------------------------------------------------------------------

    \123\ 47 CFR 22.9.
    \124\ 13 CFR 121.201, SIC 4812.
---------------------------------------------------------------------------

    48. 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 Sec. 22.99 of the 
Commission's Rules.125 Accordingly, we will use the SBA's 
definition applicable to radiotelephone companies, i.e., an entity 
employing fewer than 1,500 persons.126 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.
---------------------------------------------------------------------------

    \125\ Id.
    \126\ Id.
---------------------------------------------------------------------------

    49. Specialized Mobile Radio Licensees (SMR). Pursuant to 47 CFR 
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.127 Therefore, the regulatory fees in 
this item apply 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. The 
Commission has 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
---------------------------------------------------------------------------

    \127\ 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).
---------------------------------------------------------------------------

    50. In addition to those licensees described in paragraph 49 
above, the regulatory fees apply to all SMR providers in the Private 
Mobile Radio Service (PMRS) and the Commercial Mobile Radio Service 
(CMRS), except for those licensees that are statutorily exempt. 
These radios are used by companies of all sizes operating in all 
U.S. business categories. Because of the vast array of SMR users, 
the Commission has not developed nor would it be possible to develop 
a definition of small entities specifically applicable to SMR 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. 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.
    52. 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 128 
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.
---------------------------------------------------------------------------

    \128\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994 at 116.
---------------------------------------------------------------------------

    53. 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.
    54. 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

[[Page 37430]]

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.129 The Commission is unable at 
this time to make a meaningful estimate of the number of potential 
small businesses.
---------------------------------------------------------------------------

    \129\ See 13 CFR 121.201, SIC Major Group Code 44--Water 
Transportation (4491, 4492, 4493, 4499) and 45--Transportation by 
Air (4522, 4581).
---------------------------------------------------------------------------

    55. 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.
    56. Microwave Video Services. Microwave services includes common 
carrier,130 private operational fixed,131 and 
broadcast auxiliary radio services.132 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.133 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.
---------------------------------------------------------------------------

    \130\ 47 CFR 101 et seq (formerly part 21 of the Commission's 
rules).
    \131\ Persons eligible under parts 80 and 90 of the Commission's 
rules can use private Operational Fixed Microwave services. See 47 
CFR 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.
    \132\ Broadcast Auxiliary Microwave Service is governed by part 
74 of title 47 of the Commission's rules. See 47 CFR 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.
    \133\ 13 CFR 121.201, SIC 4812.
---------------------------------------------------------------------------

    57. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, 
highway maintenance, and emergency medical services.134 
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.135 There are approximately 37,566 governmental 
entities with populations of less than 50,000.136 All of 
these licensees are exempt from payment of regulatory fees.
---------------------------------------------------------------------------

    \134\ 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 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 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 90.33 through 
90.55.
    \135\ 5 U.S.C. 601(5).
    \136\ United States Dept. of Commerce, Bureau of the Census, 
1992 Census of Governments (1992 Census).
---------------------------------------------------------------------------

    58. 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).137 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.
---------------------------------------------------------------------------

    \137\ 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 95.401 through 95.428; 95.1 through 
95.181; 95.201 through 95.225; 47 CFR 95.191 through 95.194.
---------------------------------------------------------------------------

    59. 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.138 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.
---------------------------------------------------------------------------

    \138\ These licensees are governed by subpart I of part 22 of 
the Commission's rules. 47 CFR 22.1001 through 22.1037.
---------------------------------------------------------------------------

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

    60. 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.139 Interstate 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. Licensees/
regulatees that must pay on the basis of subscriber counts shall 
submit documentation which supports the number of units for which 
payment is submitted. Each licensee/regulatee shall provide 
certification by affixing their signature to the FCC Form 159 that 
all information submitted is true and accurate. 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.
---------------------------------------------------------------------------

    \139\ 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.
---------------------------------------------------------------------------

    61. Each licensee must submit the FCC Form 159 to the 
Commission's lockbox bank after computing the number of units 
subject

[[Page 37431]]

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.
    62. Licensees and regulatees that are exempt from payment of 
regulatory fees due to their status under Section 501(c) of the 
Internal Revenue Code, 26 U.S.C. 501(c), shall submit a copy of 
their current IRS Determination Letter or equivalent certification 
from a governmental authority attesting to their non-profit status.
    63. Licensees and regulatees are advised that failure to submit 
the required regulatory fee and/or the required supporting 
documentation 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.140 Until payment is received, no new or 
pending applications will be processed, and existing authorizations 
may be subject to rescission.141 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.142 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.143
---------------------------------------------------------------------------

    \140\ 47 U.S.C. 1.1164(a).
    \141\ 47 U.S.C. 1.1164(c).
    \142\ Public Law 104-134, 110 Stat. 1321 (1996).
    \143\ 31 U.S.C. 7701(c)(2)(B).
---------------------------------------------------------------------------

    64. 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.144 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.
---------------------------------------------------------------------------

    \144\ 47 U.S.C. 1.1166.
---------------------------------------------------------------------------

V. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    65. 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. 159 (a). We have sought comment on the proposed 
methodology for implementing these statutory requirements and any 
other potential impact of these proposals on small business 
entities. The Commission agrees with the comments submitted by AMTA 
concerning inclusion of all SMR providers among licensees subject to 
payment of regulatory fees. Clarifying language has been added to 
this FRFA. (See paragraph 50 infra.)
    66. 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 
statute establishing regulatory fees provides for permitted 
amendments to be made to the schedule of fees in the public 
interest.145 The methodology adopted in this Report and 
Order minimizes this impact by limiting the amount of increase and 
shifting costs to other services which, for the most part, are 
larger entities.
---------------------------------------------------------------------------

