[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Proposed Rules]
[Pages 70090-70093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33564]


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

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 98-200; FCC 98-298]


Assessment and Collection of Regulatory Fees For Fiscal Year 1999

AGENCY: Federal Communications Commission.

ACTION: Notice of inquiry.

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

SUMMARY: The Commission is seeking proposals to assist it in revising 
its Schedule of Regulatory Fees in order to recover the amount of 
regulatory fees that Congress has required it to collect for fiscal 
year 1999. Section 9 of the Communications Act of 1934, as amended, 
provides for the annual assessment and collection of regulatory fees. 
For fiscal year 1999 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 January 7, 1999 and Reply Comments are due 
January 19, 1999.

FOR FURTHER INFORMATION CONTACT: Terry Johnson, Office of Managing 
Director at (202) 418-0445, or the Fees Hotline at (202) 418-0192.

SUPPLEMENTARY INFORMATION:

    Adopted: November 10, 1998.
    Released: December 4, 1998.

                            Table of Contents
------------------------------------------------------------------------
                                                              Paragraph
                           Topic                                 No.
------------------------------------------------------------------------
I. Introduction............................................            1
II. Background.............................................            2
III. Discussion............................................            4
  a. Commercial Mobile Radio Services (``CMRS'')...........            5
  b. Space Stations
    i. Geostationary Orbit Space Stations (``GSOs'').......           10
    ii. Non-geostationary Orbit Space Stations (``NGSOs'').           11
  c. Interstate Telephone Service Providers................           12
  d. Treatment of New Services in all Feeable Categories...           16
IV. Procedural Matters
  a. Comment Period and Procedures.........................           19
  b. Ex Parte Rules........................................           24
  c. Authority and Further Information.....................           25
------------------------------------------------------------------------

I. Introduction

    1. By this Notice of Inquiry (``NOI''), the Commission begins a 
rulemaking proceeding seeking comments and suggestions for revising its 
Schedule of Regulatory Fees in order to recover the amount of 
regulatory fees that Congress requires it to collect for Fiscal Year 
(``FY'') 1999.1
---------------------------------------------------------------------------

    \1\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------

II. Background

    2. 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.2 In our FY 
1994 Report and Order,3 we adopted the Schedule of 
Regulatory Fees that Congress established and we prescribed rules to 
govern payment of the fees, as required by Congress.4 
Subsequently, in our FY 1995, FY 1996, FY 1997 and FY 1998 fee 
Orders,5 we modified the Schedule to increase by 
approximately 93 percent, 9 percent, 21 percent, and 7 percent, 
respectively, the revenue generated by these fees in accordance with 
the amounts Congress required us to collect for FY 1995, FY 1996, FY 
1997 and FY 1998. Also, in our FY 1995, FY 1996, FY 1997 and FY 1998 
fee Orders, we amended certain rules governing our regulatory fee 
program based upon our experience administering the program in prior 
years.6
---------------------------------------------------------------------------

    \2\ Id.
    \3\ 59 FR 30984 (Jun. 16, 1994).
    \4\ 47 U.S.C. 159(b), (f)(1).
    \5\ 60 FR 34004 (Jun. 29, 1995), 61 FR 36629 (Jul. 12, 1996), 62 
FR 37408 (Jul. 11, 1997), and 63 FR 35847 (Jul. 1, 1998), 
respectively.
    \6\ 47 CFR 1.1151 et seq.
---------------------------------------------------------------------------

    3. 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.'' 7
---------------------------------------------------------------------------

    \7\ 47 U.S.C. 159(b)(3).
---------------------------------------------------------------------------

III. Discussion

    4. Pursuant to its FY 1998 Notice of Proposed Rulemaking 
(``NPRM''),8 the Commission received comments from 
interested parties concerning its proposed ``permitted amendments'' to 
the fee schedule. However, the Commission rejected some and was unable 
to resolve several other of the commenters' proposals in time for 
inclusion in its FY 1998 Report and Order,9 due to the 
statutory 90-day advance notice required by Congress.10 
Further, in its FY 1998 Report and Order, the Commission stated its 
intention to issue this NOI requesting that interested parties comment 
on possible solutions to these unresolved issues.11 Briefly, 
the issues for which we seek comment include: (1) Clarification of the 
Commercial Mobile Radio Services (``CMRS'') fee categories and 
demarcation of which types of services or usage to include in each 
category; (2) determination of the appropriate basis for assessing 
regulatory fees on geostationary orbit space stations (``GSOs''); (3) 
determination of the appropriate method of assessing our regulatory 
costs associated with non-

