[Federal Register Volume 63, Number 63 (Thursday, April 2, 1998)]
[Proposed Rules]
[Pages 16188-16215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8459]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 98-36; FCC 98-40]


Assessment and Collection of Regulatory Fees For Fiscal Year 1998

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is proposing to revise its Schedule of 
Regulatory Fees in order to recover the amount of regulatory fees that 
Congress has required it to collect for fiscal year 1998. Section 9 of 
the Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees. For fiscal year 1998

[[Page 16189]]

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

DATES: Comments are due April 22, 1998 and Reply Comments are due May 
4, 1998.

FOR FURTHER INFORMATION CONTACT: Terry Johnson, Office of Managing 
Director at (202) 418-0445.

SUPPLEMENTARY INFORMATION:

    Adopted: March 13, 1998
    Released: March 25, 1998.

                            Table of Contents                           
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                                                              Paragraph 
                           Topic                               numbers  
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I. Introduction...........................................        1-3   
II. Background............................................        4-7   
III. Discussion...........................................       8-42   
    A. Summary of FY 1998 Fee Methodology.................       8-12   
    B. Development of FY 1998 Fees........................      13-29   
        i. Adjustment of Payment Units....................         13   
        ii. Calculation of Revenue Requirements...........         14   
        iii. Calculation of Regulatory Costs..............      15-16   
        iv. Establishment of 25% Revenue Ceilings.........      17-18   
        v. Recalculation of Fees..........................         19   
        vi. Proposed Changes to Fee Schedule..............      20-28   
            a. Commercial AM/FM Radio.....................      21-25   
            b. Alternative Proposed Schedule for AM and FM              
             Radio Stations...............................         26   
        vii. Effect of Revenue Redistributions on Major                 
         Constituencies...................................         27   
    C. Other Issues.......................................      28-33   
        i. Distinguishing between CMRS Fee Categories.....      28-31   
        ii. Clarification of Operational LEO System.......         32   
        iii. Renaming of LEO Fee Category.................         33   
    D. Procedures for Payment of Regulatory Fees..........      34-40   
        i. Annual Payments of Standard Fees...............         35   
        ii. Installment Payments for Large Fees...........         36   
        iii. Advance Payments of Small Fees...............         37   
        iv. Minimum Fee Payment Liability.................         38   
        v. Standard Fee Calculations and Payments.........      39-40   
    E. Schedule of FY 1998 Regulatory Fees................         41   
IV. Procedural Matters....................................      42-46   
    A. Comment Period and Procedures......................         42   
    B. Ex Parte Rules.....................................         43   
    C. Initial Regulatory Flexibility Analysis............         44   
    D. Authority and Further Information..................      45-46   
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Attachment A--Initial Regulatory Flexibility Analysis
Attachment B--Sources of Payment Unit Estimates
Attachment C--Calculation of Revenue Requirements
Attachment D--Calculation of Regulatory Costs
Attachment E--Calculation of FY 1997 Regulatory Fees
Attachment F--Schedule of Regulatory Fees
Attachment G--Comparison Between FY 1997 and FY 1998 Fees
Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees
Attachment I--Description of FCC Activities
Attachment J--Factors, measurements and calculations that go into 
determining station signal contours and associated population 
coverages

I. Introduction

    1. By this Notice of Proposed Rulemaking, the Commission commences 
a proceeding to revise its Schedule of Regulatory Fees in order to 
collect 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) 1998. See 47 U.S.C. 159 (a).
    2. Congress has required that we collect $162,523,000 through 
regulatory fees in order to recover the costs of our enforcement, 
policy and rulemaking, international and user information activities 
for FY 1998. See Public Law 105-119 and 47 U.S.C. 159(a)(2). This 
amount is $10,000,000 or nearly 7% more than the amount that Congress 
designated for recovery through regulatory fees for FY 1997. See 
Assessment and Collection of Regulatory Fees for Fiscal Year 1997, FCC 
97-215, released June 26, 1997, 62 FR 37408 (July 11, 1997). Thus, we 
are proposing to revise our fees in order to collect the increased 
amount that Congress has required that we collect. Additionally, we 
propose to amend the Schedule in order to simplify and streamline the 
Fee Schedule. See 47 U.S.C. 159(b)(3).
    3. In proposing to revise our fees, we adjusted the payment units 
and revenue requirement for each service subject to a fee, consistent 
with sections 159(b)(2) and (3). In addition, we are proposing changes 
to the fees pursuant to public interest considerations. The current 
Schedule of Regulatory Fees is set forth in sections 1.1152 through 
1.1156 of the Commission's rules. See 47 CFR 1.1152 through 1.1156.

II. Background

    4. Section 9(a) of the Communications Act of 1934, as amended, 
authorizes the Commission to assess and collect annual regulatory fees 
to recover the costs, as determined annually by Congress, that it 
incurs in carrying out enforcement, policy and rulemaking, 
international, and user information activities. See 47 U.S.C. 159(a). 
See Attachment I for a description of these activities. In our FY 1994 
Fee Report and Order, 59 FR 30984 (June 16, 1994), we adopted the 
Schedule of Regulatory Fees that Congress established, and we 
prescribed rules to govern payment of the fees, as required by 
Congress. See 47 U.S.C. 159(b), (f)(1). Subsequently, in

[[Page 16190]]

our FY 1995, FY 1996, and FY 1997 Fee Reports and Orders, 60 FR 34004 
(June 29, 1995), 61 FR 36629 (July 12, 1996), and 62 FR 37408 (July 11, 
1997), we modified the Schedule to increase by approximately 93 
percent, 9 percent and 21 percent, respectively, the revenue generated 
by these fees in accordance with the amounts Congress required us to 
collect in FY 1995, FY 1996 and FY 1997. Also, in our FY 1995, FY 1996, 
and FY 1997 Fee Reports and Orders, we amended certain rules governing 
our regulatory fee program based upon our experience administering the 
program in prior years. See 47 CFR Secs. 1.1151 et seq.
    5. As noted above, for FY 1994 we adopted the Schedule of 
Regulatory Fees established in section 9(g) of the Act. For fiscal 
years after FY 1994, however, sections 9(b)(2) and (3), respectively, 
provide for ``Mandatory Adjustments'' and ``Permitted Amendments'' to 
the Schedule of Regulatory Fees. See 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. See 47 U.S.C. 
159(b)(2).
    6. Section 9(b)(3), entitled ``Permitted Amendments,'' requires 
that we determine annually whether additional adjustments to the fees 
are warranted, taking into account factors that are reasonably related 
to the payer of the fee and factors that are in the public interest. In 
making these amendments, we are to ``add, delete, or reclassify 
services in the Schedule to reflect additions, deletions or changes in 
the nature of its services.'' See 47 U.S.C. 159(b)(3).
    7. Section 9(i) requires that we develop accounting systems 
necessary to adjust our fees pursuant to changes in the costs of 
regulation of the various services subject to a fee and for other 
purposes. See 47 U.S.C. 9(i). For FY 1997, we relied for the first time 
on cost accounting data to identify our regulatory costs and to develop 
our FY 1997 fees based upon these costs. Also, for FY 1997, we limited 
the increase in the amount of the fee for any service in order to phase 
in our reliance on cost-based fees for those services whose revenue 
requirement would be more than 25 percent above the revenue requirement 
which would have resulted from the ``mandatory adjustments'' to the FY 
1997 fees without incorporation of costs. This methodology enables us 
to develop regulatory fees which more closely reflect our costs of 
regulation and also allows us to make annual revisions to our fees 
based to the fullest extent possible, and consistent with the public 
interest, on the actual costs of regulating those services subject to a 
fee. Finally, section 9(b)(4)(B) requires that we notify Congress of 
any permitted amendments 90 days before those amendments go into 
effect. See 47 U.S.C. 159(b)(4)(B).

III. Discussion

A. Summary of FY 1998 Fee Methodology

    8. As noted above, Congress has required that the Commission 
recover $162,523,000 for FY 1998 through the collection of regulatory 
fees, representing the costs applicable to our enforcement, policy and 
rulemaking, international, and user information activities. See 47 
U.S.C. 159(a).
    9. In developing our proposed FY 1998 fee schedule, we first 
determined that we would continue to use the same general methodology 
as we used in developing fees for FY 1997. We next estimated payment 
units 1 for FY 1998 in order to determine the aggregate 
amount of revenue we would collect without any revision to our FY 1997 
fees. Next, we compared this revenue amount to the $162,523,000 that 
Congress has required us to collect in FY 1998 and pro-rated the 
overage among all the existing fee categories.
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    \1\ Payment units are the number of subscribers, mobile units, 
pagers, cellular telephones, licenses, call signs, adjusted gross 
revenue dollars, etc. which represent the base volumes against which 
fee amounts are calculated.
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    10. We then separately projected revenue requirements in each 
service category using data generated by our cost accounting system and 
established 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 1998 fees had remained at FY 1997 levels (adjusted only for changes 
in volume and the increase required by Congress). This methodology, 
described in our FY 1997 Report and Order at paragraph 35, reduces fees 
for services whose regulatory costs have declined and increases fees 
for services experiencing higher regulatory costs in order to continue 
to eliminate disparities disclosed by our cost accounting system 
between a service's current costs and fees ascribed to these services 
in prior fiscal years. The 25 percent limitation minimizes the impact 
of unexpected substantial increases to fees which could affect the 
well-being of licensees.
    11. Once we established our tentative FY 1998 fees, we evaluated 
proposals made by Commission staff concerning other adjustments to the 
Fee Schedule and to our collection procedures. These proposals are 
discussed in paragraphs 20-30 and are factored into our proposed FY 
1998 Schedule of Regulatory Fees, set forth in Attachment F.
    12. Finally, we have incorporated, as Attachment H, proposed 
Guidance containing detailed descriptions of each fee category, 
information on the individual or entity responsible for paying a 
particular fee and other critical information designed to assist 
potential fee payers in determining the extent of their fee liability, 
if any, for FY 1998. 2 In the following paragraphs, we 
describe in greater detail our proposed methodology for establishing 
our FY 1998 regulatory fees.
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    \2\ We also will incorporate a similar Attachment in the Report 
and Order concluding this rulemaking. That Attachment will contain 
updated information concerning any changes made to the proposed fees 
adopted by the Report and Order.
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B. Development of FY 1998 Fees

i. Adjustment of Payment Units
    13. As the first step in calculating individual service regulatory 
fees for FY 1998, we adjusted the estimated payment units for each 
service because payment units for many services have changed 
substantially since we adopted our FY 1997 fees. We obtained our 
estimated payment units through a variety of means, including our 
licensee data bases, actual prior year payment records, and industry 
and trade group projections. Whenever possible, we verified these 
estimates from multiple sources to ensure the accuracy of these 
estimates. Attachment B provides a summary of how revised payment units 
were determined for each fee category.3
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    \3\ It is important to also note that Congress' required revenue 
increase in regulatory fee payments of approximately seven percent 
in FY 1998 will not fall equally on all payers because payment units 
have changed in several services. When the number of payment units 
in a service increase from one year to another, fees do not have to 
rise as much as they would if payment units had decreased or 
remained stable. Declining payment units have the opposite effect on 
fees.
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ii. Calculation of Revenue Requirements
    14. We next multiplied the revised payment units for each service 
by our FY 1997 fee amounts in each fee category to determine how much 
revenue we would collect without any change to the FY 1997 Schedule of 
Regulatory Fees. The amount of revenue we would collect without changes 
in the fee schedule is approximately $171.5 million. This amount is 
approximately $9 million more than the amount the Commission is 
required to collect in FY 1998. We then adjusted these revenue 
requirements for each fee category on a

[[Page 16191]]

proportional basis, consistent with section 9(b)(2) of the Act, to 
obtain an estimate of revenue requirements for each fee category at the 
$162,523,000 level required by Congress for FY 1998. Attachment C 
provides detailed calculations showing how we determined the revised 
revenue amount for each service.
iii. Calculation of Regulatory Costs
    15. In accordance with section 159(i) of the Act, the Commission 
utilizes a cost accounting system designed, in part, to provide data 
which helps to ensure that fees closely reflect our actual costs of 
regulation for each service category. The Commission's cost accounting 
system accumulates both personnel and non-personnel costs on a service-
by-service basis and is described in detail in our FY 1997 Report and 
Order at paragraph 12.
    16. In order to utilize actual costs for fee development purposes, 
we first add indirect support costs to direct costs 4 and 
then adjust the results to approximate the amount of revenue that 
Congress requires us to collect in FY 1998 ($162,523,000).5 
In effect, we proportionally adjusted the actual cost data pertaining 
to regulatory fee activities recorded for the period October 1, 1996 
through September 30, 1997 (Fiscal Year 1997) among all the fee 
categories so that total costs approximated $162,523,000. For fee 
categories where fees are further differentiated by market (e.g., 
Markets 1-10 under the general VHF and UHF Commercial Television fee 
categories), we distributed the costs to each market group by 
maintaining the same ratios between the market groups as between the 
revenue requirements in the FY 1997 fee schedule. The results of these 
calculations are shown in detail in Attachment D and represent our best 
estimate of actual total attributable costs relative to each fee 
category for FY 1998.
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    \4\ One feature of our cost accounting system is that it 
separately identifies direct and indirect costs. Direct costs 
include salary and expenses for (a) staff directly assigned to our 
operating Bureaus and performing regulatory activities and (b) staff 
assigned outside the operating Bureaus to the extent that their time 
is spent performing regulatory activities pertinent to an operating 
Bureau. These costs include rent, utilities and contractual costs 
attributable to such personnel. Indirect costs include support 
personnel assigned to overhead functions such as field and 
laboratory staff and certain staff assigned to the Office of 
Managing Director. The combining of direct and indirect costs is 
accomplished on a proportional basis among all fee categories as 
shown on Attachment D.
    \5\ Congress' estimate of costs to be recovered through 
regulatory fees is generally determined ten to twelve months before 
the end of the fiscal year to which the fees actually apply. As 
such, year-end actual activity costs for FY 1997 will not equal 
exactly the amount Congress has designated for collection for FY 
1998.
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iv. Establishment of 25% Revenue Ceilings
    17. Our next step was to establish a ceiling of 25 percent on the 
increase in the revenue requirement of each fee category (over and 
above the Congressionally mandated increase in the overall revenue 
requirement and the difference in unit counts) using the same 
methodology we described in detail in our FY 1997 Report and Order. 
Capping each fee category's revenue requirement at no more than a 25 
percent increase enables us to continue the process of reducing fees 
for services with lower costs and increasing fees for services with 
higher costs in order to close the gap between actual costs and fees 
designed to recover these costs.6
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    \6\ We are not suggesting that fee increases are limited to a 25 
percent increase over the FY 1997 fees. The 25 percent increase is 
over and above the revenue which would be required after adjusting 
for projected FY 1998 payment units and the proportional share of 
the 6.56 percent increase in the amount that Congress is requiring 
us to collect. Thus, FY 1998 fees may increase more than 25 percent 
over FY 1997 fees depending upon the number of payment units. We are 
also not suggesting that this methodology will always result in a 
continuous closing of an existing gap between costs and fees 
designed to recover these costs. Since actual costs for a fee 
category may increase or decrease in consecutive years, the gap 
could either close or widen depending upon whether or not actual 
costs go down or up and by how much.
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    18. As noted in our FY 1997 Report and Order, an important 
consideration in utilizing a revenue ceiling is the impact on other fee 
payers. Because the Commission is required to collect a full 
$162,523,000 in FY 1998 regulatory fees, the additional revenue 
($34,456,724) that would have been collected from licensees subject to 
a revenue ceiling had there been no ceiling, needs to be collected 
instead from licensees not subject to the ceiling. This results in a 
certain amount of subsidization between fee payer classes.7 
We believe, however, that the public interest is best served by this 
methodology. To do otherwise would subject payers in some fee 
categories to unexpected major fee increases which could severely 
impact the economic well being of certain licensees. Attachment E 
displays the step-by-step process we used to calculate adjusted revenue 
requirements for each fee category for FY 1998, including the 
reallocation of revenue requirements resulting from the application of 
our revenue ceilings.8
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    \7\ Revenues from current fee payers already offset costs 
attributable to regulatees exempt from payment of a fee or otherwise 
not subject to a fee pursuant to section 9(h) of the Act or the 
Commission's rules. For example, CB and ship radio station users, 
amateur radio licensees, governmental entities, licensees in the 
public safety radio services, and all non-profit groups are not 
required to pay a fee. The costs of regulating these entities is 
borne by those regulatees subject to a fee requirement.
    \8\ 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 (cost-
based) revenue requirement (for those categories at or below the 25% 
ceiling) or, in the case where the calculated revenue exceeded the 
ceiling, an amount equal to the ceiling. The shortfall created by 
reducing the revenue requirement of those whose revenue requirement 
exceeded the revenue ceiling was proportionately spread among those 
fee categories whose revenue requirements were below the ceiling. 
This computation required more than one round of adjustment because 
the allocation of this revenue, in a few instances, caused the new 
revenue requirement amount to exceed the 25% ceiling. After three 
iterations (rounds), all the revenue requirements were at or below 
the revenue ceiling. See Attachment E.
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v. Recalculation of Fees
    19. Once we determined the amount of fee revenue that it is 
necessary to collect from each class of licensee, we divided the 
revenue requirement by the number of payment units (and by the license 
term, if applicable, for ``small'' fees) to obtain actual fee amounts 
for each fee category. These calculated fee amounts were then rounded 
in accordance with section 9(b)(3) of the Act. See Attachment E.
vi. Proposed Changes to Fee Schedule
    20. We examined the results of our calculations made in paragraphs 
15-19 to determine if further adjustments of the fees and/or changes to 
payment procedures were warranted based upon the public interest and 
other criteria established in 47 U.S.C. 159(b)(3). As a result of this 
review, we are proposing the following changes to our Fee Schedule:
    a. Commercial AM & FM Radio. 21. For FY 1997 we established a 
revised methodology for determining AM & FM radio regulatory fees. This 
new methodology relies upon a radio station's calculated field strength 
signal contour overlaid upon U.S. Census data to obtain an estimate of 
population coverage for each station.9 The calculated 
population coverages are then used along with a station's class to

