[Federal Register Volume 72, Number 84 (Wednesday, May 2, 2007)]
[Proposed Rules]
[Pages 24213-24238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8366]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 07-81; FCC 07-55]


Assessment and Collection of Regulatory Fees For Fiscal Year 2007

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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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 2007. 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: Comments are due May 3, 2007, and reply comments are due May 11, 
2007.

ADDRESSES: You may submit comments, identified by MD Docket No. 07-81, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs. Follow the instructions for submitting comments.
     E-mail: [email protected]. Include MD Docket No. 07-81 in the 
subject line of the message.
     Mail: Commercial overnight mail (other than U.S. Postal 
Service Express Mail, and Priority Mail, must be sent to 9300 East 
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th 
Street, SW., Washington, DC 20554.

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: April 16, 2007.
    Released: April 18, 2007.
    By the Commission:

Table of Contents

 
                                                              Paragraph
                          Heading                               number
 
I. Introduction............................................            1
II. Discussion.............................................            2
    A. FY 2007 Regulatory Fee Assessment Methodology.......            4
        1. Development of FY 2007 Regulatory Fees..........            4

[[Page 24214]]

 
            a. Calculation of Revenue and Fee Requirements.            4
            b. Additional Adjustments to Payment Units.....            5
        2. Commercial Mobile Radio Service (CMRS) Messaging            7
         Service...........................................
        3. Broadband Radio Service (BRS)/Educational                   8
         Broadband Service (EBS)...........................
        4. International Bearer Circuits...................            9
        5. Interconnected Voice over Internet Protocol                10
         Service Providers.................................
    B. Administrative and Operational Issues...............           11
        1. Use of Fee Filer................................           12
        2. Proposals for Notification and Collection of               13
         Regulatory Fees...................................
            a. Interstate Telecommunications Service                  15
             Providers (ITSPs).............................
            b. Satellite Space Station Licensees...........           17
            c. Additional Service Categories for Billing...           19
            d. Media Services Licensees....................           20
            e. Commercial Mobile Radio Service (CMRS)                 23
             Cellular and Mobile Services Assessments......
            f. Cable Television Subscribers................           28
        3. Streamlined Regulatory Fee Payment Process for             30
         Commercial Mobile Radio Service (CMRS) Cellular
         and Mobile Providers..............................
        4. Future Streamlining of the Regulatory Fee                  32
         Assessment and Collection Process.................
III. Procedural Matters....................................           33
    A. Payment of Regulatory Fees..........................           33
        1. De Minimis Fee Payment Liability................           33
        2. Standard Fee Calculations and Payment Dates.....           34
    B. Enforcement.........................................           35
    C. Initial Regulatory Flexibility Analysis.............           37
    D. Initial Paperwork Reduction Act of 1995 Analysis....           38
    E. Ex Parte Rules......................................           39
    F. Filing Requirements.................................           40
IV. Ordering Clauses.......................................           45
Attachments:
Attachment A Initial Regulatory Flexibility Analysis
Attachment B Sources of Payment Unit Estimates for FY 2007
Attachment C Calculation of Revenue Requirements and Pro-
 Rata Fees
Attachment D Proposed FY 2007 Schedule of Regulatory Fees
Attachment E Factors, Measurements, and Calculations that
 Determine Station Contours and Population Coverages
Attachment F FY 2006 Schedule of Regulatory Fees
 

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we propose to 
collect $290,295,160 in regulatory fees for Fiscal Year (FY) 2007, 
pursuant to section 9 of the Communications Act of 1934, as amended 
(the Act). 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

    2. In this NPRM, we seek comment on the development of FY 2007 
regulatory fees collected pursuant to section 9 of the Act. For FY 
2007, we tentatively propose to retain the established methods and 
policies that the Commission has used to collect section 9 regulatory 
fees since FY 2003. In addition to seeking comment on the assessment 
methodology, the Commission typically seeks comment on various 
administrative and operational issues affecting the collection of 
regulatory fees. For the FY 2007 regulatory fee cycle, we propose to 
retain the vast majority of the administrative measures used for 
notification, assessment and pre-billing of regulatory fees in previous 
years, such as generating pre-completed regulatory fee assessment forms 
for certain regulatees. Consistent with past practice, we seek comment 
on ways to improve the Commission's administrative processes for 
notifying entities of their regulatory fee obligations and collecting 
their payments. Finally, we seek comment on applying the same 
regulatory fee obligations applicable to interstate telecommunications 
providers to providers of interconnected voice over Internet Protocol 
services.
    3. The Commission is obligated to collect $290,295,160 in 
regulatory fees during FY 2007 to fund the Commission's operations. 
Consistent with our established practice, we intend to collect these 
regulatory fees in the August-September 2007 time frame in order to 
collect the required amount by the end of the fiscal year.

A. FY 2007 Regulatory Fee Assessment Methodology

1. Development of FY 2007 Regulatory Fees
a. Calculation of Revenue and Fee Requirements
    4. For our FY 2007 regulatory fee assessment, we propose to use 
essentially the same section 9 regulatory fee assessment methodology 
adopted for FY 2006. Each fiscal year, the Commission proportionally 
allocates the total amount that must be collected via section 9 
regulatory fees. The results of our proposed FY 2007 regulatory fee 
assessment methodology (including a comparison to the prior year's 
results) are contained in Appendix C. For FY 2007, we propose to use 
the receipts collected through the FY 2006 regulatory fees as the basis 
for calculating the amount the Commission must collect in FY 2007. To 
collect the $290,295,160 required by law, we propose to adjust the FY 
2006 amount downward by approximately 2.84 percent.\2\ Consistent with 
past practice,

[[Page 24215]]