[[Page 70091]]

geostationary orbit space station systems (``NGSOs'') to licensees 
which have launched satellites or to all NGSO licensees; (4) whether we 
should base revenues for interstate telephone service providers on the 
Universal Services Fund's end user methodology rather than the 
Telecommunication Relay Services Fund adjusted gross revenue 
methodology; and (5) whether we should create a ``new services'' 
category in our cost accounting system in which costs associated with 
development of new services, regardless of the service, would be 
proportionately assessed to all feeable categories rather than assessed 
to existing licensees in the same service category.
---------------------------------------------------------------------------

    \8\ 63 FR 16188, (Apr. 2, 1998).
    \9\ 63 FR 35847, (Jul. 1, 1998).
    \10\ 47 U.S.C. 159(b)(4)(B).
    \11\ See FY 1998 Report and Order at paragraaphs 48, 53, 55, and 
67.
---------------------------------------------------------------------------

a. Commercial Mobile Radio Services (``CMRS'')

    5. For FY 1998, CMRS licensees authorized for operation on 
broadband spectrum 12 are subject to payment of the CMRS 
Mobile Services fee 13 and licensees authorized for 
operation on narrowband spectrum 14 are subject to payment 
of the CMRS Messaging Services fee.15 Our fee schedule 
considers the nature of the services offered only to the extent that 
services offered on broadband spectrum and services offered on 
narrowband spectrum are subject to different categories of fee payment. 
In our FY 1998 NPRM, we invited interested parties to comment on our 
proposal to continue this fee structure for CMRS services.
---------------------------------------------------------------------------

    \12\ Includes specialized mobile radio services (part 90), 
personal communications services (part 24), wireless communications 
services (part 27), public coast stations (part 80), and public 
mobile radio stations (cellular radio, 800 MHz air-ground 
radiotelephone, and offshore radio services (part 22)). See FY 1998 
Report and Order at Attachment H, paragraph 14.
    \13\ For FY 1998, this fee is $0.29 per feeable unit. See FY 
1998 Report and Order at Attachment F.
    \14\  Includes licensees formerly licensed as part of the 
private radio services (private paging, qualifying interconnected 
business radio services, and 220-222 MHz land mobile systems (part 
90)), and licensees formerly licensed as part of the common carrier 
radio services (public mobile one-way paging (part 22)) and 
licensees of personal communications services (one-way and two-way 
paging (part 24)). See FY 1998 Report and Order at Attachment H, 
paragraph 15.
    \15\ For FY 1998, this fee is $0.04 per feeable unit. See FY 
1998 Report and Order at Attachment F.
---------------------------------------------------------------------------

    6. Several parties filed comments, in particular, concerning the 
demarcation between the CMRS Mobile Services and CMRS Messaging 
Services fee categories. SBC Communications Inc. (``SBC'') urged us to 
adopt only a single CMRS fee covering all CMRS services, contending 
that both Congress and the Commission intended to create regulatory 
symmetry among the CMRS services, and, thereby avoid any competitive 
advantage to narrowband personal communication service (``PCS'') and 
specialized mobile radio (``SMR'') service over cellular and broadband 
PCS.16 In contrast, Paging Network, Inc. (``Pagenet'') 
supported retention of the existing fee category structure, but 
recommended adoption of a subcategory for non-voice networks and 
services within the CMRS Mobile Services fee category which would be 
subject to the same fee payment as licensees within the CMRS Messaging 
Services fee category.17 Pagenet argued that there are 
significant differences in network efficiency and the level of 
Commission regulation required between voice and non-voice operations 
such that non-voice services are being charged a disproportionate share 
of the CMRS Mobile Services costs.
---------------------------------------------------------------------------

    \16\ See Comments of SBC Communications, Inc. at p. 7.
    \17\ See Comments of Paging Network, Inc. at p. 2.
---------------------------------------------------------------------------

    7. BellSouth Wireless Data (``BellSouth WD'') suggested that 900 
MHz SMR licensees should be classified in the CMRS Messaging Services 
fee category, and not in the CMRS Mobile Services fee category in which 
900 MHz SMR licensees are currently classified.18 BellSouth 
WD argued that regulatory fees should be governed by how the service 
bands are predominantly used on a licensee by licensee basis. BellSouth 
WD stated that the Commission has allocated 5 MHz of spectrum in each 
geographic region for 900 MHz SMR systems and that, in practice, this 
spectrum is licensed in 20 blocks, each consisting of 10 two-way 12.5 
kHz paths, or 0.25 MHz per 10-channel block. Further, BellSouth WD 
contended that 900 MHz SMR systems do not have the capacity to compete 
with true broadband systems, lacking the amount of spectrum of those 
services included in the CMRS Mobile Services fee category. Thus, 
BellSouth WD suggested that either we include any authorization 
providing 25 kHz or less spectrum in the CMRS Messaging Services fee 
category, or we establish a third CMRS fee payment category for systems 
that operate in the 900 MHz SMR band and other CMRS services that are 
allocated no more than 5 MHz of spectrum. American Mobile 
Telecommunications Association (``AMTA'') supported BellSouth WD's 
proposal.19
---------------------------------------------------------------------------