[[Page 16192]]

develop a range of fees for both AM and FM radio stations.
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    \9\ In FY 1997 we determined that the signal contour for AM 
radio stations would be based upon a calculated signal strength of 
0.5 mV/m from the transmitter location. For Class B FM stations the 
contour was based upon a signal strength of 54 dBuV/m from the 
transmitter location and for Class B1 FM stations the contour was 
based upon a signal strength of 57 dBuV/m. For all other FM Classes, 
a 60 dBuV/m contour was used. Attachment J describes in detail the 
factors, measurements and calculations that go into determining 
station signal contours and associated population coverages.
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    22. Although the calculated contours used in FY 1997 are consistent 
with Commission radio station signal protection policies and rules, we 
received several complaints from licensees stating that the contours 
exaggerated actual market areas and populations served. In several 
instances licensees complained that small, rural stations whose 
contours, at the fringe, intersected major metropolitan areas, were 
attributed with populations far in excess of what they considered to be 
their primary or even secondary market areas. See, for example, letters 
from KTXC, dated September 10, 1997; Music Express Broadcasting 
Corporation of Northeast Ohio, dated August 28, 1997; and Martin 
Broadcasting Company, dated August 26, 1997. To alleviate this 
disparity and to ensure that radio stations are assigned population 
coverage figures more in line with their actual market areas, we are 
proposing for FY 1998 to utilize the same general methodology for 
determining regulatory fees as we introduced in FY 1997, but to change 
the applicable signal contours to 5 m/V/m for AM radio stations and 70 
dBuV/m for FM radio stations. These reduced contours are generally 
consistent with the city grade contours of radio stations and should 
limit population coverage to only those populations actually within a 
station's primary local market area. We seek comment on this proposal. 
It should be noted that population coverage is only one factor used to 
determine radio station regulatory fees. For example, the number of 
stations claiming non-profit exemption from fees impacts the number of 
stations which may be assessed regulatory fees. Additionally, the 
overall amount that Congress requires the Commission to collect and the 
actual costs attributable to radio station regulation also influence 
the final determination of fee amounts. The following paragraphs 
explain in detail the development of our proposed fee schedule for AM 
and FM radio stations.
    23. We calculated the revenue requirements for each category of 
station (e.g., AM, FM or construction permit) 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 the population served by the same ratio between the 
individual classes as compared to the original FY 1994 Schedule 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.
    24. Our next step was to sort the data by compiling a list of every 
AM and FM station in descending order by class-weighted population. 
Next, we determined actual fees for each station. We designed a 
schedule which would place stations in wide bands based upon the 
classes of station and total populations served, with different fees 
for each band. We established the ranges for the schedule by first 
proposing a minimum and a maximum fee amount. In setting a minimum fee, 
we are proposing that it should be no less than the AM Construction 
Permit fee which we calculated in Attachment E to be $235. Therefore, 
we set the lowest radio fee at $250. In order to prevent the fee from 
becoming too great a burden for any licensee, we are proposing to limit 
the maximum fee to $2,500. At the same time, we are proposing to retain 
the number of actual fee classifications at ten as in our FY 1997 
Report and Order. This allowed us to establish fee classifications in 
$250 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.10 The resulting 
schedule of regulatory fees for radio stations (both AM and FM) would 
read:
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    \10\ The number of stations is not exactly divisible by 10, 
leaving group 10 with five less stations than the other groups.

------------------------------------------------------------------------
                                                      Number            
                Classification group                    of        Fee   
                                                     stations           
------------------------------------------------------------------------
1..................................................       878     $2,500
2..................................................       878      2,250
3..................................................       878      2,000
4..................................................       878      1,750
5..................................................       878      1,500
6..................................................       878      1,250
7..................................................       878      1,000
8..................................................       878        750
9..................................................       878        500
10.................................................       873        250
------------------------------------------------------------------------

    25. This schedule, which we propose 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 proposed fee schedule achieves the objectives of both 
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 Sec. 1.1166.
    b. Alternative Proposed Schedule for AM and FM Radio Stations.--26. 
We also received a number of complaints that licensees could not easily 
see how their station class was used in determining their regulatory 
fee for FY 1997. Further, several licensees expressed the view that 
there was not enough difference between the fees imposed on stations in 
the largest population centers and those below. See, for example, 
letter from Heckler Broadcasting, Inc. received October 2, 1997; and 
Petition for Reduction of Regulatory Fee filed September 18, 1997, from 
Family Communications, Inc. The alternative schedule shown below 
addresses both of these concerns. However, it should be noted that 
although the ratios between the classes in the alternative schedule 
would no longer match the original schedule adopted by Congress, which 
was implemented in our FY 1994 Report and Order, it addresses licensee 
complaints that the differentiations between the size of service and 
fee assessed in our existing schedule are inequitable. We invite public 
comment on whether this alternative schedule for AM and FM Radio should 
be implemented instead of the one proposed in paragraph 24.

                                        AM Radio Station Regulatory Fees                                        
----------------------------------------------------------------------------------------------------------------
                      Population served                         Class A      Class B      Class C      Class D  
----------------------------------------------------------------------------------------------------------------
<=20,000....................................................         $500         $400         $250         $300
20,001--50,000..............................................        1,000          750          400          500

[[Page 16193]]

                                                                                                                
50,001--125,000.............................................        1,500        1,000          500          750
125,001--400,000............................................        2,000        1,500          750        1,000
400,001--1,000,000..........................................        3,000        2,500        1,250        1,750
>1,000,000..................................................        4,250        3,500        2,000        2,500
----------------------------------------------------------------------------------------------------------------


                    FM Radio Station Regulatory Fees                    
------------------------------------------------------------------------
                                                 Classes A,   Classes B,
               Population served                  B1 & C3     C, C1 & C2
------------------------------------------------------------------------
<=20,000......................................         $400         $500
20,001--50,000................................          750        1,000
50,001--125,000...............................        1,000        1,500
125,001--400,000..............................        1,500        2,000
400,001--1,000,000............................        2,500        3,000
>1,000,000....................................        3,500        4,250
------------------------------------------------------------------------

vii. Effect of Revenue Redistributions on Major Constituencies
    27. The following chart illustrates the relative percentage of the 
overall revenue requirements borne by the major constituencies since 
inception of regulatory fees in FY 1994.

                                 Percentage of Revenue Collected by Constituency                                
----------------------------------------------------------------------------------------------------------------
                                                                          Fiscal years--                        
                                                ----------------------------------------------------------------
                                                     1994         1995         1996         1997         1998   
                                                   (Actual)     (Actual)     (Actual)     (Actual)    (Proposed)
----------------------------------------------------------------------------------------------------------------
Cable TV Operators (Inc. CARS Licenses)........         41.4         24.0         33.4         21.8         18.1
Broadcast Licensees............................         23.8         13.8         14.6         14.1         15.3
Satellite Operators (Inc. Earth Stations)......          3.3          3.6          4.0          5.0          5.0
Common Carriers................................         25.0         44.5         40.9         49.8         47.8
Wireless Licensees.............................          6.5         14.1          7.1          9.3         13.8
                                                ----------------------------------------------------------------
      Total....................................        100.0        100.0        100.0        100.0        100.0
----------------------------------------------------------------------------------------------------------------

C. Other Issues

i. Distinguishing between CMRS Fee Categories
    28. We have received several comments from CMRS fee payers 
concerning the difficulty some of them have had in distinguishing 
between CMRS Mobile Services fees and CMRS Messaging Services fees. In 
our FY 1997 Report and Order (see paragraphs 58-62) we stated that 
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 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. Thus, we propose that 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 would 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 would be subject to the CMRS Messaging Services fee, 
regardless of the services offered on that spectrum. See also 
Attachment H, paragraphs 14 and 15. We also tentatively conclude that 
the Wireless Communications Service should be classified as CMRS Mobile 
Services. We request comments on these matters. We also believe a 
further clarification of which entities should be paying which CMRS fee 
would be beneficial to licensees and other fee payers. Separately, we 
propose to incorporate a clarification as to what is meant by CMRS 
``units'' and who is responsible for paying regulatory fees for various 
kinds of CMRS units. See also Attachment H, paragraph 16.
    29. The following categories of CMRS licensees would be covered by 
the CMRS Mobile Services regulatory fee:

Rural Radio Service
Air-ground Radiotelephone Service
Cellular Radiotelephone Service
Offshore Radiotelephone Service
Broadband Personal Communications Services
Wireless Communications Service
Specialized Mobile Radio Service
Public Coast Service

    30. The following categories of CMRS licensees would be covered by 
the CMRS Messaging Services regulatory fee:

Paging and Radiotelephone Service
Narrowband Personal Communications Services
220-222 MHz Band
Interconnected Business Radio Services

    31. Licensees in the Specialized Mobile Radio Service have 
requested reconsideration of our determination that FY 1997 CMRS 
regulatory fees should be based upon whether a licensee operates on 
broadband or

[[Page 16194]]

narrowband spectrum. See FY 1997 Report and Order at para. 60. We 
expect to address these concerns in our action on petitions for 
reconsideration of the FY 1997 Report and Order. Interested parties may 
comment in this proceeding on the appropriate fee structure for CMRS 
licensees and, in particular, may present alternatives to the 
methodology we established for FY 1997. Commenters should be aware that 
we do not believe that a case-by-case determination of the appropriate 
fee for a particular SMR licensee would serve the public interest due 
to the heavy resource burden it would require.
ii. Clarification of Operational LEO System
    32. In our FY 1997 Report and Order at paragraph 75, we reiterated 
our requirement that licensees of low earth orbit satellite systems 
(LEOS) pay the LEO regulatory fee upon their certification of operation 
of a single satellite pursuant to Sec. 25.120(d). We stated that we 
require payment of the LEO fee following commencement of operations of 
a system's first satellite in order to assure that we recover our 
regulatory costs related to LEO systems from licensees of these systems 
as early as possible so that regulatees in other services are not 
burdened with these costs any longer than necessary. However, because 
Sec. 25.120(d) applies to both geostationary and non-geostationary 
satellite systems, we believe that we need to clarify our existing 
definition of an operational LEO satellite. Non-geostationary satellite 
licensees, including licensees of LEO systems, are required to submit 
reports pursuant to Secs. 25.142(c), 25.143(e), and 25.145(g) of the 
Commission's rules. These reports, annual and filed upon completion of 
milestones, report the status of a [the] system and indicate compliance 
under Sec. 25.120(d). In our FY 1997 Report and Order at paragraph 75, 
we reiterated our requirement that licensees of low earth orbit 
satellite systems (LEOS) pay the LEO regulatory fee upon their 
certification of operation of a single satellite pursuant to 
Sec. 25.120(d). We stated that we require payment of the LEO fee 
following commencement of operations of a system's first satellite in 
order to assure that we recover our regulatory costs related to LEO 
systems from licensees of these systems as early as possible so that 
regulatees in other services are not burdened with these costs any 
longer than necessary. However, because Sec. 25.120(d) applies to both 
geostationary and non-geostationary satellite systems, we believe that 
we need to clarify our existing definition of an operational LEO 
satellite to prevent misunderstanding of our intent as stated in 
paragraph 75 of our FY 1997 Report and Order. As such, we propose to 
add the following to our guidance (see Attachment H) relative to 
determining whether or not a LEO satellite is operational for fee 
assessment purposes:
    Licensees of Non-Geostationary Satellite Systems will be assessed 
the LEO regulatory fee upon the commencement of operation of a system's 
first satellite as reported annually pursuant to Secs. 25.142(c), 
25.143(e), 25.145(g) or upon certification of operation of a single 
satellite pursuant to Sec. 25.120(d).
iii. Renaming of LEO Fee Category
    33. ``Non-Geostationary'' satellite orbits were first introduced in 
the early 90's with the filing of applications for non-voice, non-
geostationary satellite service operating below 1 GHz. These satellites 
proposed to operate satellites in a ``low earth'' orbit, or a non-
geostationary orbit The term, ``low earth orbit'' was then synonomous 
with ``non-geostationary''. As new technologies have evolved, we have 
received applications proposing to operate in ``medium'' and ``high'' 
earth orbit technologies, also non-geostationary orbits[, have been 
filed with the FCC]. Thus, we propose to change the name of the ``Low 
Earth Orbit Satellite Systems'' fee category to the ``Non-Geostationary 
Satellite Systems'' fee category in order to clarify that non-
geostationary satellites, whether operating in low, medium or high 
orbits, are covered under this regulatory fee. This is consistent with 
current industry use, as well as with Commission rules, which refer to 
non-geostationary, not low earth, orbits and satellites. This name 
change will have no adverse impact on any entity covered by regulatory 
fees in FY 1998.

