[Federal Register Volume 62, Number 214 (Wednesday, November 5, 1997)]
[Rules and Regulations]
[Pages 59822-59825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29176]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 96-186; FCC 97-384]


Assessment and Collection of Regulatory Fees for Fiscal Year 1997

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission is revising its collection procedures for 
regulatory fees in order to help assure increased accuracy and 
timeliness of regulatory fee payments. First, permittees, licensees or 
other entities subject to a regulatory fee and claiming an exemption 
from regulatory fees based upon its status as a nonprofit entity, shall 
make a one-time filing with the Secretary of the Commission written 
documentation establishing the basis for its exemption with 60 days of 
its coming under the regulatory jurisdiction of the Commission or at 
the time its fee payment would otherwise be due, whichever is sooner, 
or at such other time as required by the Managing Director. Second, 
for-profit purchasers or assignees of licenses, stations or facilities 
previously owned by non-profit entities not subject to regulatory fees 
must notify the Secretary of the Commission of such purchase or 
reassignment within 60 days of the effective date of the purchase or 
assignment. Third, the Commission is requiring licensees of Commercial 
Mobile Radio Service (CMRS) stations to retain for two years, and 
submit to the Commission upon request, documentation used in 
calculating their fee payments. Finally, the Commission is delegating 
authority to the Managing Director to publish annually in the Federal 
Register lists of those commercial communications firms and businesses 
for commercial purposes that have paid a regulatory fee for the 
preceding fiscal year.

EFFECTIVE DATE: November 5, 1997.

ADDRESSES: Federal Communications Commission, Room 222, 1919 M Street, 
N.W., Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Regina W. Dorsey, Chief, Billings & 
Collections Branch, (202) 418-1995.

SUPPLEMENTARY INFORMATION:

    1. In the Further Notice of Proposed Rulemaking in this proceeding, 
the Commission proposed to adopt several new procedures in order to 
more efficiently and equitably collect the annual regulatory fees 
required by

[[Page 59823]]

Section 9 of the Communications Act, 47 U.S.C. 159. See Further Notice 
of Proposed Rulemaking in the Matter of Assessment and Collection of 
Regulatory Fees for Fiscal Year 1997, 62 FR 40036 (July 25, 
1997)(FNPRM). We address below the comments filed in this proceeding 
and adopt the proposed new procedures with some 
modifications.1
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    \1\ See Attachment for a list of commenters who responded to the 
FNPRM.
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    2. Specifically, we adopt a requirement that non-profit entities 
claiming an exemption from regulatory fees make a one-time filing of 
documentation establishing their exempt status. We also adopt a 
requirement that for-profit purchasers or assignees of stations or 
facilities previously owned by non-profit entities notify the 
Commission of such reassignment or sale. Additionally, we adopt a 
requirement that licensees of Commercial Mobile Radio Services (CMRS) 
maintain, and submit upon request, documentation supporting the 
calculations of their fee payments. Finally, the amendments will 
authorize the Managing Director to publish annually in the Federal 
Register the names of all fee payers.

Documentation for Non-Profit Entities

    3. Section 1.1162(c) of the Commission's Rules currently exempts 
from payment of regulatory fees those entities possessing non-profit 
status under section 501 of the Internal Revenue Code, 26 U.S.C. 501, 
or certification as a non-profit corporation or other non-profit entity 
by a state or other governmental authority. See 47 CFR 1.1162(c). The 
FNPRM proposed a one-time requirement that non-profit entities claiming 
exemptions from the regulatory fee requirement submit documentation 
establishing their non-profit status. Currently, non-profit entities 
are required to file such documentation only when requested by the 
Commission. In its comments, the National Telephone Cooperative 
Association (NTCA) opposed this proposed requirement, arguing that the 
FNPRM failed to demonstrate a need for the filing requirement.
    4. We are adopting the requirement for filing non-profit 
documentation as proposed. We believe this requirement will 
substantially assist us in administering the fee program. Development 
of a comprehensive data base of exempt entities will enable us to 
assure that only those entities entitled to the exemption benefit from 
it. It will also help assure that we calculate fees based upon a more 
accurate assessment of the number of entities expected to pay fees. The 
one-time filing requirement will thus enable us to more equitably 
establish appropriate fees for all payers. Further, although NTCA 
expresses concern regarding the burden of the filing requirement, we 
believe that duplication and mailing of a document already retained in 
the ordinary course of an entity's business for tax and other purposes 
results in only a minimal administrative burden. We will thus require 
that all entities claiming an exemption from payment of regulatory fees 
file a copy of the documentation supporting their non-profit status. 
These documents must be submitted to the Secretary of the Commission at 
a time to be established in a public notice which will be published in 
the Federal Register. Entities claiming non-profit status must also 
notify the Secretary within sixty days of any change in their non-
profit status; and for-profit purchasers or assignees of stations or 
facilities previously owned or operated by non-profit entities must 
also notify the Secretary of the purchase or reassignment within 60 
days of the purchase or assignment.
    5. NTCA also requested that we permit entities claiming exemption 
from payment of a regulatory fee to establish their non-profit status 
using types of documentation other than their current IRS determination 
letters or certification from a state or other governmental authority. 
Specifically, NTCA argues that an entity's Articles of Incorporation 
are the best evidence of its non-profit status and the Commission 
should also accept the Articles, annual state reports or similar 
documents. NTCA believes that its proposal will lessen the 
administrative burden on small entities. We note that IRS determination 
letters and state or government certifications are generally one or two 
page documents maintained as part of an entity's business files, which 
can easily be copied and filed with the Commission. Nevertheless, if 
for some reason an entity is unable to produce governmental 
certification, the amended rules also permit submission of other 
documents establishing non-profit status, as long as the documents bear 
evidence that non-profit status has been approved by a state or other 
governmental authority, consistent with the laws or regulations of the 
jurisdiction.