    \145\ See 47 U.S.C. 159 (b)(1)(A) and (b)(3).
---------------------------------------------------------------------------

    67. Conversely, we have found that our costs for regulating 
commercial microwave (domestic public fixed) services are 
significantly lower than previously thought. We are, therefore, 
eliminating 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 are exempt from payment of a 
regulatory fee until such time as they apply for a modification or 
renewal of their license.
    68. We have developed and adopted an alternative methodology 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 have received two alternative proposals which 
we have evaluated. One would segment licensees by Arbitron radio 
markets in addition to station class.146 The other 
proposal would segment licensees by service area population in 
addition to station class.147 Although neither proposal 
was found workable in its proposed state, we have expanded upon the 
use of population data to formulate our own schedule. The impact of 
adoption of our proposal will 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.
---------------------------------------------------------------------------

    \146\ See discussion of Montana Broadcasters Association 
Comments at NPRM paragraphs 29-32 supra.
    \147\ See discussion of NAB Comments at NPRM paragraphs 33-36 
supra.
---------------------------------------------------------------------------

    69. Several categories of licensees and regulatees are exempt 
from payment of regulatory fees. See Footnote 103 supra.
    Report to Congress: The Commission shall include a copy of this 
Final Regulatory Flexibility Analysis, along with this Report and 
Order, in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801(a)(1)(A). 
A copy of this FRFA (or summary thereof) will also be published in 
the Federal Register, along with this Report and Order.

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 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.
---------------------------------------------------------------------------

    \148\ 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.
    \149\ 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 category 
and a corresponding decrease in the number of licensees remaining in 
the PMRS category.

[[Page 37432]]



------------------------------------------------------------------------
                                             Sources of payment unit    
              Fee category                          estimates           
------------------------------------------------------------------------
Land Mobile (All), Microwave, IVDS,148   Based on Wireless              
 Marine (Ship & Coast), Aviation          Telecommunications Bureau     
 (Aircraft & Ground), GMRS, Amateur       (WTB) projections of new      
 Vanity Call Signs.                       applications and renewals     
                                          taking into consideration     
                                          existing Commission licensee  
                                          data bases.                   
CMRS Mobile Services (incl. Cellular/    Based on industry estimates of 
 Public Mobile Radio Services).149        growth between FY 1996 and FY 
                                          1997 and WTB projections of   
                                          new applications and average  
                                          number of mobile units        
                                          associated with each          
                                          application.                  
CMRS Messaging Services................  Based on industry estimates of 
                                          the number of units in        
                                          operation.                    
AM/FM Radio Stations...................  Based on Mass Media Bureau     
                                          licensee data.                
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
 International Public Fixed Radio         units.                        
 Service.                                                               
------------------------------------------------------------------------

Attachment C--Calculation of Revenue Requirements

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Computed FY      Pro-rated  
                        Fee category                          FY 1997 payment units    x    FY 1996    x    Payment    =    1997 revenue      revenue   
                                                                                              fee            years          requirement     requirement 
-------------------------------------------------------------------------------------------------------------------------------------------------**-----
LM (220 MHz, 470 MHZ-Base, SMRS)................                   14,175               7               5             496,125        550,996 
Private Microwave..........................................                    5,350               7              10             374,500        415,920 
IVDS.......................................................                        0               7               5                   0              0 
Marine (Ship)..............................................                   19,400               3              10             582,000        646,369 
GMRS/Other LM..............................................                   82,900               3               5           1,243,500      1,381,031 
Aviation (Aircraft)........................................                    2,120               3              10              63,600         70,634 
Marine (Coast).............................................                    2,400               3               5              36,000         39,982 
Aviation (Ground)..........................................                    2,760               3               5              41,400         45,979 
Amateur Vanity Call Signs..................................                   10,000               3              10             300,000        333,180 
AM Class A.................................................                       75           1,250               1              93,750        104,119 
AM Class B.................................................                    1,717             690               1           1,184,730      1,315,761 
AM Class C.................................................                    1,013             280               1             283,640        315,011 
AM Class D.................................................                    2,016             345               1             695,520        772,445 
AM Construction Permits....................................                       38             140               1               5,320          5,908 
FM Classes C, C1, C2, B....................................                    2,609           1,250               1           3,261,250      3,621,944 
FM Classes A, B1, C3.......................................                    2,762             830               1           2,292,460      2,546,006 
FM Construction Permits....................................                      307             690               1             211,830        235,258 
Satellite TV...............................................                      101             690               1              69,690         77,398 
Satellite TV Construction Permit...........................                        7             250               1               1,750          1,944 
VHF Markets 1-10...........................................                       43          32,000               1           1,376,000      1,528,186 
VHF Markets 11-25..........................................                       64          26,000               1           1,664,000      1,848,038 
VHF Markets 26-50..........................................                       78          17,000               1           1,326,000      1,472,656 
VHF Markets 51-100.........................................                      137           9,000               1           1,233,000      1,369,370 
VHF Remaining Markets......................................                      225           2,500               1             562,500        624,713 
VHF Construction Permits...................................                        5           5,550               1              27,750         30,819 
UHF Markets 1-10...........................................                       89          25,000               1           2,225,000      2,471,085 
UHF Markets 11-25..........................................                       86          20,000               1           1,720,000      1,910,232 
UHF Markets 26-50..........................................                      106          13,000               1           1,378,000      1,530,407 
UHF Markets 51-100.........................................                      163           7,000               1           1,141,000      1,267,195 
UHF Remaining Markets......................................                      165           2,000               1             330,000        366,498 
UHF Construction Permits...................................                       50           4,425               1             221,250        245,720 
Auxiliaries................................................                   20,000              35               1             700,000        777,420 
International HF Broadcast.................................                        6             280               1               1,680          1,866 
LPTV/Translators/Boosters..................................                    2,200             190               1             418,000        464,231 
CARS.......................................................                    1,640             325               1             533,000        591,950 
Cable Systems..............................................               65,000,000            0.55               1          35,750,000     39,703,950 
IXC, LECs, CAPS, Others....................................           59,685,000,000         0.00098               1          58,491,300     64,960,438 
CMRS Mobile Services (Cellular/Public Mobile)..............               47,300,000            0.17               1           8,041,000      8,930,335 
CMRS One-Way Paging........................................               40,850,000            0.02               1             817,000        907,360 
Domestic Public Fixed/Commercial Microwave.................                   18,845             155               1           2,920,975      3,244,035 
MDS/MMDS...................................................                    1,144             155               1             177,320        196,932 