D. Procedures for Payment of Regulatory Fees

    34. Generally, we propose to retain the procedures that we have 
established for the payment of regulatory fees. Section 9(f) requires 
that we permit ``payment by installments in the case of fees in large 
amounts, and in the case of small amounts, shall require the payment of 
the fee in advance for a number of years not to exceed the term of the 
license held by the payer.'' See 47 U.S.C. 159(f)(1). Consistent with 
section 9(f), we are again proposing to establish 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.
i. Annual Payments of Standard Fees
    35. As we have in the past, we are proposing to treat regulatory 
fee payments by certain licensees as ``standard fees'' which are those 
regulatory fees that are payable in full on an annual basis. Payers of 
standard fees are not required to make advance payments for their full 
license term and are not eligible for installment payments. All 
standard fees are payable in full on the date we establish for payment 
of fees in their regulatory fee category. The payment dates for each 
regulatory fee category will be announced either in the Report and 
Order terminating this proceeding or by public notice in the Federal 
Register pursuant to authority delegated to the Managing Director.
ii. Installment Payments for Large Fees
    36. While we are mindful that time constraints may preclude an 
opportunity for installment payments, we propose that regulatees in any 
category of service with a liability of $12,000 or more be eligible to 
make installment payments and that eligibility for installment payments 
be based upon the amount of either a single regulatory fee payment or 
combination of fee payments by the same licensee or regulatee. We 
propose that regulatees eligible to make installment payments may 
submit their required fees in two equal payments (on dates to be 
announced) or, in the alternative, in a single payment on the date that 
their final installment payment is due. Due to statutory constraints 
concerning notification to Congress prior to actual collection of the 
fees, however, it is unlikely that there will be sufficient time for 
installment payments, and that regulatees eligible to make installment 
payments will be required to pay these fees on the last date that fee 
payments may be submitted. The dates for installment payments, or a 
single payment, will be announced either in the Report and Order 
terminating this proceeding or by public notice published in the 
Federal Register pursuant to authority delegated to the Managing 
Director.
iii. Advance Payments of Small Fees
    37. 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). We propose 
that advance payments will be required from licensees of those services 
that we

[[Page 16195]]

decided would be subject to advance payments in our FY 1994 Report and 
Order, and to those additional payers set forth herein.11 We 
are also proposing that payers of advance fees will submit the entire 
fee due for the full term of their licenses when filing their initial, 
renewal, or reinstatement application. Regulatees subject to a payment 
of small fees shall pay the amount due for the current fiscal year 
multiplied by the number of years in the term of their requested 
license. In the event that the required fee is adjusted following their 
payment of the fee, the payer would not be subject to the payment of a 
new fee until filing an application for renewal or reinstatement of the 
license. Thus, payment for the full license term would be made based 
upon the regulatory fee applicable at the time the application is 
filed. The effective date for payment of small fees established in this 
proceeding will be announced in our Report and Order terminating this 
proceeding or by public notice published in the Federal Register 
pursuant to authority delegated to the Managing Director.
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    \11\ 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).
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iv. Minimum Fee Payment Liability
    38. As we have in the past, we are proposing that regulatees whose 
total regulatory fee liability, including all categories of fees for 
which payment is due by an entity, amounts to less than $10 will be 
exempted from fee payment in FY 1998.
v. Standard Fee Calculations and Payment Dates
    39. As noted, the time for payment of standard fees and any 
installment payments will be published in the Federal Register pursuant 
to authority delegated to the Managing Director. For licensees, 
permittees and holders of other authorizations in the Common Carrier, 
Mass Media, and Cable Services whose fees are not based on a 
subscriber, unit, or circuit count, we are proposing that fees be 
submitted for any authorization held as of October 1, 1997. October 1 
is the date to be used for establishing liability for payment of 
standard fees.
    40. In the case of regulatees whose fees are based upon a 
subscriber, unit or circuit count, the number of a regulatees' 
subscribers, units or circuits on December 31, 1997, will be used to 
calculate the fee payment.12
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    \12\ 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 1997, rather than on a count as of December 31, 1997.
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E. Schedule of Regulatory Fees

    41. The Commission's proposed Schedule of Regulatory Fees for FY 
1998 is contained in Attachment F of this NPRM.

IV. Procedural Matters

A. Comment Period and Procedures

    42. Pursuant to procedures set forth in Secs. 1.415 and 1.419 of 
the Commission's rules, interested parties may file comments on or 
before April 22, 1998, and reply comments on or before May 4, 1998. All 
relevant comments will be considered by the Commission before final 
action is taken in this proceeding. To file formally in this 
proceeding, participants must file an original and four copies of all 
comments, reply comments and supporting materials. If participants want 
each Commissioner to receive a personal copy of their comments, an 
original and nine copies must be filed. Comments and reply comments 
should be sent to the Office of the Secretary, Federal Communications 
Commission, Washington, D.C. 20554. Interested parties, who do not wish 
to formally participate in this proceeding, may file informal comments 
at the same address or may e-mail their comments to [email protected]. 
Comments and reply comments will be available for public inspection 
during regular business hours in the FCC Reference Center (Room 239) of 
the Federal Communications Commission, 1919 M Street, N.W., Washington, 
D.C. 20054.

B. Ex Parte Rules

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

C. Initial Regulatory Flexibility Analysis

    44. As required by the Regulatory Flexibility Act, see 5 U.S.C. 
Sec. 603, the Commission has prepared an Initial Regulatory Flexibility 
Analysis (IRFA) of the possible impact on small entities of the 
proposals suggested in this document. The IRFA is set forth as 
Attachment A. Written public comments are requested with respect to the 
IRFA. These comments must be filed in accordance with the same filing 
deadlines for comments on the rest of the NPRM, but they must have a 
separate and distinct heading, designating the comments as responses to 
the IRFA. The Office of Public Affairs, Reference Operations Division, 
shall send a copy of this NPRM, including the IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration, in 
accordance with the Regulatory Flexibility Act.

D. Authority and Further Information

    45. Authority for this proceeding is contained in sections 4(i) and 
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. Secs. 154(i)-(j), 159, & 303(r). It is ordered that this NPRM is 
adopted. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this NPRM, 
including the Initial Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.
    46. Further information about this proceeding may be obtained by 
contacting the Fees Hotline at (202) 418-0192.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Attachment A--Initial Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act 
(RFA),13 the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on small entities by the policies and rules proposed in the present 
Notice of Proposed Rulemaking, In the Matter of Assessment and 
Collection of Regulatory Fees for Fiscal Year 1998. Written public 
comments are requested on this IRFA. Comments must be identified as 
responses to the IRFA and must be filed by the deadlines for comments 
on the IRFA provided above in paragraph 42. The Commission will send a 
copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. See 5 U.S.C. 603(a). In 
addition, the NPRM and IRFA (or summaries thereof)

[[Page 16196]]

will be published in the Federal Register. See id.
---------------------------------------------------------------------------

    \13\ See 5 U.S.C. Sec. 603. The RFA, see 5 U.S.C. Sec. 601 et. 
seq., has been amended by the Contract With America Advancement Act 
of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). 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, the Proposed Rules:

    2. This rulemaking proceeding is initiated to obtain comments 
concerning the Commission's proposed amendment of its Schedule of 
Regulatory Fees. For Fiscal Year 1998, we intend to collect regulatory 
fees in the amount of $162,523,000, the amount that Congress has 
required the Commission to recover. The Commission seeks to collect the 
necessary amount through its proposed revised fees, as contained in the 
attached Schedule of Regulatory Fees, in the most efficient manner 
possible and without undue burden to the public.

II. Legal Basis

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

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

    4. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.14 The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' 15 In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act.16 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).17 A small organization is generally ``any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.'' 18 Nationwide, as of 1992, there 
were approximately 275,801 small organizations.19 ``Small 
governmental jurisdiction'' generally means ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than 50,000.'' 20 As of 
1992, there were approximately 85,006 such jurisdictions in the United 
States.21 This number includes 38,978 counties, cities, and 
towns; of these, 37,566, or 96 percent, have populations of fewer than 
50,000.22 The Census Bureau estimates that this ratio is 
approximately accurate for all governmental entities. Thus, of the 
85,006 governmental entities, we estimate that 81,600 (91 percent) are 
small entities. Below, we further describe and estimate the number of 
small entity licensees and regulatees that may be affected by the 
proposed rules, if adopted.
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    \14\ 5 U.S.C. Sec. 603(b)(3).
    \15\ Id. Sec. 601(6).
    \16\ 5 U.S.C. Sec. 601(3) (incorporating by reference the 
definition of ``small business concern'' in 15 U.S.C. Sec. 632). 
Pursuant to the RFA, 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.'' 5 U.S.C. Sec. 601(3).
    \17\ Small Business Act, 15 U.S.C. Sec. 632 (1996).
    \18\ 5 U.S.C. Sec. 601(4).
    \19\ 1992 Economic Census, U.S. Bureau of the Census, Table 6 
(special tabulation of data under contract to Office of Advocacy of 
the U.S. Small Business Administration).
    \20\ 5 U.S.C. Sec. 601(5).
    \21\ U.S. Dept. of Commerce, Bureau of the Census, ``1992 Census 
of Governments.''
    \22\ Id.
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Cable Services or Systems

    5. The SBA has developed a definition of small entities for cable 
and other pay television services, which includes all such companies 
generating $11 million or less in revenue annually. 23 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 data from 1992, there were 
1,788 total cable and other pay television services and 1,423 had less 
than $11 million in revenue. 24
---------------------------------------------------------------------------

    \23\ 13 CFR. Sec. 121.201, SIC code 4841.
    \24\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4841 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
---------------------------------------------------------------------------

    6. The Commission has developed its own definition of a small cable 
system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.25 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 
1995.26 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.
---------------------------------------------------------------------------

    \25\ 47 CFR Sec. 76.901(e). The Commission developed this 
definition based on its determination that a small cable system 
operator is one with annual revenues of $100 million or less. 
Implementation of Sections of the 1992 Cable Act: Rate Regulation, 
Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC 
Rcd 7393 (1995), 60 FR 10534 (February 27, 1995).
    \26\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for December 30, 1995).
---------------------------------------------------------------------------

    7. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' 27 The Commission has determined that there 
are 66,000,000 subscribers in the United States. Therefore, we found 
that an operator serving fewer than 660,000 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.28 Based on available data, we find that the 
number of cable operators serving 660,000 subscribers or less totals 
1,450. 29 We do not request nor do we collect information 
concerning whether cable system operators are affiliated with entities 
whose gross annual revenues exceed $250,000,000, 30 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 
66,000,000 subcribers, and we have based our fee revenue estimates on 
that figure.
---------------------------------------------------------------------------

    \27\ 47 U.S.C. Sec. 543(m)(2).
    \28\ Id. Sec. 76.1403(b).
    \29\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
    \30\ We do receive such information on a case-by-case basis only 
if a cable operator appeals a local franchise authority's finding 
that the operator does not qualify as a small cable operator 
pursuant to section 76.1403(b) of the Commission's rules. See 47 CFR 
Sec. 76.1403(d).
---------------------------------------------------------------------------

    8. Other Pay Services. Other pay television services are also 
classified under Standard Industrial Classification (SIC) 4841, which 
includes cable systems operators, closed circuit television services, 
direct broadcast satellite services (DBS),31 multipoint 
distribution systems (MDS),32 satellite

[[Page 16197]]

master antenna systems (SMATV), and subscription television services.
---------------------------------------------------------------------------

    \31\ Direct Broadcast Services (DBS) are discussed with the 
international services, infra.
    \32\ Multipoint Distribution Services (MDS) are discussed with 
the mass media services, infra.
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Common Carrier Services and Related Entities

    9. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the numbers of commercial wireless entities, appears to be data 
the Commission publishes annually in its Telecommunications Industry 
Revenue report, regarding the Telecommunications Relay Service 
(TRS).33 According to data in the most recent report, there 
are 3,459 interstate carriers.34 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.
---------------------------------------------------------------------------

    \33\ FCC, Telecommunications Industry Revenue: TRS Fund 
Worksheet Data, Figure 2 (Number of Carriers Paying Into the TRS 
Fund by Type of Carrier) (Nov. 1997) (Telecommunications Industry 
Revenue).
    \34\ Id.
---------------------------------------------------------------------------

    10. The SBA has defined establishments engaged in providing 
``Radiotelephone Communications'' and ``Telephone Communications, 
Except Radiotelephone'' to be small businesses when they have no more 
than 1,500 employees.35 Below, we discuss the total 
estimated number of telephone companies falling within the two 
categories and the number of small businesses in each, and we then 
attempt to refine further those estimates to correspond with the 
categories of telephone companies that are commonly used under our 
rules.
---------------------------------------------------------------------------

    \35\ 13 CFR Sec. 121.201, Standard Industrial Classification 
(SIC) codes 4812 and 4813. See also Executive Office of the 
President, Office of Management and Budget, Standard Industrial 
Classification Manual (1987).
---------------------------------------------------------------------------

    11. Although some affected incumbent local exchange carriers 
(ILECs) may have 1,500 or fewer employees, we do not believe that such 
entities should be considered small entities within the meaning of the 
RFA because they are either dominant in their field of operations or 
are not independently owned and operated, and therefore by definition 
not ``small entities'' or ``small business concerns'' under the RFA. 
Accordingly, our use of the terms ``small entities'' and ``small 
businesses'' does not encompass small ILECs. Out of an abundance of 
caution, however, for regulatory flexibility analysis purposes, we will 
separately consider small ILECs within this analysis and use the term 
``small ILECs'' to refer to any ILECs that arguably might be defined by 
the SBA as ``small business concerns.'' 36
---------------------------------------------------------------------------

    \36\ See 13 CFR Sec. 121.201, SIC code 4813. Since the time of 
the Commission's 1996 decision, Implementation of the Local 
Competition Provisions in the Telecommunications Act of 1996, First 
Report and Order, 11 FCC Rcd 15499, 16144-45 (1996), 61 FR 45476 
(August 29, 1996), the Commission has consistently addressed in its 
regulatory flexibility analyses the impact of its rules on such 
ILECs.
---------------------------------------------------------------------------

    12. Total Number of Telephone Companies Affected. The U.S. Bureau 
of the Census (``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.37 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 ILECs because they are not 
``independently owned and operated.'' 38 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 is reasonable to conclude that fewer than 3,497 telephone service 
firms are small entity telephone service firms or small ILECs that may 
be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \37\ U.S. 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).
    \38\ See generally 15 U.S.C. Sec. 632(a)(1).
---------------------------------------------------------------------------

    13. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
except radiotelephone (wireless) companies. The Census Bureau reports 
that there were 2,321 such telephone companies in operation for at 
least one year at the end of 1992. 39 According to the SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing no more than 1,500 
persons.40 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 ILECs. We do 
not have data specifying the number of these 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 fewer than 2,295 
small telephone communications companies other than radiotelephone 
companies are small entities or small ILECs that may be affected by the 
proposed rules, if adopted.
---------------------------------------------------------------------------