Documentation of CMRS Fees

    6. The FNPRM proposed to require Commercial Mobile Radio Service 
(CMRS) licensees to retain documents used in the calculation of their 
regulatory fees for a period of three years. A number of commenters 
argued that the Commission should not specify a format for those 
documents; that CMRS licensees should continue to retain flexibility in 
maintaining record keeping systems; that they should not be required to 
generate new or additional paperwork; and that they should not be 
required to substantiate fees in a manner not required for other 
services. See Comments filed by Bell Atlantic, NYNEX Mobile, Inc., 
Rural Cellular Association, Rural Telecommunications Group and GTE 
Service Corporation (GTE).
    7. We agree that CMRS licensees should have maximum flexibility to 
determine what documents they will use to calculate fees and that they 
should not be required to generate new or additional paperwork. Our 
proposal required only that CMRS entities retain the work papers used 
or developed in the course of calculating their fees. Thus, we were not 
requiring that CMRS licensees undertake new or additional paperwork, or 
utilize any particular format for calculating their fees. Also to the 
extent this proposal imposed somewhat different requirements on CMRS 
licensees, we believe those differences were justified. We have 
identified several discrepancies between projected and actual CMRS 
regulatory fees which are of concern. For example, for FY 1996 the 
actual number of units for which regulatory fees were paid was 18.1% 
below the total that was used to formulate the CMRS fees. While this 
disparity may result from errors in estimating the overall number of 
subscribers in the CMRS services, we believe that closer oversight of 
CMRS fee payments is prudent. Assessing more accurate fees would also 
benefit, without any significant burden, all CMRS licensees by helping 
to ensure that all CMRS fee payers fully comply with their obligation 
to contribute to the recovery of our costs of regulating CMRS. Thus, we 
will require CMRS licensees to retain, and submit to the Commission 
upon request, those documents which were actually used in the 
calculation of their fee payments and that demonstrate the accuracy of 
the payment. This will enable the Commission to efficiently audit the 
fee payments of CMRS licensees without creating any undue additional 
burden.
    8. GTE and United States Cellular Corporation (USCC) also argue 
that our proposed requirement that CMRS regulatees maintain their 
payment records for a three year period is unreasonable. GTE notes that 
our rules require telephone companies to retain their billing records 
for only eighteen

[[Page 59824]]

months. See 47 CFR 42.6. We agree that requiring CMRS licensees to 
retain these records for three years is unnecessary. We expect that any 
verification of fee payments would be accomplished within two years 
from the time that the fee payments are made. Thus, we are modifying 
our proposal and will require only a two year retention period for this 
documentation. Southwestern Bell Mobile Systems, Inc. also asserts that 
the fee documentation may contain highly confidential customer 
information. In this regard, CMRS licensees with concerns about the 
disclosure of sensitive information in any submissions to the 
Commission may request confidential treatment pursuant to Sec. 0.459 of 
the Rules. See 47 CFR 0.459.