[[Page 37433]]

                                                                                                                                                        
International Circuits.....................................                  164,000               4               1             656,000        728,554 
International Public Fixed.................................                       15             225               1               3,375          3,748 
Earth Stations.............................................                    2,500             370               1             925,000      1,027,305 
Space Stations (Geosynchronous)............................                       41          70,575               1           2,893,575      3,213,604 
Space Stations (Low Earth Orbit)...........................                        1          97,725               1              97,725        108,533 
INTELSAT/INMARSAT Signatory................................                        2         233,425               1             466,850        518,484 
                                                                                                                         -------------------------------
    Total Estimated Revenue Collected......................  .......................  ...  .........  ...  .........  ..     137,334,365    152,523,546 
    Total Revenue Requirement..............................  .......................  ...  .........  ...  .........  ..     152,523,000    152,523,000 
                                                                                                                         -------------------------------
    Difference.............................................  .......................  ...  .........  ...  .........  ..     (15,188,635)          546  
--------------------------------------------------------------------------------------------------------------------------------------------------------
** 1.1106 factor applied                                                                                                                                

Attachment D--Calculation of Regulatory Costs

----------------------------------------------------------------------------------------------------------------
                                                                  Total costs                                   
                                Actual FY 1996    Overhead &    with overhead &    Total costs    Adjusted pro- 
         Fee Category             regulatory    other indirect   other indirect   pro-rated to   rated costs ***
                                    costs          pro rated       pro rated      $152 million                  
---------------------------------------------------------------------------------------**-----------------------
LM (220 MHz, >470 MHZ-Base,                                                                                     
 SMRS).......................         536,985          210,246         747,231          792,718         792,718 
Private Microwave............         897,318          351,327       1,248,645        1,324,655       1,324,655 
IVDS.........................         319,930          125,262         445,192          472,293         472,293 
Marine (Ship)................       4,010,683        1,570,303       5,580,986        5,920,722       5,920,722 
GMRS/Other LM................       4,534,058        1,775,220       6,309,278        6,693,348       6,693,348 
Aviation (Aircraft)..........         633,302          247,957         881,259          934,905         934,905 
Marine (Coast)...............         495,912          194,164         690,077          732,084         732,084 
Aviation (Ground)............         322,995          126,462         449,457          476,817         476,817 
Amateur Vanity Call Signs....         166,171           65,061         231,232          245,308         245,308 
AM Radio.....................       3,107,681        1,216,750       4,324,431        4,587,676  ...............
    AM Class A...............  ...............  ..............  ...............  ..............         189,930 
    AM Class B...............  ...............  ..............  ...............  ..............       2,401,649 
    AM Class C...............  ...............  ..............  ...............  ..............         574,836 
    AM Class D...............  ...............  ..............  ...............  ..............       1,409,793 
    AM Construction Permits..  ...............  ..............  ...............  ..............          11,010 
FM Radio.....................       5,734,251        2,245,131       7,979,382        8,465,118  ...............
    FM Classes C, C1, C2, B..  ...............  ..............  ...............  ..............       4,787,871 
    FM Classes A, B1, C3.....  ...............  ..............  ...............  ..............       3,365,731 
    FM Construction Permits..  ...............  ..............  ...............  ..............         310,670 
Satellite TV.................  ...............  ..............  ...............  ..............          97,164 
Satellite TV Construction                                                                                       
 Permit......................  ...............  ..............  ...............  ..............           2,440 
VHF Television...............       3,660,252        1,433,099       5,093,351        5,403,403                 
    VHF Markets 1-10.........  ...............  ..............  ...............  ..............       1,187,582 
    VHF Markets 11-25........  ...............  ..............  ...............  ..............       1,436,145 
    VHF Markets 26-50........  ...............  ..............  ...............  ..............       1,144,429 
    VHF Markets 51-100.......  ...............  ..............  ...............  ..............       1,064,163 
    VHF Remaining Markets....  ...............  ..............  ...............  ..............         485,476 
    VHF Construction Permits.  ...............  ..............  ...............  ..............          23,950 
UHF Television...............       2,549,806          998,326       3,548,132        3,764,121  ...............
     UHF Markets 1-10........  ...............  ..............  ...............  ..............       1,181,817 
    UHF Markets 11-25........  ...............  ..............  ...............  ..............         913,584 
    UHF Markets 26-50........  ...............  ..............  ...............  ..............         731,930 
    UHF Markets 51-100.......  ...............  ..............  ...............  ..............         606,046 
    UHF Remaining Markets....  ...............  ..............  ...............  ..............         175,281 
  UHF Construction Permits...                                                                           117,518 
Auxiliaries..................         242,897          95,1023         37,9993           58,574         358,574 
International HF Broadcast...         211,016           82,619         293,635          311,510         433,299 
LPTV/Translators/Boosters....         258,297          101,131         359,427          381,307         380,729 
CARS.........................          56,147           21,983          78,131           82,887          82,761 
Cable Systems................      18,871,818        7,388,882      26,260,700       27,859,291      27,859,291 
IXC, LECs, CAPS, Others......      37,118,528       14,533,016      51,651,544       54,795,774      54,795,774 
CMRS Mobile Services                                                                                            
 (Cellular/Public Mobile)*...       8,507,532        3,330,954      11,838,486       12,559,141      12,559,141 
CMRS One-Way Paging..........         649,651          254,358         904,009          959,039         959,039 
Domestic Public Fixed/                                                                                          
 Commercial Microwave........          61,900           24,236          86,136           91,379          91,379 
MDS/MMDS.....................         798,729          312,726       1,111,455        1,179,114       1,179,114 
International Circuits.......       4,766,610        1,866,270       6,632,880        7,036,649       3,928,584 
International Public Fixed...          22,621            8,857          31,478           33,394         101,103 
Earth Stations...............         176,173           68,977         245,150          260,074       1,415,445 
Space Stations                                                                                                  
 (Geosynchronous)............       4,595,562        1,799,300       6,394,862        6,784,142       5,055,163 
Space Stations (Low Earth                                                                                       
 Orbit)......................           4,451            1,743           6,194            6,571       2,412,035 
INTELSAT/INMARSAT Signatory..           7,441            2,914          10,355           10,985       1,097,692 
Overhead & Other Indirect                                                                                       
 Costs.......................      40,452,376   ..............  ...............  ..............  ...............
                              ----------------------------------------------------------------------------------