we propose to divide the FY 2007 amount by the number of payment units 
in each fee category to determine the unit fee.\3\ As in prior years, 
for cases involving small fees (e.g., licenses that are renewed over a 
multiyear term), we propose to divide the resulting unit fee by the 
term of the license. We propose to round these unit fees consistent 
with the requirements of section 9(b)(2).
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    \2\ The percentage decrease of approximately 2.84 percent is 
based on the total amount of regulatory fees that was mandated by 
Congress to be collected in FY 2006, which included an amount of 
$288,771,000 in regulatory fees pursuant to section 9 of the 
Communications Act of 1934, as amended, and an additional 
$10,000,000 as required by section 3013 of the Deficit Reduction Act 
(Public Law 109-171). Together, the total amount of regulatory fees 
mandated by Congress to be collected in FY 2006 was $298,771,000. 
Also, the decrease in regulatory fee payments of approximately 2.84 
percent in FY 2007 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, and then adjusted for rounding, the 
actual fee will likely differ by an amount more or less than 2.84 
percent. For example, in industries where the number of payment 
units is declining, the per-unit regulatory fee amount for FY 2007 
may actually be more than the amount for FY 2006.
    \3\ In many instances, the regulatory fee amount is a flat fee 
per licensee or regulatee. However, in some instances the fee amount 
represents a per-unit fee (such as for International Bearer 
Circuits), a per-unit subscriber fee (such as for Cable, Commercial 
Mobile Radio Service (CMRS) Cellular/Mobile and CMRS Messaging), or 
a fee factor per revenue dollar (Interstate Telecommunications 
Service Provider fee). The payment unit is the measure upon which 
the fee is based, such as a licensee, regulatee, subscriber fee, 
etc.
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b. Additional Adjustments to Payment Units
    5. In calculating the FY 2007 regulatory fees proposed in 
Attachment D, we further adjusted the FY 2006 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 the 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 events that may impact the number 
of units for which regulatees submit payment, such as waivers and/or 
exemptions that may be filed in FY 2007, and fluctuations in the number 
of licensees or station operators due to economic, technical, or other 
reasons. Therefore, when we state that our estimated FY 2007 payment 
units are based on FY 2006 actual payment units, the number may have 
been rounded or adjusted 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), Consolidated Database System (CDBS) and 
Cable Operations and Licensing System (COALS). 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 and Annual CMRS Competition 
Report. For additional information on source material, see 
Attachment B.
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    6. 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.\5\
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    \5\ In addition, beginning in FY 2005, we established a 
procedure by which we set regulatory fees for AM and FM radio and 
VHF and UHF television Construction Permits each year at an amount 
no higher than the lowest regulatory fee in that respective service 
category. For example, the regulatory fee for a Construction Permit 
for an AM radio station will never be more than the regulatory fee 
for an AM Class C radio station serving a population of less than 
25,000.
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2. Commercial Mobile Radio Service (CMRS) Messaging Service
    7. Since FY 2003, the Commission has maintained the CMRS Messaging 
regulatory fee at the rate that was established in FY 2002 (i.e., $0.08 
per subscriber) to account for the messaging industry's declining 
subscriber base.\6\ We note that between FY 1997 and FY 2006, the CMRS 
Messaging subscriber base declined 79.7 percent from 40.8 million to 
8.3 million, respectively.\7\ We propose to continue the same approach 
for regulatory fees applicable to the messaging industry in FY 2007, 
thereby maintaining the industry's regulatory fee at $0.08 per 
subscriber. We seek comment on this proposal.
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    \6\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2003, MD Docket No. 03-83, Report and Order, 18 FCC Rcd 15985, 
15992, para. 21 (2003).
    \7\ The 40.8 million number represents a unit estimate from 
Assessment and Collection of Regulatory Fees for Fiscal Year 1997, 
MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161 (1997), and 
the 8.3 million figure represents the number of paid units as of 
fiscal year end 2006.
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3. Broadband Radio Service (BRS)/Educational Broadband Service (EBS)
    8. Recently, the Commission adopted a megahertz-based formula for 
BRS licensees with tiered fees by markets, similar to but more complex 
than the Commission's annual scale of regulatory fees paid by broadcast 
television stations.\8\ According to this formula, annual fees will be 
charged on a per-megahertz basis based upon three categories of Basic 
Trading Areas (BTA) population rankings: \9\ Licensees in BTA rankings 
1-60 will pay the highest fee, licensees in BTA rankings 61-200 will 
pay a lesser fee, and licensees in BTA rankings 201-493 will pay the 
lowest fee.\10\ Because this formula is complex, we are assessing the 
impact of this methodology (using a per-megahertz formula and a BTA 
populating ranking) on the manner in which regulatory fees are 
calculated for this class of licensees. We seek comment on how to 
devise a simple method of calculating regulatory fees that incorporates 
BTA population rankings and a per-megahertz fee for future fiscal 
years. We specifically seek comment on a formula for calculating 
regulatory fees that not only incorporates BTAs and a per-megahertz 
fee, but a formula that is also sensitive to rural operators in less 
densely populated areas. We seek comment on this proposal. Due to the 
complexities mentioned above and the need for detailed analysis, 
however, we will not implement any such changes for FY 2007.
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    \8\ See Amendment of Parts 1, 21, 73, 74 and 101 of the 
Commission's Rules to Facilitate the Provision of Fixed and Mobile 
Broadband Access, Educational and Other Advanced Services in the 
2150-2162 and 2500-2690 MHz Bands, Order on Reconsideration and 
Fifth Memorandum Opinion and Order and Third Memorandum Opinion and 
Order and Second Report and Order, 21 FCC Rcd 5606, 5756-5759, 
paras. 367-376 (2006) (BRS/EBS Second Report and Order).
    \9\ For BRS licensees that are licensed by geographic licensed 
service area (GSA), the BTA is the geographic center point of where 
its GSA is located.
    \10\ BRS/EBS Second Report and Order, 21 FCC Rcd 5759, para. 
376. (Generally, BTAs ranked 1-60 have a population greater than 1 
million, BTAs ranked 61-200 have a population 250,000 to 1 million, 
and BTAs ranked 201-493 have a population of less than 250,000.)
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4. International Bearer Circuits
    9. On February 6, 2006, VSNL Telecommunications (US) Inc. (VSNL) 
filed a Petition for Rulemaking urging the Commission to modify the 
current international bearer circuit fee rules and policies as applied 
to non-common carrier (i.e., private) submarine cable operators.\11\ We 
issued a Public Notice designating the proceeding as RM-11312 and 
requesting comment on the

[[Page 24216]]

Petition.\12\ We continue to review the record in that proceeding.
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    \11\ See Petition for Rulemaking of VSNL Telecommunications (US) 
Inc., RM-11312 (filed Feb. 6, 2006) (VSNL Petition).
    \12\ See Consumer and Governmental Affairs Bureau, Reference 
Information Center, Public Notice, Report No. 2759 (rel. Feb. 15, 
2006).
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5. Interconnected Voice Over Internet Protocol Service Providers
    10. We tentatively conclude that providers of interconnected voice 
over Internet Protocol (``VoIP'') service \13\ should pay regulatory 
fees. During FY 2006, the Commission concluded that providers of 
interconnected VoIP services should contribute to the Universal Service 
Fund.\14\ Based on section 9's broad mandate that the Commission 
``assess and collect regulatory fees to recover the costs'' of 
regulatory activities \15\ and our analysis in the 2006 Interim 
Contribution Methodology Order, we tentatively conclude that the 
Commission has the legal authority to extend regulatory fee obligations 
to interconnected VoIP service providers.\16\ We seek comment on 
whether we should assess regulatory fees on providers of interconnected 
VoIP services based on their revenue, which would be consistent with 
the regulatory fee methodology used for interstate telecommunications 
service providers, or whether we should assess regulatory fees using a 
numbers-based approach, which would be consistent with the methodology 
used for CMRS providers.
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    \13\ See 47 CFR 9.3 for the definition of interconnected VoIP 
service.
    \14\ See Universal Service Contribution Obligations for 
Providers of Interconnected Voice Over Internet Protocol (VoIP) 
Service, WC Docket No. 06-122, Report and Order and Notice of 
Proposed Rulemaking, 21 FCC Rcd 7518, 7541, para. 46 (2006) (2006 
Interim Contribution Methodology Order).
    \15\ 47 U.S.C. 159(1).
    \16\ See 2006 Interim Contribution Methodology Order 21 FCC Rcd 
at 7541, paras. 46-47 (finding that Title I gives the Commission 
subject matter jurisdiction over interconnected VoIP services and 
that imposition of a universal service contribution obligation is 
reasonably ancillary to effective performance of the Commission's 
obligations under section 254 of the Act). Here, the regulatory fee 
obligation would be reasonably ancillary to the Commission's 
obligations under section 9 of the Act.
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B. Administrative and Operational Issues