    \39\ 1992 Census, supra, at Firm Size 1-123.
    \40\ 13 CFR Sec. 121.201, SIC code 4813.
---------------------------------------------------------------------------

    14. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange services 
(LECs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies.41 According to the most recent Telecommunications 
Industry Revenue data, 1,371 carriers reported that they were engaged 
in the provision of local exchange services.42 We do not 
have data specifying the number of these carriers that are either 
dominant in their field of operations, are not independently owned and 
operated, or have more than 1,500 employees, and thus are unable at 
this time to estimate with greater precision the number of LECs that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that fewer than 1,371 providers of local 
exchange service are small entities or small ILECs that may be affected 
by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \41\ Id.
    \42\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    15. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies.43 
According to the most recent Telecommunications Industry Revenue data, 
143 carriers reported that they were engaged in the provision of 
interexchange services.44 We do not have data specifying the 
number of these carriers that are not independently owned and operated 
or have more than 1,500 employees, and thus are unable at

[[Page 16198]]

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 143 small entity 
IXCs that may be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \43\ 13 CFR Sec. 121.201, SIC code 4813.
    \44\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    16. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers (CAPs). The closest 
applicable definition under the SBA rules is for telephone 
communications companies other than except radiotelephone (wireless) 
companies.45 According to the most recent Telecommunications 
Industry Revenue data, 109 carriers reported that they were engaged in 
the provision of competitive access services.46 We do not 
have data specifying the number of these carriers that are not 
independently owned and operated, or have more than 1,500 employees, 
and thus are unable at this time to estimate with greater precision the 
number of CAPs that would qualify as small business concerns under the 
SBA's definition. Consequently, we estimate that there are fewer than 
109 small entity CAPs that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \45\ 13 CFR Sec. 121.201, SIC code 4813.
    \46\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    17. Operator Service Providers. Neither the Commission nor the SBA 
has developed a definition of small entities specifically applicable to 
providers of operator services. The closest applicable definition under 
the SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies.47 According to the most 
recent Telecommunications Industry Revenue data, 27 carriers reported 
that they were engaged in the provision of operator 
services.48 We do not have data specifying the number of 
these carriers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of operator service providers that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 27 small entity 
operator service providers that may be affected by the proposed rules, 
if adopted.
---------------------------------------------------------------------------

    \47\ 13 CFR Sec. 121.201, SIC code 4813.
    \48\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    18. Pay Telephone Operators. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to pay 
telephone operators. The closest applicable definition under SBA rules 
is for telephone communications companies other than radiotelephone 
(wireless) companies.49 According to the most recent 
Telecommunications Industry Revenue data, 441 carriers reported that 
they were engaged in the provision of pay telephone 
services.50 We do not have data specifying the number of 
these carriers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of pay telephone operators that would 
qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 441 small entity 
pay telephone operators that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \49\ 13 CFR Sec. 121.201, SIC code 4813.
    \50\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    19. Resellers (including debit card providers). Neither the 
Commission nor the SBA has developed a definition of small entities 
specifically applicable to resellers. The closest applicable SBA 
definition for a reseller is a telephone communications company other 
than radiotelephone (wireless) companies.51 According to the 
most recent Telecommunications Industry Revenue data, 339 reported that 
they were engaged in the resale of telephone service.51a We 
do not have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of resellers that would qualify as small business concerns under 
the SBA's definition. Consequently, we estimate that there are fewer 
than 339 small entity resellers that may be affected by the proposed 
rules, if adopted.
---------------------------------------------------------------------------

    \51\ 13 CFR Sec. 121.201, SIC code 4813.
    \51a\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    20. 800 Service Subscribers.51b Neither the Commission 
nor the SBA has developed a definition of small entities specifically 
applicable to 800 service (``toll free'') subscribers. The most 
reliable source of information regarding the number of 800 service 
subscribers appears to be data the Commission collects on the 800 
numbers in use.51c According to our most recent data, at the 
end of 1995, the number of 800 numbers in use was 6,987,063. Similarly, 
the most reliable source of information regarding the number of 888 
service subscribers appears to be data the Commission collects on the 
888 numbers in use.51d According to our most recent data, at 
the end of August 1996, the number of 888 numbers that had been 
assigned was 2,014,059. We do not have data specifying the number of 
these subscribers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of toll free subscribers that would 
qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 6,987,063 small 
entity 800 subscribers and fewer than 2,014,059 small entity 888 
subscribers that may be affected by the proposed rules, if adopted.
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    \51b\ We include all toll-free number subscribers in this 
category, including 888 numbers.
    \51c\ FCC, CCB Industry Analysis Division, FCC Releases, Study 
on Telephone Trends, Tbl. 20 (May 16, 1996).
    \51d\ FCC, CCB Industry Analysis Division, Long Distance Carrier 
Code Assignments, p. 80, Tbl. 10B (Oct. 18, 1996).
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International Services

    21. The Commission has not developed a definition of small entities 
applicable to licensees in the international services. Therefore, the 
applicable definition of small entity is generally the definition under 
the SBA rules applicable to Communications Services, Not Elsewhere 
Classified (NEC).51e This definition provides that a small 
entity is expressed as one with $11.0 million or less in annual 
receipts.51f According to the Census Bureau, there were a 
total of 848 communications services providers, NEC, in operation in 
1992, and a total of 775 had annual receipts of less than $9,999 
million.51g The Census report does not provide more precise 
data.
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    \51e\ An exception is the Direct Broadcast Satellite (DBS) 
Service, infra.
    \51f\ 13 CFR Sec. 120.121, SIC code 4899.
    \51g\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4899 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
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    22. International Broadcast Stations. Commission records show that 
there are 20 international broadcast station licensees. We do not 
request nor collect annual revenue information, and thus are unable to 
estimate the number of international broadcast licensees that would 
constitute a small business under the SBA definition. However, the 
Commission estimates that only six

[[Page 16199]]

international broadcast stations are subject to regulatory fee 
payments.
    23. International Public Fixed Radio (Public and Control Stations).
    There are 3 licensees in this service subject to payment of 
regulatory fees. We do not request nor collect annual revenue 
information, and thus are unable to estimate the number of 
international broadcast licensees that would constitute a small 
business under the SBA definition.
    24. Fixed Satellite Transmit/Receive Earth Stations. There are 
approximately 3000 earth station authorizations, a portion of which are 
Fixed Satellite Transmit/Receive Earth Stations. We do not request nor 
collect annual revenue information, and thus are unable to estimate the 
number of the earth stations that would constitute a small business 
under the SBA definition.
    25. Fixed Satellite Small Transmit/Receive Earth Stations. There 
are 3000 earth station authorizations, a portion of which are Fixed 
Satellite Small Transmit/Receive Earth Stations. We do not request nor 
collect annual revenue information, and thus are unable to estimate the 
number of fixed satellite transmit/receive earth stations may 
constitute a small business under the SBA definition.
    26. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. 
These stations operate on a primary basis, and frequency coordination 
with terrestrial microwave systems is not required. Thus, a single 
``blanket'' application may be filed for a specified number of small 
antennas and one or more hub stations. The Commission has processed 377 
applications. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of VSAT systems that 
would constitute a small business under the SBA definition.
    27. Mobile Satellite Earth Stations. There are two licensees. We do 
not request nor collect annual revenue information, and thus are unable 
to estimate of the number of mobile satellite earth stations that would 
constitute a small business under the SBA definition.
    28. Radio Determination Satellite Earth Stations. There are four 
licensees. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of radio determination 
satellite earth stations that would constitute a small business under 
the SBA definition.
    29. Space Stations (Geostationary). Commission records reveal that 
there are 46 space station licensees. We do not request nor collect 
annual revenue information, and thus are unable to estimate of the 
number of geostationary space stations that would constitute a small 
business under the SBA definition.
    30. Space Stations (Non-Geostationary). There are six Non-
Geostationary Space Station licensees, of which only two systems are 
operational. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of non-geostationary 
space stations that would constitute a small business under the SBA 
definition.
    31. Direct Broadcast Satellites. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of ``Cable and 
Other Pay Television Services.'' 51h This definition 
provides that a small entity is one with $11.0 million or less in 
annual receipts.51i As of December 1996, there were eight 
DBS licensees. However, the Commission does not collect annual revenue 
data for DBS and, therefore, is unable to ascertain the number of small 
DBS licensees that could be impacted by these proposed rules. Although 
DBS service requires a great investment of capital for operation, 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 
small businesses, if independently owned and operated.
---------------------------------------------------------------------------

    \51h\ 13 CFR Sec. 120.121, SIC code 4841.
    \51i\ 13 CFR Sec. 121.201, SIC code 4841.
---------------------------------------------------------------------------

Mass Media Services

    32. Commercial Radio and Television Services. The proposed rules 
and policies will apply to television broadcasting licensees and radio 
broadcasting licensees.51j The SBA defines a television 
broadcasting station that has $10.5 million or less in annual receipts 
as a small business.51k Television broadcasting stations 
consist of establishments primarily engaged in broadcasting visual 
programs by television to the public, except cable and other pay 
television services.51l Included in this industry are 
commercial, religious, educational, and other television stations.\52\ 
Also included are establishments primarily engaged in television 
broadcasting and which produce taped television program materials.\53\ 
Separate establishments primarily engaged in producing taped television 
program materials are classified under another SIC number.\54\ There 
were 1,509 television stations operating in the nation in 1992.\55\ 
That number has remained fairly constant as indicated by the 
approximately 1,564 operating television broadcasting stations in the 
nation as of December 31, 1997.\56\ For 1992,\57\ the number of 
television stations that produced less than $10.0 million in revenue 
was 1,155 establishments.\58\ Only commercial stations are subject to 
regulatory fees.
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    \51j\ While we tentatively believe 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, for purposes of this Notice we 
utilize the SBA's definition in determining the number of small 
businesses to which the proposed rules would apply. We reserve the 
right to adopt, in the future, a more suitable definition of ``small 
business'' as applied to radio and television broadcast stations or 
other entities subject to the proposed rules in this Notice, and to 
consider further the issue of the number of small entities that are 
radio and television broadcasters or other small media entities. 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. Sec. 601(3).
    \51k\ 13 CFR Sec. 121.201, SIC code 4833.
    \51l\ 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) (1992 Census, Series UC92-S-1).
    \52\ 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.
    \53\ 1992 Census, Series UC92-S-1, at Appendix A-9.
    \54\ Id., SIC code 7812 (Motion Picture and Video Tape 
Production); SIC code 7922 (Theatrical Producers and Miscellaneous 
Theatrical Services) (producers of live radio and television 
programs).
    \55\ FCC News Release No. 31327 (Jan. 13, 1993); 1992 Census, 
Series UC92-S-1, at Appendix A-9.
    \56\ FCC News Release, ``Broadcast Station Totals as of December 
31, 1997.''
    \57\ A census to determine the estimated number of 
Communications establishments is performed every five years, in 
years ending with a ``2'' or ``7.'' See 1992 Census, Series UC92-S-
1, at III.
    \58\ The amount of $10 million was used to estimate the number 
of small business establishments because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No 
category for $10.5 million existed. Thus, the number is as accurate 
as it is possible to calculate with the available information.
---------------------------------------------------------------------------

    33. Additionally, the Small Business Administration defines a radio 
broadcasting station that has $5 million or less in annual receipts as 
a small business.\59\ A radio broadcasting station is an establishment 
primarily engaged in broadcasting aural programs by radio to the 
public.\60\ Included in this industry are commercial, religious, 
educational,

[[Page 16200]]

and other radio stations.\61\ Radio broadcasting stations which 
primarily are engaged in radio broadcasting and which produce radio 
program materials are similarly included.\62\ However, radio stations 
which are separate establishments and are primarily engaged in 
producing radio program material are classified under another SIC 
number.\63\ The 1992 Census indicates that 96 percent (5,861 of 6,127) 
radio station establishments produced less than $5 million in revenue 
in 1992.\64\ Official Commission records indicate that 11,334 
individual radio stations were operating in 1992.\65\ As of December 
31, 1997, Commission records indicate that 12,27 radio stations were 
operating, of which 7,465 were FM stations.\66\ Only commercial 
stations are subject to regulatory fees.
---------------------------------------------------------------------------

    \59\ 13 CFR Sec. 121.201, SIC code 4832.
    \60\ 1992 Census, Series UC92-S-1, at Appendix A-9.
    \61\ Id.
    \62\ Id.
    \63\ Id.
    \64\ 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.
    \65\ FCC News Release, No. 31327 (Jan. 13, 1993).
    \66\ FCC News Release, ``Broadcast Station Totals as of December 
31, 1997.''
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    34. Thus, the proposed rules, if adopted, will affect approximately 
1,558 full power television stations, approximately 1,200 of which are 
considered small businesses.\67\ Additionally, the proposed rules will 
affect some 12,156 full power radio stations, approximately 11,670 of 
which are small businesses.\68\ These estimates may overstate the 
number of small entities because 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 1,952 low power television 
stations (LPTV).\69\ Given the nature of this service, we will presume 
that all LPTV licensees qualify as small entities under the SBA 
definition.
---------------------------------------------------------------------------

    \67\ We use the 77 percent figure of TV stations operating at 
less than $10 million for 1992 and apply it to the 1997 total of 
1558 TV stations to arrive at 1,200 stations categorized as small 
businesses.
    \68\ 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.
    \69\ FCC News Release, No. 7033 (Mar. 6, 1997).
---------------------------------------------------------------------------

Alternative Classification of Small Stations
    35. An alternative way to classify small radio and television 
stations is by 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.\70\ Thus, radio or 
television stations with fewer than five full-time employees are 
exempted from certain EEO reporting and record keeping 
requirements.\71\ We estimate that the total number of broadcast 
stations with 4 or fewer employees is approximately 4,239.\72\
---------------------------------------------------------------------------

    \70\ The Commission's definition of a small broadcast station 
for purposes of applying its EEO rules was adopted prior to the 
requirement of approval by the SBA pursuant to section 3(a) of the 
Small Business Act, 15 U.S.C. Sec. 632(a), as amended by section 222 
of the Small Business Credit and Business Opportunity Enhancement 
Act of 1992, Public Law 102-366, Sec. 222(b)(1), 106 Stat. 999 
(1992), as further amended by the Small Business Administration 
Reauthorization and Amendments Act of 1994, Public Law 103-403, 
Sec. 301, 108 Stat. 4187 (1994). However, this definition was 
adopted after 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).
    \71\ See, e.g., 47 CFR Sec. 73.3612 (Requirement to file annual 
employment reports on Form 395 applies to licensees with five or 
more full-time employees); First Report and Order in Docket No. 
21474 (Amendment of Broadcast Equal Employment Opportunity Rules and 
FCC Form 395), 70 FCC 2d 1466 (1979), 50 FR 50329 (December 10, 
1985). The Commission is currently considering how to decrease the 
administrative burdens imposed by the EEO rule on small stations 
while maintaining the effectiveness of our broadcast EEO 
enforcement. Order and Notice of Proposed Rule Making in MM Docket 
No. 96-16 (Streamlining Broadcast EEO Rule and Policies, Vacating 
the EEO Forfeiture Policy Statement and Amending Section 1.80 of the 
Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd 
5154 (1996), 61 FR 9964 (March 12, 1996). One option under 
consideration is whether to define a small station for purposes of 
affording such relief as one with ten or fewer full-time employees.
    \72\ Compilation of 1994 Broadcast Station Annual Employment 
Reports (FCC Form B), Equal Opportunity Employment Branch, Mass 
Media Bureau, FCC.
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Auxiliary, Special Broadcast and Other Program Distribution Services
    36. This service involves a variety of transmitters, generally used 
to relay broadcast programming to the public (through translator and 
booster stations) or within the program distribution chain (from a 
remote news gathering unit back to the station). The Commission has not 
developed a definition of small entities applicable to broadcast 
auxiliary licensees. Therefore, the applicable definitions of small 
entities are those, noted previously, under the SBA rules applicable to 
radio broadcasting stations and television broadcasting stations.\73\
---------------------------------------------------------------------------