[[Page 37434]]

                                                                                                                
        Total................     143,771,096       40,452,376     143,771,096      152,523,000     152,520,988 
        Total Revenue                                                                                           
         Requirement.........     152,523,000   ..............     152,523,000      152,523,000     152,523,000 
                              ----------------------------------------------------------------------------------
            Difference.......      (8,751,904)  ..............      (8,751,904)               0          (2,012) 
----------------------------------------------------------------------------------------------------------------
* CMRS actual FY 1996 regulatory costs have been reduced $149,233 to exclude amounts inadvertantly included in  
  the NPRM.                                                                                                     
** 1.060873875 factor applied                                                                                   
*** The pro rated costs shown in the previous column needed to be adjusted to accurately reflect full-year costs
  attributable to each international fee category. This was necessary because certain cost accounting fee codes 
  associated with international activities were utilized for only a small portion of FY 1996. This resulted in a
  skewed allocation of costs. Actual activity FTEs were utilized to make this adjustment. In making these       
  adjustments to international fee costs, overall costs attributable to international activities did not change.
  Additionally, adjustments were made in this column to sub-allocate actual TV and radio costs to markets and   
  station class, respectively. This was accomplished on a proportional basis by the same ratios between the     
  markets and classes as those which exist between the pro-rated revenue requirements calculated for the FY 1997
  TV and radio regulatory fees.                                                                                 
                                                                                                                
 Note: Columns may not add due to rounding.                                                                     


[[Page 37435]]