    \18\ See Comments of BellSouth Wireless Data, L.P. at p. 2.
    \19\ See Reply Comments of American Mobile Telecommunications 
Association, Inc. at pp. 2-4.
---------------------------------------------------------------------------

    8. Small Business in Telecommunications (``SBT'') argued that, 
because we classify narrowband PCS, which operates on 50 kHz paired 
channels, in the CMRS Messaging Services fee category,20 we 
should clarify that all CMRS stations which are authorized with channel 
bandwidth not exceeding 50 kHz are within the CMRS Messaging Services 
fee category. Moreover, SBT contended we should clarify that SMR 
systems and public coast stations are within the CMRS Messaging 
Services fee category since these stations are authorized with 
substantially less channel capacity than narrowband PCS 
stations.21
---------------------------------------------------------------------------

    \20\ See FY 1998 Report and Order at Attachment H, paragraph 15.
    \21\ See Comments of Small Business in Telecommunications at pp. 
5-6.
---------------------------------------------------------------------------

    9. We must be able to determine, or estimate with some degree of 
precision, the number of feeable units that are within each fee payment 
category and be able to determine the pro rata share of our regulatory 
costs that must be assessed per feeable unit. We are not aware of any 
existing records or other sources of information that would permit 
development of any of the proposals offered by the commenters as 
summarized above. Therefore, we seek comments on these and solicit any 
other proposals to revise the methodology the Commission uses to 
determine its CMRS fee categories. Further, we ask that all comments on 
the above and any new proposals include data (or available sources for 
data) that would enable the Commission to definitively assign each type 
of service to the appropriate proposed fee category and provide an 
estimate of the number of feeable units contained in each category for 
FY 1999.

b. Space Stations

i. Geostationary Orbit Space Stations (``GSOs'')
    10. In the past, we have adopted the statutory fee schedule's ``per 
satellite'' method for assessment of fees upon licensees of 
geostationary (GSOs) space stations, 47 U.S.C. 159(g). The calculation 
of annual regulatory fees for GSOs has however been a matter of dispute 
for several years during which proposals for alternate methods of 
calculation have been presented. Therefore, we are seeking alternative 
methods of calculating fees based on different criteria and/or 
information from affected parties. We ask commentors to suggest 
alternative methods for assessing regulatory fees for GSO space 
stations. Along with suggestions, we ask commentors to specify the data 
upon which we can base any alternative approach and the most feasible 
method for obtaining the data necessary to calculate fees.

[[Page 70092]]

ii. Non-geostationary Orbit Space Stations (``NGSOs'')
    11. In our FY 1998 Report and Order, we continued to require that 
NGSO licensees pay for NGSO systems by requiring a fee payment ``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 
25.121(d).'' In our FY 1998 proceeding, Orbital Communications 
Corporation (``ORBCOMM'') contended that, because all NGSO licensees 
benefit from our policy, enforcement and information activities and 
services, the Commission should recover its NGSO space station 
regulatory costs from all NGSO licensees, rather than from only those 
that have launched their initial satellite.22 As we stated 
in our FY 1998 Report and Order, we are including ORBCOMM's proposal in 
this NOI and seek comment here on ORBCOMM's proposal, as well as 
alternative proposals.
---------------------------------------------------------------------------

    \22\ See Comments of Orbital Communications Corporation at p. 3.
---------------------------------------------------------------------------

c. Interstate Telephone Service Providers

    12. For FY 1998 we adopted the methodology for assessing fees upon 
interstate telephone service providers that we had employed in past 
years. Under this methodology, interstate telephone service providers 
calculate their regulatory fees based upon their proportionate share of 
interstate revenues using the methodology we developed for contribution 
to the TRS Fund.23 However, in order to avoid imposing a 
double fee payment upon certain interstate telephone service providers 
(e.g, resellers), we permit those interstate telephone service 
providers to remove, from their gross interstate revenue, payments made 
to underlying carriers for telecommunications facilities and services, 
including payments for interstate access services.
---------------------------------------------------------------------------

