[Federal Register Volume 69, Number 129 (Wednesday, July 7, 2004)]
[Rules and Regulations]
[Pages 41028-41058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14769]



[[Page 41027]]

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Part II





Federal Communications Commission





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47 CFR Part 1



Assessment and Collection of Regulatory Fees for Fiscal Year 2004; 
Final Rule

  Federal Register / Vol. 69 , No. 129 / Wednesday, July 7, 2004 / 
Rules and Regulations  

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 04-73; FCC 04-146]


Assessment and Collection of Regulatory Fees for Fiscal Year 2004

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission will 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 2004. Section 9 of the 
Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees under sections 9(b)(2) and 
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and 
``Permitted Amendments'' to the Schedule of Regulatory Fees.

DATES: Effective August 6, 2004.

FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing 
Director at (202) 418-0444 or Rob Fream, Office of Managing Director at 
(202) 418-0408.

SUPPLEMENTARY INFORMATION: Adopted: June 21, 2004.
    Released: June 24, 2004.
    By the Commission: Commissioner Copps, concurring and issuing a 
statement; Commissioner Adelstein approving in part, concurring in 
part, and issuing statement.

                            Table of Contents
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                                                            Paragraph
                        Heading                             
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I. Introduction........................................                1
II. Discussion.........................................                2
    A. Development of FY2004 Fees......................                2
        1. Calculation of Revenue and Fee Requirements.                2
        2. Additional Adjustments to Payment Units.....                3
        3. Relationship of Regulatory Fees to Costs....                5
    B. Local Multipoint Distribution Service (LMDS)....               13
    C. Commercial Mobile Radio Service (CMRS) Messaging               17
     and Mobile........................................
    D. Non-Geostationary Orbit Space Stations..........               20
    E. International Bearer Circuits...................               26
    F. Secondary Broadcast Services....................               31
    G. Procedural Changes for Notification, Assessment                33
     and Collection of Regulatory Fees.................
        1. Media Services Licensees....................               36
        2. Satellite Space Station Licensees...........               40
        3. Interstate Telecommunications Service                      43
         Providers.....................................
        4. Commercial Mobile Radio Service Operators...               45
        5. Cable Television System Operators...........               52
    H. Future Streamlining of the Regulatory Fee                      60
     Assessment and Collection Process.................
    I. Procedures for Payment of Regulatory Fees.......               67
        1. De Minimis Fee Payment Liability............               67
        2. Standard Fee Calculations and Payment Dates.               68
    J. Enforcement.....................................               70
III. Procedural Matters................................               72
Attachment A--Final Regulatory Flexibility Analysis
Attachment B--Sources of Payment Unit Estimates for
 FY2004
Attachment C--Calculation of Revenue Requirements and
 Pro-Rata Fees
Attachment D--FY 2004 Schedule of Regulatory Fees
Attachment E--Factors, Measurements, and Calculations
 that Determine Station Contours and Population
 Coverages
Attachment F--Parties Filing Comments and Reply
 Comments
Attachment G--FY 2003 Schedule of Regulatory Fees
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I. Introduction

    1. In this Report and Order (``R&O''), we conclude a proceeding to 
collect $272,958,000 in regulatory fees for Fiscal Year (FY) 2004. 
These fees are mandated by Congress and are collected to recover the 
regulatory costs associated with the Commission's enforcement, policy 
and rulemaking, user information, and international activities.\1\
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    \1\ 47 U.S.C. 159(a).
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II. Discussion

A. Development of FY2004 Fees

1. Calculation of Revenue and Fee Requirements
    2. Each fiscal year, the Commission proportionally allocates the 
total amount that must be collected via regulatory fees (Attachment 
C).\2\ For FY2004, this allocation was done using FY2003 revenues as a 
base. From this base, a revenue amount for each fee category was 
calculated. Each fee category was then adjusted upward by 1.5 percent 
to reflect the increase in regulatory fees from FY2003 to FY2004. These 
FY2004 amounts were then divided by the number of payment units in each 
fee category to determine the unit fee.\3\ In instances of small fees, 
such as licenses that are renewed over a

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multiyear term, the resulting unit fee was also divided by the term of 
the license. These unit fees were then rounded in accordance with 47 
U.S.C. 159(b)(2).
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    \2\ It is important to note that the required increase in 
regulatory fee payments of approximately 1.5 percent in FY 2004 is 
reflected in the revenue that is expected to be collected from each 
service category. Because this expected revenue is adjusted each 
year by the number of estimated payment units in a service category, 
the actual fee itself is sometimes increased by a number other than 
1.5 percent. For example, in industries where the number of units is 
declining and the expected revenue is increasing, the impact of the 
fee increase may be greater.
    \3\ In most instances, the fee amount is a flat fee per licensee 
or regulatee. However, in some instances the fee amount represents a 
unit subscriber fee (such as for Cable, Commercial Mobile Radio 
Service (CMRS) Cellular/Mobile and CMRS Messaging), a per unit fee 
(such as for International Bearer Circuits), or a fee factor per 
revenue dollar (Interstate Telecommunications Service Provider fee).
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2. Additional Adjustments to Payment Units
    3. In calculating the FY2004 regulatory fees proposed in Attachment 
D, we further adjusted the FY2003 list of payment units (Attachment B) 
based upon licensee databases and industry and trade group projections. 
Whenever possible, we verified these estimates from multiple sources to 
ensure accuracy of these estimates. In some instances, Commission 
licensee databases were used, while in other instances, actual prior 
year payment records and/or industry and trade association projections 
were used in determining the payment unit counts.\4\ Where appropriate, 
we adjusted and/or rounded our final estimates to take into 
consideration variables that may impact the number of payment units, 
such as waivers and/or exemptions that may be filed in FY2004, and 
fluctuations in the number of licensees or station operators due to 
economic, technical or other reasons. Therefore, for example, when we 
note that our estimated FY2004 payment units are based on FY2003 actual 
payment units, we may have rounded that number for FY2004 or adjusted 
it slightly to account for these variables.
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    \4\ The databases we consulted include, but are not limited to, 
the Commission's Universal Licensing System (ULS), International 
Bureau Filing System (IBFS), and Consolidated Database System 
(CDBS). We also consulted industry sources including but not limited 
to Television & Cable Factbook by Warren Publishing, Inc. and the 
Broadcasting and Cable Yearbook by Reed Elsevier, Inc, as well as 
reports generated within the Commission such as the Wireline 
Competition Bureau's Trends in Telephone Service and the Wireless 
Telecommunications Bureau's Numbering Resource Utilization Forecast. 
For additional information on source material, see Attachment B.
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    4. Additional factors are considered in determining regulatory fees 
for AM and FM radio stations. These factors are facility attributes and 
the population served by the radio station. The calculation of the 
population served is determined by coupling current U.S. Census Bureau 
data with technical and engineering data, as detailed in Attachment E. 
Consequently, the population served, as well as the class and type of 
service (AM or FM), determines the regulatory fee amount to be paid.
3. Relationship of Regulatory Fees to Costs
    5. A number of parties challenge the proposed regulatory fees by 
claiming that the fees are not appropriately based on the Commission's 
regulatory costs.\5\ They argue, in particular, that the proposed fee 
for their particular service does not properly reflect the costs for 
the level of Commission regulatory activity attributable to that 
service.\6\ For example, they maintain that reduced regulatory 
oversight of their services should result in reduced fees. Further, 
CTIA and Tyco claim that the proposed fees for CMRS and international 
bearer circuits, respectively, are improper because, inter alia, the 
Commission has failed to develop a cost accounting system as required 
by section 9(i) of the Act.\7\ Verizon, however, disagrees with these 
contentions, and points out that section 9 does not require the 
Commission to set fees that are proportional to regulatory burdens on a 
service by service basis.\8\ Verizon asserts that this would be an 
``unworkable task'' for the Commission.\9\ Verizon further maintains 
that imposing increased fees on those payers who face increased 
regulation would amount to a double penalty for those carriers.\10\
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    \5\ See e.g., CTIA Comments at n. 4; Globalstar Comments at 3-7; 
Tyco Comments at 11-13; XO Communications Comments at 2-3; ORBCOMM 
Replies at 2-3; RTG Replies at 5-6; Space Imaging Replies at 3-4.
    \6\ See e.g., Space Imaging Replies at 3-4; Globalstar Comments 
at 3; FLAG Replies at 3; ORBCOMM Replies at 2-3.
    \7\ See CTIA Comments at n. 4; Tyco Comments at 5. See also 47 
U.S.C. 159(i).
    \8\ Verizon Comments at 2.
    \9\ Id. at 3.
    \10\ Id. at 2.
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    6. As we have in the past, we again reject arguments that 
regulatory fees must be precisely calibrated, on a service-by-service 
basis, to the actual costs of the Commission's regulatory activities 
for that service.\11\ We find that parties maintaining that reduced 
Commission regulatory activity in connection with any service should 
equate to a reduction in regulatory fees for that service have 
misconstrued the requirements of section 9.
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    \11\ The Commission has consistently interpreted the 
requirements of Section 9 in this manner. See e.g., Assessment and 
Collection of Regulatory Fees for Fiscal Year 1997, 12 FCC Rcd 
17161, 17171-2 (1997) (1997 Regulatory Fee Report and Order); 
Assessment and Collection of Regulatory Fees for Fiscal Year 1995, 
10 FCC Rcd. 13512, 13524 (1995) (1995 Regulatory Fee Report and 
Order); Assessment and Collection of Regulatory Fees for Fiscal Year 
1998, Report and Order, MD Docket No. 98-36, FCC 98-115, 1998 WL 
320272, para. 15 (1998) (1998 Regulatory Fee Report and Order).
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    7. Pursuant to section 9(a) the Act, 47 U.S.C. 159(a), the 
Commission is authorized to collect regulatory fees ``to recover the 
costs of * * * enforcement activities, policy and rulemaking 
activities, user information services, and international activities.'' 
Fees are to be derived by determining the full-time equivalent number 
of employees performing the activities described, ``adjusted to take 
into account factors that are reasonably related to the benefits 
provided to the payer of the fee by the Commission's activities * * *'' 
47 U.S.C. 159(b)(1)(A). This provision authorizes the Commission to 
take into account overall staff costs in implementing its continuing 
obligation to ensure that the fee schedule is consistent with section 
9(b)(1)(a), and it also makes clear that the Commission is free to 
depart from strictly cost-based fees.
    8. In this regard, the initial Schedule of Regulatory Fees that 
Congress enacted in section 9(g) reflects the ``costs adjusted for 
benefits'' approach permitted under section 9. For example, Congress 
required that satellite fees be based on the number of satellites the 
regulatee has in operation; however, the number of satellites may or 
may not relate to the actual costs in terms of FTEs of regulating that 
particular entity. Similarly, the statutory fee schedule generally 
reflects higher fees for types of regulatees that are authorized to use 
larger amounts of, or more desirable, spectrum, or that are larger and 
have more customers. For example, in the statute radio and television 
fees are based on the size of the markets served and carriers' fees are 
based on the numbers of subscribers or access lines.
    9. Moreover, adjustments to the Fee Schedule authorized by section 
9 do not, in every instance, implicate costs. Mandatory adjustments to 
the congressionally enacted Fee Schedule, as set forth in section 
9(b)(2), are ``proportionate increases or decreases'' to reflect the 
specific amount required to be collected each year in appropriations 
Acts, as well as fee adjustments to reflect ``unexpected increases or 
decreases in the numbers of licensees or units subject to payment'' of 
regulatory fees. Section 9(b)(3), ``Permitted amendments'', requires 
the Commission to add, delete or reclassify services in the fee 
schedule to reflect additions, deletions or changes in the nature of 
its services ``as a consequence of Commission rulemaking proceedings or 
changes in law.'' Section 9(b)(3) also requires the Commission to 
amend, by rule, the Fee Schedule ``if the Commission determines that 
the schedule requires amendment to comply with the requirements'' of 
section 9(b)(1)(A), cited above.\12\ Neither of these provisions 
requires amendment

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of the fee schedule to mirror all changes in regulatory costs.
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    \12\ See 47 U.S.C. 159(b)(3).
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    10. We note further that attempting to adjust fees to mirror 
exactly the costs of each particular service would be unworkable. The 
fee process specified by section 9 is by necessity a ``zero-sum'' 
proposition, since the reduction of fees in one category must be 
counterbalanced by increases in other categories to ensure that the 
total amount specified by Congress is collected. These increases would, 
of course, not necessarily reflect any increase in the costs related to 
the other services.
    11. More generally, section 9 fees are designed to recover the 
amount that Congress has required us to collect, and include the full 
amount of specified regulatory costs from regulatees as well as costs 
not directly related to those entities subject to fees. Regulatory fees 
recover: (a) Direct costs, such as salary and expenses; (b) indirect 
costs, such as overhead functions; and (c) support costs, such as rent, 
utilities, or equipment, to name a few. Regulatory fees also recover 
costs attributable to regulatees that Congress has exempted from the 
fees as well as costs attributable to licensees granted fee waivers. 
Regulatory fees take into account as well factors reasonably related to 
the benefits provided to the payer of the fee by the Commission. We 
find that Congress intended that the ``benefits'' to be recovered 
through fees were not limited strictly to the benefits derived from the 
Commission regulation of a specific service, or lack thereof, as 
parties argue. Rather, section 9(b)(1)(A) cites benefits such as 
service area coverage, shared use versus exclusive use, and ``other 
factors that the Commission determines are necessary in the public 
interest.'' \13\ Thus, there is no statutory requirement to tie each 
fee to the specific costs associated with each service.
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    \13\ See 47 U.S.C. 159(b)(1)(A).
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    12. CTIA and Tyco also object to the proposed fees based on the 
Commission's failure to develop a cost accounting system.\14\ The 
accounting system requirement set forth in section 9(i) applies when 
``necessary'' to making the limited category of adjustments authorized 
by section (b)(3), ``Permitted amendments''. Permitted amendments must 
be consistent with the ``costs adjusted for benefits'' approach set out 
in section 9(b)(1)(A). The Commission has FTE data on a macro-service 
level by fee activity as required by section 9(b)(1)(A). We find that 
this cost data, modified by the appropriate ``benefits'' analysis, 
results in a regulatory fee schedule that comports with the 
requirements of section 9, including section 9(i). The Commission has, 
in the past, attempted to devise and implement a cost accounting system 
to be used in connection with regulatory fees. In 1997, the Commission 
developed a cost accounting system that was based on staff reporting of 
the numbers of hours spent in various activities for each pay 
period.\15\ Reliance on these reports proved problematic.\16\ In FY 
1999, the Commission discontinued attempts to base the schedule on the 
available cost data.\17\ In later explaining the decision to abandon 
the cost-based methodology, the Commission stated that it ``found that 
developing a regulatory fee structure based on available but 
insufficiently detailed cost information sometimes did not permit us to 
recover the amount that Congress required us to collect. In some 
instances, the large increases in the cost of regulation could not be 
adjusted to an acceptable and balanced level.'' \18\ Nevertheless, we 
find that the macro-level FTE data available is sufficient to inform 
the cost basis portion of our regulatory fees. We therefore reject 
CTIA's and Tyco's arguments. And, as noted above, the Commission is 
authorized to make permitted amendments to bring the Fee Schedule into 
compliance with section 9(b)(1)(A), a provision that clearly permits 
the Commission to depart from strictly cost-based fees. Going forward, 
we will continue to use Permitted amendments to amend the fee schedule, 
as appropriate, where our cost data or benefits analysis, or both, 
require us to do so to comply with the requirements of section 
9(b)(1)(A).
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    \14\ CTIA Comments at footnote 4; Tyco Comments at 5.
    \15\ See 1997 Regulatory Fee Report and Order, 12 FCC Rcd. at 
17165-70; Assessment and Collection of Regulatory Fees for Fiscal 
Year 1997, MD Docket No. 96-186, FCC 97-49, Notice of Proposed 
Rulemaking, 1997 WL 90978, paras. 9, 15-16 (adopted Feb. 17, 1997; 
released Mar. 5, 1997)(1997 Regulatory Fee NPRM).
    \16\ In the FY 1997 proceeding, the Commission determined that 
some fee categories, especially those for small regulatees, received 
disproportionately high cost allocations. The Commission adjusted 
for these high cost allocations by redistributing the costs among 
fee categories, and established a 25 percent limit on the amount by 
which fee categories could be increased. See 1997 Regulatory Fee 
Report and Order at 17175-77. For FY 1998, the Commission continued 
to rely on cost accounting data to identify its regulatory costs and 
to develop fees based on these costs, and retained the 25 percent 
limit on the amount by which fee categories could be increased. See 
1998 Regulatory Fee Report and Order, at para. 8.
    \17\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 1999, Report and Order, 14 FCC Rcd. 9868 (1999) (1999 
Regulatory Fee Report and Order).
    \18\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2002, 17 FCC Rcd 13203, 13206 (2002).
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B. Local Multipoint Distribution Service (LMDS)

    13. In the FY2003 NPRM,\19\ we sought comment on the appropriate 
fee classification of the Local Multipoint Distribution Service 
(LMDS).\20\ Some commenters urged that LMDS be classified in the 
microwave fee category. We declined to do so because technological 
developments and emerging commercial applications suggested that usage 
of LMDS could evolve differently than services in the microwave fee 
category.\21\ We recognized, however, that ``substantive distinctions 
exist between MDS and LMDS, and that they should not be placed in the 
same fee category.'' \22\ Therefore, we created a separate LMDS fee 
category and stated that we would ``initiate a specific proceeding that 
addresses the policies and fee structure governing LMDS and other 
wireless services.'' In the FY2004 NPRM, we again sought comment on the 
appropriate fee classification for LMDS. We received comments from XO 
Communications, Inc. (``XO''), and reply comments from Rural 
Telecommunications Group, Inc. (``RTG'').
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    \19\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2003, Notice of Proposed Rulemaking, 18 FCC Rcd 6088-89 
paragraphs 6-9 (2003) (FY 2003 NPRM).
    \20\ In both 2001 and 2002, we denied requests to move LMDS from 
the Multipoint Distribution Service (MDS) fee category to the 
microwave fee category. See Assessment and Collection of Regulatory 
Fees for Fiscal Year 2001, Report and Order, 16 FCC Rcd 13525 
(2001); Assessment and Collection of Regulatory Fees for Fiscal Year 
2001, Memorandum Opinion and Order, 17 FCC Rcd 24920 (2002) (FY 2001 
Memorandum Opinion and Order).
    \21\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2003, Report and Order, 18 FCC Rcd 15988 paragraph 9 (2003) (FY 
2003 Report and Order).
    \22\ Id. Although we separated MDS and LMDS into separate fee 
categories, we set the regulatory fee amounts for both services at 
$265 per license.
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    14. XO makes two primary arguments and one alternative request. 
First, it claims that the proposed regulatory fees imposed on LMDS are 
disproportionate to the costs associated with regulating the service 
and that they are too high in relationship to the FCC's administrative 
burden in overseeing LMDS service.\23\ As we explained, supra at 
Section II.A.3., we reject arguments that regulatory fees must be 
precisely calibrated, on a service-by-service basis, to the actual 
costs of the Commission's regulatory activities for that service.
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    \23\ XO Comments at 2-3.
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    15. Second, XO argues that we should, for purposes of establishing