                                                                                          Attachment E--Calculation of FY 1997 Regulatory Fees                                                                                          
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Costs vs.     Pro-rated                                                                                           Computed     Rounded               
                                                       Pro-rated     Adjusted       revenue       revenue                      Round 1     Round 1 pro-      Round 2       Round 2    Round 2 pro-    new FY      new FY                
                    Fee category                        revenue      activity     requirement   requirement  Round 1 target   adjustable   rated target      target      adjustable   rated target     1997        1997      Expected FY
                                                      requirement      costs      difference     plus 25%        revenue        target       revenue**       revenue       target      revenue***   regulatory  regulatory  1997 revenue
                                                                                   (percent)      ceiling                      revenue                                     revenue                      fee         fee                 
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base, SMRS)..................       550,996       792,718        43.87        688,745         688,745  ...........        688,745        688,745  ............       688,745         10          10        708,750
Private Microwave..................................       415,920     1,324,655       218.49        519,900         519,900  ...........        519,900        519,900  ............       519,900         10          10        536,000
IVDS...............................................             0       472,293  ............             0               0  ...........              0              0  ............             0  ..........  ..........  ............
Marine (Ship)......................................       646,369     5,920,722       816.00        807,961         807,961  ...........        807,961        807,961  ............       807,961          4           5        970,000
GMRS/Other LM......................................     1,381,031     6,693,348       384.66      1,726,289       1,726,289  ...........      1,726,289      1,726,289  ............     1,726,289          4           5      2,072,500
Aviation (Aircraft)................................        70,634       934,905      1223.59         88,293          88,293  ...........         88,293         88,293  ............        88,293          4           5        106,000
Marine (Coast).....................................        39,982       732,084      1731.03         49,978          49,978  ...........         49,978         49,978  ............        49,978          4           5         60,000
Aviation (Ground)..................................        45,979       476,817       937.03         57,474          57,474  ...........         57,474         57,474  ............        57,474          4           5         69,000
Amateur Vanity Call Signs..........................       333,180       245,308       -26.37        416,475         245,308      245,308        310,879        310,879       310,879       311,096          3           5        500,000
AM Class A.........................................       104,119       189,930        82.42        130,149         130,149  ...........        130,149        130,149  ............       130,149      1,735       1,725        129,375
AM Class B.........................................     1,315,761     2,401,649        82.53      1,644,701       1,644,701  ...........      1,644,701      1,644,701  ............     1,644,701        958         950      1,631,150
AM Class C.........................................       315,011       574,836        82.48        393,764         393,764  ...........        393,764        393,764  ............       393,764        389         390        395,070
AM Class D.........................................       772,445     1,409,793        82.51        965,556         965,556  ...........        965,556        965,556  ............       965,556        479         480        967,680
AM Construction Permits............................         5,908        11,010        86.36          7,385           7,385  ...........          7,385          7,385  ............         7,385        194         195          7,410
FM Classes C,C1,C2,B...............................     3,621,944     4,787,871        32.19      4,527,430       4,527,430  ...........      4,527,430      4,527,430  ............     4,527,430      1,735       1,725      4,500,525
FM Classes A,B1,C3.................................     2,546,006     3,365,731        32.20      3,182,508       3,182,508  ...........      3,182,508      3,182,508  ............     3,182,508      1,152       1,150      3,176,300
FM Construction Permits............................       235,258       310,670        32.06        294,073         294,073  ...........        294,073        294,073  ............       294,073        958         950        308,750
Satellite TV.......................................        77,398        97,164        25.54         96,748          96,748  ...........         96,748         96,748  ............        96,748        958         950         95,950
Satellite TV Construction Permit...................         1,944         2,440        25.51          2,430           2,430  ...........          2,430          2,430  ............         2,430        347         345          2,415
VHF Markets 1-10...................................     1,528,186     1,187,582       -22.29      1,910,233       1,187,582    1,187,582      1,505,023      1,505,023     1,505,023     1,506,076     35,025      35,025      1,618,950
VHF Markets 11-25..................................     1,848,038     1,436,145       -22.29      2,310,048       1,436,145    1,436,145      1,820,027      1,820,027     1,820,027     1,821,301     28,458      28,450      1,416,000
VHF Markets 26-50..................................     1,472,656     1,144,429       -22.29      1,840,820       1,144,429    1,144,429      1,450,335      1,450,335     1,450,335     1,451,350     18,607      18,600      1,719,900
VHF Markets 51-100.................................     1,369,370     1,064,163       -22.29      1,711,713       1,064,163    1,064,163      1,348,614      1,348,614     1,348,614     1,349,558      9,851       9,850      1,253,550
VHF Remaining Markets..............................       624,713       485,476       -22.29        780,891         485,476      485,476        615,244        615,244       615,244       615,674      2,736       2,725        630,000
VHF Construction Permits...........................        30,819        23,950       -22.29         38,524          23,950       23,950         30,352         38,524  ............        23,950      4,790       4,800         38,500
UHF Markets 1-10...................................     2,471,085     1,181,817       -52.17      3,088,856       1,181,817    1,181,817      1,497,717      1,497,717     1,497,717     1,498,765     16,840      16,850      1,524,125
UHF Markets 11-25..................................     1,910,232       913,584       -52.17      2,387,790         913,584      913,584      1,157,785      1,157,785     1,157,785     1,158,595     13,472      13,475      1,126,600
UHF Markets 26-50..................................     1,530,407       731,930       -52.17      1,913,009         731,930      731,930        927,575        927,575       927,575       928,224      8,757       8,750        792,350
UHF Markets 51-100.................................     1,267,195       606,046       -52.17      1,583,994         606,046      606,046        768,042        768,042       768,042       768,580      4,715       4,725        721,275
UHF Remaining Markets..............................       366,498       175,281       -52.17        458,123         175,281      175,281        222,134        222,134       222,134       222,289      1,347       1,350        301,125
UHF Construction Permits...........................       245,720       117,518       -52.17        307,150         117,518      117,518        148,931        148,931       148,931       149,035      2,981       2,975        248,750
Auxiliaries........................................       777,420       358,574       -53.88        971,775         358,574      358,574        454,421        454,421       454,421       454,739         23          25        500,000
International HF Broadcast.........................         1,866       433,299    23,120.74          2,333           2,333  ...........          2,333          2,333  ............         2,333        389         390          2,340
LPTV/Translators/Boosters..........................       464,231       380,729       -17.99        580,289         380,729      380,729        482,498        482,498       482,498       482,836        219         220        484,000
CARS...............................................       591,950        82,761       -86.02        739,938          82,761       82,761        104,883        104,883       104,883       104,956         64          65        106,600
Cable Systems......................................    39,703,950    27,859,291       -29.83     49,629,938      27,859,291   27,859,291     35,306,079     35,306,079    35,306,079    35,330,794       0.54        0.54     35,100,000
IXC, LECs, CAPS, Others............................    64,960,438    54,795,774       -15.65     81,200,548      54,795,774   54,795,774     69,442,684     69,442,684    69,442,684    69,491,294    0.00116     0.00116     69,234,600
CMRS Mobile Services (Cellular/Public Mobile)......     8,930,335    12,559,141        40.63     11,162,919      11,162,919  ...........     11,162,919     11,162,919  ............    11,162,919       0.24        0.24     11,352,000
CMRS One-Way Paging................................       907,360       959,039         5.70      1,134,200         959,039      959,039      1,215,390      1,134,200  ............     1,134,200       0.03        0.03      1,225,500
Domestic Public Fixed/Commercial Microwave.........     3,244,035        91,379       -97.18      4,055,044          91,379       91,379        115,805        115,805       115,805       115,886          6           5         94,225
MDS/MMDS...........................................       196,932     1,179,114       498.74        246,165         246,165  ...........        246,165        246,165  ............       246,165        215         215        245,960
International Circuits.............................       728,554     3,928,584       439.23        910,693         910,693  ...........        910,693        910,693  ............       910,693          6           5        820,000
International Public Fixed.........................         3,748       101,103     2,597.52          4,685           4,685  ...........          4,685          4,685  ............         4,685        312         310          4,650
Earth Stations.....................................     1,027,305     1,415,445        37.78      1,284,131       1,284,131  ...........      1,284,131      1,284,131  ............     1,284,131        514         515      1,287,500
Space Stations (Geosynchronous)....................     3,213,604     5,055,163        57.31      4,017,005       4,017,005  ...........      4,017,005      4,017,005  ............     4,017,005     97,976      97,975      4,016,975
Space Stations (Low Earth Orbit)...................       108,533     2,412,035     2,122.40        135,666         135,666  ...........        135,666        135,666  ............       135,666    135,666     135,675        135,675
INTELSAT/INMARSAT Signatory........................       518,484     1,097,692       111.71        648,105         648,105  ...........        648,105        648,105  ............       648,105    324,053     324,050        648,100
                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Estimated Revenue Collected..............   152,523,549   152,520,988  ............   190,654,436     127,435,859   93,840,776    152,519,498    152,446,480   117,678,673   152,514,281  ..........  ..........   152,885,125
    Total Revenue Requirement......................   152,523,000   152,523,000  ............   152,523,000     152,523,000  ...........    152,523,000    152,523,000  ............   152,523,000  ..........  ..........   152,523,000
                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      Difference...................................           549       (2,012)  ............    38,131,436    (25,087,142)  ...........        (3,502)       (76,520)  ............       (8,719)  ..........  ..........      362,125 
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
**1.2673 factor applied    *** 1.0007 factor applied.                                                                                                                                                                                   