    \73\ 13 C.F.R. Sec. 121.201, SIC code 4832.
---------------------------------------------------------------------------

    37. There are currently 2,720 FM translators and boosters, 4,952 TV 
translators.\74\ 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.\75\
---------------------------------------------------------------------------

    \74\ FCC News Release, Broadcast Station Totals as of December 
31, 1996, No. 71831 (Jan. 21, 1997).
    \75\ 15 U.S.C. Sec. 632.
---------------------------------------------------------------------------

    38. Multipoint Distribution Service (MDS). This service involves a 
variety of transmitters, which are used to relay programming to the 
home or office, similar to that provided by cable television 
systems.\76\ In connection with the 1996 MDS auction the Commission 
defined small businesses as entities that had annual average gross 
revenues for the three preceding years not in excess of $40 
million.\77\ This definition of a small entity in the context of MDS 
auctions has been approved by the SBA.\78\ These stations were licensed 
prior to implementation of Section 309(j) of the Communications Act of 
1934, as amended, 47 U.S.C. Sec. 309(j). Licenses for new MDS 
facilities are now awarded to auction winners in Basic Trading Areas 
(BTAs) and BTA-like areas.\79\ 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 1,878 MDS licensees are 
subject to regulatory

[[Page 16201]]

fees and the number which are small businesses is unknown.
---------------------------------------------------------------------------

    \76\ For purposes of this item, MDS includes both the single 
channel Multipoint Distribution Service (MDS) and the Multichannel 
Multipoint Distribution Service (MMDS).
    \77\ See 47 C.F.R. Sec. 1.2110 (a)(1).
    \78\ 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).
    \79\ 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

    39. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities applicable to cellular 
licensees. Therefore, the applicable definition of small entity is the 
definition under the SBA rules applicable to radiotelephone (wireless) 
companies. This provides that a small entity is a radiotelephone 
company employing no more than 1,500 persons.\80\ According to the 
Bureau of the Census, only twelve radiotelephone firms out of a total 
of 1,178 such firms which operated during 1992 had 1,000 or more 
employees.\81\ Therefore, even if all twelve of these firms were 
cellular telephone companies, nearly all cellular carriers were small 
businesses under the SBA's definition. In addition, we note that there 
are 1,758 cellular licenses; however, a cellular licensee may own 
several licenses. In addition, according to the most recent 
Telecommunications Industry Revenue data, 804 carriers reported that 
they were engaged in the provision of either cellular service or 
Personal Communications Service (PCS) services, which are placed 
together in the data.\82\ We do not have data specifying the number of 
these carriers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of cellular service carriers that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 804 small cellular 
service carriers that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \80\ 13 C.F.R. Sec. 121.201, SIC code 4812.
    \81\ 1992 Census, Series UC92-S-1, at Table 5, SIC code 4812.
    \82\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    40. 220 MHz Radio Services. Because the Commission has not yet 
defined a small business with respect to 220 MHz services, we will 
utilize the SBA definition applicable to radiotelephone companies, 
i.e., an entity employing no more than 1,500 persons.\83\ With respect 
to 220 MHz services, the Commission has proposed a two-tiered 
definition of small business for purposes of auctions: (1) for Economic 
Area (EA) licensees, 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. Given that 
nearly all radiotelephone companies under the SBA definition employ no 
more than 1,500 employees (as noted supra), we will consider the 
approximately 1,500 incumbent licensees in this service as small 
businesses under the SBA definition.
---------------------------------------------------------------------------

    \83\ 13 C.F.R. Sec. 121.201, SIC code 4812.
---------------------------------------------------------------------------

    41. Private and Common Carrier Paging. The Commission has proposed 
a two-tier definition of small businesses in the context of auctioning 
licenses in the Common Carrier Paging and exclusive Private Carrier 
Paging services. Under the proposal, a small business will be defined 
as either (1) an entity that, together with its affiliates and 
controlling principals, has average gross revenues for the three 
preceding years of not more than $3 million, or (2) an entity that, 
together with affiliates and controlling principals, has average gross 
revenues for the three preceding calendar years of not more than $15 
million. Because 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 no more than 1,500 
persons.\84\ At present, there are approximately 24,000 Private Paging 
licenses and 74,000 Common Carrier Paging licenses. According to the 
most recent Telecommunications Industry Revenue data, 172 carriers 
reported that they were engaged in the provision of either paging or 
``other mobile'' services, which are placed together in the data.\85\ 
We do not have data specifying the number of these carriers that are 
not independently owned and operated or have more than 1,500 employees, 
and thus are unable at this time to estimate with greater precision the 
number of paging carriers that would qualify as small business concerns 
under the SBA's definition. Consequently, we estimate that there are 
fewer than 172 small paging carriers that may be affected by the 
proposed rules, if adopted. We estimate that the majority of private 
and common carrier paging providers would qualify as small entities 
under the SBA definition.
---------------------------------------------------------------------------

    \84\ 13 C.F.R. Sec. 121.201, SIC code 4812.
    \85\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    42. Mobile Service Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. As noted above in 
the section concerning paging service carriers, the closest applicable 
definition under the SBA rules is that for radiotelephone (wireless) 
companies,\86\ and the most recent Telecommunications Industry Revenue 
data shows that 172 carriers reported that they were engaged in the 
provision of either paging or ``other mobile'' services.\87\ 
Consequently, we estimate that there are fewer than 172 small mobile 
service carriers that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \86\ 13 C.F.R. Sec. 121.201, SIC code 4812.
    \87\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    43. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years.\88\ 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. \89\ These 
regulations defining ``small entity'' in the context of broadband PCS 
auctions have been approved by the SBA.\90\ 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.\91\ 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 entity PCS providers as defined by the SBA and the 
Commission's auction rules.
---------------------------------------------------------------------------

    \88\ 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 C.F.R. Sec. 24.720(b).
    \89\ 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).
    \90\ See, e.g., Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding, PP Docket No. 93-253, Fifth 
Report and Order, 9 FCC Rcd 5532, 5581-84 (1994).
    \91\ FCC News, Broadband PCS, D, E and F Block Auction Closes, 
No. 71744 (released January 14, 1997).
---------------------------------------------------------------------------

    44. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS.

[[Page 16202]]

The Commission does not have sufficient information to determine 
whether any of these licensees are small businesses within the SBA-
approved definition for radiotelephone companies. 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 by 
auction. Such auctions have not yet been scheduled, however. Given that 
nearly all radiotelephone companies have no more than 1,500 employees 
and that no reliable estimate of the number of prospective MTA and BTA 
narrowband licensees can be made, we assume, for purposes of this IRFA, 
that all of the licenses will be awarded to small entities, as that 
term is defined by the SBA.
    45. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service.92 A significant subset of the Rural Radiotelephone 
Service is the Basic Exchange Telephone Radio Systems 
(BETRS).93 We will use the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing no more than 1,500 
persons.94 There are approximately 1,000 licensees in the 
Rural Radiotelephone Service, and we estimate that almost all of them 
qualify as small entities under the SBA's definition.
---------------------------------------------------------------------------

    \92\ The service is defined in Section 22.99 of the Commission's 
Rules, 47 C.F.R. Sec. 22.99.
    \93\ BETRS is defined in Sections 22.757 and 22.759 of the 
Commission's Rules, 47 C.F.R. Secs. 22.757, 22.759.
    \94\ 13 C.F.R. Sec. 121.201, SIC code 4812.
---------------------------------------------------------------------------

    46. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service.95 Accordingly, we will use the SBA's 
definition applicable to radiotelephone companies, i.e., an entity 
employing no more than 1,500 persons.96 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.
---------------------------------------------------------------------------

    \95\ The service is defined in Section 22.99 of the Commission's 
Rules, 47 C.F.R. Secs. 22.99.
    \96\ 13 C.F.R. Sec. 121.201, SIC code 4812.
---------------------------------------------------------------------------

    47. Specialized Mobile Radio (SMR). The Commission awards bidding 
credits in auctions for geographic area 800 MHz and 900 MHz SMR 
licenses to firms that had revenues of no more than $15 million in each 
of the three previous calendar years.97 In the context of 
900 MHz SMR, this regulation defining ``small entity'' has been 
approved by the SBA; approval concerning 800 MHz SMR is being sought.
---------------------------------------------------------------------------

    \97\ See 47 C.F.R. Sec. 90.814(b)(1).
---------------------------------------------------------------------------

    48. The proposed fees in the NPRM 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 no more than $15 million. One 
firm has over $15 million in revenues. We assume, for purposes of this 
IRFA, that all of the remaining existing extended implementation 
authorizations are held by small entities, as that term is defined by 
the SBA.
    49. The Commission has held auctions for geographic area licenses 
in the 900 MHz SMR band, and recently completed an auction for 
geographic area 800 MHz SMR licenses. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. In the recently 
concluded 800 MHz SMR auction there were 524 licenses awarded to 
winning bidders, of which 38 were won by small or very small entities.
    50. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories. The Commission has not 
developed a definition of small entity specifically applicable to PLMR 
licensees due to the vast array of PLMR users. For the purpose of 
determining whether a licensee is a small business as defined by the 
SBA, each licensee would need to be evaluated within its own business 
area.
    51. The Commission is unable at this time to estimate the number of 
small businesses which could be impacted by the rules. However, the 
Commission's 1994 Annual Report on PLMRs 98 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. Because any 
entity engaged in a commercial activity is eligible to hold a PLMR 
license, the proposed rules in this context could potentially impact 
every small business in the United States.
---------------------------------------------------------------------------

    \98\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994, at 116.
---------------------------------------------------------------------------

    52. Amateur Radio Service. We estimate that 10,000 applicants will 
apply for vanity call signs in FY 1998. All are presumed to be 
individuals. All other amateur licensees are exempt from payment of 
regulatory fees.
    53. Aviation and Marine Radio Service. Small businesses in the 
aviation and marine radio services use a marine very high frequency 
(VHF) radio, any type of emergency position indicating radio beacon 
(EPIRB) and/or radar, a VHF aircraft radio, and/or any type of 
emergency locator transmitter (ELT). The Commission has not developed a 
definition of small entities specifically applicable to these small 
businesses. Therefore, the applicable definition of small entity is the 
definition under the SBA rules for radiotelephone 
communications.99
---------------------------------------------------------------------------

    \99\ 13 C.F.R. Sec. 121.201, SIC code 4812.
---------------------------------------------------------------------------

    54. Most applicants for 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 IRFA, we estimate that there 
may be at least 712,000 potential licensees which are individuals or 
are small entities, as that term is defined by the SBA. We estimate, 
however, that only 16,500 will be subject to FY 1998 regulatory fees.
    55. Fixed Microwave Services. Microwave services include common 
carrier,100 private-operational fixed,101 and 
broadcast auxiliary radio services.102 At present, there are 
approximately 22,015 common carrier fixed licensees and 61,670 private 
operational-fixed licensees and broadcast auxiliary radio licensees in 
the microwave services. The Commission has not yet defined a small 
business with respect to microwave services. For purposes of this IRFA, 
we will utilize the SBA's definition applicable to radiotelephone

[[Page 16203]]

companies--i.e., an entity with no more than 1,500 
persons.103 We estimate, for this purpose, that all of the 
Fixed Microwave licensees (excluding broadcast auxiliary licensees) 
would qualify as small entities under the SBA definition for 
radiotelephone companies.
---------------------------------------------------------------------------

    \100\ 47 C.F.R. Sec. 101 et seq. (formerly, Part 21 of the 
Commission's Rules).
    \101\ Persons eligible under Parts 80 and 90 of the Commission's 
rules can use Private Operational-Fixed Microwave services. See 47 
C.F.R. Parts 80 and 90. Stations in this service are called 
operational-fixed to distinguish them from common carrier and public 
fixed stations. Only the licensee may use the operational-fixed 
station, and only for communications related to the licensee's 
commercial, industrial, or safety operations.
    \102\ Auxiliary Microwave Service is governed by Part 74 of 
Title 47 of the Commission's Rules. See 47 C.F.R. Sec. 74 et seq. 
Available to licensees of broadcast stations and to broadcast and 
cable network entities, broadcast auxiliary microwave stations are 
used for relaying broadcast television signals from the studio to 
the transmitter, or between two points such as a main studio and an 
auxiliary studio. The service also includes mobile TV pickups, which 
relay signals from a remote location back to the studio.
    \103\ 13 C.F.R. Sec. 121.201, SIC 4812.
---------------------------------------------------------------------------

    56. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.104 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 indicated supra in paragraph four of 
this IRFA, all governmental entities with populations of less than 
50,000 fall within the definition of a small entity.105 All 
licensees in this category are exempt from the payment of regulatory 
fees.
---------------------------------------------------------------------------

    \104\ With the exception of the special emergency service, these 
services are governed by Subpart B of Part 90 of the Commission's 
Rules, 47 C.F.R. Secs. 90.15-90.27. 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 
communications related to the delivery of emergency medical 
treatment. 47 C.F.R. Secs. 90.15-90.27. 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 C.F.R. Secs. 90.33-
90.55.
    \105\ 5 U.S.C. Sec. 601(5).
---------------------------------------------------------------------------

    57. Personal Radio Services. Personal radio services provide short-
range, low power radio for personal communications, radio signalling, 
and business communications not provided for in other services. The 
services include the citizen's band (CB) radio service, general mobile 
radio service (GMRS), radio control radio service, and family radio 
service (FRS).106 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 
other licensees that would qualify as small under the SBA's definition; 
however, only GMRS licensees are subject to regulatory fees.
---------------------------------------------------------------------------

    \106\ 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 C.F.R. Secs. 95.401-95.428; Secs. 95.1-
95.181; Secs. 95.201-95.225; 47 C.F.R. Secs. 95.191-95.194.
---------------------------------------------------------------------------

    58. Offshore Radiotelephone Service. This service operates on 
several UHF TV broadcast channels that are not used for TV broadcasting 
in the coastal area of the states bordering the Gulf of Mexico. 
107 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 for 
radiotelephone communications.
---------------------------------------------------------------------------

    \107\  This service is governed by Subpart I of Part 22 of the 
Commission's Rules. See 47 C.F.R. Secs. 22.1001--22.1037.
---------------------------------------------------------------------------

    59. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The Commission auctioned 
geographic area licenses in the WCS service. In the auction, there were 
seven winning bidders that qualified as very small business entities, 
and one that qualified as a small business entity. We conclude that the 
number of geographic area WCS licensees affected includes these eight 
entities.