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regulatory fees, group like services under the same classification or 
impose similar regulatory fees.\24\ Specifically, it proposes that we 
classify LMDS as a microwave service, to which the proposed $50 per 
license per year fee applies, rather than subjecting LMDS licensees to 
the proposed $270 per license per year fee applicable to the Multipoint 
Distribution Service (``MDS'').\25\ XO states that, contrary to the 
assertions in the FY2003 Report and Order, LMDS is not different than 
other microwave services and that it is operationally, functionally, 
and legally similar to the 24 and 39 GHz services.\26\ The upperband 
services, according to XO, are also competitive substitutes for one 
another and can be used to ``complement'' one another.\27\ In the 
alternative, XO requests that if we retain a separate fee category for 
LMDS, we should strive to create regulatory parity and competitive 
neutrality in our regulations by imposing the same regulatory fees as 
are imposed on other microwave licensees.\28\ RTG, in its reply 
comments, supports XO's contentions and adds that by assessing the same 
fee on the LMDS and MDS categories, the Commission effectively requires 
LMDS licensees to pay regulatory fees more than five times those of 
other upperband services.\29\ RTG also notes that because many LMDS 
licensees are small and rural companies that utilize this spectrum for 
point-to-point links and for CMRS backhaul, the assessment of higher 
annual regulatory fees (when compared to similar services) will unduly 
harm such licensees.\30\
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    \24\ XO Comments at 4-5.
    \25\ Id. at 5. XO mistakenly asserts that the fees imposed on 
LMDS licenses are assessed on a ``per station'' basis. Id. In fact, 
these fees are assessed on a ``per call sign'' basis. See NPRM 
Attachment D, ``FY2004 Schedule of Regulatory Fees.''
    \26\ Id. at 4.
    \27\ Id.
    \28\ Id. at 5.
    \29\ Replies of RTG at 5.
    \30\ Replies of RTG at 5-6.
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    16. We find no basis for changing our proposed fee schedule to 
reduce the annual LMDS fee by more than 80 percent, thereby requiring a 
proportional increase in the fees for all other fee payors. First, as a 
matter of statutory interpretation, section 9 does not require that 
competitive services be assessed comparable regulatory fees. Second, 
LMDS licenses are, as a factual matter, quite different than other Part 
101 fixed microwave services in the upper frequency bands (above 15 
GHz), except for those in the 24 and 39 GHz bands that will be or have 
been auctioned.\31\ While these three services are licensed on a 
geographic basis allowing licensees to place multiple stations within 
the authorized service areas, most microwave stations are currently 
licensed on a site-by-site basis thereby requiring, depending on the 
frequency band, multiple individual licenses to serve a particular 
geographic area or multiple points therein. Third, even when the fees 
for LMDS licensees are compared with the fees for licensees in the 24 
and 39 GHz bands, we do not find that the current assessments result in 
disproportionate burdens for LMDS licensees. LMDS Block A licensees are 
authorized for 1150 MHz of spectrum, more than 10 times the amount of 
spectrum authorized with an individual 24 and 39 GHz license. Using the 
authorized bandwidth for each license as a proxy, we note that the LMDS 
fee for Block A licenses is actually lower on a per megahertz basis 
than 24 and 39 GHz licenses under both the FY2003 and proposed FY2004 
fee schedules. We note that under this method of analysis, LMDS Block B 
licenses, authorized for 150 MHz in the 31,000-31,075/31,225-31,300, 
pay $1.85 per MHz under the proposed schedule. We will address this 
anomaly in our next year's regulatory fee proceeding. Accordingly, we 
are maintaining the current fee categories and assessing the proposed 
amounts for the current fiscal year.
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    \31\ The auction of 24 GHz Service licenses (Auction No. 56) is 
scheduled to begin July 28, 2004. See Public Notice, DA 04-1271 
(released May 5, 2004); see also Amendments to Parts 1, 2, 87 and 
101 of the Commission's Rules to Licensed Fixed Services at 24 GHz, 
WT Docket No. 99-327, Report and Order, 15 FCC Rcd 16934 (2000). The 
Commission auctioned 39 GHz licenses in Auction No. 30. See 39 GHz 
Band Auction Closes,'' Public Notice, 15 FCC Rcd 13648 (WTB 2000); 
see also Amendment of the Commission's Rules Regarding the 37.0-38.6 
GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report and Order 
and Second Notice of Proposed Rule Making, 12 FCC Rcd 18600 (1997). 
We also note that most Multiple Address Systems spectrum (MAS) 
licenses were licensed by auction and on a geographic area basis, 
but in the lower 900 MHz band. See ``Multiple Address Systems 
Spectrum Auction Closes,'' Public Notice, 16 FCC Rcd 21011 (WTB 
2001); Amendment of the Commission's Rules Regarding Multiple 
Address Systems, WT Docket No. 97-81, Report and Order, 15 FCC Rcd 
11956, Erratum, 15 FCC Rcd 16415 (2000) (designating certain MAS 
spectrum to be licensed by auction and on a geographic basis). 
Additional information regarding Commission auctions may be obtained 
via the FCC's Web site at http://wireless.fcc.gov/auctions/.
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C. Commercial Mobile Radio Service (CMRS) Messaging and Cellular/Mobile 
Service Providers

    17. In the FY2004 NPRM, we proposed to maintain the CMRS Messaging 
subscriber regulatory fee rate at the FY 2003 level to avoid further 
contributing to the financial hardships associated with a declining 
subscriber base. We received no comments or reply comments on this 
matter. Consequently, we will maintain the CMRS messaging regulatory 
fee rate in FY2004 at $0.08 per subscriber, the same level as in 
FY2003.
    18. The Rural Cellular Association (``RCA'') filed comments 
addressing the proposed rate of $0.26 per unit subscriber fee for CMRS 
Cellular/Mobile service providers. RCA contends that the proposed per 
unit fee is the same as in FY2003, despite a 6.5 percent increase in 
CMRS cellular and mobile units from 141.8 million to 151.0 million.\32\ 
RCA maintains that although the congressional revenue requirement has 
increased by 1.5 percent, the per unit subscriber fee should go down 
because the number of CMRS units has grown. In its reply comments, 
Verizon Wireless agrees with RCA and proposes a reduction in the 
proposed fee to $0.25 per subscriber unit.\33\
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    \32\ Rural Cellular Association Comments at 2-3.
    \33\ Verizon Wireless Replies at 4.
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    19. Since preparing the FY2004 NPRM, we have received revised CMRS 
cellular and mobile unit estimates that result in a reduction in the 
per unit fee from $0.26 to $0.25. Based on our revised estimate of 
153.0 million units, the CMRS cellular and mobile fee rate will be 
$0.25 per subscriber unit.

D. Non-Geostationary Orbit Space Stations

    20. New Operating Globalstar LLC (``Globalstar''), Space Imaging 
LLC (``Space Imaging'') and ORBCOMM LLC (``ORBCOMM'') filed comments 
asking the Commission to reduce the proposed FY2004 regulatory fee for 
non-geostationary orbit (``NGSO'') satellite system licensees.\34\ 
Globalstar maintains that the Commission has proposed a nearly 50% 
increase in the FY2004 fee for NGSO satellite systems of the FY2003 
fee, a result of the decrease from seven to five in the number of 
estimated payment units calculated by the Commission between FY2003 and 
FY2004.\35\ Globalstar argues that the smaller number of NGSO operators 
in FY2004 should reduce the level of Commission regulatory activity 
relating to NGSOs and should therefore result in a reduced regulatory 
fee.\36\ Globalstar argues further that the 50% increase in fees for 
NGSO satellite licensees is not proportionate to the increase in 
appropriations or to the increase in fees

[[Page 41032]]

charged in other fee categories.\37\ Globalstar urges the Commission to 
revise the NGSO satellite regulatory fees downward by reducing the 
revenue requirement for NGSOs, combining the revenue requirements for 
GSO and NGSO satellite licensees, or maintaining the FY2003 regulatory 
fee for NGSOs.\38\ Satellite Imaging and ORBCOMM support Globalstar's 
arguments.
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    \34\ Comments of Globalstar at 1; Space Imaging at 1; ORBCOMM at 
1.
    \35\ Globalstar Comments at 1-2.
    \36\ Id., at 4.
    \37\ Id., at 5.
    \38\ Id., at 7-8.
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    21. The increase in the NGSO satellite system fee is the direct 
result of a decrease from seven to five in the number of estimated 
payment units calculated by the Commission between FY2003 and FY2004. 
As we explained, supra at footnote 2, because the annual expected 
revenue is adjusted each year by the number of estimated payment units, 
the actual fee may increase by a number other than the 1.5%. Moreover, 
as we discussed, supra at section II.A.3., section 9 does not require 
that regulatory fees be precisely calculated, on a service-by-service 
basis, to the actual costs of the Commission's regulatory activities 
for that service.\39\
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    \39\ Moreover, we find that a number of ongoing or recently 
completed activities at the Commission in FY2004 have an impact on 
the NGSO fee category, including: (1) Rulemaking proceedings 
concerning (a) NGSO spectrum, (b) realignment of big low earth orbit 
(``Big LEO'') satellite systems, (c) space station licensing reform, 
(d) bond issuances, (e) E911 Call Center Reporting Requirements--
primarily affecting NGSOs in the mobile satellite service; (2) 
satellite milestone reviews for 2 GHz systems; (3) orbital debris 
matters; and (4) U.S. representation and participation in 
International Telecommunications Union (``ITU'') Working Groups and 
Study Groups regarding shared spectrum policy.
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    22. Our procedures for determining the annual regulatory fee 
amounts for each of our fee categories is detailed in the Discussion 
section of this Report and Order. We recognize that annual fee amounts 
in categories populated by small numbers of payment units can fluctuate 
considerably when payment units enter or exit the fee service category. 
We remind regulatees of this fact in our regulatory fee proceedings 
each year.\40\
---------------------------------------------------------------------------

    \40\ See footnote 2 of this Report and Order.
---------------------------------------------------------------------------

    23. Nonetheless, we recognize that a 43% fee increase is 
significant, especially considering the absolute dollar amount of the 
NGSO category's per-unit fee. An unexpected fee increase of 43% 
introduces an aspect of financial uncertainly in any industry, 
regardless of its financial state.
    24. Given the small number of licenses in this fee category, we 
therefore conclude that relief is warranted for NGSO licensees. In 
FY2003, the fee assessed per operational system in non-geostationary 
orbit (NGSO) was $108,375. In our FY2004 NPRM, we proposed a per unit 
fee of $154,425. Because we have concluded that relief for this fee 
category is warranted, we will assess a FY2004 fee of $131,400 per 
license.\41\ This will provide a financially challenged industry some 
relief.
---------------------------------------------------------------------------

    \41\ This is an amount roughly halfway between the FY2003 
regulatory fee for NGSO satellite systems ($108,375) and the initial 
fee amount in our proposed FY2004 Fee Schedule ($154,425).
---------------------------------------------------------------------------

    25. The FY2004 NGSO per-system regulatory fee is therefore set at 
$131,400, rather than the $154,425 amount that was in the proposed 
FY2004 fee schedule. We will revise the fee schedule so that the lost 
revenue from the NGSO category is recouped by allocating a very small 
assessment across all regulatory fee categories.

E. International Bearer Circuits

    26. Tyco Telecommunications (U.S.) Inc. (``Tyco'') challenges the 
regulatory fee for the international bearer circuit category and the 
manner in which the Commission determines the fee rate for this 
category. Tyco argues: (1) The Commission's capacity-based methodology 
for determining regulatory fees for international bearer circuits 
favors older, lower-capacity systems to the detriment of newer, higher-
capacity systems; (2) the current methodology does not account for the 
reduced regulation of private submarine cable operators; and (3) the 
Commission's method of imposing fees on a company's ``lit and sold'' 
(also known as ``active'') bearer circuit capacity is at odds with how 
private submarine cable operators actually sell capacity today, thereby 
requiring operators to expend time to determine whether and when fees 
apply to them based on the Commission's definition of ``active.'' \42\
---------------------------------------------------------------------------

    \42\ Tyco Comments at pages i-ii and 13-14.
---------------------------------------------------------------------------

    27. Tyco proposes that the following changes be made to the 
regulatory fee regime: (1) Separate the private submarine cable 
operator subcategory from the existing international bearer circuit fee 
category by creating a new private submarine cable operator category; 
(2) allocate the revenue requirement now proposed for all international 
bearer circuit operators between the two new fee categories by 
determining the respective regulatory burden caused by the two new 
categories of payees; and (3) adopt a flat, per-cable-landing-license 
fee for private submarine cable operators.
    28. The Satellite Industry Association (``SIA'') and FLAG Telecom 
Group Limited (``FLAG'') support Tyco's position. SIA notes that 
satellite operators also provide international circuits on a non-common 
carrier basis and requests that the Commission reform its international 
bearer circuit regulatory fee regime to reflect the disparate 
regulatory costs generated by common carriers and non-common 
carriers.\43\ Specifically, SIA states that the new fee category 
proposed by Tyco should include non-common carrier satellite providers 
as well as private submarine cable providers.\44\ FLAG supports the 
imposition of a flat regulatory fee on cable landing licensees.\45\
---------------------------------------------------------------------------

    \43\ SIA Replies at 4.
    \44\ Id. at 3.
    \45\ FLAG Replies at 3.
---------------------------------------------------------------------------

    29. We conclude that the legal arguments made by Tyco, SIA and FLAG 
warrant further consideration. However, we did not solicit comment in 
our FY2004 NPRM on the many complex issues raised by the commenters 
concerning our international bearer circuit fee category. We therefore 
do not have a record to take action on these issues at this time. We 
agree with the commenters that the use of a fee system based on 
licenses, rather than circuits, would be administratively simpler for 
both the Commission and carriers.\46\ We are also concerned that basing 
the fees on the active circuits may provide disincentives to carriers 
to initiate new services and to use new facilities efficiently.\47\ A 
more complete record on these issues is needed. Consequently, we plan 
to raise these issues and seek comment in our FY2005 NPRM on possible 
changes to the circuit-based fees structure for international carriers.
---------------------------------------------------------------------------

    \46\ Tyco Comments at 15-17, 23-24; FLAG Replies at 1-2.
    \47\ Tyco Comments at 10.
---------------------------------------------------------------------------

    30. Commenters also raised procedural issues concerning the 
calculation and obligation to pay regulatory fees. For example, FLAG 
states that it is difficult for private submarine cable operators to 
price their offerings to customers because it is frequently difficult 
to determine with certainty which party--operator or customer--in a 
particular transaction is responsible for paying the necessary 
regulatory fees.\48\ Upon the release of

[[Page 41033]]

our FY2004 Report and Order, we will issue a Public Notice that 
provides further guidance on the procedural points raised by the 
commenters with regards to regulatory fee payments for international 
bearer circuits.
---------------------------------------------------------------------------

    \48\ Id. at 1-2. Tyco also argues that the calculation used to 
derive bearer circuit fees may systematically underestimate the 
amount of active capacity subject to regulatory fees, because, 
currently, only U.S.-licensed common carriers and common carrier 
satellite operators are required to file circuit status reports. We 
find that circuit status reports as well as the actual payments from 
the previous year provide a reasonable basis for our estimates. We 
note that in a separate proceeding the Commission has sought comment 
on whether non-common carriers should also be required to file 
circuit status reports. See Reporting Requirements for U.S. 
Providers of International Telecommunications Service; Amendment of 
Part 43 of the Commission's Rules, Notice of Proposed Rulemaking, IB 
Docket No. 04-112, FCC 04-70, released April 12, 2004.
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F. Secondary Broadcast Services

    31. Mr. Chris Kidd submitted comments regarding the proposed 
regulatory fees for secondary broadcast services, such as FM boosters 
and translators. Mr. Kidd states that FM translators should be placed 
in a distinct fee category rather than sharing a fee category with FM 
Boosters and argues that FM boosters should be added to the fee 
category with low power television (``LPTV''), TV Translators and TV 
Boosters.\49\ According to Mr. Kidd, FM translators have a higher 
degree of business and programming restrictions placed on them than do 
TV translators, as well as an effective radiated power (``ERP'') 
restriction, making them a less desirable license to hold and therefore 
warranting a lower regulatory fee.\50\
---------------------------------------------------------------------------

    \49\ Mr. Chris Kidd Comments at 4-5.
    \50\ Mr. Chris Kidd Comments at 4.
---------------------------------------------------------------------------

    32. We find that there is an inadequate record to warrant revising 
our two existing fee categories for secondary broadcast services. We 
originally devised these categories on the basis of the nature of 
service (a category for television and a category for FM radio) due to 
differing characteristics of these services. We have no reason to 
change this finding at this time. Further, we note that the need for 
some of the restrictions placed on FM translators is the direct result 
of their tendency to interfere with the operation of other services 
within their range of signal reach. Despite the restrictions, FM 
translators are still subject to interference complaints, all of which 
must be addressed and resolved by the Commission. For these reasons, we 
do not find a basis to make changes to our existing fee categories for 
secondary broadcast services.

G. Procedural Changes for Notification, Assessment and Collection of 
Regulatory Fees

    33. Last year, we proposed that we would not disseminate general 
public notices to regulatees through surface mail informing them of 
when regulatory fees are due. We explained that with the widespread use 
of the Internet, we believe that disseminating public notices through 
surface mail is not an efficient use of our time and resources. We 
believe we can better serve the public by providing this type of 
general information on our Web site, while exploring ways to 
disseminate specific regulatory fee bills or assessments through 
surface mail. We made the same proposal this year in our FY2004 NPRM 
and received no comments on the matter.
    34. Accordingly, we will provide public notices, fact sheets and 
all necessary regulatory fee payment procedure information on our Web 
site at http://www.fcc.gov/fees, just as we have for the past several 
years; but we will no longer disseminate public notices through surface 
mail. In the event that regulatees do not have access to the Internet, 
hardcopies of public notices and other relevant materials will be 
mailed upon request to anyone who contacts the FCC Consumer Center at 
(888) 225-5322.
    35. In our FY2004 NPRM, we also proposed to disseminate fee 
assessments to five categories of licensees: Media services licensees, 
satellite space station licensees, interstate telecommunications 
service providers, cable television system operators and commercial 
mobile radio service operators. We stated that we were making these 
proposals and exploring options for these service categories in an 
effort to improve the efficacy of our fee collection process. Based on 
comments received in this proceeding and the current resources 
available to the Commission, we set forth below how we will proceed 
with these service categories.
1. Media Services Licenses
    36. In FY2003, the Commission mailed fee assessment notifications 
to media services licensees for the first time.\51\ We propose to 
repeat this endeavor this year in the same or similar fashion. We 
received no comments specific to our proposal to repeat the mail out. 
Therefore, we will repeat the endeavor this year with one exception. 
Last year, we sent two separate mailings of postcards on a facility ID 
basis, thereby giving licensees two opportunities to update or correct 
information. Because of our success with last year's fee assessment 
postcard initiative, we will only mail a single round of postcards on a 
facility ID basis this year.
---------------------------------------------------------------------------

    \51\ Fee assessments were issued for AM and FM Radio Stations, 
AM and FM Construction Permits, FM Translators/Boosters, VHF and UHF 
Television Stations, VHF and UHF Television Construction Permits, 
Satellite Television Stations, Low Power Television (LPTV) Stations, 
and LPTV Translators/Boosters. Fee assessments were not issued for 
broadcast auxiliary stations in FY2003, nor will they be issued for 
them in FY2004.
---------------------------------------------------------------------------

    37. As was the case last year, we will mail the postcards to 
licensees and any of their other points of contact on file (the actual 
payers of their prior year regulatory fees, such as their corporate 
headquarters, legal representatives, etc.). By doing so, licensees and 
their other points of contact will all be furnished with the same 
information for each facility ID in question so that they can designate 
among themselves the payer of this year's fee. Mailing postcards to 
different addresses on file for each facility ID also enables parties 
for each facility ID the opportunity to visit a Commission-authorized 
Web site to (1) update or correct information on the postcard, and (2) 
certify their fee-exempt status, if any. The Web site will be made 
available this summer. In addition to the postcards directing parties 
to a Web site to makes updates or corrections to information, the 
postcards will also include the telephone number for the FCC CORES Help 
Desk at (877) 480-3201, Option 4, which can be called to obtain 
clarification on procedures.
    38. We stress to media services licensees that assessment postcards 
are being mailed to these licensees to assist them in completing the 
Form 159, and that this form must accompany the fee payment. The 
postcard is not intended to be a substitute for a Form 159. Media 
services licensees must still submit a completed Form 159 with their 
fee payments, despite having received an assessment postcard. We are 
unable to process regulatory fee payments submitted without a completed 
Form 159.
    39. We also emphasize that the most important data element to 
include on the Form 159 is the station's facility ID. The facility ID 
is a unique identifier that never changes over the course of a 
station's existence. Despite the Form 159 filing instructions that call 
for each station's call sign and facility ID to be provided, we 
received many Form 159s from media services entities that provided only 
a station's call sign.
2. Satellite Space Station Licensees
    40. Last year, we mailed regulatory fee assessment letters for the 
first time to satellite space station licensees. In our FY2004 NRPM, we 
proposed to repeat this mailing again this year.
    41. Despite our original proposal, we will not send assessment 
letters to satellite licensees this year. Rather, our experience with 
last year's fee assessment effort has given us the ability to mail 
regulatory fee bills through surface mail to licensees in our