Publication of Fee Data

    9. In the FNPRM, we proposed to publish in the Federal Register a 
list of all commercial regulatees that have paid their regulatory fees, 
along with the amount of the fee paid by each fee payor, and the volume 
or number of units upon which the fee payment was based.2 
Many commenters opposed our proposal, contending that publication of 
fee payments and units would require regulatees to disclose highly 
confidential business information.
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    \2\ Southwestern Bell Mobil Systems also contends that the 
FNPRM's statement that regulatory fee payments by CMRS licensees 
shall be calculated on the ``number of pagers, cellular telephones, 
or PCS units'' is inconsistent with the fee payment requirements set 
forth in the Report and Order. We disagree. The Report and Order 
established fees for cellular telephone and PCS units in the CMRS 
Mobile Services and a fee for paging units in the CMRS Messaging 
Service.
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    10. We agree that the proposal to publish payment data could result 
in the disclosure of sensitive marketing information in some instances. 
We also conclude that there is an insufficient basis at this time to 
warrant disclosure of such information. Thus, we will not publish 
either fee payment information or the unit totals upon which a fee 
payment is calculated. We believe, however, that publication of the 
names of commercial fee payers may serve as a deterrent to non-payment. 
Thus, we delegate to the Managing Director authority to issue annually 
a public notice setting forth the names of commercial regulatory fee 
payers and to publish the public notice in the Federal Register.

Final Regulatory Flexibility Analysis

    11. As required by the Regulatory Flexibility Act 
(RFA),3 an Initial Regulatory Flexibility Analysis (IRFA) 
was incorporated in the Further Notice of Proposed Rulemaking In the 
Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 
1997, 62 FR 40036 (July 25, 1997). The Commission sought written public 
comments on the proposals in its FNPRM, including on the IRFA. This 
present Final Regulatory Flexibility Analysis (FRFA) conforms to the 
RFA, as amended.4
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    \3\ 5 U.S.C. Sec. 603.
    \4\ See 5 U.S.C. Sec. 604. The RFA, see 5 U.S.C. 601 et seq., 
has been amended by the Contract with America Advancement Act 
(CWAAA), Public Law 104-121, 110 Stat. 847 (1996). Title II of the 
CWAAA is ``The Small Business Regulatory Enforcement Fairness Act of 
1996'' (SBREFA).
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I. Need for and Objectives of this Report and Order

    12. This rulemaking proceeding was initiated in order to modify our 
collection procedures for regulatory fees in order to help assure 
increased accuracy and timeliness of regulatory fee payments.

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

    13. None.

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

    14. Under the RFA, small entities may include small organizations, 
small businesses, and small governmental jurisdictions. 5 U.S.C. 
601(6). The RFA, 5 U.S.C. 601(3), generally defines the term ``small 
business'' as having the same meaning as the term ``small business 
concern'' under the Small Business Act, 15 U.S.C. 632. A small business 
concern is one that: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) meets any additional 
criteria established by the Small Business Administration (SBA).
    15. The proposals adopted in this Report and Order affect a very 
broad array of small entities, including small entities described as 
cable services or systems, common carrier services and related 
entities, international services, mass media services, and wireless and 
commercial mobile services. In the rulemaking proceeding in this docket 
preceding the FNPRM, we extensively described the small entities that 
might be affected by this action, and have also described the numbers 
of such entities. (See ``Final Regulatory Flexibility Analysis,'' 
Attachment A of Report and Order, MD Docket No. 96-186, FCC 97-215, 
released June 26, 1997, 62 FR 37408 (July 11, 1997).) We hereby 
incorporate into this FRFA, by reference, those descriptive sections 
from the previous Report and Order.

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

    16. With certain exceptions, the Commission's Schedule of 
Regulatory Fees applies to all Commission licensees and regulatees. In 
the rulemaking proceeding in this docket preceding the FNPRM, we 
described the methodology used by affected entities to determine 
required fee amounts, the procedures for calculating and filing fee 
payments, the skills necessary to file, and the results of not filing 
in accordance with the rules. (See Report and Order, FCC 97-215 supra. 
at Attachment H and Sec. 1.1157 through 1.1167 of the Commission's 
Rules, 47 CFR 1.1157 through 1.1167.) We hereby incorporate into this 
FRFA, by reference, those descriptions. In addition, we note that the 
proposals adopted here require Commercial Mobile Radio Service (CMRS) 
licensees to maintain and make available to the FCC, upon request, 
documentation concerning the basis for their fee payments and that 
these documents be retained by the payer for two years; require that 
non-profit entities exempt from the regulatory fee requirement submit 
documentation of their non-profit status; that for-profit entities 
purchasing a station from a non-profit entity notify the Commission of 
the sale or reassignment; and authorize the Commission to publish 
annually, in the Federal Register, a list of those firms and 
individuals who paid a fee for the preceding fiscal year and who 
engaged in the provision of communications for commercial purposes.