    \23\ See Telecommunications Relay Services, 8 FCC Rcd 5300 
(1993).
---------------------------------------------------------------------------

    13. In our FY 1998 proceeding, SBC contended that our methodology 
imposes an undue burden upon the local exchange carriers (``LECs'') 
because we permit interexchange carriers (``IXCs'') to deduct payments 
made to underlying common carriers from their gross interstate revenues 
while LECs do not have such payments to deduct. SBC suggested that use 
of end user revenues--the same contribution base used for the Universal 
Service Fund--to calculate the annual fees would alleviate that burden 
and be more competitively neutral.24
---------------------------------------------------------------------------

    \24\ See Report and Order In the Matter of Universal Service, 62 
FR 32861 (Jun. 17, 1997).
---------------------------------------------------------------------------

    14. In our FY 1998 proceeding, we declined to adopt SBC's proposal. 
We disagreed with SBC's description that end user revenues are more 
competitively neutral than our current methodology. Specifically, 
assuming that all fees are recovered from customers, including 
customers of interstate telephone service providers that purchase their 
service for resale, retail customers would still pay the same rates. To 
the extent that services are provided in competition with other 
interstate telephone service providers, those interstate telephone 
service providers would pay the same percentage amounts when providing 
the same services to the same customers. Additionally, in the FY 1998 
proceeding, we said we do not have adequate data to estimate total 
common carrier interstate end user revenue.25
---------------------------------------------------------------------------

    \25\ See FY 1998 Report and Order at paragraph 67.
---------------------------------------------------------------------------

    15. As we indicated in our FY 1998 Report and Order, we are 
revisiting SBC's proposal here. Thus, we ask the common carrier 
industry to comment on the feasibility of relying on end user revenues 
as provided to the Universal Services Fund, as opposed to net revenues 
based upon the TRS Fund. Further, we ask that commenters specify the 
data upon which we can base this or any other alternative approach and 
the most feasible method for obtaining this information.

d. Treatment of New Services in All Feeable Categories

    16. In our FY 1998 proceeding, a number of payors of GSO fees 
argued that licensees in existing GSO satellite services unfairly bear 
the cost of our policy and rulemaking activities related to the 
development of rules and procedures for ``new'' GSO satellite services. 
They suggested that we create a separate regulatory category in our 
regulatory cost accounting system for ``new services'' where the 
Commission has not yet authorized a licensee. Regulatory costs 
associated with the development of policy and rules for such new 
services throughout the Commission would be charged to this cost 
category and distributed across all fee payors when calculating 
regulatory fee rates for any given fiscal year. Regulatory costs 
associated with these new services would be charged to the appropriate 
service, as they are now, upon the grant of the first authorization or 
license for that service.
    17. In our FY 1998 Report and Order, we concluded that due to a 
tight collection schedule, as a practical matter, we had no viable 
alternative other than adoption of the fees as proposed in the NPRM, 
without any of the amendments proposed by commenters. However, as 
indicated in our FY 1998 Report and Order, we seek comment on this and 
other alternative approaches to our current regulatory fee cost 
recovery methodology for new and developmental services. Specifically, 
we seek comment on whether a regulatory category for ``new services,'' 
which would impact payors in all services, should be added to our cost 
accounting system.
    18. In addition, in our FY 1998 proceeding, some parties suggested 
that the Commission identify more clearly costs related to those 
activities intended to be covered by regulatory fees. We seek comment 
on whether and how we should further distinguish our costs, in 
particular those costs related to regulatory activities and ongoing 
regulation of licensees. Further, we seek suggestions as to how we can 
ensure that the amounts collected are distributed properly among our 
fee categories.

IV. Procedural Matters

a. Comment Period and Procedures

    19. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments on or before 
January 7, 1999, and reply comments on or before July 19, 1999. 
Comments may be filed using the Commission's Electronic Comment Filing 
System (ECFS) or by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
    20. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/ecfs.html>. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should include the following words in the body of the message, ``get 
form 26
---------------------------------------------------------------------------

    \26\ 47 CFR 1.204(b)(1).
---------------------------------------------------------------------------

c. Authority and Further Information

    25. 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. 154(i)--(j), 159, and 303(r). It is ordered that this NOI is 
adopted.
    26. Further information about this proceeding may be obtained by 
contacting the Fees Hotline at (202) 418-0192, or you may e-mail your 
questions to [email protected].

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-33564 Filed 12-17-98; 8:45 am]
BILLING CODE 6712-01-P