[[Page 41034]]

two satellite space station service categories. Specifically, 
geostationary orbit space station (``GSO'') and direct broadcast 
satellite (``DBS'') service licensees will receive bills requesting 
regulatory fee payment for satellites that (1) were licensed by the 
Commission and operational on or before October 1, 2003; and (2) were 
not co-located with and technically identical to another operational 
satellite on October 1, 2003 (i.e., were not functioning as a spare 
satellite). NGSO licensees will receive bills requesting regulatory fee 
payment for systems that were licensed by the Commission and 
operational on or before October 1, 2003. It is important to note that 
a ``bill'' is distinct from an ``assessment'' in that a ``bill'' is 
automatically entered into the agency's financial system as a fee 
obligation owed to the Commission. The Accounts Receivable, or bill, 
will reflect the estimated amount for each license and will have a due 
date of the last day of the filing window. The Commission is taking 
this step as part of its efforts to modernize its financial practices. 
Having the bill's obligation already entered as an Accounts Receivable 
makes the agency's process of determining penalties or denial-of-
service due to non-payment quicker and more efficient than making 
similar determinations for those who receive assessments, which are not 
automatically entered into the agency's Accounts Receivable system. The 
Commission intends to eventually bill all fee payers.
    42. Note that bills sent to GSO, DBS and NGSO licensees will only 
be for the satellite or system aspects of their respective operations. 
These licensees may have regulatory fee obligations in other service 
categories (such as earth stations, broadcast facilities, etc.) and are 
expected to meet their full fee obligations for their entire portfolio 
of licensees held.
3. Interstate Telecommunications Service Providers
    43. In our FY2004 NPRM, we stated that we will continue to generate 
and send pre-completed Form 159-W assessments to Interstate 
Telecommunications Service Providers (``ITSP'') to assist them in their 
payment of regulatory fees. We received no comments or reply comments 
on this matter.
    44. In FY2001, the Commission began sending pre-completed FCC Form 
159-W assessments to carriers in an effort to assist them in paying the 
Interstate Telecommunications Service Provider (ITSP) regulatory 
fee.\52\ The fee amount on FCC Form 159-W was calculated from the FCC 
Form 499-A report, which carriers are required to submit by April 1st 
of each year. Subsequently, in FY2002 and FY2003, the FCC Form 159-W 
was refined to simplify the regulatory fee payment process.\53\ 
Although in FY 2004 we will continue to generate and mail pre-completed 
FCC Form 159-W's, this year we will also consider these mailings as 
``bills'' rather than assessments. Other than the distinction that 
these ``bills'' will be entered into the Commission's financial system, 
there will be no procedural changes in using FCC Form 159-W to submit 
payment of FY2004 ITSP regulatory fees.
---------------------------------------------------------------------------

    \52\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2001, Report and Order, 16 FCC Rcd 13590 (2001) at 67. See also 
FCC Public Notice--Common Carrier Regulatory Fees (August 3, 2001) 
at 4.
    \53\ Beginning in FY2002, Form 159-W included a payment section 
at the bottom of the form that allowed carriers the opportunity to 
send in Form 159-W in lieu of completing Form 159 Remittance Advice 
Form.
---------------------------------------------------------------------------

4. Commercial Mobile Radio Service (CMRS) Cellular and Mobile Services
    45. In our FY2004 NPRM, we proposed to mail assessments to 
Commercial Mobile Radio Services (CMRS) cellular and mobile service 
providers using information from the Numbering Resource Utilization 
Forecast (NRUF) report. We proposed that subscriber data from the NRUF 
report be used to compute and assess a regulatory fee obligation. We 
solicited comments on the feasibility of this assessment proposal. CTIA 
and the Rural Cellular Association (RCA) request clarification of our 
proposal to send assessment letters to CMRS providers based on 
Numbering Resource Utilization Forecast (NRUF) reports.\54\ Cingular 
and Dobson oppose the use of NRUF data.\55\ For the reasons stated 
below, we will use NRUF ``assigned'' telephone number counts \56\ 
reported for the period ending December 31, 2003.\57\ We note that the 
use of December 31 is consistent with our past practice of requiring 
regulatory fee payments to be based on subscriber counts as of December 
31.
---------------------------------------------------------------------------

    \54\ CTIA and RCA Comments.
    \55\ Cingular Wireless LLC Comments and Dobson Communications 
Corporation Replies.
    \56\ ``Assigned numbers are numbers working in the Public 
Switched Telephone Network under an agreement such as a contract or 
tariff at the request of specific end users or customers for their 
use, or numbers not yet working but having a customer service order 
pending. Numbers that are not yet working and have a service order 
pending for more than five days shall not be classified as assigned 
numbers.'' 47 CFR 52.15(f)(iii).
    \57\ For most entities, this submission was due February 1, 
2004.
---------------------------------------------------------------------------

    46. Cingular states that NRUF assigned number counts do not reflect 
porting and therefore may be an inaccurate subscriber count proxy.\58\ 
We find that Cingular's concern is valid and we will therefore adjust 
the NRUF ``assigned'' number counts to net Type 0 ports (``in'' and 
``out'') so that our assessment will more accurately reflect a 
carrier's actual subscriber count. Cingular also notes that, as a 
result of number pooling, many wireless carriers receive their new 
numbers as thousand-number blocks and that, within each block, up to 
100 numbers can be retained by the donating carrier.\59\ Retained 
numbers, however, are reported in the NRUF as assigned to the holder of 
the thousand block thereby resulting in an undercount for the donating 
carrier and an overage for the recipient. At this time, we are unable 
to address this issue. CMRS providers, however, may correct our 
estimated counts and therefore will not be harmed should their actual 
subscriber count be lower than their NRUF assigned count (netted for 
porting).
---------------------------------------------------------------------------

    \58\ Cingular Comments at 3-4.
    \59\ Id. at 4-5. Cingular states that in two populous California 
codes (310 and 909), the ``contamination threshold'' has been 
increased to 25%, so that, in each thousand block a carrier 
receives, up to 250 numbers already may be retained.
---------------------------------------------------------------------------

    47. Accordingly, we will use NRUF report data and our Local Number 
Portability (LNP) database to compile an estimated subscriber count of 
active, assigned telephone numbers, net of ported numbers. The proposed 
regulatory fee payment will be based on this net figure. We will send 
out two assessment letters to CMRS Cellular and Mobile providers using 
data from the NRUF report. The first assessment letter will include 
assigned number counts (netted for porting), which will include a list 
of the carrier's Operating Company Numbers (OCNs) upon which the 
assessment is based. The letters will not include assigned number 
counts by OCNs, but rather an aggregate of assigned numbers for each 
carrier.
    48. If a carrier determines that there is a discrepancy between the 
number of estimated subscribers we have calculated using the NRUF and 
LNP databases and what the carrier believes to be its total, the 
carrier may correct our estimate of the aggregate total directly on the 
letter and state a reason for the discrepancy. If the OCNs identified 
on the accompanying letter do not belong to the carrier, the OCNs which 
do not belong on the list should be indicated, and the total number of 
subscribers as of December 31, 2003

[[Page 41035]]

should be provided. If some of the subscribers are no longer customers, 
but have been assigned to another company, please indicate the company 
which has acquired these subscribers. This information, including any 
changes in the estimated aggregate total (carrier must provide a reason 
for the change), changes in OCNs, and the name of the company that has 
acquired some of the subscribers, should be mailed to: Federal 
Communications Commission, 445 12th Street, SW., Room 1-C848, 
Washington, DC 20554 by July 21, 2004. We will review the letters, and 
decide whether to accept the revised totals. Based upon this feedback, 
we will send out a second assessment letter that will coincide with the 
payment period of regulatory fees. This second assessment letter with 
aggregate totals will constitute the basis upon which FY2004 regulatory 
fees will be paid. Carriers will not have an opportunity to correct the 
aggregate subscriber count on the second assessment letter. When making 
the regulatory fee payment by mail, carriers must include the second 
assessment letter along with FCC Form 159 Remittance Advice. Of course, 
paying electronically using Fee Filer, carriers will not have to send 
in the second assessment letter.
    49. Letters of assessment, with assigned number counts (netted for 
porting), will be mailed to carriers that filed an NRUF report. Since 
not all carriers are required to file NRUF reports, it is conceivable 
that some carriers will not be sent a letter of assessment. For those 
carriers, the current methodology \60\ in place for CMRS Wireless 
services will apply. They should use their subscriber count as of 
December 31, 2003 and submit payment accordingly on FCC Form 159. 
However, whether a carrier receives a letter of assessment or computes 
the subscriber count itself, the Commission reserves its right, under 
the Communications Act, to audit the number of subscribers upon which 
regulatory fees were paid. In the event that the Commission determines 
that the number of subscribers is inaccurate or that an insufficient 
reason is given for making a correction on a letter of assessment, we 
reserve the right to assess a carrier for the difference between what 
was paid and what should have been paid.
---------------------------------------------------------------------------

    \60\ Federal Communications Commission, Regulatory Fees Fact 
Sheet, ``What You Owe--Commercial Wireless Services, July 2003, page 
1.
---------------------------------------------------------------------------

    50. In its comments, Cingular also argues that the use of NRUF data 
for regulatory fee assessments would violate the Paperwork Reduction 
Act (PRA) because the Office of Management and Budget (OMB) never 
approved the use of NRUF for purposes other than number 
optimization.\61\ Cingular argues that the use of the NRUF information 
in the regulatory fee context ``would have significant consequences for 
the accuracy of the data as a surrogate for any individual carrier's 
current subscriber or telephone number count.'' \62\
---------------------------------------------------------------------------

    \61\ Cingular Comments at 7-9, citing 44 U.S.C. 
3506(c)(1)(B)(iii) (each information collection must inform the 
public of ``the reasons the information is being collected'' and 
``the way such information is to be used''). The NRUF report is a 
Paperwork Reduction Act (PRA) information collection approved by OMB 
under OMB Control No. 3060-0895. See Notice of Public Information 
Collection(s) Being Reviewed by the Federal Communications 
Commission, 69 FR 5545 (Feb. 5, 2004) (``The information will be 
used by the Commission, state regulatory commissions, and the NANP 
Administrator to monitor numbering resource utilization and to 
project the date of area code and NANP exhaust.'')
    \62\ Cingular Comments at 8.
---------------------------------------------------------------------------

    51. We note that in Tozzi,\63\ the U.S. District Court for the 
District of Columbia rejected essentially the same argument. There, 
plaintiffs argued that the EPA could not use data collected under an 
OMB-approved information collection for a new purpose ``without first 
obtaining a separate OMB approval,'' \64\ and that using the data for a 
use different than that approved by OMB `constitutes a substantive or 
material modification,' which requires approval from OMB.'' \65\ The 
court rejected these arguments,\66\ and found that the plaintiffs 
``failed to show that OMB must separately approve all new uses of data 
that agencies have previously collected.'' \67\ The court stated that 
that ``this kind of Government action [a new use for information 
collected] does not fall under the category of harms the PRA was 
enacted to address.'' \68\ We therefore reject Cingular's argument.
---------------------------------------------------------------------------

    \63\ Tozzi v. U.S. Environmental Protection Agency, No. Civ. 98-
0169(TFH) (D.D.C. Apr. 21, 1998) (1998 WL 1661504)
    \64\ Id. at *2.
    \65\ Id. at *2-*3.
    \66\ Id. at *3 (observing that ``the EPA has not made a 
substantive or material modification of the use of the data. * * * 
The information itself is not modified in any way. The way in which 
it is collected is not modified in any way.'').
    \67\ Id.
    \68\ Id.
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5. Cable Subscriber--Billing
    52. In our FY2004 NPRM, we proposed to modify our payment unit 
assessment methodology and our fee collection procedures for the cable 
industry by assessing regulatory fees for individual cable operators 
based on cable subscriber counts that the operators have reported in 
publicly available data sources. The primary data sources we proposed 
to reference were the Broadcasting and Cable Yearbook 2003-2004 
(``Yearbook'') \69\ and industry statistics published by the National 
Cable and Telecommunications Association (``NCTA'').\70\
---------------------------------------------------------------------------

    \69\ Broadcasting and Cable Yearbook 2003-2004, by Reed 
Elsevier, Inc., Newton, MA, 2003. Subscriber counts reported in 
Section C, ``Multiple System Operators, Independent Owners and Cable 
Systems,'' page C-3.
    \70\ NCTA maintains an updated list of the 25 largest multiple-
system operators at its Web site located at http://www.ncta.com.
---------------------------------------------------------------------------

    53. We proposed that the 25 largest multiple-system operators 
(``MSOs''), as listed on NCTA's web page, would base their fee 
obligations on their subscriber counts as reported by NCTA. Cable 
operators listed in the Yearbook would base their fee obligations upon 
their basic subscriber counts as reported in the Yearbook. Cable 
operators not in NCTA's top 25 MSOs and not listed in the Yearbook 
would certify their aggregate basic subscriber counts as of December 
31, 2003 on the Remittance Advice FCC Form 159 with the understanding 
that we would corroborate the certified counts with other publicly 
available data sources.\71\ NCTA and the American Cable Association 
(``ACA'') support our overall proposed assessment methodology, though 
both parties urge the Commission to provide an opportunity for cable 
operators listed in the data sources to rectify their subscriber 
numbers.\72\ Based on our original proposal and the comments received, 
we now provide the following guidance to cable operators.
a. Fee Assessment and Collection Procedures for NCTA's 25 Largest MSOs 
and Cable Operators Reported in the 2003-2004 Edition of the Yearbook
---------------------------------------------------------------------------

    \71\ Sources consulted by the Commission may include but not be 
limited to Cable TV Investor by Kagan World Media and Television and 
Cable Factbook by Warren Communications.
    \72\ NCTA Comments at 3, and ACA Comments at 1.
---------------------------------------------------------------------------

    54. NCTA's 25 largest MSOs and cable operators reported in the 
2003-2004 edition of the Yearbook will receive two rounds of fee 
assessment letters via surface mail--an initial assessment and a final 
assessment. The first assessment will be based on the number of basic 
cable subscribers reported by NCTA or in the Yearbook--the 25 largest 
MSOs shall refer to the subscriber counts reported by NCTA and all 
other operators shall refer to the subscriber counts reported in the 
Yearbook.
    55. We assume that the subscriber counts reported by NCTA and the 
Yearbook will coincide closely with the

[[Page 41036]]

number of subscribers served by cable operators as of December 31, 
2003. However, if the number of subscribers on the initial assessment 
differs from the number of subscribers served as of December 31, 2003, 
we ask that cable operators amend their assessment letters by 
correcting the number of basic subscribers served and mail the amended 
letter back to the Commission at 445 12th Street, S.W., Room 1-C807, 
Washington, DC 20554. The amended assessment letter should indicate the 
specific reasons for the difference and indicate how and when the 
difference occurred (e.g. acquisition or sale of cable system, name of 
buying/selling entity, date of transaction, etc.). The amended letter 
should be mailed to the Commission address above by July 21, 2004. If 
cable operators do not contact us, we will assume the initial 
assessment is correct and we will expect the fee payment to be based on 
the number of subscribers on the initial assessment. As in previous 
years, operators will certify their subscriber counts in Block 30 of 
the FCC Form 159 Remittance Advice when making their regulatory fee 
payments.
    56. We will review the amended assessment and will either accept 
the amendment, or contact the operator for more information. Upon 
establishing an agreed upon subscriber count, we will mail a final 
assessment letter that states the agreed upon subscriber count. If the 
cable operator and the Commission are unable to establish an agreed 
upon subscriber count by the due date of regulatory fees, the operator 
will be expected to submit payment for the number of subscribers on the 
initial assessment.
b. Fee Assessment and Collection Procedures for Cable Operators Not 
Listed in NCTA's 25 Largest MSOs and Not Reported in the 2003-2004 
Edition of the Yearbook
    57. Cable operators not listed in NCTA's 25 Largest MSOs and not 
reported in the Yearbook will not receive assessment letters. If an 
operator's subscriber base is not reported by NCTA or in the Yearbook, 
it should simply provide its aggregate basic subscriber count as of 
December 31, 2003 and certify this subscriber count in Block 30 of the 
FCC Form 159 Remittance Advice. It is not necessary to provide a 
listing of the Community Unit Identifier Numbers (``CUIDs''), nor a 
breakdown of individual subscriber counts for each CUID. A certified 
aggregate subscriber count for the operator's system(s) will suffice.
    58. Cable operators who do not have access to the Internet to view 
the NCTA list or Yearbook may contact the FCC CORES Help Desk at (877) 
480-3201, Option 4, to obtain their publicized subscriber count, if 
available, in either data source.
    59. In our FY2004 NPRM, we proposed to institute a new de minimis 
fee exemption for cable operators serving 250 or fewer subscribers.\73\ 
Upon further analysis of our proposal, we find that it is not feasible 
to implement. An exemption of this magnitude--and one tied to a payment 
unit amount rather than a dollar amount--is inconsistent with the 
Commission's general $10 fee exemption that is in place for all 
regulatees. If we implemented a 250 subscriber de minimis exemption for 
cable subscribers, regulatees in other industries understandably would 
seek similar treatment. The task of managing similar yet different de 
minimis exemptions across multiple fee categories in different 
industries would prove to be too cumbersome for the Commission to 
perform when determining the fee sufficiency of various licensees. For 
these reasons, we decline to adopt our proposal for de minimis fee 
exemption relief designed exclusively for cable television system 
operators.
---------------------------------------------------------------------------

    \73\ ACA requested that the de minimum exemption be expanded to 
include cable operators serving less than 1,000 subscribers. See ACA 
comments, passim. In light of our decision that implementation of a 
de minimus exemption of any size is not feasible, ACA's argument is 
moot.
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H. Future Streamlining of the Regulatory Fee Assessment and Collection 
Process

    60. In our FY2004 NPRM, we welcomed comments on a broad range of 
options concerning our commitment to reviewing, streamlining and 
modernizing our statutorily required fee-assessment and collection 
procedures. Our areas of particular interest included: (1) The process 
for notifying licensees about changes in the annual regulatory fee 
schedule and how it can be improved; (2) the most effective way to 
disseminate regulatory fee assessments and bills, i.e. through surface 
mail, e-mail, or some other mechanism; (3) the fee payment process, 
including how the agency's electronic payment system can be improved 
and whether to make use of Fee Filer mandatory over a particular 
monetary level or for licensees holding a certain number of licenses; 
and (4) the timing of fee payments, including whether we should alter 
the existing fee payment ``window'' in any way.
    61. Kenneth J. Brown filed comments on this issue. Mr. Brown argues 
that we should include an FCC telephone number on the assessment 
postcards that will be mailed to media services entities to assist 
small businesses with no connection to the Internet.\74\ Last year's 
assessment postcards only included a Commission-authorized web address 
entities could access to make various updates or corrections to the 
information on file for their facility ID. In addition to the web 
address, we will include the FCC CORES Help Desk telephone number on 
this year's fee assessment postcards.
---------------------------------------------------------------------------

    \74\ Mr. Kenneth J. Brown Comments at 1.
---------------------------------------------------------------------------

    62. Mr. Brown also notes that the assessment postcards state that 
the fee cited is the base fee only for the facility ID in question, and 
does not include any fee(s) for supplemental services such as broadcast 
auxiliary service.\75\ Last year, we mailed postcards for all primary 
media services and all supplemental media services with the exception 
of the broadcast auxiliary service. We will repeat this exercise this 
year. The postcards will again be mailed out on a facility ID basis. We 
find that it is clear to the recipient of the postcard that the cited 
fee is only for the facility ID in question. As a point of 
clarification, the text of this year's postcards will make it apparent 
to recipients that the cited fee is only for the facility ID in 
question and does not include the recipient's fee obligation(s) for any 
supplemental services.
---------------------------------------------------------------------------

    \75\ Mr. Kenneth J. Brown Comments at 1.
---------------------------------------------------------------------------

    63. Finally, Mr. Brown responded to our solicitation for comments 
on migrating licensees to Fee Filer--our electronic payment software 
application available on the Commission's Web site. Mr. Brown opposed 
any such mandatory migration to Fee Filer. He noted that last year the 
mandatory Internet browser to access all of the features of the 
Universal Licensing System (the FCC's licensing database for wireless 
services) and the mandatory Internet browser to access Fee Filer were 
not the same edition of browsers.\76\
    64. We will not at this time establish any thresholds (monetary 
amount of fee obligation, number of licenses held, etc.) for making use 
of Fee Filer mandatory. However, we strongly encourage regulatees to 
make their fee payments via Fee Filer regardless of the amount of fee 
obligation or number of licenses held. Through its evolution, Fee Filer 
has become an easy and convenient way to make fee payments on a timely 
basis. Regulatees who use Fee Filer do not expose themselves to the 
risk of unexpected slow mail delivery that could cause fee payments to 
be filed late