    11. We seek comment on the administrative and operational processes 
used to collect the annual section 9 regulatory fees. Although these 
issues do not affect the amount of regulatory fees parties are 
obligated to submit, the administrative and operational issues affect 
the process of submitting payment. We invite comment on ways to improve 
these processes.
1. Use of Fee Filer
    12. We continue to encourage regulatees to use the Commission's 
online electronic Fee Filer application. Using the Commission's Fee 
Filer application reduces paperwork burdens on payors because it 
eliminates the need to file a FCC Form 159. Regulatees submitting more 
than twenty-five (25) Form 159-Cs are strongly encouraged to use Fee 
Filer when sending their regulatory fee payment. We note that Fee Filer 
will accept credit card payments of up to $99,999.99.
2. Proposals for Notification and Collection of Regulatory Fees
    13. In this section, we seek comment on the administrative 
processes that the Commission uses to notify regulatees and collect 
regulatory fees. Each year, we generate public notices and fact sheets 
that notify regulatees of the fee payment due date and provide 
additional information regarding regulatory fee payment procedures. 
Consistent with our established practice, we propose to provide public 
notices, fact sheets and all other relevant material on our Web site at 
http://www.fcc.gov/fees/regfees.html for the FY 2007 regulatory fee 
cycle. Regulatees are then expected to pay their yearly regulatory fees 
by filing FCC Form 159 or by accessing the Commission's Fee Filer web 
application. As a general practice, we will not send regulatory fee 
material to regulatees via surface mail. However, in the event that 
regulatees do not have access to the Internet, we will mail public 
notices and other relevant material upon request. Regulatees and the 
general public may request such information by contacting the FCC 
Financial Operations HelpDesk at (877) 480-3201, Option 4. We seek 
comment on ways to improve our administrative processes.
    14. As discussed above, we do not send public notices and fact 
sheets to regulatees en masse. We propose, however, to continue to send 
specific regulatory fee pre-bills or assessment notifications via 
surface mail to the select fee categories discussed below.\17\ Pre-
bills are hardcopy billing statements that the Commission mails to 
certain regulatees. Currently, the Commission only sends pre-bills to 
interstate telecommunications service providers (ITSPs) and satellite 
space station licensees. The remaining regulatees do not receive pre-
bills. We are pursuing our pre-billing initiatives as part of our 
effort to modernize our financial practices. These initiatives also 
provide licensees with notification of upcoming regulatory fees. We 
seek comment on expanding our pre-billing initiatives to include other 
regulatory fee service categories.
a. Interstate Telecommunications Service Providers (ITSPs)
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    \17\ An assessment is a proposed statement of the amount of 
regulatory fees owed by an entity to the Commission (or proposed 
subscriber count to be ascribed for purposes of setting the entity's 
regulatory fee) but it is not entered into the Commission's 
accounting system as a current debt. A pre-bill is considered an 
account receivable in the Commission's accounting system. Pre-bills 
reflect the amount owed and have a payment due date of the last day 
of the regulatory fee payment window. Consequently, if a pre-bill is 
not paid by the due date, it becomes delinquent and is subject to 
our debt collection procedures. See also 47 CFR 1.1161(c), 
1.1164(f)(5), and 1.1910.
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    15. In FY 2001, we began mailing pre-completed FCC Form 159-W 
assessments to carriers in an effort to assist them in paying their 
Interstate Telecommunications Service Provider (ITSP) regulatory fee. 
The fee amount on FCC Form 159-W was calculated from the FCC Form 499-A 
worksheet. Beginning in FY 2004, we mailed the completed FCC Form 159-W 
as a pre-bill, rather than as an assessment of amount due. Other than 
the manner in which Form 159-W payments were entered into our financial 
system, carriers experienced no procedural changes regarding the use of 
the FCC Form 159-W when submitting payment of their ITSP regulatory 
fees. We seek comment on continuing this pre-billing process in FY 
2007.
    16. We also propose to round lines 14 (total subject revenues) and 
16 (total regulatory fee owed) on FCC Form 159-W to the nearest dollar. 
Line 14 must be rounded to a whole dollar amount because this data 
field is linked to the FCC Form 159 Remittance Advice Block 25A 
(quantity), which can only accept whole numbers. It logically follows 
that if line 14 must be rounded, then the form's final line that 
calculates the total fee owed (line 16) should be rounded to the 
nearest dollar, as well. Also, rounding lines 14 and 16 will nominally 
ease the filing and payment burdens of our Form 159-W filers. We seek 
comment on these proposals and on other ways that we could improve our 
pre-billing initiative for ITSPs.
b. Satellite Space Station Licensees
    17. Beginning in FY 2004, we mailed regulatory fee pre-bills via 
surface mail to licensees in our two satellite space station service 
categories. Specifically, geostationary orbit space station (GSO) 
licensees receive bills requesting regulatory fee payment for 
satellites that (1) were licensed by the Commission and operational on 
or before October 1

[[Page 24217]]