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

    17. As described in the Paragraph 16, the Commission proposed 
certain modifications to the collection procedures for regulatory fees 
in order to help assure increased accuracy and timeliness of regulatory 
fee payments. Each of the above-described proposals that require 
compliance would entail some level of economic impact, and this impact 
would fall on some small entities. We believe, however, that these 
proposals, if adopted, would help ensure the integrity of the 
regulatory fees program. We have reduced the impact as a result of 
public comments. Documentation concerning the basis for CMRS fees must 
be retained for only two years rather than three, and need not be 
submitted to the Commission

[[Page 59825]]

unless requested. Further, this Report and Order authorizes the 
Managing Director the option to publish only the names of fee payers 
and not fee amounts and unit counts objected to by commenters.
    Report to Congress: The Commission shall include a copy of this 
Final Regulatory Flexibility Analysis, along with this Report and 
Order, in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601(a)(1)(A). A 
copy of this FRFA (or summary thereof) will also be published in the 
Federal Register, along with this Report and Order.

Ordering Clauses

    18. Accordingly, it is ordered, That the rule changes as specified 
above and as set forth in the Attachment are adopted.
    19. It is further ordered that the rule changes made herein will 
become effective November 5, 1997. This action is taken pursuant to 
Sections 4(i), 4(j), 9 and 303(r) of the Communications Act as amended, 
47 U.S.C. 154(i), 154(j), 159 and 303(r).

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

Rule Changes

    Part 1 of title 47 of the Code of Federal Regulations is amended as 
follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154, 207, 303 and 309(j) unless 
otherwise noted.

    2. Section 1.1157 is amended by adding a new paragraph (d) to read 
as follows:


Sec. 1.1157  Payment of charges for regulatory fees.

* * * * *
    (d) Any Commercial Mobile Radio Service (CMRS) licensee subject to 
payment of an annual regulatory fee shall retain for a period of two 
(2) years from the date on which the regulatory fee is paid, those 
business records which were used to calculate the amount of the 
regulatory fee.
    3. Section 1.1159 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 1.1159  Filing locations and receipts for regulatory fees.

* * * * *
    (e) The Managing Director may issue annually, at his discretion, a 
Public Notice setting forth the names of all commercial regulatees that 
have paid a regulatory fee and shall publish the Public Notice in the 
Federal Register.
    4. Section 1.1162 is amended by adding new paragraphs (c)(1) and 
(c)(2) to read as follows:


Sec. 1.1162  General exemptions from regulatory fees.

* * * * *
    (c) * * *
    (1) Any permittee, licensee or other entity subject to a regulatory 
fee and claiming an exemption from a regulatory fee based upon its 
status as a nonprofit entity, as described above, shall file with the 
Secretary of the Commission (Attn: Managing Director) written 
documentation establishing the basis for its exemption within 60 days 
of its coming under the regulatory jurisdiction of the Commission or at 
the time its fee payment would otherwise be due, whichever is sooner, 
or at such other time as required by the Managing Director. Acceptable 
documentation may include Internal Revenue Service determination 
letters, state or government certifications or other documentation that 
non-profit status has been approved by a state or other governmental 
authority. Applicants, permittees and licensees are required to file 
documentation of their nonprofit status only once, except upon request 
of the Managing Director.
    (2) Within sixty (60) days of a change in nonprofit status, a 
licensee or permittee previously claiming a 501(C) exemption is 
required to file with the Secretary of the Commission (Attn: Managing 
Director) written notice of such change in its nonprofit status or 
ownership. Additionally, for-profit purchasers or assignees of a 
license, station or facility previously licensed or operated by a non-
profit entity not subject to regulatory fees must notify the Secretary 
of the Commission (Attn: Managing Director) of such purchase or 
reassignment within 60 days of the effective date of the purchase or 
assignment.
* * * * *
    Note: The following attachment will not appear in the Code of 
Federal Regulations.

Attachment

    Comments were filed by the following parties:

GTE Service Corporation
United States Cellular Corporation
Saco River Cellular Corporation
Citizens Utilities Company
Cellular XL Associates
Cellular Telecommunications Industry Association
American Mobile Telecommunications Association
BellSouth Corporation
PrimCo Personal Communications
Rural Cellular Association
Bell Atlantic NYNEX Mobile, Inc.
Rural Telecommunications Group
National Telephone Cooperative Association
Southwestern Bell Mobile Systems, Inc., et. al.
Personal Communications Industry Association

[FR Doc. 97-29176 Filed 11-4-97; 8:45 am]
BILLING CODE 6712-01-P