[[Page 41037]]

and hence be subject to a 25% late payment penalty.
---------------------------------------------------------------------------

    \76\ Mr. Kenneth J. Brown Comments at 2.
---------------------------------------------------------------------------

    65. Regarding Mr. Brown's statement about mandatory browser 
requirements, while interface problems may prevent the Commission's 
Universal Licensing System (ULS) and Fee Filer Systems from being 
accessible via all models and editions of browsers, that does not mean 
that the Commission imposes browser requirements to access these 
automated systems. The ULS and Fee Filer systems were developed in 
different Commission offices, for different purposes, and are 
maintained by different technical support staff.
    66. The specific issue identified by Mr. Brown is that editions of 
Netscape's browsers in the 4.X series do not interface well with Fee 
Filer. Netscape first made its 4.X browsers available to the public in 
2001 and these versions of Netscape's browsers are now rarely in 
use.\77\ The Commission has been aware of the interface problem and 
attempted without success to resolve it. When customers access the Fee 
Filer system via a Netscape browser in the 4.X series, we prompt them 
with an automated message that they may experience interface problems 
and recommend that they upgrade their browser to a newer edition. 
Considering that 4.X is three years old, and that the life expectancy 
of a browser edition is considerably less than three years, the 
Commission believes that it is a wiser use of its resources to alert 
customers to the interface issue and encourage browser upgrades rather 
than spend further resources to resolve an interface problem with a 
legacy browser edition.
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    \77\ Netscape currently offers the 6.X and 7.X editions of its 
browsers. Currently, fewer than 1% of customer visits to Fee Filer 
are done so via Netscape browsers in the 4.X series, and as newer 
editions of browsers are made available, fewer users will hold onto 
the 4.X series.
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I. Procedures for Payment of Regulatory Fees

1. De minimis Fee Payment Liability
    67. Regulatees whose total regulatory fee liability, including all 
categories of fees for which payment is due by an entity, amounts to 
less than $10 are exempt from payment of regulatory fees in FY2004.
2. Standard Fee Calculations and Payment Dates
    68. As in prior years, the responsibility for payment of fees by 
service category is as follows:
    (a) Media services: The responsibility for the payment of 
regulatory fees rests with the holder of the permit or license as of 
October 1, 2003. However, in instances where a license or permit is 
transferred or assigned after October 1, 2003, responsibility for 
payment rests with the holder of the license or permit at the time 
payment is due.
    (b) Wireline (Common Carrier) Services: Fees must be paid for any 
authorization issued on or before October 1, 2003. However, where a 
license or permit is transferred or assigned after October 1, 2003, 
responsibility for payment rests with the holder of the license or 
permit at the time payment is due.
    (c) Wireless Services: Commercial Mobile Radio Service (CMRS) 
cellular, mobile, and messaging services (fees based upon a subscriber, 
unit or circuit count): The number of subscribers, units or circuits on 
December 31, 2003 will be used as the basis from which to calculate the 
fee payment. For small multi-year wireless services, the regulatory fee 
will be due at the time of authorization or renewal of the license, 
which is generally for a period of five or ten-years and paid 
throughout the year.
    (d) Cable Services (fees based upon a subscriber count): The number 
of subscribers, units or circuits on December 31, 2003 will be used as 
the basis from which to calculate the fee payment.\78\ CARS licensees: 
Fees must be paid for any authorization issued on or before October 1, 
2003.
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    \78\ Cable system operators and MSOs that are not listed in any 
of the data sources indicated in this item 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. Operators 
may base their count on ``a typical day in the last full week'' of 
December 2003, rather than on a count as of December 31, 2003.
---------------------------------------------------------------------------

    (e) International Services: Earth stations, geostationary orbit 
space stations, international public fixed radio services and 
international broadcast stations: Payment is calculated per operational 
station. Non-geostationary orbit satellite systems: Payment is 
calculated per operational system. The responsibility for the payment 
of regulatory fees rests with the holder of the permit or license on 
October 1, 2003. However, in instances where a license or permit is 
transferred or assigned after October 1, 2003, responsibility for 
payment rests with the holder of the license or permit at the time 
payment is due. International bearer circuits: Payment is calculated 
per active circuit as of December 31, 2003.
    69. The Commission strongly recommends that entities submitting 
more than twenty-five (25) Form 159-C's use the electronic Fee Filer 
program when sending in their regulatory fee payment. The Commission 
will, for the convenience of payers, accept fee payments made in 
advance of the normal formal window for the payment of regulatory fees.

J. Enforcement

    70. Finally, as a reminder to all licensees, section 159(c) of the 
Communications Act requires us to impose an additional charge as a 
penalty for late payment of any regulatory fee. As in years past, a 
late payment penalty of 25 percent of the amount of the required 
regulatory fee will be assessed on the first day following the deadline 
date for filing of these fees. Failure to pay regulatory fees and/or 
any late penalty will subject regulatees to sanctions, including the 
provisions set forth in the Debt Collection Improvement Act of 1996 
(``DCIA''). We also assess administrative processing charges on 
delinquent debts to recover additional costs incurred in processing and 
handling the related debt pursuant to the DCIA and section 1.1940(d) of 
the Commission's Rules. These administrative processing charges will be 
assessed on any delinquent regulatory fee, in addition to the 25 
percent late charge penalty. Partial underpayments of regulatory fees 
are treated in the following manner. The licensee will be given credit 
for the amount paid, but if it is later determined that the fee paid is 
incorrect or was submitted after the deadline date, the 25 percent late 
charge penalty will be assessed on the portion that is submitted after 
the filing window.
    71. Furthermore, we recently amended our regulatory fee rules 
effective October 1, 2004, to provide that we will withhold action on 
any applications or other requests for benefits filed by anyone who is 
delinquent in any non-tax debts owed to the Commission (including 
regulatory fees) and will ultimately dismiss those applications or 
other requests if payment of the delinquent debt or other satisfactory 
arrangement for payment is not made. See 47 CFR 1.1161(c), 
1.1164(f)(5), and 1.1910. Failure to pay regulatory fees can also 
result in the initiation of a proceeding to revoke any and all 
authorizations held by the delinquent payer.

III. Procedural Matters

    72. Authority for this proceeding is contained in sections 4(i) and 
(j), 8, 9, and 303(r) of the Communications Act

[[Page 41038]]

of 1934, as amended.\79\ It is ordered that the rule changes specified 
herein be adopted. It is further ordered that the rule changes made 
herein will become effective August 6, 2004. A Final Regulatory 
Flexibility Analysis (FRFA) has been performed and is found in 
Attachment A, and it is ordered that the Commission's Consumer And 
Governmental Affairs Bureau, Reference Information Center, send this to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA). Finally, it is ordered that this proceeding is terminated.
---------------------------------------------------------------------------

    \79\ See 47 U.S.C. 154(i)-(j), 159, and 303(r).

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Attachment A--Final Regulatory Flexibility Analysis

    A. As required by the Regulatory Flexibility Act (RFA),\80\ the 
Commission prepared an Initial Regulatory Flexibility Analysis (IRFA) 
of the possible significant economic impact on small entities by the 
policies and rules in the present Notice of Proposed Rulemaking, In the 
Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 
2004. Written public comments were sought on the FY 2004 fees proposal, 
including comments on the IRFA. This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA.\81\
---------------------------------------------------------------------------

    \80\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by 
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
    \81\ See 5 U.S.C. 604.
---------------------------------------------------------------------------

I. Need for, and Objectives of, the Proposed Rules

    B. This rulemaking proceeding is initiated to amend the Schedule of 
Regulatory Fees in the amount of $272,958,000, the amount that Congress 
has required the Commission to recover. The Commission seeks to collect 
the necessary amount through its revised Schedule of Regulatory Fees in 
the most efficient manner possible and without undue public burden.

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

    C. None.

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

    73. 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 and policies, if adopted.\82\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \83\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\84\ 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 SBA.\85\
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    \82\ 5 U.S.C. 603(b)(3).
    \83\ 5 U.S.C. 601(6).
    \84\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \85\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    74. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.\86\
---------------------------------------------------------------------------

    \86\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028, 
at page 40 (July 2002).
---------------------------------------------------------------------------

    75. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.\87\
---------------------------------------------------------------------------

    \87\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
---------------------------------------------------------------------------

    76. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' \88\ As of 1997, there were approximately 
87,453 governmental jurisdictions in the United States.\89\ This number 
includes 39,044 county governments, municipalities, and townships, of 
which 37,546 (approximately 96.2%) have populations of fewer than 
50,000, and of which 1,498 have populations of 50,000 or more. Thus, we 
estimate the number of small governmental jurisdictions overall to be 
84,098 or fewer.
---------------------------------------------------------------------------

    \88\ 5 U.S.C. 601(5).
    \89\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2000, Section 9, pages 299-300, Tables 490 and 492.
---------------------------------------------------------------------------

    77. We have included small incumbent local exchange carriers in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
\90\ The SBA's Office of Advocacy contends that, for RFA purposes, 
small incumbent local exchange carriers are not dominant in their field 
of operation because any such dominance is not ``national'' in 
scope.\91\ We have therefore included small incumbent local exchange 
carriers in this RFA analysis, although we emphasize that this RFA 
action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
---------------------------------------------------------------------------

    \90\ 15 U.S.C. 632.
    \91\ Letter from Jere W. Glover, Chief Counsel for Advocacy, 
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small 
Business Act contains a definition of ``small-business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 
601(3) (RFA). SBA regulations interpret ``small business concern'' 
to include the concept of dominance on a national basis. See 13 CFR 
121.102(b).
---------------------------------------------------------------------------

    78. Incumbent Local Exchange Carriers (LECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees.\92\ According to 
Commission data,\93\ 1,337 carriers have reported that they are engaged 
in the provision of incumbent local exchange services. Of these 1,337 
carriers, an estimated 1,032 have 1,500 or fewer employees and 305 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by our proposed action.
---------------------------------------------------------------------------

    \92\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517110 (changed from 513310 in October 2002).
    \93\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
Page 5-5 (Aug. 2003) (hereinafter ``Trends in Telephone Service''). 
This source uses data that are current as of December 31, 2001.
---------------------------------------------------------------------------

    79. Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees.\94\ 
According to Commission

[[Page 41039]]

data,\95\ 609 carriers have reported that they are engaged in the 
provision of either competitive access provider services or competitive 
local exchange carrier services. Of these 609 carriers, an estimated 
458 have 1,500 or fewer employees and 151 have more than 1,500 
employees. In addition, 16 carriers have reported that they are 
``Shared-Tenant Service Providers,'' and all 16 are estimated to have 
1,500 or fewer employees. In addition, 35 carriers have reported that 
they are ``Other Local Service Providers.'' Of the 35, an estimated 34 
have 1,500 or fewer employees and one has more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive local exchange service, competitive access providers, 
``Shared-Tenant Service Providers,'' and ``Other Local Service 
Providers'' are small entities that may be affected by our proposed 
action.
---------------------------------------------------------------------------

    \94\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \95\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    80. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\96\ According to Commission data,\97\ 133 carriers have 
reported that they are engaged in the provision of local resale 
services. Of these, an estimated 127 have 1,500 or fewer employees and 
six have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of local resellers are small entities that 
may be affected by our proposed action.
---------------------------------------------------------------------------

    \96\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \97\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    81. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\98\ According to Commission data,\99\ 625 carriers have 
reported that they are engaged in the provision of toll resale 
services. Of these, an estimated 590 have 1,500 or fewer employees and 
35 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of toll resellers are small entities that 
may be affected by our proposed action.
---------------------------------------------------------------------------

    \98\ 13 CFR 121.201, NAICS code 517310 (changed to 513330 in 
October 2002).
    \99\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    82. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\100\ According to Commission data,\101\ 761 carriers have 
reported that they are engaged in the provision of payphone services. 
Of these, an estimated 757 have 1,500 or fewer employees and four have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of payphone service providers are small entities that may 
be affected by our proposed action.
---------------------------------------------------------------------------

    \100\ 3 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \101\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    83. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\102\ According to Commission data,\103\ 261 carriers 
have reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 223 have 1,500 or fewer employees and 
38 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by our proposed action.
---------------------------------------------------------------------------

    \102\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \103\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    84. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\104\ According to Commission data,\105\ 23 carriers have 
reported that they are engaged in the provision of operator services. 
Of these, an estimated 22 have 1,500 or fewer employees and one has 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of OSPs are small entities that may be affected by our 
proposed action.
---------------------------------------------------------------------------

    \104\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \105\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    85. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\106\ According to Commission data,\107\ 37 carriers have 
reported that they are engaged in the provision of prepaid calling 
cards. Of these, an estimated 36 have 1,500 or fewer employees and one 
has more than 1,500 employees. Consequently, the Commission estimates 
that the majority of prepaid calling card providers are small entities 
that may be affected by our proposed action.
---------------------------------------------------------------------------

    \106\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \107\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    86. 800 and 800-Like Service Subscribers.\108\ Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for 800 and 800-like service (``toll free'') subscribers. 
The appropriate size standard under SBA rules is for the category 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees.\109\ The most reliable 
source of information regarding the number of these service subscribers 
appears to be data the Commission collects on the 800, 888, and 877 
numbers in use.\110\ According to our data, at the end of January, 
1999, the number of 800 numbers assigned was 7,692,955; the number of 
888 numbers assigned was 7,706,393; and the number of 877 numbers 
assigned was 1,946,538. 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 businesses under the SBA size standard. Consequently, 
we estimate that there are 7,692,955 or fewer small entity 800 
subscribers; 7,706,393 or fewer small entity 888 subscribers; and 
1,946,538 or fewer small entity 877 subscribers.
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    \108\ We include all toll-free number subscribers in this 
category, including those for 888 numbers.
    \109\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \110\ FCC, Common Carrier Bureau, Industry Analysis Division, 
Study on Telephone Trends, Tables 21.2, 21.3, and 21.4 (Feb. 19, 
1999).
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    87. International Service Providers. The Commission has not 
developed a small business size standard specifically for providers of 
international service. The appropriate size standards under SBA rules 
are for the two broad categories of Satellite Telecommunications and 
Other Telecommunications. Under both categories, such a business is 
small if it has $12.5 million or less in average

[[Page 41040]]

annual receipts.\111\ For the first category of Satellite 
Telecommunications, Census Bureau data for 1997 show that there were a 
total of 324 firms that operated for the entire year.\112\ Of this 
total, 273 firms had annual receipts of under $10 million, and an 
additional 24 firms had receipts of $10 million to $24,999,999. Thus, 
the majority of Satellite Telecommunications firms can be considered 
small.
---------------------------------------------------------------------------

    \111\ 13 CFR 121.201, NAICS codes 517410 and 517910 (changed 
from 513340 and 513390 in October 2002).
    \112\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 513340 (issued October 2000).
---------------------------------------------------------------------------

    88. The second category--Other Telecommunications--includes 
``establishments primarily engaged in * * * providing satellite 
terminal stations and associated facilities operationally connected 
with one or more terrestrial communications systems and capable of 
transmitting telecommunications to or receiving telecommunications from 
satellite systems.'' \113\ According to Census Bureau data for 1997, 
there were 439 firms in this category that operated for the entire 
year.\114\ Of this total, 424 firms had annual receipts of $5 million 
to $9,999,999 and an additional six firms had annual receipts of $10 
million to $24,999,990. Thus, under this second size standard, the 
majority of firms can be considered small.
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    \113\ Office of Management and Budget, North American Industry 
Classification System, page 513 (1997) (NAICS code 513390, changed 
to 517910 in October 2002).
    \114\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 513390 (issued October 2000).
---------------------------------------------------------------------------

    89. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging'' \115\ and ``Cellular and Other Wireless 
Telecommunications.'' \116\ Under both SBA categories, a wireless 
business is small if it has 1,500 or fewer employees. For the census 
category of Paging, Census Bureau data for 1997 show that there were 
1,320 firms in this category, total, that operated for the entire 
year.\117\ Of this total, 1,303 firms had employment of 999 or fewer 
employees, and an additional 17 firms had employment of 1,000 employees 
or more.\118\ Thus, under this category and associated small business 
size standard, the great majority of firms can be considered small. For 
the census category Cellular and Other Wireless Telecommunications, 
Census Bureau data for 1997 show that there were 977 firms in this 
category, total, that operated for the entire year.\119\ Of this total, 
965 firms had employment of 999 or fewer employees, and an additional 
12 firms had employment of 1,000 employees or more.\120\ Thus, under 
this second category and size standard, the great majority of firms 
can, again, be considered small.
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    \115\ 13 CFR 121.201, NAICS code 513321 (changed to 517211 in 
October 2002).
    \116\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \117\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
    \118\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
    \119\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).
    \120\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
---------------------------------------------------------------------------

    90. Internet Service Providers. The SBA has developed a small 
business size standard for Internet Service Providers. This category 
comprises establishments ``primarily engaged in providing direct access 
through telecommunications networks to computer-held information 
compiled or published by others.'' \121\ Under the SBA size standard, 
such a business is small if it has average annual receipts of $21 
million or less.\122\ According to Census Bureau data for 1997, there 
were 2,751 firms in this category that operated for the entire 
year.\123\ Of these, 2,659 firms had annual receipts of under $10 
million, and an additional 67 firms had receipts of between $10 million 
and $24,999,999.\124\ Thus, under this size standard, the great 
majority of firms can be considered small entities.
---------------------------------------------------------------------------

    \121\ Office of Management and Budget, North American Industry 
Classification System, page 515 (1997). NAICS code 514191, ``On-Line 
Information Services'' (changed to current name and to code 518111 
in October 2002).
    \122\ 13 CFR 121.201, NAICS code 518111.
    \123\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 4, Receipts Size of Firms Subject to Federal 
Income Tax: 1997, NAICS code 514191 (issued October 2000).
    \124\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 4, Receipts Size of Firms Subject to Federal 
Income Tax: 1997, NAICS code 514191 (issued October 2000).
---------------------------------------------------------------------------

    91. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the broad economic census category 
``Cellular and Other Wireless Telecommunications.'' \125\ Under this 
SBA category, a wireless business is small if it has 1,500 or fewer 
employees. For the census category Cellular and Other Wireless 
Telecommunications firms, Census Bureau data for 1997 show that there 
were 977 firms in this category, total, that operated for the entire 
year.\126\ Of this total, 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more.\127\ Thus, under this category and size standard, the great 
majority of firms can be considered small. According to the most recent 
Trends in Telephone Service data, 719 carriers reported that they were 
engaged in the provision of cellular service, personal communications 
service, or specialized mobile radio telephony services, which are 
placed together in the data.\128\ We have estimated that 294 of these 
are small, under the SBA small business size standard.\129\
---------------------------------------------------------------------------

    \125\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \126\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).
    \127\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
    \128\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (August 2003). This source uses data that are current as of 
December 31, 2001.
    \129\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (August 2003). This source uses data that are current as of 
December 31, 2001.
---------------------------------------------------------------------------

    92. Common Carrier Paging. The SBA has developed a small business 
size standard for wireless firms within the broad economic census 
categories of ``Cellular and Other Wireless Telecommunications.'' \130\ 
Under this SBA category, a wireless business is small if it has 1,500 
or fewer employees. For the census category of Paging, Census Bureau 
data for 1997 show that there were 1,320 firms in this category, total, 
that operated for the entire year.\131\ Of this total, 1,303 firms had 
employment of 999 or fewer employees, and an additional 17 firms had 
employment of 1,000 employees or

[[Page 41041]]

more.\132\ Thus, under this category and associated small business size 
standard, the great majority of firms can be considered small.
---------------------------------------------------------------------------

    \130\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \131\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
    \132\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
---------------------------------------------------------------------------

    93. In the Paging Second Report and Order, the Commission adopted a 
size standard for ``small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments.\133\ A small business is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years.\134\ 
The SBA has approved this definition.\135\ An auction of Metropolitan 
Economic Area (MEA) licenses commenced on February 24, 2000, and closed 
on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold.\136\ 
Fifty-seven companies claiming small business status won 440 
licenses.\137\ An auction of MEA and Economic Area (EA) licenses 
commenced on October 30, 2001, and closed on December 5, 2001. Of the 
15,514 licenses auctioned, 5,323 were sold.\138\ One hundred thirty-two 
companies claiming small business status purchased 3,724 licenses. A 
third auction, consisting of 8,874 licenses in each of 175 EAs and 
1,328 licenses in all but three of the 51 MEAs commenced on May 13, 
2003, and closed on May 28, 2003. Seventy-seven bidders claiming small 
or very small business status won 2,093 licenses. \139\ Currently, 
there are approximately 74,000 Common Carrier Paging licenses. 
According to the most recent Trends in Telephone Service, 608 private 
and common carriers reported that they were engaged in the provision of 
either paging or ``other mobile'' services.\140\ Of these, we estimate 
that 589 are small, under the SBA-approved small business size 
standard.\141\ We estimate that the majority of common carrier paging 
providers would qualify as small entities under the SBA definition.
---------------------------------------------------------------------------