of the respective fiscal year; and (2) were not co-located with and 
technically identical to another operational satellite on that date 
(i.e., were not functioning as a spare satellite). Non-geostationary 
orbit space station (NGSO) licensees received pre-bills requesting 
regulatory fee payment for systems that were licensed by the Commission 
and operational on or before October 1 of the respective fiscal year.
    18. For FY 2007, we propose to continue mailing pre-bills for our 
GSO and NGSO satellite space station categories. We seek comment on 
this proposal. We emphasize that the pre-bills that we propose to 
generate for our GSO and NGSO licensees will only be for the satellite 
or system aspects of their respective operations. GSO and NGSO 
licensees typically have regulatory fee obligations in other service 
categories (such as earth stations, broadcast facilities, etc.), and we 
expect satellite operators to meet their full fee payment obligation 
for all of their FCC holdings. We seek comment on our proposal to 
generate regulatory fee pre-bills for our two satellite space station 
service categories.
c. Additional Service Categories for Billing
    19. We propose to expand our section 9 regulatory fee pre-billing 
initiative to include the service categories for Earth Stations and 
Cable Television Relay Service (CARS) Stations, beginning in FY 2007. 
Pre-billing can be accomplished for these categories because they are 
comprised of relatively few payment units (relative to many other 
categories in our Schedule of Regulatory Fees), and because the 
Commission maintains licensing databases for both categories. We seek 
comment on our proposal to send regulatory fee pre-bills via surface 
mail to licensees of Earth Stations and CARS.
d. Media Services Licensees
    20. Beginning in FY 2003, we sent fee assessment notifications via 
surface mail to media services entities on a per-facility basis. The 
notifications provided the assessed fee amount for the facility in 
question, as well as the data attributes that determined the fee 
amount. We have since refined this initiative with improved 
results.\18\ We propose to continue our assessment initiative for media 
services licensees this year.\19\ We seek comment on this proposal.
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    \18\ Some of those refinements have been to provide licensees 
with a Commission-authorized web site to update or correct any 
information concerning their facilities, and to amend their fee-
exempt status, if need be. Also, our notifications now provide 
licensees with a telephone number to call in the event that they 
need customer assistance. The notifications themselves have been 
refined so that licensees of fewer than four facilities receive 
individual fee assessment postcards for their facilities; whereas 
licensees of four or more facilities now receive a single assessment 
letter that lists all of their facilities and the associated 
regulatory fee obligation for each facility.
    \19\ Fee assessments are proposed again to be 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, to the 
extent that applicants, permittees and licensees of such facilities 
do not qualify as government entities or non-profit entities. Fee 
assessments have not been issued for broadcast auxiliary stations in 
prior years, nor will they be issued in FY 2007.
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    21. Consistent with procedures used last year, we propose to mail 
assessment notifications to licensees to their primary record of 
contact populated in CDBS (Consolidated Database System) and to their 
secondary record of contact, if available. We will continue to make the 
Commission-authorized web site available to licensees to update or 
correct any information concerning their facilities and to amend their 
fee-exempt status, if need be.\20\ We seek comment on this proposal.
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    \20\ The Commission-authorized web site for media services 
licensees is http://www.fccfees.com.
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    22. Under our proposal, licensees must still submit a completed FCC 
Form 159 Remittance Advice with their fee payments. The assessment 
notifications cannot be used as a substitute for a completed Form 159.
e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile Services 
Assessments
    23. As we have done in prior years, we propose to mail an 
assessment letter to Commercial Mobile Radio Service (CMRS) providers 
using data that is based on the Numbering Resource Utilization Forecast 
(NRUF) form, which includes a list of the carrier's Operating Company 
Numbers (OCNs) upon which the assessment is based.\21\ Consistent with 
existing practice, the letters will not include OCNs with their 
respective assigned number counts, but rather, an aggregate total of 
assigned numbers for each carrier. We also propose to continue our 
procedure of giving entities an opportunity to amend their subscriber 
counts by sending two rounds of assessment letters--an initial 
assessment and a final assessment letter. We seek comment on this 
proposal.
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    \21\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2005 and Assessment and Collection of Regulatory Fees for 
Fiscal Year 2004, MD Docket Nos. 05-59 and 04-73, Report and Order 
and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paras. 38-44 
(2005) (FY 2005 R&O and Order on Recon).
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    24. If the number of subscribers on the initial assessment letter 
differs from the subscriber count the service provider provided on its 
NRUF form, the carrier can correct its subscriber count by returning 
the assessment letter or by contacting the Commission and stating a 
reason for the change, such as the purchase or the sale of a 
subsidiary, including the date of the transaction, and any other 
information that will help to justify a reason for the change.
    25. If we receive no response or correction to our initial 
assessment letter, we will expect the fee payment to be based on the 
number of subscribers listed on the initial assessment. We will review 
all responses to initial assessment letters and determine whether a 
change in the number of subscribers is warranted. We will then generate 
and mail a final assessment letter. The final assessment letter will 
inform carriers as to whether or not we accept the changed number of 
subscribers. 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. We seek comment on our 
current procedures of assessing CMRS subscriber counts (for NRUF 
filers), and other ways to improve the process.
    26. Although an initial and a final assessment letter will be 
mailed to carriers that have filed an NRUF form, some carriers may not 
be sent a letter of assessment because they did not file the NRUF form. 
We propose that these carriers compute their fee payment using the 
standard methodology \22\ that is currently in place for CMRS Wireless 
services (e.g., compute their subscriber counts as of December 31, 
2006), and submit their payment accordingly on FCC Form 159. However, 
regardless of whether a carrier receives an assessment letter or 
computes the subscriber count itself, the Commission may audit the 
number of subscribers for which regulatory fees are 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 the initial assessment letter, the Commission will assess 
the carrier for the difference between what was paid and what should 
have been paid.
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    \22\ Federal Communications Commission, Regulatory Fees Fact 
Sheet: What You Owe--Commercial Wireless Services for FY 2005 at 1 
(rel. Jul. 2005).
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    27. We, therefore, propose to (1) derive the subscriber count from 
NRUF

[[Page 24218]]

data based on ``assigned'' number counts that have been adjusted for 
porting to net Type 0 ports (``in'' and ``out''); (2) provide carriers 
with an opportunity to revise their subscriber counts at the time when 
the initial assessment letter is mailed; and (3) require carriers to 
confirm their subscriber counts at the aggregate level using data in 
the NRUF report. We seek comment on these proposals.
f. Cable Television Subscribers
    28. We propose to continue to permit cable television operators to 
base their regulatory fee payment on their company's aggregate year-end 
subscriber count, rather than requiring them to sub-report subscriber 
counts on a per community unit identifier (CUID) basis on the FCC Form 
159 Remittance Advice. We seek comment on this proposal. Operators, 
after providing their company's aggregate subscriber count in Block 25A 
of the FCC Form 159, will still be required to certify the accuracy of 
the subscriber count in Block 30. This practice has worked well for the 
Commission the past three fiscal years and has eased administrative 
burdens for the cable television industry.
    29. Last year, for the first time, we sent a message to e-mail 
addresses populated in the Media Bureau's Cable Operations and 
Licensing System (COALS) to notify recipients of the FY 2006 regulatory 
fee payment due date and the fee amount for basic cable television 
subscribers. We propose to continue this effort for FY 2007. We also 
propose to discontinue our practice of sending fee assessment letters 
via surface mail to cable television operators who are on file as 
having paid regulatory fees the previous fiscal year. We seek comment 
on our proposals.
3. Streamlined Regulatory Fee Payment Process for Commercial Mobile 
Radio Service (CMRS) Cellular and Mobile Providers
    30. In FY 2006, we streamlined the CMRS payment process by 
eliminating the requirement for CMRS providers to identify their 
individual call signs when making their regulatory fee payment, 
requiring instead for CMRS providers to pay their regulatory fees only 
at the aggregate subscriber level without having to identify their 
various call signs.\23\ We propose to continue this practice in FY 
2007. We seek comment on this proposal. As an additional measure to 
reduce the administrative burden on CMRS licensees, we propose to 
consolidate the CMRS cellular and CMRS mobile fee categories into one 
fee category, thereby eliminating the requirement for CMRS providers to 
separate their subscriber counts into CMRS cellular and CMRS mobile fee 
categories during the regulatory fee payment process. We seek comment 
on this proposal.
---------------------------------------------------------------------------

    \23\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092, 
8105, para. 48 (2006).
---------------------------------------------------------------------------