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. 108 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 Telecommunications Relay Service 
(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, and complete and submit an FCC 
Form 159. Licensees ordinarily will keep a list of the number of units 
they have in service as part of their normal business practices. No 
additional outside professional skills are required to complete the FCC 
Form 159, and it can be completed by the employees responsible for an 
entity's business records.
---------------------------------------------------------------------------

    \108\  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 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. This latter, optional 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 are advised that failure to submit the 
required regulatory fee in a timely manner will subject the licensee or 
regulatee to a late payment fee of 25% in addition to the required fee. 
109 Until payment is received, no new or pending

[[Page 16204]]

applications will be processed, and existing authorizations may be 
subject to rescission. 110 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 
guarantee if that person or entity fails to pay a delinquent debt owed 
to any federal agency. 111 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. 112
---------------------------------------------------------------------------

    \109\  47 U.S.C. 1.1164(a).
    \110\  47 U.S.C. 1.1164(c).
    \111\  Public Law 104-134, 110 Stat. 1321 (1996).
    \112\  31 U.S.C. 7701(c)(2)(B).
---------------------------------------------------------------------------

    63. The Commission's rules currently provide 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. 113 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.
---------------------------------------------------------------------------

    \113\  47 U.S.C. Sec. 1.1166.
---------------------------------------------------------------------------

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

    64. The Omnibus Consolidated Appropriation Act, Public Law 105-119, 
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 the 
Commission to collect for Fiscal Year (FY) 1998. See 47 U.S.C. 
Sec. 159(a). We seek comment on the proposed methodology for 
implementing these statutory requirements and any other potential 
impact of these proposals on small entities.
    65. With the use of actual cost accounting data for computation of 
regulatory fees, we found that some fees which were very small in 
previous years would have increased dramatically. The methodology 
proposed in this NPRM minimizes this impact by limiting the amount of 
increase and shifting costs to other services which, for the most part, 
are larger entities.
    66. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. See, e.g., footnote 108, supra, and 
Attachment H of the NPRM, infra.

VI. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rules

    67. None.

Attachment B--Sources of Payment Unit Estimates for FY 1998

    In order to calculate individual service fees for FY 1998, we 
adjusted FY 1997 payment units for each service to more accurately 
reflect expected FY 1998 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 1998 estimates with actual FY 1997 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 1998 
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 1998 payment units are based on FY 1997 actual payment 
units, it does not necessarily mean that our FY 1998 projection is 
exactly the same number as FY 1997. It means that we have either 
rounded the FY 1998 number or adjusted it slightly to account for these 
variables.

------------------------------------------------------------------------
           Fee category               Sources of payment unit estimates 
------------------------------------------------------------------------
Land Mobile (All), Microwave, IVDS  Based on Wireless Telecommunications
 \114\, Marine (Ship & Coast),       Bureau (WTB) projections of new    
 Aviation (Aircraft & Ground),       applications and renewals taking   
 GMRS, Amateur Vanity Call Signs,    into consideration existing        
 Domestic Public Fixed.              Commission licensee data bases.    
                                     Aviation (Aircraft) and Marine     
                                     (Ship) estimates have been adjusted
                                     to take into consideration the     
                                     licensing of portions of these     
                                     services on a voluntary basis.     
CMRS Mobile Services..............  Based on actual FY 1997 payment     
                                     units adjusted to take into        
                                     consideration industry estimates of
                                     growth between FY 1997 and FY 1998 
                                     and Wireless Telecommunications    
                                     Bureau 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 actual FY 1997 payment     
                                     units.                             
UHF/VHF Television Stations.......  Based on actual FY 1997 payment     
                                     units.                             
AM/FM/TV Construction Permits.....  Based on actual FY 1997 payment     
                                     units.                             
LPTV, Translators and Boosters....  Based on actual FY 1997 payment     
                                     units.                             
Auxiliaries.......................  Based on actual FY 1997 payment     
                                     units.                             
MDS/MMDS..........................  Based on actual FY 1997 payment     
                                     units.                             
Cable Antenna Relay Service (CARS)  Based on actual FY 1997 payment     
                                     units.                             
Cable Television System             Based on Cable Services Bureau and  
 Subscribers.                        industry estimates of              
                                     subscribership.                    
Interstate Telephone Service        Based on actual FY 1997 interstate  
 Providers.                          revenues associated with           
                                     contributions to the               
                                     Telecommunications Relay System    
                                     (TRS) Fund, adjusted to take into  
                                     consideration FY 1998 revenue      
                                     growth in this industry as         
                                     estimated by the Common Carrier    
                                     Bureau.                            
Earth Stations....................  Based on actual FY 1997 payment     
                                     units.                             
Space Stations (GEOs & NGEOs).....  Based on International Bureau       
                                     licensee data bases.               
International Bearer Circuits.....  Based on International Bureau       
                                     estimate.                          

[[Page 16205]]

                                                                        
International HF Broadcast          Based on actual FY 1997 payment     
 Stations, International Public      units.                             
 Fixed Radio Service.                                                   
------------------------------------------------------------------------
\114\ The Wireless Telecommunications Bureau's staff advises that they  
  do not anticipate receiving any applications for IVDS in FY 1998.     
  Therefore, since there is no volume, there will be no regulatory, fee 
  in the IVDS category for FY 1998.                                     


                                                    Attachment C--Calculation of Revenue Requirements                                                   
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Computed FY 1998      Pro-rated   
                  Fee category                     FY 1998 payment   x      FY 1997 Fee     x     Payment years    =       revenue           revenue    
                                                        units                                                            requirement       requirement  
--------------------------------------------------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base, SMRS)...............             4,645                     10                      5               232,250           225,691
Private Microwave...............................             3,830                     10                     10               383,000           372,184
Domestic Public Fixed/Commercial Microwave......             5,150                     10                     10               515,000           500,456
IVDS............................................                 0                      0                      5                     0                 0
Marine (Ship)...................................            16,500                      5                     10               825,000           801,702
GMRS/Other LM...................................            72,465                      5                      5             1,811,625         1,760,465
Aviation (Aircraft).............................             3,500                      5                     10               175,000           170,058
Marine (Coast)..................................             1,370                      5                      5                34,250            33,283
Aviation (Ground)...............................             1,865                      5                      5                46,625            45,308
Amateur Vanity Call Signs.......................            10,000                      5                     10               500,000           485,880
AM/FM Radio.....................................             8,646                  1,126                      1             9,735,396         9,460,469
AM Construction Permits.........................                62                    195                      1                12,090            11,749
FM Construction Permits.........................               473                    950                      1               449,350           436,660
Satellite TV....................................               105                    950                      1                99,750            96,933
Satellite TV Construction Permit................                10                    345                      1                 3,450             3,353
VHF Markets 1-10................................                42                 35,025                      1             1,471,050         1,429,508
VHF Markets 11-25...............................                61                 28,450                      1             1,735,450         1,686,441
VHF Markets 26-50...............................                71                 18,600                      1             1,320,600         1,283,306
VHF Markets 51-100..............................               118                  9,850                      1             1,162,300         1,129,477
VHF Remaining Markets...........................               207                  2,725                      1               564,075           548,146
VHF Construction Permits........................                10                  4,800                      1                48,000            46,644
UHF Markets 1-10................................                94                 16,850                      1             1,583,900         1,539,171
UHF Markets 11-25...............................                96                 13,475                      1             1,293,600         1,257,069
UHF Markets 26-50...............................               124                  8,750                      1             1,085,000         1,054,360
UHF Markets 51-100..............................               172                  4,725                      1               812,700           789,749
UHF Remaining Markets...........................               182                  1,350                      1               245,700           238,761
UHF Construction Permits........................                50                  2,975                      1               148,750           144,549
Auxiliaries.....................................            20,000                     25                      1               500,000           485,880
International HF Broadcast......................                 4                    390                      1                 1,560             1,516
LPTV/Translators/Boosters.......................             2,290                    220                      1               503,800           489,573
CARS............................................             1,800                     65                      1               117,000           113,696
Cable Systems...................................        66,000,000                   0.54                      1            35,640,000        34,633,530
Interstate Telephone Service Providers..........    70,103,000,000                0.00116                      1            81,319,480        79,023,026
CMRS Mobile Services (Cellular/Public Mobile)...        55,540,000                   0.24                      1            13,329,600        12,953,173
CMRS--Messaging.................................        39,592,000                   0.03                      1             1,187,760         1,154,218
MDS/MMDS........................................             1,878                    215                      1               403,770           392,368
International Circuits..........................           325,000                      5                      1             1,625,000         1,579,110
International Public Fixed......................                 3                    310                      1                   930               904
Earth Stations..................................             3,000                    515                      1             1,545,000         1,501,369
Space Stations (Geostationary Orbit)............                46                 97,975                      1             4,506,850         4,379,577
Space Stations (Non-Geostationary Orbit)........                 2                135,675                      1               271,350           263,687
                                                                                                                 ---------------------------------------
    ****** Total Estimated Revenue Collected....  ................       ................       ................           167,246,011       162,523,000
    ****** Total Revenue Requirement............  ................       ................       ................           162,523,000       162,523,000
        Difference..............................  ................       ................       ................             4,723,011                 0
    ** 0.971760098 factor applied                                                                                                                       
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 16206]]


                                 Attachment D.--Calculation of Regulatory Costs                                 
----------------------------------------------------------------------------------------------------------------
                                                                   Total costs                                  
                                 Actual FY 1997   Overhead and    with overhead     Total costs                 
         Fee category              regulatory    other indirect     and other      pro-rated to    Adjusted pro-
                                     costs          pro rated      indirect pro   $162 million**  rated costs***
                                                                      rated                                     
----------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base,                                                                                     
 SMRS)........................       1,952,428           98,195       2,050,623        2,113,136       2,113,136
Microwave.....................       4,860,809          244,469       5,105,277        5,260,912       5,260,912
IVDS..........................       2,122,499          106,749       2,229,248        2,297,206       2,297,206
Marine (Ship).................       2,754,238          138,521       2,892,759        2,980,945       2,980,945
GMRS/Other LM.................       5,943,682          298,930       6,242,612        6,432,918       6,432,918
Aviation (Aircraft)...........         980,895           49,333       1,030,228        1,061,635       1,061,635
Marine (Coast)................         685,608           34,482         720,090          742,041         742,041
Aviation (Ground).............         562,239           28,277         590,516          608,518         608,518
Amateur Vanity Call Signs.....          88,615            4,457          93,072           95,909          95,909
AM/FM Radio...................      14,125,529          710,427      14,835,955       15,288,230      14,396,926
    AM Construction Permits...  ...............  ..............  ...............  ..............         103,960
    FM Construction Permits...  ...............  ..............  ...............  ..............         787,344
Satellite TV..................  ...............  ..............  ...............  ..............          70,397
Satellite TV Construction                                                                                       
 Permit.......................  ...............  ..............  ...............  ..............          11,690
VHF Television................       4,957,533          249,333       5,206,866        5,365,598  ..............
    VHF Markets 1-10..........  ...............  ..............  ...............  ..............       1,291,499
    VHF Markets 11-25.........  ...............  ..............  ...............  ..............       1,129,458
    VHF Markets 26-50.........  ...............  ..............  ...............  ..............       1,371,983
    VHF Markets 51-100........  ...............  ..............  ...............  ..............       1,000,147
    VHF Remaining Markets.....  ...............  ..............  ...............  ..............         502,757
    VHF Construction Permits..  ...............  ..............  ...............  ..............          30,584
UHF Television................       2,954,865          148,611       3,103,476        3,198,086  ..............
    UHF Markets 1-10..........  ...............  ..............  ...............  ..............       1,023,388
    UHF Markets 11-25.........  ...............  ..............  ...............  ..............         756,347
    UHF Markets 26-50.........  ...............  ..............  ...............  ..............         531,842
    UHF Markets 51-100........  ...............  ..............  ...............  ..............         484,190
    UHF Remaining Markets.....  ...............  ..............  ...............  ..............         202,119
    UHF Construction Permits..  ...............  ..............  ...............  ..............         166,940
Auxiliaries...................         146,460            7,366         153,826          158,515         158,515
International HF Broadcast....         217,931           10,961         228,891          235,869         235,869
LPTV/Translators/Boosters.....         736,547           37,044         773,590          797,173         797,173
CARS..........................          61,797            3,108          64,905           66,883          66,883
Cable Systems.................      20,125,023        1,012,164      21,137,187       21,781,555      21,781,555
Interstate Telephone Service                                                                                    
 Providers....................      53,234,026        2,677,341      55,911,367       57,615,828      57,615,828
CMRS Mobile Services (Cellular/                                                                                 
 Public Mobile)...............      11,273,798          567,002      11,840,801       12,201,768      12,201,768
CMRS--One Way Paging..........       6,015,701          302,552       6,318,254        6,510,866       6,510,866
MDS/MMDS......................       1,357,260           68,262       1,425,521        1,468,979       1,468,979
International Circuits........       8,253,772          415,114       8,668,886        8,933,157       8,933,157
International Public Fixed....         193,436            9,729         203,165          209,358         209,358
Earth Stations................         339,999           17,100         357,099          367,985         367,985
Space Stations (Geostationary                                                                                   
 Orbit).......................       5,677,889          285,563       5,963,452        6,145,248       6,145,248
Space Stations (Non-                                                                                            
 Geostationary Orbit).........         540,215           27,169         567,385          584,681         584,681
Overhead & Other Indirect                                                                                       
 Costs........................       7,552,257   ..............  ...............  ..............  ..............
                               ---------------------------------------------------------------------------------
        *****Total............     157,715,049        7,552,257     157,715,049      162,523,000     162,532,656
        *****Total Revenue                                                                                      
         Requirement..........     162,523,000   ..............     162,523,000      162,523,000     162,523,000
        Difference............      (4,807,951)  ..............      (4,807,951)  ..............           9,656
----------------------------------------------------------------------------------------------------------------
**1.046987 factor applied                                                                                       
***The pro rated costs shown in the previous column needed to be adjusted to sub-allocate TV and radio costs.   
Note: Columns may not add due to rounding.                                                                      


[[Page 16207]]