    \133\ Revision of Part 22 and Part 90 of the Commission's Rules 
to Facilitate Future Development of Paging Systems, Second Report 
and Order, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (Paging Second 
Report and Order); see also Revision of Part 22 and Part 90 of the 
Commission's Rules to Facilitate Future Development of Paging 
Systems, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 
10030, 10085-10088, paras. 98-107 (1999).
    \134\ Paging Second Report and Order, 12 FCC Rcd at 2811, para. 
179.
    \135\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, from Aida 
Alvarez, Administrator, Small Business Administration, dated 
December 2, 1998.
    \136\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \137\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \138\ See ``Lower and Upper Paging Band Auction Closes,'' Public 
Notice, 16 FCC Rcd 21821 (WTB 2002).
    \139\ See ``Lower and Upper Paging Bands Auction Closes,'' 
Public Notice, 18 FCC Rcd 11154 (WTB 2003).
    \140\ See Trends in Telephone Service, Industry Analysis 
Division, Wireline Competition Bureau, Table 5.3 (Number of 
Telecommunications Service Providers that are Small Businesses) (May 
2002).
    \141\ 13 CFR 121.201, NAICS code 517211.
---------------------------------------------------------------------------

    94. 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.\142\ The SBA has 
approved these definitions.\143\ The Commission auctioned geographic 
area licenses in the WCS service. In the auction, which commenced on 
April 15, 1997 and closed on April 25, 1997, there were seven bidders 
that won 31 licenses that qualified as very small business entities, 
and one bidder that won one license that qualified as a small business 
entity. An auction for one license in the 1670-1674 MHz band commenced 
on April 30, 2003 and closed the same day. One license was awarded. The 
winning bidder was not a small entity.
---------------------------------------------------------------------------

    \142\ Amendment of the Commission's Rules to Establish Part 27, 
the Wireless Communications Service (WCS), Report and Order, 12 FCC 
Rcd 10785, 10879, para. 194 (1997).
    \143\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
---------------------------------------------------------------------------

    95. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The SBA has developed a small business size 
standard for ``Cellular and Other Wireless Telecommunications'' 
services.\144\ Under the SBA small business size standard, a business 
is small if it has 1,500 or fewer employees.\145\ According to the most 
recent Trends in Telephone Service data, 719 carriers reported that 
they were engaged in wireless telephony.\146\ We have estimated that 
294 of these are small under the SBA small business size standard.
---------------------------------------------------------------------------

    \144\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \145\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \146\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (August 2003). This source uses data that are current as of 
December 31, 2001.
---------------------------------------------------------------------------

    96. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission has created a small business 
size standard for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar 
years.\147\ For Block F, an additional small business size standard for 
``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\148\ These 
small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA.\149\ No small businesses 
within the SBA-approved small business size standards 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 
percent of the 1,479 licenses for Blocks D, E, and F.\150\ On March 23, 
1999, the Commission reauctioned 155 C, D, E, and F Block licenses; 
there were 113 small business winning bidders.\151\
---------------------------------------------------------------------------

    \147\ 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, 11 FCC Rcd 7824, 7850-
7852, paras. 57-60 (1996); see also 47 CFR 24.720(b).
    \148\ 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, 11 FCC Rcd 7824, 7852, 
para. 60.
    \149\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
    \150\ FCC News, ``Broadband PCS, D, E and F Block Auction 
Closes,'' No. 71744 (released January 14, 1997).
    \151\ See ``C, D, E, and F Block Broadband PCS Auction Closes,'' 
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------

    97. On January 26, 2001, the Commission completed the auction of 
422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning 
bidders in this auction, 29 qualified as

[[Page 41042]]

``small'' or ``very small'' businesses.\152\ Subsequent events, 
concerning Auction 35, including judicial and agency determinations, 
resulted in a total of 163 C and F Block licenses being available for 
grant.
---------------------------------------------------------------------------

    \152\ See ``C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
---------------------------------------------------------------------------

    98. Narrowband Personal Communications Services. The Commission 
held an auction for Narrowband PCS licenses that commenced on July 25, 
1994, and closed on July 29, 1994. A second auction commenced on 
October 26, 1994 and closed on November 8, 1994. For purposes of the 
first two Narrowband PCS auctions, ``small businesses'' were entities 
with average gross revenues for the prior three calendar years of $40 
million or less.\153\ Through these auctions, the Commission awarded a 
total of 41 licenses, 11 of which were obtained by four small 
businesses.\154\ To ensure meaningful participation by small business 
entities in future auctions, the Commission adopted a two-tiered small 
business size standard in the Narrowband PCS Second Report and 
Order.\155\ A ``small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $40 million.\156\ A ``very 
small business'' is an entity that, together with affiliates and 
controlling interests, has average gross revenues for the three 
preceding years of not more than $15 million.\157\ The SBA has approved 
these small business size standards.\158\ A third auction commenced on 
October 3, 2001 and closed on October 16, 2001. Here, five bidders won 
317 (Metropolitan Trading Areas and nationwide) licenses.\159\ Three of 
these claimed status as a small or very small entity and won 311 
licenses.
---------------------------------------------------------------------------

    \153\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding Narrowband PCS, Third Memorandum Opinion 
and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175, 
196, para. 46 (1994).
    \154\ See ``Announcing the High Bidders in the Auction of ten 
Nationwide Narrowband PCS Licenses, Winning Bids Total 
$617,006,674,'' Public Notice, PNWL 94-004 (released August 2, 
1994); ``Announcing the High Bidders in the Auction of 30 Regional 
Narrowband PCS Licenses; Winning Bids Total $490,901,787,'' Public 
Notice, PNWL 94-27 (released November 9, 1994).
    \155\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, para. 40 (2000).
    \156\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, para. 40 (2000).
    \157\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, para. 40 (2000).
    \158\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
    \159\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16 
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------

    99. Lower 700 MHz Band Licenses. We adopted criteria for defining 
three groups of small businesses for purposes of determining their 
eligibility for special provisions such as bidding credits.\160\ We 
have defined a ``small business'' as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years.\161\ A ``very 
small business'' is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
are not more than $15 million for the preceding three years.\162\ 
Additionally, the lower 700 MHz Service has a third category of small 
business status that may be claimed for Metropolitan/Rural Service Area 
(MSA/RSA) licenses. The third category is ``entrepreneur,'' which is 
defined as an entity that, together with its affiliates and controlling 
principals, has average gross revenues that are not more than $3 
million for the preceding three years.\163\ The SBA has approved these 
small size standards.\164\ An auction of 740 licenses (one license in 
each of the 734 MSAs/RSAs and one license in each of the six Economic 
Area Groupings (EAGs)) commenced on August 27, 2002, and closed on 
September 18, 2002. Of the 740 licenses available for auction, 484 
licenses were sold to 102 winning bidders. Seventy-two of the winning 
bidders claimed small business, very small business or entrepreneur 
status and won a total of 329 licenses. \165\ A second auction 
commenced on May 28, 2003, and closed on June 13, 2003, and included 
256 licenses: 5 EAG licenses and 476 Cellular Market Area 
licenses.\166\ Seventeen winning bidders claimed small or very small 
business status and won 60 licenses, and nine winning bidders claimed 
entrepreneur status and won 154 licenses.\167\
---------------------------------------------------------------------------

    \160\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002).
    \161\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1087-88, para. 172 (2002).
    \162\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1087-88, para. 172 (2002).
    \163\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1088, para. 173 (2002).
    \164\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
August 10, 1999.
    \165\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
17 FCC Rcd 17272 (WTB 2002).
    \166\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
    \167\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
---------------------------------------------------------------------------

    100. Upper 700 MHz Band Licenses. The Commission released a Report 
and Order, authorizing service in the upper 700 MHz band.\168\ This 
auction, previously scheduled for January 13, 2003, has been 
postponed.\169\
---------------------------------------------------------------------------

    \168\ Service Rules for the 746-764 and 776-794 MHz Bands, and 
Revisions to Part 27 of the Commission's Rules, Second Memorandum 
Opinion and Order, 16 FCC Rcd 1239 (2001).
    \169\ See ``Auction of Licenses for 747-762 and 777-792 MHz 
Bands (Auction No. 31) Is Rescheduled,'' Public Notice, 16 FCC Rcd 
13079 (WTB 2003).
---------------------------------------------------------------------------

    101. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
we adopted size standards for ``small businesses'' and ``very small 
businesses'' for purposes of determining their eligibility for special 
provisions such as bidding credits and installment payments.\170\ A 
small business in this service is an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years.\171\ Additionally, 
a very small business is an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $15 million for the preceding three years.\172\ SBA approval 
of these definitions is not required.\173\ An auction of 52 Major 
Economic Area (MEA) licenses commenced on September 6, 2000, and

[[Page 41043]]

closed on September 21, 2000.\174\ Of the 104 licenses auctioned, 96 
licenses were sold to nine bidders. Five of these bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001, and closed on 
February 21, 2001. All eight of the licenses auctioned were sold to 
three bidders. One of these bidders was a small business that won a 
total of two licenses.\175\
---------------------------------------------------------------------------

    \170\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299 (2000).
    \171\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, para. 108 (2000).
    \172\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, para. 108 (2000).
    \173\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, para. 108 n.246 (for the 746-764 MHz and 776-794 
MHz bands, the Commission is exempt from 15 U.S.C. 632, which 
requires Federal agencies to obtain SBA approval before adopting 
small business size standards).
    \174\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
    \175\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

    102. Specialized Mobile Radio. The Commission awards ``small 
entity'' bidding credits in auctions for Specialized Mobile Radio (SMR) 
geographic area licenses in the 800 MHz and 900 MHz bands to firms that 
had revenues of no more than $15 million in each of the three previous 
calendar years. \176\ The Commission awards ``very small entity'' 
bidding credits to firms that had revenues of no more than $3 million 
in each of the three previous calendar years.\177\ The SBA has approved 
these small business size standards for the 900 MHz Service.\178\ The 
Commission has held auctions for geographic area licenses in the 800 
MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 
1995, and closed on April 15, 1996. Sixty bidders claiming that they 
qualified as small businesses under the $15 million size standard won 
263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR 
auction for the upper 200 channels began on October 28, 1997, and was 
completed on December 8, 1997. Ten bidders claiming that they qualified 
as small businesses under the $15 million size standard won 38 
geographic area licenses for the upper 200 channels in the 800 MHz SMR 
band.\179\ A second auction for the 800 MHz band was held on January 
10, 2002 and closed on January 17, 2002 and included 23 BEA licenses. 
One bidder claiming small business status won five licenses.\180\
---------------------------------------------------------------------------

    \176\ 47 CFR 90.814(b)(1).
    \177\ 47 CFR 90.814(b)(1).
    \178\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
August 10, 1999. We note that, although a request was also sent to 
the SBA requesting approval for the small business size standard for 
800 MHz, approval is still pending.
    \179\ See ``Correction to Public Notice DA 96-586 `FCC Announces 
Winning Bidders in the Auction of 1020 Licenses To Provide 900 MHz 
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB 
1996).
    \180\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    103. The auction of the 1,053 800 MHz SMR geographic area licenses 
for the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven bidders won 108 geographic area 
licenses for the General Category channels in the 800 MHz SMR band 
qualified as small businesses under the $15 million size standard.\181\ 
In an auction completed on December 5, 2000, a total of 2,800 Economic 
Area licenses in the lower 80 channels of the 800 MHz SMR service were 
sold.\182\ Of the 22 winning bidders, 19 claimed small business status 
and won 129 licenses. Thus, combining all three auctions, 40 winning 
bidders for geographic licenses in the 800 MHz SMR band claimed status 
as small business.
---------------------------------------------------------------------------

    \181\ See, ``800 MHz Specialized Mobile Radio (SMR) Service 
General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction 
Closes; Winning Bidders Announced,'' Public Notice, 15 FCC Rcd 17162 
(2000).
    \182\ See, ``800 MHz SMR Service Lower 80 Channels Auction 
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736 
(2000).
---------------------------------------------------------------------------

    104. In addition, there are numerous incumbent site-by-site SMR 
licensees and licensees with extended implementation authorizations in 
the 800 and 900 MHz bands. We do not know how many firms provide 800 
MHz or 900 MHz geographic area SMR 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 analysis, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that small business size standard is approved by the SBA.
    105. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
definition of small entities specifically applicable to such incumbent 
220 MHz Phase I licensees. To estimate the number of such licensees 
that are small businesses, we apply the small business size standard 
under the SBA rules applicable to ``Cellular and Other Wireless 
Telecommunications'' companies. This category provides that a small 
business is a wireless company employing no more than 1,500 
persons.\183\ According to the Census Bureau data for 1997, only twelve 
firms out of a total of 1,238 such firms that operated for the entire 
year in 1997, had 1,000 or more employees.\184\ If this general ratio 
continues in the context of Phase I 220 MHz licensees, the Commission 
estimates that nearly all such licensees are small businesses under the 
SBA's small business standard.
---------------------------------------------------------------------------

    \183\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \184\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 513322 (October 2000).
---------------------------------------------------------------------------

    106. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service, and is subject to spectrum auctions. In the 220 MHz 
Third Report and Order, we adopted a small business size standard for 
defining ``small'' and ``very small'' businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits and installment payments.\185\ This small business standard 
indicates that a ``small business'' is an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
not exceeding $15 million for the preceding three years.\186\ A ``very 
small business'' is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
do not exceed $3 million for the preceding three years.\187\ The SBA 
has approved these small size standards.\188\ Auctions of Phase II 
licenses commenced on September 15, 1998, and closed on October 22, 
1998.\189\ In the first auction, 908 licenses were auctioned in three 
different-sized geographic areas: three nationwide licenses, 30 
Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) 
Licenses. Of the 908 licenses auctioned, 693 were sold.\190\ Thirty-
nine small businesses

[[Page 41044]]

won 373 licenses in the first 220 MHz auction. A second auction 
included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen 
companies claiming small business status won 158 licenses.\191\ A third 
auction included four licenses: 2 BEA licenses and 2 EAG licenses in 
the 220 MHz Service. No small or very small business won any of these 
licenses.\192\
---------------------------------------------------------------------------

    \185\ Amendment of Part 90 of the Commission's Rules To Provide 
For the Use of the 220-222 MHz Band by the Private Land Mobile Radio 
Service, Third Report and Order, 12 FCC Rcd 10943, 11068-70, paras. 
291-295 (1997).
    \186\ Id. at 11068, paras. 291.
    \187\ Id.
    \188\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
January 6, 1998.
    \189\ See generally ``220 MHz Service Auction Closes,'' Public 
Notice, 14 FCC Rcd 605 (WTB 1998).
    \190\ See ``FCC Announces It Is Prepared To Grant 654 Phase II 
220 MHz Licenses After Final Payment Is Made,'' Public Notice, 14 
FCC Rcd 1085 (WTB 1999).
    \191\ See ``Phase II 220 MHz Service Spectrum Auction Closes,'' 
Public Notice, 14 FCC Rcd 11218 (WTB 1999).
    \192\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    107. 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, and are often used in 
support of the licensee's primary (non-telecommunications) business 
operations. For the purpose of determining whether a licensee of a PLMR 
system is a small business as defined by the SBA, we could use the 
definition for ``Cellular and Other Wireless Telecommunications.'' This 
definition provides that a small entity is any such entity employing no 
more than 1,500 persons.\193\ The Commission does not require PLMR 
licensees to disclose information about number of employees, so the 
Commission does not have information that could be used to determine 
how many PLMR licensees constitute small entities under this 
definition. Moreover, because PMLR licensees generally are not in the 
business of providing cellular or other wireless telecommunications 
services but instead use the licensed facilities in support of other 
business activities, we are not certain that the Cellular and Other 
Wireless Telecommunications category is appropriate for determining how 
many PLMR licensees are small entities for this analysis. Rather, it 
may be more appropriate to assess PLMR licensees under the standards 
applied to the particular industry subsector to which the licensee 
belongs.\194\
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    \193\ See 13 CFR 121.201, NAICS code 517212.
    \194\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------

    108. The Commission's 1994 Annual Report on PLMRs \195\ 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 revised rules in this context could potentially 
impact every small business in the United States.
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    \195\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994, at paragraph 116.
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    109. Fixed Microwave Services. Fixed microwave services include 
common carrier,\196\ private operational-fixed,\197\ and broadcast 
auxiliary radio services.\198\ 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 created a size standard for 
a small business specifically with respect to fixed microwave services. 
For purposes of this analysis, the Commission uses the SBA small 
business size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees.\199\ The 
Commission does not have data specifying the number of these licensees 
that have more than 1,500 employees, and thus are unable at this time 
to estimate with greater precision the number of fixed microwave 
service licensees that would qualify as small business concerns under 
the SBA's small business size standard. Consequently, the Commission 
estimates that there are up to 22,015 common carrier fixed licensees 
and up to 61,670 private operational-fixed licensees and broadcast 
auxiliary radio licensees in the microwave services that may be small 
and may be affected by the rules and policies proposed herein. We 
noted, however, that the common carrier microwave fixed licensee 
category includes some large entities.
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    \196\ See 47 CFR 101 et seq. (formerly, Part 21 of the 
Commission's Rules) for common carrier fixed microwave services 
(except Multipoint Distribution Service).
    \197\ Persons eligible under parts 80 and 90 of the Commission's 
Rules can use Private Operational-Fixed Microwave services. See 47 
CFR 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.
    \198\ Auxiliary Microwave Service is governed by Part 74 of 
Title 47 of the Commission's Rules. See 47 CFR Part 74. This service 
is 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 television 
pickups, which relay signals from a remote location back to the 
studio.
    \199\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
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    110. 39 GHz Service. The Commission created a special small 
business size standard for 39 GHz licenses--an entity that has average 
gross revenues of $40 million or less in the three previous calendar 
years.\200\ An additional size standard for ``very small business'' is: 
an entity that, together with affiliates, has average gross revenues of 
not more than $15 million for the preceding three calendar years.\201\ 
The SBA has approved these small business size standards.\202\ The 
auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed 
on May 8, 2000. The 18 bidders who claimed small business status won 
849 licenses. Consequently, the Commission estimates that 18 or fewer 
39 GHz licensees are small entities that may be affected by the rules 
and policies proposed herein.
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    \200\ See Amendment of the Commission's Rules Regarding the 
37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report 
and Order, 12 FCC Rcd 18600 (1997), 63 FR 6079 (Feb. 6, 1998).
    \201\ Id.
    \202\ See Letter to Kathleen O'Brien Ham, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, FCC, 
from Aida Alvarez, Administrator, SBA (Feb. 4, 1998) (VoI P); See 
Letter to Margaret Wiener, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, from Hector Barreto, Administrator, Small Business 
Administration, dated January 18, 2002 (WTB).
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    111. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video 
telecommunications.\203\ The auction of the 986 Local Multipoint 
Distribution Service (LMDS) licenses began on February 18, 1998 and 
closed on March 25, 1998. The Commission established a small business 
size standard for LMDS licenses as an entity that has average gross 
revenues of less than $40 million in the three previous calendar 
years.\204\ An additional small business size standard for ``very small 
business'' was added as an entity that, together with its affiliates, 
has average gross revenues of not more than $15 million for the 
preceding three calendar years.\205\ The

[[Page 41045]]