[[Page 37436]]

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 Messaging Services (per unit) (47 CFR Parts 20, 22                 
 and 90)................................................             .03
Multipoint Distribution Services (per call sign) (47 CFR                
 Part 21)...............................................             215
Radio--AM and FM (47 CFR Part 73):                        ..............
    Group 1.............................................           2,000
    Group 2.............................................           1,800
    Group 3.............................................           1,600
    Group 4.............................................           1,400
    Group 5.............................................           1,200
    Group 6.............................................           1,000
    Group 7.............................................             800
    Group 8.............................................             600
    Group 9.............................................             400
    Group 10............................................             200
AM Construction Permits.................................             195
FM Construction Permits.................................             950
TV (47 CFR Part 73) VHF Commercial:                       ..............
    Markets 1-10........................................          35,025
    Markets 11-25.......................................          28,450
    Markets 26-50.......................................          18,600
    Markets 51-100......................................           9,850
    Remaining Markets...................................           2,725
    Construction Permits................................           4,800
TV (47 CFR Part 73) UHF Commercial:                       ..............
    Markets 1-10........................................          16,850
    Markets 11-25.......................................          13,475
    Markets 26-50.......................................           8,750
    Markets 51-100......................................           4,725
    Remaining Markets...................................           1,350
    Construction Permits................................           2,975
Satellite Television Stations (All Markets).............             950
Construction Permits--Satellite Television Stations.....             345
Low Power TV, TV/FM Translators & Boosters (47 CFR Part                 
 74)....................................................             220
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)....................................................             .54
Interstate Telephone Service Providers (per revenue                     
 dollar)................................................          .00116
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).............................          97,975
Low Earth Orbit Satellite (per operational system) (47                  
 CFR Part 25)...........................................         135,675
International Bearer Circuits (per active 64KB circuit).               5
International Public Fixed (per call sign) (47 CFR Part                 
 23)....................................................             310
International (HF) Broadcast (47 CFR Part 73)...........             390
                                                                        
------------------------------------------------------------------------
\1\ No fee.                                                             

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BILLING CODE 6712-01-C

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. 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, 1995, and 1996 and the services subject to the fee schedule, 
and the comments of the parties in our proceeding to adopt fees for 
FY 1997. 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. 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 501of 
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 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. 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).150 For FY 1997, 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.151 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.
---------------------------------------------------------------------------

    \150\  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.
    \151\  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

[[Page 37442]]

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, 
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, there is no 
regulatory fee 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, 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, 
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, 
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, 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 $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, 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, 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, 
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.152
---------------------------------------------------------------------------

    \152\ 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 broadband 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: Specialized Mobile Radio Services (part 90); 153 
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), assigned to its customers, including resellers of its 
services. For FY 1997, the regulatory fee is $.24 per unit.
---------------------------------------------------------------------------

    \153\  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 section 
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) Messaging Services: 
The Commercial Mobile Radio Service (CMRS) is an ``umbrella'' 
descriptive term attributed to various existing narrowband 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 
Messaging Services include certain licensees which formerly were 
licensed as part of the Private Radio Services (e.g., Private 
Paging, qualifying interconnected Business Radio Services, and 220-
222 MHz Land Mobile Systems), 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-