                                                                                          Attachment E.--Calculation of FY 1998 Regulatory Fees                                                                                         
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Costs vs.                                                                                                                                      
                                                               Pro-rated     Adjusted     revenue    Pro-revenue     Round 1      Round 1    Round 1 Pro-    Round 2      Round 2    Round 2 Pro-   Computed   Rounded new              
                        Fee category                            revenue      activity   requirement  requirement     Target      Adjustable     rated        Target      Adjustable     rated     new FY 1998    FY 1998     Expected FY
                                                              requirement     costs      difference    plus 25%      revenue       target       target       revenue       target       target     regulatory   regulatory  1998 revenue
                                                                                         (percent)     ceiling                    revenue      revenue                    revenue      revenue        fee          fee                  
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470MHZ-Base, SMRS)...........................      225,691     2,113,136       836.30      282,114      282,114   ...........      282,114      282,114   ...........      282,114           12           12      278,700 
Microwave..................................................      872,640     5,260,912       502.87    1,090,800    1,090,800   ...........    1,090,800    1,090,800   ...........    1,090,800           12           12    1,077,600 
IVDS.......................................................            0     2,297,206  ...........            0            0   ...........            0            0   ...........            0            0            0            0 
Marine (Ship)..............................................      801,702     2,980,945       271.83    1,002,128    1,002,128   ...........    1,002,128    1,002,128   ...........    1,002,128            6            6      990,000 
GMRS/Other LM..............................................    1,760,465     6,432,918       265.41    2,200,581    2,200,581   ...........    2,200,581    2,200,581   ...........    2,200,581            6            6    2,173,950 
Aviation (Aircraft)........................................      170,058     1,061,635       524.28      212,573      212,573   ...........      212,573      212,573   ...........      212,573            6            6      210,000 
Marine (Coast).............................................       33,283       742,041      2129.49       41,604       41,604   ...........       41,604       41,604   ...........       41,604            6            6       41,100 
Aviation (Ground)..........................................       45,308       608,518      1243.07       56,635       56,635   ...........       56,635       56,635   ...........       56,635            6            6       55,950 
Amateur Vanity Call Signs..................................      485,880        95,909       -80.26      607,350      607,350        95,909      128,310      128,310       128,310      128,757         1.29         1.29      128,757 
AM/FM Radio................................................    9,460,469    14,396,926        52.18   11,825,586   11,825,586   ...........   11,825,586   11,825,586   ...........   11,825,586        1,368        1,375   11,888,250 
AM Construction Permits....................................       11,749       103,960       784.84       14,686       14,686   ...........       14,686       14,686   ...........       14,686          237          235       14,570 
FM Construction Permits....................................      436,660       787,344        80.31      545,825      545,825   ...........      545,825      545,825   ...........      545,825        1,154        1,150      543,950 
Satellite TV...............................................       96,933        70,397       -27.38      121,166      121,166        70,397       94,179       94,179        94,179       94,508          900          900       94,500 
Satellite TV Construction Permit...........................        3,353        11,690       248.64        4,191        4,191   ...........        4,191        4,191   ...........        4,191          419          420        4,200 
VHF Markets 1-10...........................................    1,429,508     1,291,499        -9.65    1,786,885    1,291,499     1,291,499    1,727,804    1,727,804     1,727,804    1,733,829       41,282       41,275    1,733,550 
VHF Markets 11-25..........................................    1,686,441     1,129,458       -33.03    2,108,051    1,129,458     1,129,458    1,511,021    1,511,021     1,511,021    1,516,290       24,857       24,850    1,515,850 
VHF Markets 26-50..........................................    1,283,306     1,371,986         6.91    1,604,133    1,371,986     1,371,986    1,835,481    1,604,133   ...........    1,604,133       22,593       22,600    1,604,600 
VHF Markets 51-100.........................................    1,129,477     1,000,147       -11.45    1,411,846    1,000,147     1,000,147    1,338,025    1,338,025     1,338.025    1,342,691       11,379       11,375    1,342,250 
VHF Remaining Markets......................................      548,146       502,757        -8.28      685,183      502,757       502,757      672,602      672,602       672,602      674,948        3,261        3,250      672,750 
VHF Construction Permits...................................       46,644        30,584       -34.43       58,305       30,584        30,584       40,916       40,916        40,916       41,059        4,106        4,100       41,000 
UHF Markets 1-10...........................................    1,539,171     1,023,388       -33.51    1,923,964    1,023,388     1,023,388    1,369,117    1,369,117     1,369,117    1,373,892       14,616       14,625    1,374,750 
UHF Markets 11-25..........................................    1,257,069       756,347       -39.83    1,571,336      756,347       756,347    1,011,862    1,011,862     1,011,862    1,015,391       10,577       10,575    1,015,200 
UHF Markets 26-50..........................................    1,054,360       531,842       -49.56    1,317,950      531,842       531,842      711,513      711,513       711,513      713,994        5,758        5,750      713,000 
UHF Markets 51-100.........................................      789,749       484,190       -38.69      987,186      484,190       484,190      647,763      647,763       647,763      650,022        3,779        3,775      649,300 
UHF Remaining Markets......................................      238,761       202,119       -15.35      298,451      202,119       202,119      270,400      270,400       270,400      271,343        1,491        1,500      273,000 
UHF Construction Permits...................................      144,549       166,940        15.49      180,686      166,940       166,940      223,337      180,686   ...........      180,686        3,614        3,625      181,250 
Auxiliaries................................................      485,880       158,515       -67.38      607,350      158,515       158,515      212,066      212,066       212,066      212,805           11           11      220,000 
International HF Broadcast.................................        1,516       235,869     15458.64        1,895        1,895   ...........        1,895        1,895   ...........        1,895          474          475        1,900 
LPTV/Translators/Boosters..................................      489,573       797,173        62.83      611,966      611,966   ...........      611,966      611,966   ...........      611,966          267          265      606,850 
CARS.......................................................      113,696        66,883       -41.17      142,120       66,883        66,883       89,478       89,478        89,478       89,790           50           50       90,000 
Cable Systems..............................................   34,633,530    21,781,555       -37.11   43,291,913   21,781,555    21,781,555   29,139,975   29,139,975    29,139,975   29,241,595         0.44         0.44   29,241,595 
Interstate Telephone Service Providers.....................   79,023,026    57,615,828       -27.09   98,778,783   57,615,828    57,615,828   77,080,070   77,080,070    77,080,070   77,348,871      0.00110      0.00110   77,348,871 
CMRS Mobile Services (Cellular/Public Mobile)..............   12,953,173    12,201,768        -5.80   16,191,466   12,201,768    12,201,768   16,323,867   16,191,466   ...........   16,191,466         0.29         0.29   16,191,466 
CMRS Messaging Services....................................    1,154,218     6,510,866       464.09    1,442,773    1,442,773   ...........    1,442,773    1,442,773   ...........    1,442,773         0.04         0.04    1,442,773 
MDS/MMDS...................................................      392,368     1,468,979       274.39      490,460      490,460   ...........      490,460      490,460   ...........      490,460          261          260      488,280 
International Circuits.....................................    1,579,110     8,933,157       465.71    1,973,888    1,973,888   ...........    1,973,888    1,973,888   ...........    1,973,888            6            6    1,950,000 
International Public Fixed.................................          904       209,358     23059.07        1,130        1,130   ...........        1,130        1,130   ...........        1,130          377          375        1,125 
Earth Stations.............................................    1,501,369       367,985       -75.49    1,876,711      367,985       367,985      492,301      492,301       492,301      494,017          165          165      495,000 
Space Stations (Geostationary Orbit).......................    4,379,577     6,145,248        40.32    5,474,471    5,474,471   ...........    5,474,471    5,474,471   ...........    5,474,471      119,010      119,000    5,474,000 
Space Stations (Non-Geostationary Orbit)...................      263,687       584,681       121.73      329,609      329,609   ...........      329,609      329,609   ...........      329,609      164,804      164,800      329,600 
    ****** Total Estimated Revenue Collected...............  162,522,999   162,532,659  ...........  203,153,749  128,453,011   100,850,097  162,523,000  162,116,000   116,537,401  162,523,000  ...........  ...........  162,499,486 
    ****** Total Revenue Requirement.......................  162,523,000   162,523,000  ...........  162,523,000  162,523,000   ...........  162,523,000  162,523,000   ...........  162,523,000  ...........  ...........  162,523,000 
      Difference...........................................           (1)        9,659  ...........   40,630,749  (34,069,989)  ...........            0     (406,400)  ...........            0  ...........  ...........      (23,514)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
** 1.33782803 factor applied                                                                                                                                                                                                            
*** 1.003487295 factor applied                                                                                                                                                                                                          


[[Page 16208]]


       Attachment F.--Proposed FY 1998 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)..................................................           12
Microwave (per license) (47 CFR Part 101)..................           12
Interactive Video Data Service (per license) (47 CFR Part               
 95).......................................................        (\1\)
Marine (Ship) (per station) (47 CFR Part 80)...............            6
Marine (Coast) (per license) (47 CFR Part 80)..............            6
General Mobile Radio Service (per license) (47 CFR Part 95)            6
Land Mobile (per license) (all stations not covered by PMRS             
 and CMRS).................................................            6
Aviation (Aircraft) (per station) (47 CFR Part 87).........            6
Aviation (Ground) (per license) (47 CFR Part 87)...........            6
Amateur Vanity Call Signs (per call sign) (47 CFR Part 97).         1.29
CMRS Mobile Services (per unit) (47 CFR Parts 20, 22, 24,               
 27, 80 and 90)............................................          .29
CMRS One-Way Paging (per unit) (47 CFR Parts 20, 22 and 90)          .04
Multipoint Distribution Services (per call sign) (47 CFR                
 Part 21)..................................................          260
AM & FM Radio (47 CFR Part 73):                                         
    Group 1................................................        2,500
    Group 2................................................        2,250
    Group 3................................................        2,000
    Group 4................................................        1,750
Group 5....................................................        1,500
    Group 6................................................        1,250
    Group 7................................................        1,000
    Group 8................................................          750
    Group 9................................................          500
    Group 10...............................................          250
    AM Construction Permits................................          235
    FM Construction Permits................................        1,150
TV (47 CFR Part 73) VHF Commercial:                                     
    Markets 1-10...........................................       41,275
    Markets 11-25..........................................       24,850
    Markets 26-50..........................................       22,600
    Markets 51-100.........................................       11,375
    Remaining Markets......................................        3,250
    Construction Permits...................................        4,100
TV (47 CFR Part 73) UHF Commercial:                                     
    Markets 1-10...........................................       14,625
    Markets 11-25..........................................       10,575
    Markets 26-50..........................................        5,750
    Markets 51-100.........................................        3,775
    Remaining Markets......................................        1,500
    Construction Permits...................................        3,625
Satellite Television Stations (All Markets)................          900
Construction Permits--Satellite Television Stations........          420
Low Power TV, TV/FM Translators & Boosters (47 CFR Part 74)          265
Broadcast Auxiliary (47 CFR Part 74).......................           11
Cable Antenna Relay Service (47 CFR Part 78)...............           50
Cable Television Systems (per subscriber)..................          .44
Interstate Telephone Service Providers (per revenue dollar)        .0011
Earth Stations (47 CFR Part 25)............................          165
Space Stations (per operational station in geostationary                
 orbit) (47 CFR Part 25) also includes Direct Broadcast                 
 Satellite Service (per operational station) (47 CFR Part               
 100)......................................................      119,000
Space Stations (per operational system in non-geostationary             
 orbit) (47 CFR Part 25)...................................      164,800
International Circuits (per active 64KB circuit)...........            6
International Public Fixed (per call sign) (47 CFR Part 23)          375
International (HF) Broadcast (47 CFR Part 73)..............         475 
------------------------------------------------------------------------
\1\ No fee.                                                             


     Attachment G.--Comparison Between FY 1997 and Proposed FY 1998     
                             Regulatory Fees                            
------------------------------------------------------------------------
                                                   Annual      Proposed 
                                                 regulatory   regulatory
                 Fee category                     fee  FY      fee  FY  
                                                    1997         1998   
------------------------------------------------------------------------
PMRS (per license) (Formerly Land Mobile-                               
 Exclusive Use at 220-222 Mhz, above 470 Mhz,                           
 Base Station and SMRS) (47 CFR Part 90)......           10           12
Microwave (per license) (47 CFR Part 101).....           10           12
Marine (Ship) (per station) (47 CFR Part 80)..            5            6
Marine (Coast) (per license) (47 CFR Part 80).            5            6
General Mobile Radio Service (per license) (47                          
 CFR Part 95).................................            5            6

[[Page 16209]]

                                                                        
Land Mobile (per license) (all stations not                             
 covered by PMRS and CMRS)....................            5            6
Aviation (Aircraft) (per station) (47 CFR Part                          
 87)..........................................            5            6
Aviation (Ground) (per license) (47 CFR Part                            
 87)..........................................            5            6
Amateur Vanity Call Signs (per call sign) (47                           
 CFR Part 97).................................            5         1.29
CMRS Mobile Services (per unit) (47 CFR Parts                           
 20, 22, 24, 27, 80 and 90)...................          .24          .29
CMRS Messaging Services [formerly One Way                               
 Paging] (per unit) (47 CFR Parts 20, 22, and                           
 90)..........................................          .03          .04
Multipoint Distribution Services (per call                              
 sign) (47 CFR Part 21).......................          215          260
Radio (47 CFR Part 73):                                                 
    Group 1...................................        2,000        2,500
    Group 2...................................        1,800        2,250
    Group 3...................................        1,600        2,000
    Group 4...................................        1,400        1,750
    Group 5...................................        1,200        1,500
    Group 6...................................        1,000        1,250
    Group 7...................................          800        1,000
    Group 8...................................          600          750
    Group 9...................................          400          500
    Group 10..................................          200          250
AM Construction Permits.......................          195          235
FM Construction Permits.......................          950        1,150
TV (47 CFR Part 73) VHF Commercial:                                     
    Markets 1-10..............................       35,025       41,275
    Markets 11-25.............................       28,450       24,850
    Markets 26-50.............................       18,600       22,600
    Markets 51-100............................        9,850       11,375
    Remaining Markets.........................        2,725        3,250
    Construction Permits......................        4,800        4,100
TV (47 CFR Part 73) UHF Commercial:                                     
    Markets 1-10..............................       16,850       14,625
    Markets 11-25.............................       13,575       10,575
    Markets 26-50.............................        8,750        5,750
    Markets 51-100............................        4,725        3,775
    Remaining Markets.........................        1,350        1,500
    Construction Permits......................        2,975        3,625
Satellite Television Stations (All Markets)...          950          900
Construction Permits--Satellite Television                              
 Stations.....................................          345          420
Low Power TV, TV/FM Translators & Boosters (47                          
 CFR Part 74).................................          220          265
Broadcast Auxiliary (47 CFR Part 74)..........           25           11
Cable Antenna Relay Service (47 CFR Part 78)..           65           50
Earth Stations (47 CFR Part 25)...............          515          165
Cable Television Systems (per subscriber) (47                           
 CFR Part 76).................................          .54          .44
Interstate Telephone Service Providers (per                             
 revenue dollar)..............................       .00116        .0011
Space Stations (per operational station in                              
 geostationary orbit) (47 CFR Part 25) also                             
 includes Direct Broadcast Satellite Service                            
 (per operational station) (47 CFR Part 100)..       97,975      119,000
Space Stations (per operational system in non-                          
 geostationary orbit) (47 CFR Part 25)........      135,675      164,800
International Bearer Circuits (per active 64KB                          
 circuit).....................................            5            6
International Public Fixed (per call sign) (47                          
 CFR Part 23).................................          310          375
International (HF) Broadcast (47 CFR Part 73).          390          475
------------------------------------------------------------------------

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

    1. The guidelines below provide an explanation of regulatory fee 
categories established by the Schedule of Regulatory Fees in section 9 
(g) of the Communications Act, 47 U.S.C. Sec. 159(g) as modified in the 
instant NPRM. 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, 1996, and 1997 and 
the services subject to the fee schedule. 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 501 of the 
Internal Revenue Code or the certification of a governmental authority 
attesting to its nonprofit status. The governmental exemption applies 
even where the government-owned or community-owned facility is in 
competition with a commercial operation. Other specific exemptions are 
discussed below in the descriptions of other particular service 
categories.