SBA has approved these small business size standards in the context of 
LMDS auctions.\206\ There were 93 winning bidders that qualified as 
small entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 32 small and very small business winning that won 119 
licenses.
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    \203\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, para. 348 (1997).
    \204\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, para. 348 (1997).
    \205\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, para. 348 (1997).
    \206\ See Letter to Dan Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA (Jan. 6, 1998).
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    112. 218-219 MHz Service. The first auction of 218-219 MHz 
(previously referred to as the Interactive and Video Data Service or 
IVDS) spectrum resulted in 178 entities winning licenses for 594 
Metropolitan Statistical Areas (MSAs).\207\ Of the 594 licenses, 567 
were won by 167 entities qualifying as a small business. For that 
auction, we defined a small business as an entity that, together with 
its affiliates, has no more than a $6 million net worth and, after 
federal income taxes (excluding any carry over losses), has no more 
than $2 million in annual profits each year for the previous two 
years.\208\ In the 218-219 MHz Report and Order and Memorandum Opinion 
and Order, we defined a small business as an entity that, together with 
its affiliates and persons or entities that hold interests in such an 
entity and their affiliates, has average annual gross revenues not 
exceeding $15 million for the preceding three years.\209\ A very small 
business is defined as an entity that, together with its affiliates and 
persons or entities that hold interests in such an entity and its 
affiliates, has average annual gross revenues not exceeding $3 million 
for the preceding three years.\210\ The SBA has approved of these 
definitions.\211\ At this time, we cannot estimate the number of 
licenses that will be won by entities qualifying as small or very small 
businesses under our rules in future auctions of 218-219 MHz spectrum. 
Given the success of small businesses in the previous auction, and the 
prevalence of small businesses in the subscription television services 
and message communications industries, we assume for purposes of this 
analysis that in future auctions, many, and perhaps all, of the 
licenses may be awarded to small businesses.
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    \207\ See ``Interactive Video and Data Service (IVDS) 
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227 
(1994).
    \208\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330 
(1994).
    \209\ Amendment of Part 95 of the Commission's Rules to Provide 
Regulatory Flexibility in the 218-219 MHz Service, Report and Order 
and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).
    \210\ Id.
    \211\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
January 6, 1998.
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    113. Location and Monitoring Service (LMS). Multilateration LMS 
systems use non-voice radio techniques to determine the location and 
status of mobile radio units. For purposes of auctioning LMS licenses, 
the Commission has defined ``small business'' as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the preceding three years not exceeding $15 
million.\212\ A ``very small business'' is defined as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the preceding three years not exceeding $3 
million.\213\ These definitions have been approved by the SBA.\214\ An 
auction for LMS licenses commenced on February 23, 1999, and closed on 
March 5, 1999. Of the 528 licenses auctioned, 289 licenses were sold to 
four small businesses. We cannot accurately predict the number of 
remaining licenses that could be awarded to small entities in future 
LMS auctions.
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    \212\ Amendment of Part 90 of the Commission's Rules to Adopt 
Regulations for Automatic Vehicle Monitoring Systems, Second Report 
and Order, 13 FCC Rcd 15182, 15192 paragraph 20 (1998); see also 47 
CFR 90.1103.
    \213\ Amendment of Part 90 of the Commission's Rules to Adopt 
Regulations for Automatic Vehicle Monitoring Systems, Second Report 
and Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
    \214\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
February 22, 1999.
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    114. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\215\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (BETRS).\216\ The 
Commission uses the SBA's small business size standard applicable to 
``Cellular and Other Wireless Telecommunications,'' i.e., an entity 
employing no more than 1,500 persons.\217\ There are approximately 
1,000 licensees in the Rural Radiotelephone Service, and the Commission 
estimates that there are 1,000 or fewer small entity licensees in the 
Rural Radiotelephone Service that may be affected by the rules and 
policies proposed herein.
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    \215\ The service is defined in section 22.99 of the 
Commission's Rules, 47 CFR 22.99.
    \216\ BETRS is defined in section 22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \217\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
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    115. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service.\218\ We will use SBA's small business size 
standard applicable to ``Cellular and Other Wireless 
Telecommunications,'' i.e., an entity employing no more than 1,500 
persons.\219\ 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 small business size standard.
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    \218\ The service is defined in section 22.99 of the 
Commission's Rules, 47 CFR 22.99.
    \219\ 13 CFR 121.201, NAICS codes 513322 (changed to 517212 in 
October 2002).
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    116. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees.\220\ 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. For purposes of our evaluations 
in this analysis, we estimate that there are up to approximately 
712,000 licensees that are small businesses (or individuals) under the 
SBA standard. In addition, between December 3, 1998 and December 14, 
1998, the Commission held an auction of 42 VHF Public Coast licenses in 
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz 
(coast transmit) bands. For purposes of the auction, the Commission 
defined a ``small'' business as an entity that, together with 
controlling interests and affiliates, has average gross revenues for 
the preceding three years not to exceed $15 million dollars. In 
addition, a ``very small'' business is one that, together with 
controlling interests and affiliates, has

[[Page 41046]]

average gross revenues for the preceding three years not to exceed $3 
million dollars.\221\ There are approximately 10,672 licensees in the 
Marine Coast Service, and the Commission estimates that almost all of 
them qualify as ``small'' businesses under the above special small 
business size standards.
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    \220\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \221\ Amendment of the Commission's Rules Concerning Maritime 
Communications, PR Docket No. 92-257, Third Report and Order and 
Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).
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    117. Offshore Radiotelephone Service. This service operates on 
several ultra high frequencies (UHF) television broadcast channels that 
are not used for television broadcasting in the coastal areas of states 
bordering the Gulf of Mexico.\222\ There are presently approximately 55 
licensees in this service. We are unable to estimate at this time the 
number of licensees that would qualify as small under the SBA's small 
business size standard for ``Cellular and Other Wireless 
Telecommunications'' services.\223\ Under that SBA small business size 
standard, a business is small if it has 1,500 or fewer employees.\224\
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    \222\ This service is governed by Subpart I of Part 22 of the 
Commission's Rules. See 47 CFR 22.1001-22.1037.
    \223\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \224\ Id.
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    118. Multiple Address Systems (MAS). Entities using MAS spectrum, 
in general, fall into two categories: (1) those using the spectrum for 
profit-based uses, and (2) those using the spectrum for private 
internal uses. With respect to the first category, the Commission 
defines ``small entity'' for MAS licenses as an entity that has average 
gross revenues of less than $15 million in the three previous calendar 
years.\225\ ``Very small business'' is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $3 million for the preceding three calendar years.\226\ The SBA 
has approved of these definitions.\227\ The majority of these entities 
will most likely be licensed in bands where the Commission has 
implemented a geographic area licensing approach that would require the 
use of competitive bidding procedures to resolve mutually exclusive 
applications. The Commission's licensing database indicates that, as of 
January 20, 1999, there were a total of 8,670 MAS station 
authorizations. Of these, 260 authorizations were associated with 
common carrier service. In addition, an auction for 5,104 MAS licenses 
in 176 EAs began November 14, 2001, and closed on November 27, 
2001.\228\ Seven winning bidders claimed status as small or very small 
businesses and won 611 licenses.
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    \225\ See Amendment of the Commission's Rules Regarding Multiple 
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para. 
123 (2000).
    \226\ Id.
    \227\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
June 4, 1999.
    \228\ See ``Multiple Address Systems Spectrum Auction Closes,'' 
Public Notice, 16 FCC Rcd 21011 (2001).
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    119. With respect to the second category, which consists of 
entities that use, or seek to use, MAS spectrum to accommodate internal 
communications needs, we note that MAS serves an essential role in a 
range of industrial, safety, business, and land transportation 
activities. MAS radios are used by companies of all sizes, operating in 
virtually all U.S. business categories, and by all types of public 
safety entities. For the majority of private internal users, the 
definitions developed by the SBA would be more appropriate. The 
applicable definition of small entity in this instance appears to be 
the ``Cellular and Other Wireless Telecommunications'' definition under 
the SBA rules. This definition provides that a small entity is any 
entity employing no more than 1,500 persons.\229\ The Commission's 
licensing database indicates that, as of January 20, 1999, of the 8,670 
total MAS station authorizations, 8,410 authorizations were for private 
radio service, and of these, 1,433 were for private land mobile radio 
service.
---------------------------------------------------------------------------

    \229\ See 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    120. Incumbent 24 GHz Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band, 
and applicants who wish to provide services in the 24 GHz band. The 
applicable SBA small business size standard is that of ``Cellular and 
Other Wireless Telecommunications'' companies. This category provides 
that such a company is small if it employs no more than 1,500 
persons.\230\ According to Census Bureau data for 1997, there were 977 
firms in this category, total, that operated for the entire year.\231\ 
Of this total, 965 firms had employment of 999 or fewer employees, and 
an additional 12 firms had employment of 1,000 employees or more.\232\ 
Thus, under this size standard, the great majority of firms can be 
considered small. These broader census data notwithstanding, we believe 
that there are only two licensees in the 24 GHz band that were 
relocated from the 18 GHz band, Teligent \233\ and TRW, Inc. It is our 
understanding that Teligent and its related companies have less than 
1,500 employees, though this may change in the future. TRW is not a 
small entity. Thus, only one incumbent licensee in the 24 GHz band is a 
small business entity.
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    \230\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \231\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Employment Size of Firms Subject to Federal Income 
Tax: 1997,'' Table 5, NAICS code 513322 (issued October 2000).
    \232\ Id. The census data do not provide a more precise estimate 
of the number of firms that have employment of 1,500 or fewer 
employees; the largest category provided is ``Firms with 1,000 
employees or more.''
    \233\ Teligent acquired the DEMS licenses of FirstMark, the only 
licensee other than TRW in the 24 GHz band whose license has been 
modified to require relocation to the 24 GHz band.
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    121. Future 24 GHz Licensees. With respect to new applicants in the 
24 GHz band, we have defined ``small business'' as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the three preceding years not exceeding $15 
million.\234\ ``Very small business'' in the 24 GHz band is defined as 
an entity that, together with controlling interests and affiliates, has 
average gross revenues not exceeding $3 million for the preceding three 
years.\235\ The SBA has approved these definitions.\236\ The Commission 
will not know how many licensees will be small or very small businesses 
until the auction, if required, is held.
---------------------------------------------------------------------------

    \234\ Amendments to Parts 1, 2, 87 and 101 of the Commission's 
Rules To License Fixed Services at 24 GHz, Report and Order, 15 FCC 
Rcd 16934, 16967, para. 77 (2000) (24 GHz Report and Order); see 
also 47 CFR 101.538(a)(2).
    \235\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77; 
see also 47 CFR 101.538(a)(1).
    \236\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, from Gary M. Jackson, Assistant 
Administrator, Small Business Administration, dated July 28, 2000.
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    122. Multipoint Distribution Service, Multichannel Multipoint 
Distribution Service, and Instructional Television Fixed Service. 
Multichannel Multipoint Distribution Service (MMDS) systems, often 
referred to as ``wireless cable,'' transmit video programming to 
subscribers using the microwave frequencies of the Multipoint 
Distribution Service (MDS) and Instructional Television Fixed Service 
(ITFS).\237\ In connection with the 1996 MDS auction, the Commission 
defined ``small business'' as an entity that, together with its 
affiliates, has average

[[Page 41047]]

gross annual revenues that are not more than $40 million for the 
preceding three calendar years.\238\ The SBA has approved of this 
standard.\239\ The MDS auction resulted in 67 successful bidders 
obtaining licensing opportunities for 493 Basic Trading Areas 
(BTAs).\240\ Of the 67 auction winners, 61 claimed status as a small 
business. At this time, we estimate that of the 61 small business MDS 
auction winners, 48 remain small business licensees. In addition to the 
48 small businesses that hold BTA authorizations, there are 
approximately 392 incumbent MDS licensees that have gross revenues that 
are not more than $40 million and are thus considered small 
entities.\241\
---------------------------------------------------------------------------

    \237\ 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, Report and Order, 10 FCC Rcd 9589, 9593, para. 
7 (1995) (MDS Auction R&O).
    \238\ 47 CFR 21.961(b)(1).
    \239\ See Letter to Margaret Wiener, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Bureau, from Gary Jackson, Assistant 
Administrator for Size Standards, Small Business Administration, 
dated March 20, 2003 (noting approval of $40 million size standard 
for MDS auction).
    \240\ Basic Trading Areas (BTAs) were designed by Rand McNally 
and are the geographic areas by which MDS was auctioned and 
authorized. See MDS Auction R&O, 10 FCC Rcd at 9608, paragraph 34.
    \241\ 47 U.S.C. 309(j). Hundreds of stations were licensed to 
incumbent MDS licensees prior to implementation of Section 309(j) of 
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-
auction licenses, the applicable standard is SBA's small business 
size standard for ``other telecommunications'' (annual receipts of 
$12.5 million or less). See 13 CFR 121.201, NAICS code 517910.
---------------------------------------------------------------------------

    123. In addition, the SBA has developed a small business size 
standard for Cable and Other Program Distribution,\242\ which includes 
all such companies generating $12.5 million or less in annual 
receipts.\243\ According to Census Bureau data for 1997, there were a 
total of 1,311 firms in this category, total, that had operated for the 
entire year.\244\ Of this total, 1,180 firms had annual receipts of 
under $10 million, and an additional 52 firms had receipts of $10 
million or more but less than $25 million.\245\ Consequently, we 
estimate that the majority of providers in this service category are 
small businesses that may be affected by the proposed rules and 
policies.
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    \242\ 13 CFR 121.201, NAICS code 517510.
    \243\ Id.
    \244\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4 (issued October 2000).
    \245\ Id.
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    124. Finally, while SBA approval for a Commission-defined small 
business size standard applicable to ITFS is pending, educational 
institutions are included in this analysis as small entities.\246\ 
There are currently 2,032 ITFS licensees, and all but 100 of these 
licenses are held by educational institutions. Thus, we tentatively 
conclude that at least 1,932 ITFS licensees are small businesses.
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    \246\ In addition, the term ``small entity'' under SBREFA 
applies to small organizations (nonprofits) and to small 
governmental jurisdictions (cities, counties, towns, townships, 
villages, school districts, and special districts with populations 
of less than 50,000). 5 U.S.C. 601(4)-(6). We do not collect annual 
revenue data on ITFS licensees.
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    125. Cable and Other Program Distribution. This category includes 
cable systems operators, closed circuit television services, direct 
broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems, and subscription television services. 
The SBA has developed small business size standard for this census 
category, which includes all such companies generating $12.5 million or 
less in revenue annually.\247\ According to Census Bureau data for 
1997, there were a total of 1,311 firms in this category, total, that 
had operated for the entire year.\248\ Of this total, 1,180 firms had 
annual receipts of under $10 million and an additional 52 firms had 
receipts of $10 million or more but less than $25 million. 
Consequently, the Commission estimates that the majority of providers 
in this service category are small businesses that may be affected by 
the rules and policies proposed herein.
---------------------------------------------------------------------------

    \247\ 13 CFR 121.201, NAICS code 513220 (changed to 517510 in 
October 2002).
    \248\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization)'', Table 4, NAICS code 513220 (issued October 2000).
---------------------------------------------------------------------------

    126. Cable System Operators (Rate Regulation Standard). The 
Commission has developed its own small business size standard for cable 
system operators, for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.\249\ The most recent estimates indicate 
that there were 1,439 cable operators who qualified as small cable 
system operators at the end of 1995.\250\ 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, the Commission estimates that 
there are now fewer than 1,439 small entity cable system operators that 
may be affected by the rules and policies proposed herein.
---------------------------------------------------------------------------

    \249\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determination that a small cable system operator is one 
with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 
60 FR 10534 (February 27, 1995).
    \250\ Paul Kagan Associates, Inc., Cable TV Investor, February 
29, 1996 (based on figures for December 30, 1995).
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    127. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, 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.'' \251\ The Commission has determined 
that there are 67,700,000 subscribers in the United States.\252\ 
Therefore, an operator serving fewer than 677,000 subscribers shall be 
deemed a small operator, if its annual revenues, when combined with the 
total annual revenues of all its affiliates, do not exceed $250 million 
in the aggregate.\253\ Based on available data, the Commission 
estimates that the number of cable operators serving 677,000 
subscribers or fewer, totals 1,450.\254\ The Commission neither 
requests nor collects information on whether cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million,\255\ and therefore are unable, at this time, to estimate more 
accurately the number of cable system operators that would qualify as 
small cable operators under the size standard contained in the 
Communications Act of 1934.
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    \251\ 47 U.S.C. 543(m)(2).
    \252\ See FCC Announces New Subscriber Count for the Definition 
of Small Cable Operator, Public Notice, DA 01-158 (January 24, 
2001).
    \253\ 47 CFR 76.901(f).
    \254\ See FCC Announces New Subscriber Count for the Definition 
of Small Cable Operators, Public Notice, DA-01-0158 (released 
January 24, 2001).
    \255\ The Commission does receive such information on a case-by-
case basis 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 76.901(f) of the Commission's rules. See 47 CFR 
76.909(b).
---------------------------------------------------------------------------

    128. Open Video Services. Open Video Service (OVS) systems provide 
subscription services.\256\ The SBA has created a small business size 
standard for Cable and Other Program Distribution.\257\ This standard 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The Commission has certified approximately 25 OVS 
operators to serve 75 areas, and some of these are currently providing

[[Page 41048]]

service.\258\ Affiliates of Residential Communications Network, Inc. 
(RCN) received approval to operate OVS systems in New York City, 
Boston, Washington, DC, and other areas. RCN has sufficient revenues to 
assure that they do not qualify as a small business entity. Little 
financial information is available for the other entities that are 
authorized to provide OVS and are not yet operational. Given that some 
entities authorized to provide OVS service have not yet begun to 
generate revenues, the Commission concludes that up to 24 OVS operators 
(those remaining) might qualify as small businesses that may be 
affected by the rules and policies proposed herein.
---------------------------------------------------------------------------

    \256\ See 47 U.S.C. 573.
    \257\ 13 CFR 121.201, NAICS code 513220 (changed to 517510 in 
October 2002).
    \258\ See http://www.fcc.gov/csb/ovs/csovscer.html (current as 
of March 2002).
---------------------------------------------------------------------------

    129. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. The SBA has defined a small 
business size standard for Cable and other Program Distribution, 
consisting of all such companies having annual receipts of no more than 
$12.5 million.\259\ According to Census Bureau data for 1997, there 
were 1,311 firms in the industry category Cable and Other Program 
Distribution, total, that operated for the entire year.\260\ Of this 
total, 1,180 firms had annual receipts of $10 million or less, and an 
additional 52 firms had receipts of $10 million or more but less than 
$25 million.\261\ Thus, under this standard, we estimate that the 
majority of providers in this service category are small businesses 
that may be affected by the proposed rules and policies.
---------------------------------------------------------------------------

    \259\ 13 CFR 121.201, NAICS code 517510.
    \260\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4 (issued October 2000).
    \261\ Id.
---------------------------------------------------------------------------

    130. Multichannel Video Distribution and Data Service. MVDDS is a 
terrestrial fixed microwave service operating in the 12.2-12.7 GHz 
band. No auction has yet been held in this service, although an action 
has been scheduled for January 14, 2004.\262\ Accordingly, there are no 
licensees in this service.
---------------------------------------------------------------------------

    \262\ ``Auctions of Licenses in the Multichannel Video 
Distribution and Data Service Rescheduled for January 14, 2004,'' 
Public Notice, DA 03-2354 (August 28, 2003).
---------------------------------------------------------------------------

    131. Amateur Radio Service. These licensees are believed to be 
individuals, and therefore are not small entities.
    132. Aviation and Marine Services. Small businesses in the aviation 
and marine radio services use a very high frequency (VHF) marine or 
aircraft radio and, as appropriate, an emergency position-indicating 
radio beacon (and/or radar) or an emergency locator transmitter. The 
Commission has not developed a small business size standard 
specifically applicable to these small businesses. For purposes of this 
analysis, the Commission uses the SBA small business size standard for 
the category ``Cellular and Other Telecommunications,'' which is 1,500 
or fewer employees.\263\ 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. For purposes 
of our evaluations in this analysis, we estimate that there are up to 
approximately 712,000 licensees that are small businesses (or 
individuals) under the SBA standard. In addition, between December 3, 
1998 and December 14, 1998, the Commission held an auction of 42 VHF 
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 
161.775-162.0125 MHz (coast transmit) bands. For purposes of the 
auction, the Commission defined a ``small'' business as an entity that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $15 million. In 
addition, a ``very small'' business is one that, together with 
controlling interests and affiliates, has average gross revenues for 
the preceding three years not to exceed $3 million.\264\ There are 
approximately 10,672 licensees in the Marine Coast Service, and the 
Commission estimates that almost all of them qualify as ``small'' 
businesses under the above special small business size standards.
---------------------------------------------------------------------------

    \263\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \264\ Amendment of the Commission's Rules Concerning Maritime 
Communications, Third Report and Order and Memorandum Opinion and 
Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