[[Page 37443]]

way and two-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 CMRS 
One-Way Paging regulatory fee category with a CMRS Messaging 
Services category for regulatory fee collection purposes. Each 
licensee in the CMRS Messaging Services will pay an annual 
regulatory fee for each unit (pager, telephone number, or mobile) 
assigned to its customers, including resellers of its services. For 
FY 1997, the regulatory fee is $.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 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.154 In response to numerous requests, we have 
combined class of station and grade B contour population data to 
formulate a schedule of radio fees which differentiate between 
stations based on class of station and population served. In 
general, higher class stations and stations in metropolitan areas 
will pay higher fees than lower class stations and stations located 
in rural areas. The specific fee that a station must pay is 
determined by where it ranks after weighting its fee requirement 
(determined by class of station) with its population. The regulatory 
fee classifications for Radio Stations for FY 1997 are as follows:
---------------------------------------------------------------------------

    \154\ 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.

Group 1........................................................   $2,000
Group 2........................................................    1,800
Group 3........................................................    1,600
Group 4........................................................    1,400
Group 5........................................................    1,200
Group 6........................................................    1,000
Group 7........................................................      800
Group 8........................................................      600
Group 9........................................................      400
Group 10.......................................................      200
                                                                        

    18. Licensees may determine the appropriate fee payment by 
referring to the list provided at Attachment K to this Report and 
Order. This same information will be available on the FCC's internet 
world wide web site (http://www.fcc.gov), by calling the FCC's 
National Call Center (1-888-225-5322), and will be included in the 
Public Notices mailed to each licensee.

b. Construction Permits--Commercial AM Radio

    19. This category includes holders of permits to construct new 
Commercial AM Stations. For FY 1997, 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

    20. This category includes holders of permits to construct new 
Commercial FM Stations. For FY 1997, permittees will pay a fee of 
$950 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.

d. Commercial Television Stations

    21. 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. 
65, 1997 Edition, Warren Publishing, Inc. The fees for each category 
of station are as follows:

VHF Markets 1-10.............................................    $35,025
VHF Markets 11-25............................................     28,450
VHF Markets 26-50............................................     18,600
VHF Markets 51-100...........................................      9,850
VHF Remaining Markets........................................      2,725
                                                                        
UHF Markets 1-10.............................................     16,850
UHF Markets 11-25............................................     13,475
UHF Markets 26-50............................................      8,750
UHF Markets 51-100...........................................      4,725
UHF Remaining Markets........................................      1,350
                                                                        

e. Commercial Television Satellite Stations

    22. Commonly owned Television Satellite Stations in any market 
(authorized pursuant to Note 5 of Sec. 73.3555 of the Commission's 
Rules) that retransmit programming of the primary station are 
assessed a fee of $950 annually. Those stations designated as 
Television Satellite Stations in the 1997 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

    23. This category includes holders of permits to construct new 
Commercial VHF Television Stations. For FY 1997, VHF permittees will 
pay an annual regulatory fee of $4,800. 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

    24. This category includes holders of permits to construct new 
UHF Television Stations. For FY 1997, UHF Television permittees will 
pay an annual regulatory fee of $2,975. 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

    25. The fee for UHF and VHF Television Satellite Station 
construction permits for FY 1997 is $345. 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

    26. 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, licensees in low power television, FM 
translator and booster, and TV translator and booster category will 
pay a regulatory fee of $220 for each license held.

j. Broadcast Auxiliary Stations

    27. 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 infra). For FY 1997, licensees of 
Commercial Auxiliary Stations will pay a $25 annual regulatory fee 
on a per call sign basis.

k. Multipoint Distribution Service

    28. 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, MDS

[[Page 37444]]

and MMDS stations will pay an annual regulatory fee of $215 per call 
sign.

3. Cable Services

a. Cable Television Systems

    29. 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, 
Cable Systems will pay a regulatory fee of $.54 per 
subscriber.155 Payments for Cable Systems are to be made 
on a per subscriber basis as of December 31, 1996. 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.
---------------------------------------------------------------------------

    \155\ 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

    30. 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, 
licensees will pay an annual regulatory fee of $65 per CARS license.

4. Common Carrier Services

a. Commercial Microwave (Domestic Public Fixed Radio Service)

    31. 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 infra).

b. Interstate Telephone Service Providers

    32. 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, 
carriers must 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 0.00116 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................................  ...........      0.00116
(6) Fee due (4)times(5).......................  ...........  ...........
------------------------------------------------------------------------

5. International Services

a. Earth Stations

    33. 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.156 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, 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.
---------------------------------------------------------------------------

    \156\ 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.
---------------------------------------------------------------------------

    34. Receive-only earth stations. For FY 1997, there is no 
regulatory fee for receive-only earth stations.

b. Space Stations (Geosynchronous)

    35. 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, entities authorized to operate 
geosynchronous space stations (including DBS satellites) will be 
assessed an annual regulatory fee of $97,975 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)

    36. 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/

[[Page 37445]]

or private carrier basis. For FY 1997, entities authorized to 
operate Low Earth Orbit Satellite Systems will be assessed an annual 
regulatory fee of $135,675 per operational system in orbit. Payment 
is required for any LEO System that has one or more operational 
satellites (launched, tested and providing service).

d. International Bearer Circuits

    37. Regulatory fees for International Bearer Circuits are to be 
paid by 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 non-common carrier 
submarine cable operators is required for circuits sold on an 
indefeasible right of use (IRU) basis or leased to any customer, 
including themselves or their affiliates, 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. Payment of the international bearer circuit fee 
is also required by non-common carrier satellite operators for 
circuits sold or leased to any customer, including themselves or 
their affiliates, other than an international common carrier 
authorized by the Commission to provide U.S. international common 
carrier services. The fee is based upon active 64 Kbps circuits, or 
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, the regulatory fee is $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 
------------------------------------------------------------------------

e. 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, International Public Fixed Radio Service licensees 
will pay a $310 annual regulatory fee per call sign.

f. 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, 
International HF Broadcast Stations will pay an annual regulatory 
fee of $390 per station license.