    31. In our FY 1998 Report and Order, the Commission classified 
Wireless Communications Service (WCS), which included Personal 
Communications Services (Part 24), as a CMRS Mobile Service, stating 
that the Commercial Mobile Radio Service (CMRS) is ``an `umbrella' 
descriptive term attributed to various existing broadband services 
authorized to provide interconnected mobile radio services.'' \24\ 
However, beginning in FY 1998, a separate fee code was provided for 
Personal Communications Service (PCS) to monitor the number of units in 
this category of service. In recent years, the need to track the number 
of units for CMRS cellular and CMRS mobile separately has become 
unnecessary, especially for regulatory fee purposes. Therefore, 
beginning in FY 2007, we propose to consolidate the CMRS cellular and 
CMRS mobile fee categories into one CMRS fee category. To illustrate, 
in FY 2007 the CMRS cellular fee category of ``0711'' and the CMRS 
mobile fee category of ``0712'' would be consolidated into the fee 
category of ``0711.'' Licensees paying regulatory fees for CMRS 
cellular and CMRS mobile will need only to identify their aggregate 
subscriber unit totals under the fee code of ``0711.'' We seek comment 
on this proposal.
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    \24\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 1998, MD Docket No. 98-36, Report and Order, 63 FR 35847, para. 
49, and in Attachment H, Detailed Guidance on Who Must Pay 
Regulatory Fees, para. 14 (1998).
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4. Future Streamlining of the Regulatory Fee Assessment and Collection 
Process
    32. We continue to welcome comments concerning our commitment to 
reviewing, streamlining, and modernizing our statutorily required fee 
assessment and collection procedures. Our areas of particular interest 
include: (1) The process for notifying licensees about changes in the 
annual Schedule of Regulatory Fees and how it can be improved; (2) the 
most effective way to disseminate regulatory fee assessments and bills, 
e.g., through surface mail, e-mail, online Web site, or some other 
mechanism; (3) the fee payment process, including how the agency's 
online regulatory fee filing system (Fee Filer) can be enhanced; (4) 
the timing of fee payments, including whether we should alter the 
existing section 9 regulatory fee payment window in any way; and (5) 
the timing of fee assessments and pre-bills.

III. Procedural Matters

 A. Payment of Regulatory Fees

1. De Minimis Fee Payment Liability
    33. Consistent with past practice, regulatees whose total FY 2006 
regulatory fee liability, including all categories of fees for which 
payment is due, amounts to less than $10 will be exempted from payment 
of FY 2007 regulatory fees.
2. Standard Fee Calculations and Payment Dates
    34. The Commission will, for the convenience of payers, accept fee 
payments made in advance of the window for the payment of regulatory 
fees. Licensees are reminded that, under our current rules, the 
responsibility for payment of fees by service category is as follows:
    (a) Media Services: Regulatory fees must be paid for initial 
construction permits that were granted on or before October 1, 2006 for 
AM/FM radio stations, VHF/UHF television stations and satellite 
television stations. Regulatory fees must be paid for all broadcast 
facility licenses granted on or before October 1, 2006. In instances 
where a permit or license is transferred or assigned after October 1, 
2006, responsibility for payment rests with the holder of the permit or 
license as of the fee due date.
    (b) Wireline (Common Carrier) Services: Regulatory fees must be 
paid for authorizations that were granted on or before October 1, 2006. 
In instances where a permit or license is transferred or assigned after 
October 1, 2006, responsibility for payment rests with the holder of 
the permit or license as of the fee due date.
    (c) Wireless Services: Commercial Mobile Radio Service (CMRS) 
cellular, mobile, and messaging services (fees based upon a subscriber, 
unit or circuit count): Regulatory fees must be paid for authorizations 
that were granted on or before October 1, 2006. The number of 
subscribers, units or circuits on December 31, 2006 will be used as the 
basis from which to calculate the fee payment.
    The first eleven regulatory fee categories in our Schedule of 
Regulatory Fees (see Attachment D) pay what we refer to as ``small 
multi-year wireless regulatory fees.'' Entities pay these regulatory 
fees in advance for the entire amount of their 5-year or 10-year term

[[Page 24219]]

of initial license, and only pay regulatory fees again for the license 
at the time of its next renewal. So while we include these eleven 
categories in our Schedule of Regulatory Fees to publicize the fee 
amounts, we do not actually collect these fees on an annual basis.
    (d) Multichannel Video Programming Distributor Services (cable 
television operators and CARS licensees): Regulatory fees must be paid 
for the number of basic cable television subscribers as of December 31, 
2006.\25\ Regulatory fees also must be paid for CARS licenses that were 
granted on or before October 1, 2006. In instances where a CARS license 
is transferred or assigned after October 1, 2006, responsibility for 
payment rests with the holder of the license as of the fee due date.
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    \25\ Cable television system operators should compute their 
basic 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 2006, rather than on a count as of December 31, 
2006.
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    (e) International Services: Regulatory fees must be paid for earth 
stations, geostationary orbit space stations and non-geostationary 
orbit satellite systems that were licensed and operational on or before 
October 1, 2006. In instances where a license is transferred or 
assigned after October 1, 2006, responsibility for payment rests with 
the holder of the license as of the fee due date. Regulatory fees must 
be paid for international bearer circuits, the payments of which are 
determined by the number of active circuits as of December 31, 
2006.\26\
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    \26\ Regulatory fees for International Bearer Circuits are to be 
paid by facilities-based common carriers that have active 
international bearer circuits in any transmission facility for the 
provision of service to an end user or resale carrier, which 
includes active circuits to themselves or to their affiliates. In 
addition, non-common carrier satellite operators must pay a fee for 
each circuit sold or leased to any customer, including themselves or 
their affiliates, other than an international common carrier 
authorized by the Commission to provide U.S. international common 
carrier services. Non-common carrier submarine cable operators are 
also to pay fees for any and all international bearer circuits sold 
on an indefeasible right of use (IRU) basis or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. See Assessment and 
Collection of Regulatory Fees for Fiscal Year 2001, MD Docket No. 
01-76, Report and Order, 16 FCC Rcd 13525, 13593 (2001); Regulatory 
Fees Fact Sheet: What You Owe--International and Satellite Services 
Licensees for FY 2004 at 3 (rel. July 2004) (the fact sheet is 
available on the FCC web-site at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249904A4.pdf). On February 6, 2006, VSNL 
Telecommunications (US) Inc. filed a Petition for Rulemaking urging 
the Commission to reform the current International Bearer Circuit 
Fee rules and policies as applied to non-common carrier submarine 
cable operators. See Petition for Rulemaking of VSNL 
Telecommunications (US) Inc., RM-11312 (filed February 6, 2006). 
This Petition remains pending before the Commission, which has 
issued a Public Notice requesting comment on the petition. See 
Consumer and Governmental Affairs Bureau, Reference Information 
Center, Public Notice, Report No. 2759 (released February 15, 2006). 
The Commission intends to resolve the complex issues presented by 
this Petition separately, and any comments on these issues filed in 
the instant proceeding will be incorporated into, and addressed, 
with those filed on the Petition for Rulemaking.
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B. Enforcement

    35. 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. Regulatory fee payment must be received 
and stamped at the lockbox bank by the last day of the regulatory fee 
filing window, and not merely postmarked by the last day of the window. 
Failure to pay regulatory fees and/or any late penalty will subject 
regulatees to sanctions, including the Commission's Red Light Rule (see 
47 CFR 1.1910) and 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 47 CFR 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. In 
case of partial payments (underpayments) of regulatory fees, the 
licensee will be given credit for the amount paid, but if it is later 
determined that the fee paid is incorrect or not timely paid, then the 
25 percent late charge penalty (and other charges and/or sanctions, as 
appropriate) will be assessed on the portion that is not paid in a 
timely manner.
    36. Furthermore, our regulatory fee rules 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 entity responsible for paying the delinquent 
fee(s).