    133. Personal Radio Services. Personal radio services provide 
short-range, low power radio for personal communications, radio 
signaling, and business communications not provided for in other 
services. The Personal Radio Services include spectrum licensed under 
part 95 of our rules.\265\ These services include Citizen Band Radio 
Service (CB), General Mobile Radio Service (GMRS), Radio Control Radio 
Service (R/C), Family Radio Service (FRS), Wireless Medical Telemetry 
Service (WMTS), Medical Implant Communications Service (MICS), Low 
Power Radio Service (LPRS), and Multi-Use Radio Service (MURS).\266\ 
There are a variety of methods used to license the spectrum in these 
rule parts, from licensing by rule, to conditioning operation on 
successful completion of a required test, to site-based licensing, to 
geographic area licensing. Under the RFA, the Commission is required to 
make a determination of which small entities are directly affected by 
the rules being proposed. Since all such entities are wireless, we 
apply the definition of cellular and other wireless telecommunications, 
pursuant to which a small entity is defined as employing 1,500 or fewer 
persons.\267\ Many of the licensees in these services are individuals, 
and thus are not small entities. In addition, due to the mostly 
unlicensed and shared nature of the spectrum utilized in many of these 
services, the Commission lacks direct information upon which to base an 
estimation of the number of small entities under an SBA definition that 
might be directly affected by the proposed rules.
---------------------------------------------------------------------------

    \265\ 47 CFR part 90.
    \266\ The Citizens Band Radio Service, General Mobile Radio 
Service, Radio Control Radio Service, Family Radio Service, Wireless 
Medical Telemetry Service, Medical Implant Communications Service, 
Low Power Radio Service, and Multi-Use Radio Service are governed by 
Subpart D, Subpart A, Subpart C, Subpart B, Subpart H, Subpart I, 
Subpart G, and Subpart J, respectively, of Part 95 of the 
Commission's rules. See generally 47 CFR part 95.
    \267\ 13 CFR 121.201, NAICS Code 517212.
---------------------------------------------------------------------------

    134. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.\268\

[[Page 41049]]

There are a total of approximately 127,540 licensees in these services. 
Governmental entities \269\ as well as private businesses comprise the 
licensees for these services. All governmental entities with 
populations of less than 50,000 fall within the definition of a small 
entity.\270\
---------------------------------------------------------------------------

    \268\ With the exception of the special emergency service, these 
services are governed by Subpart B of part 90 of the Commission's 
Rules, 47 CFR 90.15-90.27. The police service includes approximately 
27,000 licensees that serve state, county, and municipal enforcement 
through telephony (voice), telegraphy (code) and teletype and 
facsimile (printed material). The fire radio service includes 
approximately 23,000 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 
approximately 41,000 licensees that are state, county, or municipal 
entities that use the radio for official purposes not covered by 
other public safety services. There are approximately 7,000 
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 approximately 9,000 state and local 
governments are licensed to highway maintenance service to provide 
emergency and routine communications to aid other public safety 
services to keep main roads safe for vehicular traffic. The 
approximately 1,000 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 CFR 90.15-90.27. The approximately 20,000 
licensees in the special emergency service include medical services, 
rescue organizations, veterinarians, handicapped persons, disaster 
relief organizations, school buses, beach patrols, establishments in 
isolated areas, communications standby facilities, and emergency 
repair of public communications facilities. 47 CFR 90.33-90.55.
    \269\ 47 CFR 1.1162.
    \270\ 5 U.S.C. 601(5).
---------------------------------------------------------------------------

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

    136. 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.\271\ Interstate telephone service providers must compute 
their annual regulatory fee based on their interstate and international 
end-user revenue using information they already supply to the 
Commission in compliance with the Form 499-A, Telecommunications 
Reporting Worksheet, 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.
    137. Each licensee must submit the FCC Form 159 to the Commission's 
lockbox bank after computing the number of units subject to the fee. 
Licensees may also file electronically to minimize the burden of 
submitting multiple copies of the FCC Form 159. Applicants who pay 
small fees in advance and provide fee information as part of their 
application must use FCC Form 159.
---------------------------------------------------------------------------

    \271\ 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.
---------------------------------------------------------------------------

    138. 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 penalty of 25 percent in 
addition to the required fee.\272\ If payment is not received, new or 
pending applications may be dismissed, and existing authorizations may 
be subject to rescission.\273\ 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.\274\ Nonpayment of regulatory fees is a debt owed the 
United States pursuant to 31 U.S.C. 3711 et seq., and the Debt 
Collection Improvement Act of 1996, Public Law 194-134. Appropriate 
enforcement measures as well as administrative and judicial remedies, 
may be exercised by the Commission. 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.\275\
---------------------------------------------------------------------------

    \272\ 47 CFR 1.1164.
    \273\ 47 CFR 1.1164(c).
    \274\ Public Law 104-134, 110 Stat. 1321 (1996).
    \275\ 31 U.S.C. 7701(c)(2)(B).
---------------------------------------------------------------------------

    139. The Commission's rules currently provide for relief in 
exceptional circumstances. Persons or entities may request a waiver, 
reduction or deferment of payment of the regulatory fee.\276\ 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 defer payment 
in response to a request filed with the appropriate supporting 
documentation.
---------------------------------------------------------------------------

    \276\ 47 CFR 1.1166.
---------------------------------------------------------------------------

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

    140. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives: (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. As described in Section III of this FRFA, supra, we have 
created procedures in which all fee-filing licensees and regulatees use 
a single form, FCC Form 159, and have described in plain language the 
general filing requirements. We have sought comment on other 
alternatives that might simplify our fee procedures or otherwise 
benefit small entities, while remaining consistent with our statutory 
responsibilities in this proceeding.
    141. The Omnibus Appropriations Act for FY 2004, Public Law 108-
199, 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) 2004.\277\ As 
noted, we seek comment on the proposed methodology for implementing 
these statutory requirements and any other potential impact of these 
proposals on small entities.
---------------------------------------------------------------------------

    \277\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------

    142. We have previously used cost accounting data for computation 
of regulatory fees, but found that some fees which were very small in 
previous years would have increased dramatically and would have a 
disproportionate impact on smaller entities. The methodology we are 
proposing in this Report and Order minimizes this impact by limiting 
the amount of increase and shifting

[[Page 41050]]

costs to other services which, for the most part, are larger entities.
    143. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. See, e.g., footnote 271, supra.
    Report to Small Business Administration: The Commission will send a 
copy of this Report and Order, including a copy of the FRFA to the 
Chief Counsel for Advocacy of the Small Business Administration. The 
Report and Order and FRFA (or summaries thereof) will also be published 
in the Federal Register.
    Report to Congress: The Commission will send a copy of this Final 
Regulatory Flexibility Analysis (FRFA), along with this Report and 
Order, in a report to Congress pursuant to the Congressional Review 
Act, 5 U.S.C. 801(a)(1)(A).

Attachment B--Sources of Payment Unit Estimates for FY 2004

    In order to calculate individual service fees for FY 2004, we 
adjusted FY 2003 payment units for each service to more accurately 
reflect expected FY 2004 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. The databases we 
consulted include the Commission's Universal Licensing System (ULS), 
International Bureau Filing System (IBFS), and Consolidated Database 
System. The industry sources we consulted include, but are not limited 
to, Television & Cable Factbook by Warren Publishing, Inc. and the 
Broadcasting and Cable Yearbook by Reed Elsevier, Inc, as well as 
reports generated within the Commission such as the Wireline 
Competition Bureau's Trends in Telephone Service and the Wireless 
Telecommunications Bureau's Numbering Resource Utilization Forecast.
    We tried to obtain verification for these estimates from multiple 
sources and, in all cases; we compared FY 2004 estimates with actual FY 
2003 payment units to ensure that our revised estimates were 
reasonable. Where appropriate, 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 2004 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 2004 payment units are based 
on FY 2003 actual payment units, it does not necessarily mean that our 
FY 2004 projection is exactly the same number as FY 2003. It means that 
we have either rounded the FY 2004 number or adjusted it slightly to 
account for these variables.

------------------------------------------------------------------------
         Fee category              Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave,  Based on Wireless Telecommunications
 218-219 MHz, Marine (Ship &    Bureau (WTB) projections of new
 Coast), Aviation (Aircraft &   applications and renewals taking into
 Ground), GMRS, Amateur         consideration existing Commission
 Vanity Call Signs, Domestic    licensee data bases. Aviation (Aircraft)
 Public Fixed.                  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 Wireless Telecommunications
                                Bureau estimates.
CMRS Messaging Services......  Based on Wireless Telecommunications
                                Bureau estimates.
AM/FM Radio Stations.........  Based on estimates from Media Services
                                Bureau estimates and actual FY 2003
                                payment units.
UHF/VHF Television Stations..  Based on Media Services Bureau estimates
                                and actual FY 2003 payment units.
AM/FM/TV Construction Permits  Based on Media Services Bureau estimates
                                and actual FY 2003 payment units.
LPTV, Translators and          Based on actual FY 2003 payment units.
 Boosters.
Broadcast Auxiliaries........  Based on actual FY 2003 payment units.
MDS/LMDS/MMDS................  Based on Wireless Telecommunications
                                Bureau estimates and actual FY 2003
                                payment units.
Cable Television Relay         Based on actual FY 2003 payment units.
 Service (CARS) Stations.
Cable Television System        Based on Media Services Bureau
 Subscribers.                   (previously Cable Services Bureau),
                                industry estimates of subscribership,
                                and actual FY 2003 payment units.
Interstate Telecommunication   Based on actual FY 2003 interstate
 Service Providers.             revenues reported on Telecommunications
                                Reporting Worksheet, adjusted for FY
                                2004 revenue growth/decline for
                                industry, and estimations by the
                                Wireline Competition Bureau.
Earth Stations...............  Based on actual FY 2003 payment estimates
                                and projected FY 2004 units.
Space Stations (GSOs & NGSOs)  Based on International Bureau licensee
                                data base estimates.
International Bearer Circuits  Based on International Bureau estimates.
International HF Broadcast     Based on International Bureau estimates.
 Stations, International
 Public Fixed Radio Service.
------------------------------------------------------------------------


                                      Attachment C.--Calculation of FY 2004 Revenue Requirements and Pro-Rata Fees
 [Regulatory fees for the first ten categories below are collected by the Commission in advance to cover the term of the license and are submitted along
                                               with the application at the time the application is filed.]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              FY 2003      Pro-rated FY    Computed new   Rounded new FY   Expected new
             Fee category               FY 2004 payment        Years          revenue      2004 revenue       FY 2004          2004           FY 2004
                                             units                           estimate      requirement**  regulatory fee  regulatory fee      revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (exclusive use)................              3,400              10         330,000         334,916              10              10         340,000
PLMRS (shared use)...................             46,000              10       2,665,000       2,704,697               6               5       2,300,000
Microwave............................              3,000              10       1,525,000       1,547,716              52              50       1,500,000
218-219 MHz (formerly IVDS)..........                  3              10           1,500           1,522              51              50           1,500
Marine (ship)........................              3,900              10         660,000         669,831              17              15         585,000

[[Page 41051]]

 
GMRS.................................             15,000               5         265,000         268,947               4               5         375,000
Aviation (aircraft)..................              3,100              10         155,000         157,309               5               5         155,000
Marine (coast).......................                962              10         100,000         101,490              11              10          96,200
Aviation (ground)....................              1,600               5         127,500         129,399              16              15         120,000
Amateur vanity call signs............              7,800              10         159,740         162,119            2.08            2.08         162,119
AM Class A...........................                 69               1         195,000         198,560           2,878           2,875         198,375
AM Class B...........................              1,699               1       2,384,800       2,428,337           1,429           1,425       2,421,075
AM Class C...........................                990               1         828,300         843,421             852             850         841,500
AM Class D...........................              1,888               1       2,728,350       2,778,159           1,471           1,475       2,784,800
FM Classes A, B1 & C3................              3,220               1       5,544,000       5,701,258           1,771           1,775       5,715,500
FM Classes B, C, C0, C1 & C2.........              3,022               1       6,875,050       7,056,607           2,335           2,325       7,026,150
AM construction permits..............                 73               1          21,840          33,855             464             465          33,945
FM construction permits..............                162               1         373,700         268,430           1,657           1,650         267,300
Satellite TV.........................                122               1         126,000         129,369           1,060           1,050         128,100
Satellite TV construction permit.....                  3               1           2,575           1,553             518             520           1,560
VHF markets 1-10.....................                 43               1       2,536,600       2,595,946          60,371          60,375       2,596,125
VHF markets 11-25....................                 64               1       2,593,500       2,653,885          41,467          41,475       2,654,400
VHF markets 26-50....................                 77               1       2,199,125       2,246,372          29,174          29,175       2,246,475
VHF markets 51-100...................                123               1       2,114,775       2,160,482          17,565          17,575       2,161,725
VHF remaining markets................                235               1         930,050         954,129           4,060           4,050         951,750
VHF construction permits.............                  6               1          74,000          27,974           4,662           4,650          27,900
UHF markets 1-10.....................                 90               1       1,521,600       1,600,803          17,787          17,775       1,599,750
UHF markets 11-25....................                 81               1       1,236,000       1,309,989          16,173          16,175       1,310,175
UHF markets 26-50....................                117               1       1,041,675       1,088,742           9,305           9,300       1,088,100
UHF markets 51-100...................                170               1         900,475         944,964           5,559           5,550         943,500
UHF remaining markets................                183               1         270,750         303,743           1,660           1,650         301,950
UHF construction permits.............                 34               1         373,500         193,319           5,686           5,675         192,950
Broadcast auxiliaries................             25,000               1         250,000         254,564              10              10         250,000
LPTV/translators/boosters............              2,900               1       1,092,445       1,112,389             384             385       1,116,500
CARS stations........................              1,000               1         130,500         132,882             133             135         135,000
Cable television systems.............         65,000,000               1      44,550,000      45,363,307            0.70            0.70      45,500,000
Interstate telecommunication service      58,500,000,000               1     125,370,000     127,658,761       0.0021822         0.00218     127,530,000
 providers...........................
CMRS mobile services (cellular/public        153,000,000               1      36,868,000      38,695,143           0.253            0.25      38,250,000
 mobile).............................
CMRS messaging services..............         14,500,000               1       1,576,000       1,160,693            0.08            0.08       1,160,000
MDS/MMDS.............................              1,600               1         956,915         434,894             272             270         432,000
LMDS.................................                340               1         258,375          92,582             272             270          91,800
International bearer circuits........          2,800,000               1       6,942,000       7,068,733            2.52            2.52       7,056,000
International public fixed...........                  1               1           1,725           1,756           1,756           1,750           1,750
Earth stations.......................              3,400               1         661,290         673,363             198             200         680,000
International HF broadcast...........                  5               1           3,650           3,717             743             745           3,725
Space stations (geostationary).......                 77               1       8,671,875       8,830,189         114,678         114,675       8,829,975

[[Page 41052]]

 
Space stations (non-geostationary)...                  5               1         758,625         657,000         131,400         131,400         657,000
Total estimated revenue to be          .................  ..............     268,951,805     273,737,819  ..............  ..............     272,821,674
 collected...........................
Total revenue requirement............  .................  ..............  ..............     272,958,000  ..............  ..............     272,958,000
Difference...........................  .................  ..............  ..............         779,819  ..............  ..............      (136,326)
--------------------------------------------------------------------------------------------------------------------------------------------------------
**1.01471 factor applied based on the amount Congress designated for recovery through regulatory fees (Pub. L. 108-7 and 47 U.S.C. 159(a)(2)).


           Attachment D.--FY 2004 Schedule of Regulatory Fees
 [Regulatory fees for the first eleven categories below are collected by
   the Commission in advance to cover the term of the license and are
   submitted along with the application at the time the application is
                                 filed.]
------------------------------------------------------------------------
                                                              Annual
                      Fee category                        regulatory fee
                                                             (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90)....        10
Microwave (per license) (47 CFR part 101)...............        50
218-219 MHz (Formerly Interactive Video Data Service)           50
 (per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............        15
Marine (Coast) (per license) (47 CFR part 80)...........        10
General Mobile Radio Service (per license) (47 CFR part          5
 95)....................................................
Rural Radio (47 CFR part 22) (previously listed under            5
 the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90).......         5
Aviation (Aircraft) (per station) (47 CFR part 87)......         5
Aviation (Ground) (per license) (47 CFR part 87)........        15
Amateur Vanity Call Signs (per call sign) (47 CFR part           2.08
 97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts            .25
 20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22,          .08
 24 and 90).............................................
Multipoint Distribution Services (MMDS/MDS) (per call          270
 sign) (47 CFR part 21).................................
Local Multipoint Distribution Service (per call sign)          270
 (47 CFR part 101)......................................
AM Radio Construction Permits...........................       465
FM Radio Construction Permits...........................     1,650
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10........................................    60,375
    Markets 11-25.......................................    41,475
    Markets 26-50.......................................    29,175
    Markets 51-100......................................    17,575
    Remaining Markets...................................     4,050
    Construction Permits................................     4,650
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10........................................    17,775
    Markets 11-25.......................................    16,175
    Markets 26-50.......................................     9,300
    Markets 51-100......................................     5,550
    Remaining Markets...................................     1,650
    Construction Permits................................     5,675
Satellite Television Stations (All Markets).............     1,050
Construction Permits--Satellite Television Stations.....       520
Low Power TV, TV/FM Translators & Boosters (47 CFR part        385
 74)....................................................
Broadcast Auxiliaries (47 CFR part 74)..................        10
CARS (47 CFR part 78)...................................       135
Cable Television Systems (per subscriber) (47 CFR part            .70
 76)....................................................
Interstate Telecommunication Service Providers (per               .00218
 revenue dollar)........................................
Earth Stations (47 CFR part 25).........................       200
Space Stations (per operational station in geostationary   114,675
 orbit) (47 CFR part 25) also includes DBS Service (per
 operational station) (47 CFR part 100).................
Space Stations (per operational system in non-             131,400
 geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit).         2.52
International Public Fixed (per call sign) (47 CFR part      1,750
 23)....................................................
International (HF) Broadcast (47 CFR part 73)...........       745
------------------------------------------------------------------------


[[Page 41053]]

FY 2004 Schedule of Regulatory Fees (Continued)

                                      FY 2004 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
                                                                                                     FM Classes
            Population served              AM Class   AM Class   AM Class   AM Class   FM Classes   B, C, C0, C1
                                              A          B          C          D       A, B1 & C3       & C2
----------------------------------------------------------------------------------------------------------------
<=25,000................................        600        450        350        425           525           675
25,001-75,000...........................      1,200        900        525        625         1,050         1,175
75,001-150,000..........................      1,800      1,125        700      1,075         1,450         2,200
150,001-500,000.........................      2,700      1,925      1,050      1,275         2,225         2,875
500,001-1,200,000.......................      3,900      2,925      1,750      2,125         3,550         4,225
1,200,001-3,000,000.....................      6,000      4,500      2,625      3,400         5,775         6,750
>3,000,000..............................      7,200      5,400      3,325      4,250         7,350         8,775
----------------------------------------------------------------------------------------------------------------

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

AM Stations

    For stations with nondirectional daytime antennas, the theoretical 
radiation was used at all azimuths. For stations with directional 
daytime antennas, specific information on each day tower, including 
field ratio, phasing, spacing and orientation was retrieved, as well as 
the theoretical pattern root-mean-square of the radiation in all 
directions in the horizontal plane (RMS) figure milliVolt per meter 
(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 sections 73.150 
and 73.152 of the Commission's rules.\278\ Radiation values were 
calculated for each of 360 radials around the transmitter site. Next, 
estimated soil conductivity data was retrieved from a database 
representing the information in FCC Figure R3 \279\. 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 360 radials. The resulting distance to city 
grade contours were used to form a geographical polygon. Population 
counting was accomplished by determining which 2000 block centroids 
were contained in the polygon. (A block centroid is the center point of 
a small area containing population as computed by the U.S. Census 
Bureau.) The sum of the population figures for all enclosed blocks 
represents the total population for the predicted city grade coverage 
area.
---------------------------------------------------------------------------

    \278\ 47 CFR 73.150 and 73.152.
    \279\ See Map of Estimated Effective Ground Conductivity in the 
United States, 47 CFR 73.190 Figure R3.
---------------------------------------------------------------------------