[[Page 16210]]

1. Private Wireless Radio Services

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

a. Exclusive Use Services

    4. Private Mobile Radio Services (PMRS) (Formerly Land Mobile 
Services): Regulatees in this category include those authorized under 
part 90 of the Commission's Rules to provide limited access Wireless 
Radio service that allows high quality voice or digital communications 
between vehicles or to fixed stations to further the business 
activities of the licensee. These services, using the 220-222 MHz band 
and frequencies at 470 MHz and above, may be offered on a private 
carrier basis in the Specialized Mobile Radio Services 
(SMRS).115 For FY 1998, PMRS licensees will pay a $12 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.116 The total regulatory fee due is 
either $60 for a license with a five year term or $120 for a license 
with a 10 year term.
---------------------------------------------------------------------------

    \115\ 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.
    \116\ Although this fee category includes licenses with ten-year 
terms, the estimated volume of ten-year license applications in FY 
1998 is less than one-tenth of one percent and, therefore, is 
statistically insignificant.
---------------------------------------------------------------------------

    5. Microwave Services: These services include private and 
commercial microwave systems and private and commercial carrier systems 
authorized under part 101 of the Commission's Rules to provide 
telecommunications services between fixed points on a high quality 
channel of communications. Microwave systems are often used to relay 
data and to control railroad, pipeline, and utility equipment. 
Commercial systems typically are used for video or data transmission or 
distribution. For FY 1998, Microwave licensees will pay a $12 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 $120 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 
1998. Therefore, for FY 1998, 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. The Commission exercises that authority. Thus, 
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 1998, parties required to be 
licensed and those choosing to be licensed for Marine (Ship) Stations 
will pay a $6 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 $60 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 1998, 
licensees of Marine (Coast) Stations will pay a $6 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 $30 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 1998, licensees of 
services in this category will pay a $6 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 $30 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. The commission exercises that 
authority. Thus, 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 
1998, parties required to be licensed and those choosing to be licensed 
for Aviation (Aircraft) Stations will pay a $6 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 $60 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

[[Page 16211]]

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 1998, licensees of Aviation (Ground) Stations will pay a $6 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 $30 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 1998, GMRS licensees will pay a $6 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 $30 per license for the five-year license term.

c. Amateur Radio Vanity Call Signs

    13. Amateur Vanity Call Signs: This category covers voluntary 
requests for specific call signs in the Amateur Radio Service 
authorized under part 97 of the Commission's Rules. Applicants for 
Amateur Vanity Call-Signs will continue to pay a $5 annual regulatory 
fee per call sign, as prescribed in the FY 1997 fee schedule, payable 
for an entire ten-year license term at the time of application for a 
vanity call sign until the FY 1998 fee schedule becomes effective. The 
total regulatory fee due would be $50 per license for the ten-year 
license term.117 For FY 1998, Amateur Vanity Call Sign 
applicants will pay a $1.29 annual regulatory fee per call sign, 
payable for an entire ten-year term at the time of application for a 
new, renewal or reinstatement license. The total regulatory fee due is 
$12.90 per call sign for the ten-year license term. We propose that 
there will be no refunds to applicants who submit applications before 
implementation of the FY 1998 fee.
---------------------------------------------------------------------------

    \117\ 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); 118 Broadband Personal Communications Services (part 
24), Public Coast Stations (part 80); Public Mobile Radio (Cellular, 
Rural Radio Service, 800 MHz Air-Ground Radiotelephone, and Offshore 
Radio Services) (part 22); and Wireless Communications Service (part 
27). Each licensee in this group will pay an annual regulatory fee for 
each mobile or cellular unit (mobile or telephone number), assigned to 
its customers, including resellers of its services. For FY 1998, the 
regulatory fee is $.29 per unit.
---------------------------------------------------------------------------

    \118\ 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.
---------------------------------------------------------------------------

    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 and Radiotelephone Service), 
licensees formerly licensed as part of the Common Carrier Radio 
Services (e.g., Public Mobile One-Way Paging), licensees of Narrowband 
Personal Communications Service (PCS) (e.g., one-way and two-way 
paging), and 220-222 MHz Band and Interconnected Business Radio 
Service. 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. 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 1998, the regulatory fee is $.04 per unit.
    16. Finally, we are reiterating our definition of CMRS payment 
units to make it clear that fees are assessable on each PCS or cellular 
telephone and each one-way or two-way pager capable of receiving or 
transmitting information, whether or not the unit is ``active'' on the 
``as-of'' date for payment of these fees. The unit becomes ``feeable'' 
if the end user or assignee of the unit has possession of the unit and 
the unit is capable of transmitting or receiving voice or non-voice 
messages or data and the unit is either owned and operated by the 
licensee of the CMRS system or a reseller, or the end user of a unit 
has a contractual agreement for the provision of a CMRS service from a 
licensee of a CMRS system or a reseller of a CMRS service. The 
responsible payer of the regulatory fee is the CMRS licensee. For 
example, John Doe purchases a pager and contractually obtains paging 
services from Paging Licensee X. Paging Licensee X is responsible for 
paying the applicable regulatory fee for this unit. Likewise, Cellular 
Licensee Y donates cellular phones to a high school and the high school 
either pays for or obtains free cellular service from Cellular Licensee 
Y. In this situation, Cellular Licensee Y is responsible for paying the 
applicable regulatory fees for these units.

2. Mass Media Services

    17. 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

    18. 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.119 We 
have combined class of station and city grade 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

[[Page 16212]]

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 1998 are as follows:
---------------------------------------------------------------------------

    \119\ 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........................................................   $2,500
Group 2........................................................    2,250
Group 3........................................................    2,000
Group 4........................................................    1,750
Group 5........................................................    1,500
Group 6........................................................    1,250
Group 7........................................................    1,000
Group 8........................................................      750
Group 9........................................................      500
Group 10.......................................................      250
                                                                        

    19. Licensees may determine the appropriate fee payment by 
referring to a list which will be provided as an attachment to the 
final Report and Order in this proceeding. 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 may be included in Public Notices mailed to each licensee.

b. Construction Permits--Commercial AM Radio

    20. This category includes holders of permits to construct new 
Commercial AM Stations. For FY 1998, permittees will pay a fee of $235 
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 group within which the station 
appears.

c. Construction Permits--Commercial FM Radio

    21. This category includes holders of permits to construct new 
Commercial FM Stations. For FY 1998, permittees will pay a fee of 
$1,150 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 group within which the station 
appears.

d. Commercial Television Stations

    22. 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. 66, 1998 
Edition, Warren Publishing, Inc. The fees for each category of station 
are as follows:

VHF Markets 1-10..............................................   $41,275
VHF Markets 11-25.............................................    24,850
VHF Markets 26-50.............................................    22,600
VHF Markets 51-100............................................    11,375
VHF Remaining Markets.........................................     3,250
UHF Markets 1-10..............................................    14,625
UHF Markets 11-25.............................................    10,575
UHF Markets 26-50.............................................     5,750
UHF Markets 51-100............................................     3,775
UHF Remaining Markets.........................................     1,500
                                                                        

e. Commercial Television Satellite Stations

    23. 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 $900 annually. Those stations designated as Television 
Satellite Stations in the 1998 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

    24. This category includes holders of permits to construct new 
Commercial VHF Television Stations. For FY 1998, VHF permittees will 
pay an annual regulatory fee of $4,100. 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

    25. This category includes holders of permits to construct new UHF 
Television Stations. For FY 1998, UHF Television permittees will pay an 
annual regulatory fee of $3,625. 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

    26. The fee for UHF and VHF Television Satellite Station 
construction permits for FY 1998 is $420. 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

    27. 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 1998, 
licensees in low power television, FM translator and booster, and TV 
translator and booster category will pay a regulatory fee of $265 for 
each license held.

j. Broadcast Auxiliary Stations

    28. 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 1998, 
licensees of Commercial Auxiliary Stations will pay an $11 annual 
regulatory fee on a per call sign basis.

k. Multipoint Distribution Service

    29. 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 1998, 
MDS and MMDS

[[Page 16213]]

stations will pay an annual regulatory fee of $260 per call sign.

3. Cable Services

a. Cable Television Systems

    30. 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 1998, Cable Systems 
will pay a regulatory fee of $.44 per subscriber.120 
Payments for Cable Systems are to be made on a per subscriber basis as 
of December 31, 1997. 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.
---------------------------------------------------------------------------

    \120\ 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

    31. 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 1998, licensees will 
pay an annual regulatory fee of $50 per CARS license.

4. Common Carrier Services

a. Commercial Microwave (Domestic Public Fixed Radio Service)

    32. 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

    33. 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 1998, 
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 0.0011 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................................                    0.0011
(6) Fee due (4)times(5).......................                          
------------------------------------------------------------------------

5. International Services

a. Earth Stations

    34. 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. 121 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 1998, licensees of VSATs, Mobile 
Satellite Earth Stations, and Fixed-Satellite Transmit/Receive and 
Transmit-Only Earth Stations will pay a fee of $165 per authorization 
or registration as well as a separate fee of $165 for each associated 
Hub Station.
---------------------------------------------------------------------------

    \121\  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 1998.
---------------------------------------------------------------------------

    35. Receive-only earth stations. For FY 1998, there is no 
regulatory fee for receive-only earth stations.

b. Space Stations (Geostationary Orbit)

    36. Geostationary Orbit (also referred to as Geosynchronous) Space 
Stations are domestic and international satellites positioned in orbit 
to remain approximately fixed relative to the

[[Page 16214]]

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 
1998, entities authorized to operate geostationary space stations 
(including DBS satellites) will be assessed an annual regulatory fee of 
$119,000 per operational station in orbit. Payment is required for any 
geostationary satellite that has been launched and tested and is 
authorized to provide service.

c. Space Stations (Non-Geostationary Orbit)

    37. Non-Geostationary Orbit Systems (such as Low Earth Orbit (LEO) 
Systems) are space stations that orbit the earth in non-geosynchronous 
orbit. They are authorized under part 25 of the Commission's rules to 
provide communications between satellites and earth stations on a 
common carrier and/or private carrier basis. For FY 1998, entities 
authorized to operate Non-Geostationary Orbit Systems (NGSOs) will be 
assessed an annual regulatory fee of $164,800 per operational system in 
orbit. Payment is required for any NGSO System that has one or more 
operational satellites operational. In our FY 1997 Report and Order at 
paragraph 75 we retained our requirement that licensees of LEOs pay the 
LEO regulatory fee upon their certification of operation of a single 
satellite pursuant to section 25.120(d). We require payment of this fee 
following commencement of operations of a system's first satellite to 
insure 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. 
Because section 25.120(d) has significant implications beyond 
regulatory fees (such as whether the entire planned cluster is 
operational in accordance with the terms and conditions of the license) 
we are clarifying our current definition of an operational LEO 
satellite to prevent misinterpretation of our intent as follows:

    Licensees of Non-Geostationary Satellite Systems (such as LEOs) are 
assessed a regulatory fee upon the commencement of operation of a 
system's first satellite as reported annually pursuant to sections 
25.142(c), 25.143(e), 25.145(g), or upon certification of operation of 
a single satellite pursuant to section 25.120(d).

d. International Bearer Circuits

    38. 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 
1998, the regulatory fee is $6.00 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

    39. 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 1998, International Public Fixed Radio Service licensees will 
pay a $375 annual regulatory fee per call sign.

f. International (HF) Broadcast

    40. 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 1998, International HF Broadcast 
Stations will pay an annual regulatory fee of $475 per station license.

Attachment I--Description of FCC Activities

    Authorization of Service: The authorization or licensing of radio 
stations, telecommunications equipment, and radio operators, as well as 
the authorization of common carrier and other services and facilities. 
Includes policy direction, program development, legal services, and 
executive direction, as well as support services associated with 
authorization activities.122
---------------------------------------------------------------------------

    \122\ Although Authorization of Service is described in this 
exhibit, it is not one of the activities included as a feeable 
activity for regulatory fee purposes pursuant to section 9(a)(1) of 
the Act. 47 U.S.C. 159(a)(1).
---------------------------------------------------------------------------

    Policy and Rulemaking: Formal inquiries, rulemaking proceedings to 
establish or amend the Commission's rules and regulations, action on 
petitions for rulemaking, and requests for rule interpretations or 
waivers; economic studies and analyses; spectrum planning, modeling, 
propagation-interference analyses, and allocation; and development of 
equipment standards. Includes policy direction, program development, 
legal services, and executive direction, as well as support services 
associated with policy and rulemaking activities.
    Enforcement: Enforcement of the Commission's rules, regulations and 
authorizations, including investigations, inspections, compliance 
monitoring, and sanctions of all types. Also includes the receipt and 
disposition of formal and informal complaints regarding common carrier 
rates and services, the review and acceptance/rejection of carrier 
tariffs, and the review, prescription and audit of carrier accounting 
practices. Includes policy

[[Page 16215]]

direction, program development, legal services, and executive 
direction, as well as support services associated with enforcement 
activities.
    Public Information Services: The publication and dissemination of 
Commission decisions and actions, and related activities; public 
reference and library services; the duplication and dissemination of 
Commission records and databases; the receipt and disposition of public 
inquiries; consumer, small business, and public assistance; and public 
affairs and media relations. Includes policy direction, program 
development, legal services, and executive direction, as well as 
support services associated with public information activities.

Attachment J--Factors, Measurements and Calculations That Go Into 
Determining Station Signal Contours and Associated Population 
Coverages

AM Stations

    Specific information on each day tower, including field ratio, 
phasing, spacing and orientation was retrieved, as well as the 
theoretical pattern RMS figure (mV/m @ 1 km) for the antenna system. 
The standard, or modified standard if pertinent, horizontal plane 
radiation pattern was calculated using techniques and methods specified 
in Secs. 73.150 and 73.152 of the Commission's rules. See 47 U.S.C. 
73.150 and 73.152. Radiation values were calculated for each of 72 
radials around the transmitter site (every 5 degrees of azimuth). Next, 
estimated soil conductivity data was retrieved from a database 
representing the information in FCC Figure M3. Using the calculated 
horizontal radiation values, and the retrieved soil conductivity data, 
the distance to the city grade (5 mV/m) contour was predicted for each 
of the 72 radials. The resulting distance to city grade contours were 
used to form a geographical polygon. Population counting was 
accomplished by determining which 1990 block centroids were contained 
in the polygon. The sum of the population figures for all enclosed 
blocks represents the total population for the predicted city grade 
coverage area.

FM Stations

    The maximum of the horizontal and vertical HAAT (m) and ERP (kW) 
was used. Where the antenna HAMSL was available, it was used in lieu of 
the overall HAAT figure to calculate specific HAAT figures for each of 
72 radials under study. Any available directional pattern information 
was applied as well, to produce a radial-specific ERP figure. The HAAT 
and ERP figures were used in conjunction with the propagation curves 
specified in Sec. 73.313 of the Commission's rules to predict the 
distance to the city grade (70 dBuV/m or 3.17 mV/m) contour for each of 
the 72 radials. See 47 U.S.C. 73.313. The resulting distance to city 
grade contours were used to form a geographical polygon. Population 
counting was accomplished by determining which 1990 block centroids 
were contained in the polygon. The sum of the population figures for 
all enclosed blocks represents the total population for the predicted 
city grade coverage area.

[FR Doc. 98-8459 Filed 4-1-98; 8:45 am]
BILLING CODE 6712-01-P