C. Initial Regulatory Flexibility Analysis

    37. With respect to this NPRM, an Initial Regulatory Flexibility 
Analysis (IRFA), is contained in Attachment A of the Appendix.\27\ 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM specified infra. The 
Commission will send a copy of the NPRM, including the IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration.
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    \27\ See 5 U.S.C. 603. In addition, the NPRM and the IRFA (or 
summaries thereof) will be published in the Federal Register.
---------------------------------------------------------------------------

D. Initial Paperwork Reduction Act of 1995 Analysis

    38. This NPRM does not contain proposed or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4). Completion of the 159 family of forms required by the 
Commission's regulatory fee payment process is already approved by the 
Office of Management and Budget under information collections 3060-0589 
and 3060-0949.

E. Ex Parte Rules

    39. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's 
rules.\28\ Ex parte presentations are permissible if disclosed in 
accordance with Commission rules, except during the Sunshine Agenda 
period when presentations, ex parte or otherwise, are generally 
prohibited. Persons making oral ex parte presentations are reminded 
that a memorandum summarizing a presentation must contain a summary of 
the substance of the presentation and not merely a listing of the 
subjects discussed. More than a one- or two-sentence description of the 
views and arguments presented is generally

[[Page 24220]]

required.\29\ Additional rules pertaining to oral and written 
presentations are set forth in section 1.1206(b).
---------------------------------------------------------------------------

    \28\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202, 1.1203.
    \29\ See 47 CFR 1.1206(b)(2).
---------------------------------------------------------------------------

F. Filing Requirements

    40. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules,\30\ interested parties may file comments on or 
before the dates indicated on the first page of this document. Comments 
may be filed using: (1) the Commission's Electronic Comment Filing 
System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) 
procedures for filing paper copies.\31\
---------------------------------------------------------------------------

    \30\ See id. 1.415, 1419.
    \31\ Electronic Filing of Documents in Rulemaking Proceedings, 
13 FCC Rcd 11322 (1998).
---------------------------------------------------------------------------

    41. Electronic Filers: Comments may be filed electronically using 
the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs or the 
Federal eRulemaking Portal: http://www.regulations.gov. Filers should 
follow the instructions provided on the Web site for submitting 
comments. For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to [email protected], and include the following 
words in the body of the message, ``get form.'' A sample form and 
directions will be sent in response.
    42. Paper Filers: Parties who choose to file by paper must file an 
original and four copies of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although we continue to experience delays in 
receiving U.S. Postal Service mail). All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
    43. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC, 20554. These documents will also be available free online, via 
ECFS. Documents will be available electronically in ASCII, Word 97, 
and/or Adobe Acrobat.
    44. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an e-mail to [email protected] or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: http://www.fcc.gov.

IV. Ordering Clauses

    45. Accordingly, it is ordered that, pursuant to sections 4(i) and 
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed 
Rulemaking is hereby adopted.
    46. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Attachment A--Initial Regulatory Flexibility Analysis

    47. As required by the Regulatory Flexibility Act (RFA),\32\ the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules in the present NPRM. Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed on or before the dates indicated on the first 
page of this NPRM. The Commission will send a copy of the NPRM, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.\33\ In addition, the NPRM and IRFA (or 
summaries thereof) will be published in the Federal Register.\34\
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    \32\ 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).
    \33\ 5 U.S.C. 603(a).
    \34\ Id.
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I. Need for, and Objectives of, the Proposed Rules

    48. This rulemaking proceeding is initiated to obtain comments 
concerning the Commission's proposed amendment of its Schedule of 
Regulatory Fees in the amount of $290,295,160, the amount that Congress 
has required the Commission to recover. The Commission seeks to collect 
the necessary amount through its proposed Schedule of Regulatory Fees 
in the most efficient manner possible and without undue public burden.

II. Legal Basis

    49. This action, including publication of proposed rules, is 
authorized under sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\35\
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    \35\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
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III. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    50. 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.\36\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \37\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\38\ A ``small business

[[Page 24221]]

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.\39\
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    \36\ 5 U.S.C. 603(b)(3).
    \37\ 5 U.S.C. 601(6).
    \38\ 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.''
    \39\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    51. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.\40\
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    \40\ SBA, Programs and Services, SBA Pamphlet No. CO-0028, at 
page 40 (July 2002).
---------------------------------------------------------------------------

    52. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.\41\
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    \41\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
---------------------------------------------------------------------------

    53. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' \42\ Census Bureau data for 
2002 indicate that there were 87,525 local governmental jurisdictions 
in the United States.\43\ We estimate that, of this total, 84,377 
entities were ``small governmental jurisdictions.'' \44\ Thus, we 
estimate that most governmental jurisdictions are small.
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    \42\ 5 U.S.C. 601(5).
    \43\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2006, Section 8, page 272, Table 415.
    \44\ We assume that the villages, school districts, and special 
districts are small, and total 48,558. U.S. Census Bureau, 
Statistical Abstract of the United States: 2006, section 8, page 
273, Table 417. For 2002, Census Bureau data indicate that the total 
number of county, municipal, and township governments nationwide was 
38,967, of which 35,819 were small. Id.
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    54. 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.'' 
\45\ 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.\46\ 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.
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    \45\ 15 U.S. C. 632.
    \46\ 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).
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    55. Incumbent Local Exchange Carriers (ILECs). 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.\47\ According to 
Commission data,\48\ 1,303 carriers have reported that they are engaged 
in the provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 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.
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    \47\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517110.
    \48\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
Page 5-5 (June 2005) (hereinafter ``Trends in Telephone Service''). 
This source uses data that are current as of October 1, 2004.
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    56. 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.\49\ 
According to Commission data,\50\ 769 carriers have reported that they 
are engaged in the provision of either competitive access provider 
services or competitive local exchange carrier services. Of these 769 
carriers, an estimated 676 have 1,500 or fewer employees and 94 have 
more than 1,500 employees. In addition, 12 carriers have reported that 
they are ``Shared-Tenant Service Providers,'' and all 12 are estimated 
to have 1.500 or fewer employees. In addition, 39 carriers have 
reported that they are ``Other Local Service Providers.'' Of the 39, an 
estimated 38 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.
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    \49\ 13 CFR 121.201, NAICS code 517110.
    \50\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    57. 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.\51\ According to Commission data,\52\ 143 carriers have 
reported that they are engaged in the provision of local resale 
services. Of these, an estimated 141 have 1,500 or fewer employees and 
two 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.
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    \51\ 13 CFR 121.201, NAICS code 517310.
    \52\ ``Trends in Telephone Service'' at Table 5.3.
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    58. 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.\53\ According to Commission data,\54\ 770 carriers have 
reported that they are engaged in the provision of toll resale 
services. Of these, an estimated 747 have 1,500 or fewer employees and 
23 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.
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    \53\ 13 CFR 121.201, NAICS code 517310.
    \54\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    59. 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.\55\ According to Commission data,\56\ 654 carriers have 
reported that they are engaged in the provision of payphone services. 
Of these, an estimated 652 have 1,500 or fewer employees and two 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.
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    \55\ 3 CFR 121.201, NAICS code 517110.
    \56\ ``Trends in Telephone Service'' at Table 5.3.
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    60. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA

[[Page 24222]]

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.\57\ According to Commission data,\58\ 316 carriers have 
reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 292 have 1,500 or fewer employees and 
24 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.
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    \57\ 13 CFR 121.201, NAICS code 517110.
    \58\ ``Trends in Telephone Service'' at Table 5.3.
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    61. 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.\59\ According to Commission data,\60\ 23 carriers have 
reported that they are engaged in the provision of operator services. 
Of these, an estimated 20 have 1,500 or fewer employees and three have 
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.
---------------------------------------------------------------------------

    \59\ 13 CFR 121.201, NAICS code 517110.
    \60\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    62. 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.\61\ According to Commission data,\62\ 89 carriers have 
reported that they are engaged in the provision of prepaid calling 
cards. Of these, an estimated 88 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.
---------------------------------------------------------------------------

    \61\ 13 CFR 121.201, NAICS code 517310.
    \62\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    63. 800 and 800-Like Service Subscribers.\63\ 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.\64\ The most reliable 
source of information regarding the number of these service subscribers 
appears to be data the Commission receives from Database Service 
Management on the 800, 866, 877, and 888 numbers in use.\65\ According 
to our data, at the end of December 2004, the number of 800 numbers 
assigned was 7,540,453; the number of 888 numbers assigned was 
5,947,789; the number of 877 numbers assigned was 4,805,568; and the 
number of 866 numbers assigned was 5,011,291. We do not have data 
specifying the number of these subscribers that are independently owned 
and operated or have 1,500 or fewer 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 7,540,453 or fewer 
small entity 800 subscribers; 5,947,789 or fewer small entity 888 
subscribers; 4,805,568 or fewer small entity 877 subscribers, and 
5,011,291 or fewer entity 866 subscribers.
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    \63\ We include all toll-free number subscribers in this 
category, including those for 888 numbers.
    \64\ 13 CFR 121.201, NAICS code 517310.
    \65\ ``Trends in Telephone Service'' at Tables 18.4, 18.5, 18.6, 
and 18.7.
---------------------------------------------------------------------------

    64. International Service Providers. There is no small business 
size standard developed specifically for providers of international 
service. The appropriate size standards under SBA rules are for the two 
broad census categories of ``Satellite Telecommunications'' and ``Other 
Telecommunications.'' Under both categories, such a business is small 
if it has $13.5 million or less in average annual receipts.\66\
---------------------------------------------------------------------------

    \66\ 13 CFR 121.201, NAICS codes 517410 and 517910.
---------------------------------------------------------------------------

    65. The first category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing point-to-point 
telecommunications services to other establishments in the 
telecommunications and broadcasting industries by forwarding and 
receiving communications signals via a system of satellites or 
reselling satellite telecommunications.'' \67\ For this category, 
Census Bureau data for 2002 show that there were a total of 371 firms 
that operated for the entire year.\68\ Of this total, 307 firms had 
annual receipts of under $10 million, and 26 firms had receipts of $10 
million to $24,999,999.\69\ Consequently, we estimate that the majority 
of Satellite Telecommunications firms are small entities that might be 
affected by our action.
---------------------------------------------------------------------------

    \67\ U.S. Census Bureau, 2002 NAICS Definitions, ``517410 
Satellite Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \68\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 517410 (issued Nov. 2005).
    \69\ Id. An additional 38 firms had annual receipts of $25 
million or more.
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    66. The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications telemetry, and radar station operations; or (2) 
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.''\70\ For this category, 
Census Bureau data for 2002 show that there were a total of 332 firms 
that operated for the entire year.\71\ Of this total, 259 firms had 
annual receipts of under $10 million and 15 firms had annual receipts 
of $10 million to $24,999,999.\72\ Consequently, we estimate that the 
majority of Other Telecommunications firms are small entities that 
might be affected by our action.
---------------------------------------------------------------------------

    \70\ U.S. Census Bureau, 2002 NAICS Definitions, ``517910 Other 
Telecommunications'' http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \71\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 517910 (issued Nov. 2005).
    \72\ Id. An additional 14 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

    67. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging'' \73\ and ``Cellular and Other Wireless 
Telecommunications.'' \74\ Under both categories, the SBA deems a 
wireless business to be small if it has 1,500 or fewer employees. For 
the census category of Paging, Census Bureau data for 2002 show that 
there were 807 firms in this category that operated for the entire 
year.\75\ Of this total, 804 firms had employment of 999 or fewer 
employees, and three firms had employment of 1,000 employees or 
more.\76\ Thus, under

[[Page 24223]]

this category and associated small business size standard, the majority 
of firms can be considered small. For the census category of Cellular 
and Other Wireless Telecommunications, Census Bureau data for 2002 show 
that there were 1,397 firms in this category that operated for the 
entire year.\77\ Of this total, 1,378 firms had employment of 999 or 
fewer employees, and 19 firms had employment of 1,000 employees or 
more.\78\ Thus, under this second category and size standard, the 
majority of firms can, again, be considered small.
---------------------------------------------------------------------------

    \73\ 13 CFR 121.201, NAICS code 517211.
    \74\ 13 CFR 121.201, NAICS code 517212.
    \75\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 517211 (issued Nov. 2005).
    \76\ 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 for firms with ``1000 
employees or more.''
    \77\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 517212 (issued Nov. 2005).
    \78\ 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 for firms with ``1000 
employees or more.''
---------------------------------------------------------------------------

    68. 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.'' \79\ Under the SBA size standard, 
such a business is small if it has average annual receipts of $21 
million or less.\80\ According to Census Bureau data for 1997, there 
were 2,751 firms in this category that operated for the entire 
year.\81\ 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.\82\ Thus, under this size standard, the great majority 
of firms can be considered small entities.
---------------------------------------------------------------------------

    \79\ Office of Management and Budget, North American Industry 
Classification System, page 515 (1997). NAICS code 518111, ``On-Line 
Information Services.''
    \80\ 13 CFR 121.201, NAICS code 518111.
    \81\ 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).
    \82\ 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).
---------------------------------------------------------------------------