Attachment I--Description of FCC Activities

I. Activities That Are Not Included In Regulatory Fees

    1. 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. Although Authorization of 
Service is described in this attachment, 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).

II. Activities That Are Included In Regulatory Fees

    2. 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.
    3. 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.
    4. 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.

Attachment J--FCC Cost Accounting Activity and Project Codes

Activity Codes

10  Authorization of Service
11  TeleCom Act--Authorization of Service
20  Policy and Rule Making
21  TeleCom Act--Policy and Rule Making
30  Enforcement
31  TeleCom Act--Enforcement
40  Public Information Services
41  TeleCom Act--Public Information Services
51  Spectrum Auction Direction & Support
70  Executive Direction & Support
80  Bureau/Office Direction & Support
91  Spectrum Auction--Authorization of Service
92  Spectrum Auction--Policy & Rule Making
93  Spectrum Auction--Enforcement
94  Spectrum Auction--Public Information Services

Project Codes

N01  Land Mobile--Exclusive Use
N02  Microwave
N03  Interactive Video Data Service (IVDS)
N04  Aviation (Aircraft)
N05  Aviation (Ground)
N06  Marine (Ship)
N07  Marine (Coast)
N08  General Mobile Radio Service (GMRS)
N09  Land Mobile--Shared Use
N10  Amateur Vanity Call Signs
N11  Cable Antenna Relay Service (CARS)
N12  Cable Television Systems
N13  Domestic Public Fixed Radio
N14  Cellular Radio
N15  Public Mobile Radio/CMRS/two-way paging
N16  Public Mobile Radio(one-way paging)
N17  International Public Fixed Radio
N18  Earth Stations
N19  Space Stations
N20  IXCS, LECS, and Other Providers
N21  International Bearer Circuits
N22  Personal Communication Services (PCS)
N23  AM Radio
N24  FM Radio
N25  VHF Television
N26  UHF Television
N27  Broadcast Auxiliary
N28  LPTV/Translators/Boosters
N29  International Short Wave
N30  Multipoint Distribution Service/MMDS
N31  Amateur Radio
N32  Direct Broadcast Satellite (DBS)
N33  Commercial Radio Operators
N34  Restricted Permits
N35  Citizens' Band and Radio Control
N36  Certification/Type Accept.& Approval/Notifications
N37  Other
N38  Low Earth Orbiting Satellites
N39  Signatory to Inmarsat and Instelsat

Project Codes-Spectrum Auction Only

N51  Cellular Unserved
N52  IVDS RSAs/Defaults
N53  800 MHz SMR
N54  PCS Narrowband

[[Page 37446]]

N55  PCS D, E, & F
N56  LMDS 28 GHz
N57  LMS (AVM)
N58  DARS
N59  220 MHz

Project Codes-Reimbursable Agreements

P01  Special Travel Initiatives
P02  Travel Reimbursement Program--Section 1353
P03  U.S. Department of Commerce
P04  Bureau of Alcohol, Tobacco and Firearms
P05  U. S. Customs Service
P06  Office of Naval Research
P07  VOA Computer Models
P08  NTIS/ECAC
P09  NTIS Tapes--Master Files
P10  NTIS Tapes--Public Access
P11  U.S. Coast Guard
P12  Drug Enforcement Agency
P13  Radio Marti
P14  ITU Fellows
P15  TV Marti
P16  NTIS--Source Program
P17  Miscellaneous Reimbursable

Attachment K--AM/FM Fees

    Note: This attachment because of its size and cost is not being 
printed in the Federal Register. The information contained in this 
attachment is available by calling the FCC National Call Center at 
1-888-225-5322 and is also available at the FCC web site (http://
www.fcc.gov).

Attachment L--Parties Filing Comments and Reply Comments

Parties Filing Comments on the Notice of Proposed Rule Making

Ram Mobile Data USA Limited Partnership
American Mobile Telecommunications Association, Inc.
Paging Network, Inc.
Personal Communications Industry Association
IXC Carrier, Inc.
Industrial Telecommunications Association, Inc.
L/Q Licensee, Inc.
National Association of Broadcasters
Montana Broadcasters Association
Arkansas Broadcasters Association
Wright Broadcasting Systems, Inc.
PanAmSat Corporation
GE American Communications, Inc.
SBC Communications, Inc.
Comsat Corporation
American Radio Relay league, Inc.

Parties Filing Comments on the Initial Regulatory Flexibility Analysis

American Mobile Telecommunications Association, Inc.

Parties Filing Reply Comments on the Notice of Proposed Rule Making

Century Cellunet, Inc.
Arch Communications Group, Inc.
Personal Communications Industry Association
PanAmSat Corporation
GE American Communications, Inc.
Hughes Communications, Inc./DIRECTV, Inc. (Joint)
Columbia Communications Corporation
S&S Communications
Ameritech
Missouri Broadcasters Association

[FR Doc. 97-17240 Filed 7-10-97; 8:45 am]
BILLING CODE 6712-01-P