FM Stations

    The greater of the horizontal or vertical effective radiated power 
(ERP) (kW) and respective height above average terrain (HAAT) (m) 
combination was used. Where the antenna height above mean sea level 
(HAMSL) was available, it was used in lieu of the average HAAT figure 
to calculate specific HAAT figures for each of 360 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 Field Strength (50-50) propagation curves 
specified in 47 CFR 73.313 of the Commission's rules to predict the 
distance to the city grade (70 dBu (decibel above 1 microVolt per 
meter) or 3.17 mV/m) contour for each of the 360 radials.\280\ The 
resulting distance to city grade contours were used to form a 
geographical polygon. Population counting was accomplished by 
determining which 2000 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.
---------------------------------------------------------------------------

    \280\ 47 CFR 73.313.
---------------------------------------------------------------------------

Attachment F

Parties Filing Comments on the Notice of Proposed Rulemaking

Chris Kidd
XO Communications, Inc. (``XO'')
National Cable & Telecommunications Association (``NCTA'')
Cingular Wireless LLC (``Cingular'')
Rural Cellular Association (``RCA'')
New Operating Globalstar LLC (``Globalstar'')
Cellular Telecommunications and Internet Association (``CTIA'')
Tyco Communications (US) Inc. (``Tyco'')
American Cable Association (``ACA'')
Kenneth J. Brown

Parties Filing Reply Comments

FLAG Telecom Group Limited (``FLAG'')
Rural Telecommunications Group, Inc. (``RTG'')
Verizon Wireless (``Verizon'')
Space Imaging LLC (``Space Imaging'')
ORBCOMM LLC & ORBCOMM License Corp. (``ORBCOMM'')
Verizon (``Verizon'')
The Satellite Industry Association (``SIA'')
Dobson Communications Corporation (``Dobson'')

           Attachment G.--FY 2003 Schedule of Regulatory Fees
------------------------------------------------------------------------
                                                              Annual
                      Fee category                        regulatory fee
                                                            (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90)....        10
Microwave (per license) (47 CFR part 101)...............        25
218-219 MHz (Formerly Interactive Video Data Service)           30
 (per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............        15

[[Page 41054]]

 
Marine (Coast) (per license) (47 CFR part 80)...........        10
General Mobile Radio Service (per license) (47 CFR part          5
 95)....................................................
Rural Radio (47 CFR part 22) (previously listed under            5
 the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90).......         5
Aviation (Aircraft) (per station) (47 CFR part 87)......         5
Aviation (Ground) (per license) (47 CFR part 87)........        15
Amateur Vanity Call Signs (per call sign) (47 CFR part           1.63
 97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts            .26
 20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22,          .08
 24 and 90).............................................
Multipoint Distribution Services (MMDS/MDS) (per call          265
 sign) (47 CFR part 21).................................
Local Multipoint Distribution Service (per call sign)          265
 (47 CFR, part 101).....................................
AM Radio Construction Permits...........................       455
FM Radio Construction Permits...........................     1,850
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10........................................    57,650
    Markets 11-25.......................................    43,225
    Markets 26-50.......................................    30,125
    Markets 51-100......................................    18,075
    Remaining Markets...................................     4,450
    Construction Permits................................     4,625
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10........................................    15,850
    Markets 11-25.......................................    12,875
    Markets 26-50.......................................     8,075
    Markets 51-100......................................     4,975
    Remaining Markets...................................     1,425
    Construction Permits................................     8,300
Satellite Television Stations (All Markets).............     1,000
Construction Permits--Satellite Television Stations.....       515
Low Power TV, TV/FM Translators & Boosters (47 CFR part        365
 74)....................................................
Broadcast Auxiliary (47 CFR part 74)....................        10
CARS (47 CFR part 78)...................................        90
Cable Television Systems (per subscriber) (47 CFR part            .66
 76)....................................................
Interstate Telecommunication Service Providers (per               .00199
 revenue dollar)........................................
Earth Stations (47 CFR part 25).........................       210
Space Stations (per operational station in geostationary   115,625
 orbit) (47 CFR part 25) also includes Direct Broadcast
 Satellite Service (per operational station) (47 CFR
 part 100)..............................................
Space Stations (per operational system in non-             108,375
 geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit).         2.67
International Public Fixed (per call sign) (47 CFR part      1,725
 23)....................................................
International (HF) Broadcast (47 CFR part 73)...........       730
------------------------------------------------------------------------

FY 2003 Schedule of Regulatory Fees

                                      FY 2003 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
                                                                                                     FM Classes
            Population served              AM Class   AM Class   AM Class   AM Class   FM Classes   B, C, C0, C1
                                              A          B          C          D       A, B1 & C3       & C2
----------------------------------------------------------------------------------------------------------------
<=25,000................................        600        450        325        400           475           625
25,001-75,000...........................      1,200        900        475        600           950         1,100
75,001-150,000..........................      1,800      1,125        650      1,000         1,300         2,025
150,001-500,000.........................      2,700      1,925        975      1,200         2,025         2,650
500,001-1,200,000.......................      3,900      2,925      1,625      2,000         3,200         3,900
1,200,001-3,000,000.....................      6,000      4,500      2,450      3,200         5,225         6,250
>3,000,000..............................      7,200      5,400      3,100      4,000         6,650         8,125
----------------------------------------------------------------------------------------------------------------

Concurring Statement of Commissioner Michael Copps

Re: Assessment and Collection of Regulatory Fees for Fiscal Year 2004

    I respectfully concur in today's decision. This year the Commission 
again relies on across-the-board proportionate increases from the 
previous year's schedule of fees. I am concerned that the Commission 
does not address when or how it would adjust the regulatory fees 
pursuant to section 9(b)(3) of the Act. I recognize the difficulty the 
Commission has had in developing a cost accounting system to be used in 
connection with regulatory fees. Nevertheless, as technology advances 
and our regulatory activities change, we must continue to look for ways 
to improve our regulatory fee methodology to ensure that we continue

[[Page 41055]]

to comply fully with the Act's requirements.

Statement of Commissioner Jonathan Adelstein Approving in Part, 
Concurring in Part

Re: Assessment and Collection of Regulatory Fees for Fiscal Year 2004; 
MD Docket No. 04-73

    Last year, I provided in detail a number of concerns with the 
methodology used by the Commission in determining regulatory fees. I 
appreciate the efforts in this item to respond to some of the problems 
that I raised at that time and the item's candor in assessing the 
Commission's difficulties in implementing a more granular cost-based 
accounting system. I also want to thank the staff of the Office of 
General Counsel and the Office of the Managing Director for their 
continued dialogue on these complicated issues.
    Implementation of section 9 of the Act raises a number of 
challenges for the Commission in that it allows for both cost-based and 
benefits-based adjustments but puts in place criteria for certain 
changes to the regulatory fee schedule. Clearly, the Commission does 
have some discretion in making adjustments to the fees, and the 
Commission is free to depart from strictly cost-based fees. However, I 
can only concur to certain portions of the Report and Order because I 
remain concerned about the impracticality of the Commission considering 
significant changes that undoubtedly occur from time to time in the 
costs of regulatory fees for individual services.

Rule Changes

0
Part 1 of title 47 of the Code of Federal Regulations is amended to 
read as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309, 
and 325(e).


0
2. Section 1.1152 is revised to read as follows:


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

 
------------------------------------------------------------------------
    Exclusive use services (per
             license)               Fee amount \1\         Address
------------------------------------------------------------------------
1. Land Mobile (Above 470 MHz and
 220 MHz Local, Base Station &
 SMRS) (47 CFR, Part 90):
    (a) New, Renew/Mod (FCC 601 &           $10.00  FCC, P.O. Box
     159).                                           358130, Pittsburgh,
                                                     PA 15251-5130.
    (b) New, Renew/Mod (Electronic           10.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
    (c) Renewal only (FCC 601 &              10.00  FCC, P.O. Box
     159).                                           358245, Pittsburgh,
                                                     PA 15251-5245.
    (d) Renewal only (Electronic             10.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
    220 MHz Nationwide:
        (a) New, Renew/Mod (FCC              10.00  FCC, P.O. Box 358130
         601 & 159).                                 Pittsburgh, PA
                                                     15251-5130.
        (b) New, Renew/Mod                   10.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
        (c) Renewal only (FCC 601            10.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.
        (d) Renewal only                     10.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
2. Microwave (47 CFR Pt. 101)
 (Private):
    (a) New, Renew/Mod (FCC 601 &            50.00  FCC, P.O. Box
     159).                                           358130, Pittsburgh,
                                                     PA 15251-5130.
    (b) New, Renew/Mod (Electronic           50.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
    (c) Renewal only (FCC 601 &              50.00  FCC, P.O. Box
     159).                                           358245, Pittsburgh,
                                                     PA 15251-5245.
    (d) Renewal only (Electronic             50.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
3. 218-219 MHz Service:
    (a) New, Renew/Mod (FCC 601 &            50.00  FCC, P.O. Box
     159).                                           358130, Pittsburgh,
                                                     PA 15251-5130.
    (b) New, Renew/Mod (Electronic           50.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
    (c) Renewal only (FCC 601 &              50.00  FCC, P.O. Box
     159).                                           358245, Pittsburgh,
                                                     PA 15251-5245.
    (d) Renewal only (Electronic             50.00  FCC, P.O. Box
     Filing) (FCC 601 & 159).                        358994, Pittsburgh,
                                                     PA 15251-5994.
4. Shared Use Services:
    Land Mobile (Frequencies)
    Below 470 MHz--except 220
     MHz):
        (a) New, Renew/Mod (FCC               5.00  FCC, P.O. Box
         601 & 159).                                 358130, Pittsburgh,
                                                     PA 15251-5130.
        (b) New, Renew/Mod                    5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
        (c) Renewal only (FCC 601             5.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.
        (d) Renewal only                      5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
    General Mobile Radio Service:
        (a) New, Renew/Mod (FCC               5.00  FCC, P.O. Box
         605 & 159).                                 358130, Pittsburgh,
                                                     PA 15251-5130.
        (b) New, Renew/Mod                    5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA 15251-5994.
        (c) Renewal only (FCC 605             5.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.
        (d) Renewal only                      5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA 15251-5994.
    Rural Radio (Part 22):
        (a) New, Additional                   5.00  FCC, P.O. Box
         Facility, Major Renew/Mod                   358994, Pittsburgh,
         (Electronic Filing) (FCC                    PA 15251-5994.
         601 & 159).
        (b) Renewal, Minor Renew/             5.00  FCC, P.O. Box
         Mod (Electronic Filing)                     358994, Pittsburgh,
         (FCC 601 & 159).                            PA 15251-5994.
    Marine Coast:
        (a) New Renewal/Mod (FCC             10.00  FCC, P.O. Box
         601 & 159).                                 358130, Pittsburgh,
                                                     PA 15251-5130.
        (b) Renewal only (FCC 601            10.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.
        (c) Renewal only                     10.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
    Aviation Ground:
        (a) New, Renewal/Mod (FCC            15.00  FCC, P.O. Box
         601 & 159).                                 358130, Pittsburgh,
                                                     PA 15251-5130.
        (b) Renewal only (FCC 601            15.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.
        (c) Renewal only                     15.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         601 & 159).                                 PA 15251-5994.
    Marine Ship:
        (a) New, Renewal/Mod (FCC            15.00  FCC, P.O. Box
         605 & 159).                                 358130, Pittsburgh,
                                                     PA 15251-5130.
        (b) New, Renewal/Mod                 15.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA 15251-5994.
        (c) Renewal only (FCC 605            15.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA 15251-5245.

[[Page 41056]]

 
        (d) Renewal only                     15.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA 15251-5994.
    Aviation Aircraft:
        (a) New, Renew/Mod (FCC               5.00  FCC, P.O. Box
         605 & 159).                                 358130, Pittsburgh,
                                                     PA, 15251-5130.
        (b) New, Renew/Mod                    5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA, 15251-5994.
        (c) Renewal only (FCC 605             5.00  FCC, P.O. Box
         & 159).                                     358245, Pittsburgh,
                                                     PA, 15251-5245.
        (d) Renewal only                      5.00  FCC, P.O. Box
         (Electronic Filing) (FCC                    358994, Pittsburgh,
         605 & 159).                                 PA, 15251-5994.
5. Amateur Vanity Call Signs:
     (a) Initial or Renew (FCC 605            2.08  FCC, P.O. Box
     & 159).                                         358130, Pittsburgh,
                                                     PA, 15251-5130.
    (b) Initial or Renew                      2.08  FCC, P.O. Box
     (Electronic Filing) (FCC 605                    358994, Pittsburgh,
     & 159).                                         PA, 15251-5994.
6. CMRS Mobile Services (per
 unit):
    (FCC 159).....................          \2\.25  FCC, P.O. Box
                                                     358835, Pittsburgh,
                                                     PA, 15251-5835.
7. CMRS Messaging Services (per
 unit):
    (FCC 159).....................          \3\.08  FCC, P.O. Box
                                                     358835, Pittsburgh,
                                                     PA, 15251-5835.
8. Multipoint Distribution:
    (Includes MMDS and MDS).......          270     FCC, Multipoint,
                                                     P.O. Box 358835,
                                                     Pittsburgh, PA,
                                                     15251-5835.
9. Local Multipoint Distribution
 Service:
    (Includes MMDS and MDS).......          270     FCC, Multipoint,
                                                     P.O. Box 358835,
                                                     Pittsburgh, PA,
                                                     15251-5835.
------------------------------------------------------------------------
\1\ Note that ``small fees'' are collected in advance for the entire
  license term. Therefore, the annual fee amount shown in this table
  that is a small fee (categories 1 through 5) must be multiplied by the
  5- or 10-year license term, as appropriate, to arrive at the total
  amount of regulatory fees owed. It should be further noted that
  application fees may also apply as detailed in Sec.   1.1102 of this
  chapter.
\2\ These are standard fees that are to be paid in accordance with Sec.
   1.1157(b) of this chapter.
\3\ These are standard fees that are to be paid in accordance with Sec.
   1.1157(b) of this chapter.


0
3. Section 1.1153 is revised to read as follows:


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

----------------------------------------------------------------------------------------------------------------
 Radio [AM and FM] (47 CFR,
          Part 73)              Fee amount                                  Address
----------------------------------------------------------------------------------------------------------------
1. AM Class A
    <=25,000 population.....            $600  FCC, Radio, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
    25,001-75,000 population           1,200
    75,001-150,000                     1,800
     population.
    150,001-500,000                    2,700
     population.
    500,001-1,200,000                  3,900
     population.
    1,200,001-3,000,000                6,000
     population.
    >3,000,000 population...           7,200
2. AM Class B
    <=25,000 population.....             450
    25,001-75,000 population             900
    75,001-150,000                     1,125
     population.
    150,001-500,000                    1,925
     population.
    500,001-1,200,000                  2,925
     population.
    1,200,001-3,000,000                4,500
     population.
    >3,000,000 population...           5,400
3. AM Class C
    <=25,000 population.....             350
    25,001-75,000 population             525
    75,001-150,000                       700
     population.
    150,001-500,000                    1,050
     population.
    500,001-1,200,000                  1,750
     population.
    1,200,001-3,000,000                2,625
     population.
    >3,000,000 population...           3,325
4. AM Class D
    <=25,000 population.....             425
    25,001-75,000 population             625
    75,001-150,000                     1,075
     population.
    150,001-500,000                    1,275
     population.
    500,001-1,200,000                  2,125
     population.
    1,200,001-3,000,000                3,400
     population.
    >3,000,000 population...           4,250
5. AM Construction Permit                465

[[Page 41057]]

 
6. FM Classes A, B1 and C3
    <=25,000 population.....             525
    25,001-75,000 population           1,050
    75,001-150,000                     1,450
     population.
    150,001-500,000                    2,225
     population.
    500,001-1,200,000                  3,550
     population.
    1,200,001-3,000,000                5,775
     population.
    >3,000,000 population...           7,350
7. FM Classes B, C, C0, C1
 and C2
    <=25,000 population.....             675
    25,001-75,000 population           1,175
    75,001-150,000                     2,200
     population.
    150,001-500,000                    2,875
     population.
    500,001-1,200,000                  4,225
     population.
    1,200,001-3,000,000                6,750
     population.
    >3,000,000 population...           8,775
8. FM Construction Permits             1,650
    TV (47 CFR, Part 73) VHF
     Commercial
        1. Markets 1 thru 10          60,375  FCC, TV Branch, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
        2. Markets 11 thru            41,475
         25.
        3. Markets 26 thru            29,175
         50.
        4. Markets 51 thru            17,575
         100.
        5. Remaining Markets           4,050
        6. Construction                4,650
         Permits.
    UHF Commercial
        1. Markets 1 thru 10          17,775  FCC, UHFCommercial, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
        2. Markets 11 thru            16,175
         25.
        3. Markets 26 thru             9,300
         50.
        4. Markets 51 thru             5,550
         100.
        5. Remaining Markets           1,650
        6. Construction                5,675
         Permits.
    Satellite UHF/VHF
     Commercial
        1. All Markets......           1,050  FCC, Satellite TV, P.O. Box 358835, Pittsburgh, PA 15251-5835.
        2. Construction                  520
         Permits.
    Low Power TV, TV/FM
     Translator,& TV/FM
     Booster (47 CFR Part
     74)
                                         385  FCC, Low Power, P.O. Box 358835, Pittsburgh, PA 15251-5835.
    Broadcast Auxiliary
                                          10  FCC, Auxiliary, P.O. Box 358835, Pittsburgh, PA 15251-5835.
----------------------------------------------------------------------------------------------------------------
\1\ Note that ``small fees'' are collected in advance for the entire license term. Therefore, the annual fee
  amount shown in this table that is a small fee (categories 1 through 5) must be multiplied by the 5- or 10-
  year license term, as appropriate, to arrive at the total amount of regulatory fees owed. It should be further
  noted that application fees may also apply as detailed in Sec.   1.1102 of this chapter.


0
4. Section 1.1154 is revised to read as follows:


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

--------------------------------------------------------------------------------------------------------------------------------------------------------
               Radio facilities                     Fee amount                                             Address
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Microwave (Domestic Public Fixed)                      $50.00     FCC, P.O. Box 358994, Pittsburgh, PA, 15251-5994.
 (Electronic Filing) (FCC Form 601 & 159).
Carriers:
    1. Interstate Telephone Service Providers                .00218  FCC, Carriers, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
     (per interstate and international end-
     user revenues (see FCC Form 499-A).
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\1\ Note that ``small fees'' are collected in advance for the entire license term. Therefore, the annual fee amount shown in this table that is a small
  fee (categories 1 through 5) must be multiplied by the 5- or 10-year license term, as appropriate, to arrive at the total amount of regulatory fees
  owed.It should be further noted that application fees may also apply as detailed in Sec.   1.1102 of this chapter.


0
5. Section 1.1155 is revised to read as follows:


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

[[Page 41058]]



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                                                     Fee amount                                            Address
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1. Cable Television Relay Service..............            $135     FCC, Cable P.O. Box 358835 Pittsburgh, PA 15251-5835.
2. Cable TV System (per subscriber)............                .70
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 \1\ Note that ``small fees'' are collected in advance for the entire license term. Therefore, the annual fee amount shown in this table that is a small
  fee (categories 1 through 5) must be multiplied by the 5- or 10-year license term, as appropriate, to arrive at the total amount of regulatory fees
  owed. It should be further noted that application fees may also apply as detailed in Sec.   1.1102 of this chapter.


0
6. Section 1.1156 is revised to read as follows:


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

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                Radio facilities                     Fee amount                                            Address
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1. International (HF) Broadcast................            $745     FCC, International, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
2. International Public Fixed..................           1,750     FCC, International P.O. Box 358835, Pittsburgh, PA, 15251-5835.
Space Stations (Geostationary Orbit)...........         114,675     FCC, Space Stations, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
Space Stations (Non-Geostationary Orbit).......         131,400     FCC, Space Stations, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
Earth Stations Transmit/Receive & Transmit Only             200     FCC, Earth Station, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
 (per authorization or registration).
Carriers International Bearer Circuits (per                   2.52  FCC, International, P.O. Box 358835, Pittsburgh, PA, 15251-5835.
 active 64KB circuit or equivalent).
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\1\ Note that ``small fees'' are collected in advance for the entire license term. Therefore, the annual fee amount shown in this table that is a small
  fee (categories 1 through 5) must be multiplied by the 5-or 10-year license term, as appropriate, to arrive at the total amount of regulatory fees
  owed. It should be further noted that application fees may also apply as detailed in Sec.   1.1102 of this chapter.

[FR Doc. 04-14769 Filed 7-6-04; 8:45 am]
BILLING CODE 6712-01-P