    69. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the two broad economic census 
categories of ``Paging'' \83\ and ``Cellular and Other Wireless 
Telecommunications.'' \84\ Under both categories, the SBA deems a 
wireless business to be small if it has 1,500 or fewer employees. For 
the census category of Paging, Census Bureau data for 2002 show that 
there were 807 firms in this category that operated for the entire 
year.\85\ Of this total, 804 firms had employment of 999 or fewer 
employees, and three firms had employment of 1,000 employees or 
more.\86\ Thus, under this category and associated small business size 
standard, the majority of firms can be considered small. For the census 
category of Cellular and Other Wireless Telecommunications, Census 
Bureau data for 2002 show that there were 1,397 firms in this category 
that operated for the entire year.\87\ Of this total, 1,378 firms had 
employment of 999 or fewer employees, and 19 firms had employment of 
1,000 employees or more.\88\ Thus, under this second category and size 
standard, the majority of firms can, again, be considered small.
---------------------------------------------------------------------------

    \83\ 13 CFR 121.201, NAICS code 517211.
    \84\ 13 CFR 121.201, NAICS code 517212.
    \85\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 517211 (issued Nov. 2005).
    \86\ 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 for firms with ``1000 
employees or more.''
    \87\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 517212 (issued Nov. 2005).
    \88\ 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 for firms with ``1000 
employees or more.''
---------------------------------------------------------------------------

    70. Common Carrier Paging. As noted, the SBA has developed a small 
business size standard for wireless firms within the broad economic 
census categories of ``Cellular and Other Wireless 
Telecommunications.'' \89\ Under this SBA category, a wireless business 
is small if it has 1,500 or fewer employees. For the census category of 
Paging, U.S. Census Bureau data for 1997 show that there were 1,320 
firms in this category, total, that operated for the entire year.\90\ 
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.\91\ Thus, under this category and associated small business size 
standard, the great majority of firms can be considered small.
---------------------------------------------------------------------------

    \89\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \90\ 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).
    \91\ 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.''
---------------------------------------------------------------------------

    71. In addition, 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.\92\ 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.\93\ The SBA has approved this definition.\94\ 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.\95\ Fifty-seven companies claiming small business status won 
440 licenses.\96\ 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.\97\ 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.\98\ Currently, there 
are approximately 74,000 Common Carrier Paging licenses. According to 
the most recent ``Trends in Telephone Service'', 408 private and common 
carriers reported that they were engaged in the provision of either 
paging or ``other mobile'' services.\99\ Of these, we estimate that 589 
are small, under the SBA-approved small business size standard.\100\ We 
estimate that the majority of common carrier paging

[[Page 24224]]

providers would qualify as small entities under the SBA definition.
---------------------------------------------------------------------------

    \92\ 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).
    \93\ Paging Second Report and Order, 12 FCC Rcd at 2811, para. 
179.
    \94\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, from Aida 
Alvarez, Administrator, Small Business Administration, dated Dec. 2, 
1998.
    \95\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \96\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \97\ See ``Lower and Upper Paging Band Auction Closes,'' Public 
Notice, 16 FCC Rcd 21821 (WTB 2002).
    \98\ See ``Lower and Upper Paging Bands Auction Closes,'' Public 
Notice, 18 FCC Rcd 11154 (WTB 2003).
    \99\ ``Trends in Telephone Service'' at Table 5.3.
    \100\ 13 CFR 121.201, NAICS code 517211.
---------------------------------------------------------------------------

    72. 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.\101\ The SBA has 
approved these definitions.\102\ 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.
---------------------------------------------------------------------------

    \101\ 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).
    \102\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, FCC, from 
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
---------------------------------------------------------------------------

    73. 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.\103\ Under the SBA small business size standard, a business 
is small if it has 1,500 or fewer employees.\104\ According to ``Trends 
in Telephone Service'' data, 437 carriers reported that they were 
engaged in wireless telephony.\105\ We have estimated that 260 of these 
are small under the SBA small business size standard.
---------------------------------------------------------------------------

    \103\ 13 CFR 121.201, NAICS code 517212.
    \104\ 13 CFR 121.201, NAICS code 517212.
    \105\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    74. 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.\106\ 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.\107\ These 
small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA.\108\ 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.\109\ On March 23, 
1999, the Commission reauctioned 155 C, D, E, and F Block licenses; 
there were 113 small business winning bidders.\110\
---------------------------------------------------------------------------

    \106\ 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 Sec.  24.720(b).
    \107\ 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.
    \108\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, FCC, from 
Aida Alvarez, Administrator, SBA (Dec. 2, 1998).
    \109\ FCC News, ``Broadband PCS, D, E and F Block Auction 
Closes,'' No. 71744 (rel. Jan. 14, 1997).
    \110\ See ``C, D, E, and F Block Broadband PCS Auction Closes,'' 
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------

    75. 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 ``small'' or ``very small'' 
businesses.\111\ 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. On February 15, 2005, the 
Commission completed an auction of 188 C block licenses and 21 F block 
licenses in Auction No. 58. There were 24 winning bidders for 217 
licenses.\112\ Of the 24 winning bidders, 16 claimed small business 
status and won 156 licenses.
---------------------------------------------------------------------------

    \111\ See ``C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
    \112\ See ``Broadband PCS Spectrum Auction Closes; Winning 
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd 
3703 (2005).
---------------------------------------------------------------------------

    76. 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.\113\ Through these auctions, the Commission awarded a 
total of 41 licenses, 11 of which were obtained by four small 
businesses.\114\ 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.\115\ 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.\116\ 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.\117\ The SBA has approved 
these small business size standards.\118\ 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.\119\ Three of 
these claimed status as a small or very small entity and won 311 
licenses.
---------------------------------------------------------------------------

    \113\ 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).
    \114\ 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 (rel. Aug. 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 (rel. Nov. 9, 1994).
    \115\ 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).
    \116\ 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).
    \117\ 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).
    \118\ 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 Dec. 2, 1998.
    \119\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16 
FCC Rcd 18663 (WTB 2001).

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

[[Page 24225]]

    77. 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.\120\ 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.\121\ 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.\122\ 
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.\123\ The SBA has approved these 
small size standards.\124\ 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.\125\ 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.\126\ 
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.\127\ On July 26, 2005, the Commission 
completed an auction of 5 licenses in the Lower 700 MHz band (Auction 
No. 60). There were three winning bidders for five licenses. All three 
winning bidders claimed small business status.
---------------------------------------------------------------------------

    \120\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002).
    \121\ 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).
    \122\ 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).
    \123\ 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).
    \124\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
Aug. 10, 1999.
    \125\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
17 FCC Rcd 17272 (WTB 2002).
    \126\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
    \127\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
---------------------------------------------------------------------------

    78. Upper 700 MHz Band Licenses. The Commission released a Report 
and Order, authorizing service in the upper 700 MHz band.\128\ This 
auction, previously scheduled for January 13, 2003, has been 
postponed.\129\
---------------------------------------------------------------------------

    \128\ 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).
    \129\ 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).
---------------------------------------------------------------------------

    79. 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.\130\ 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.\131\ 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.\132\ SBA approval 
of these definitions is not required.\133\ An auction of 52 Major 
Economic Area (MEA) licenses commenced on September 6, 2000, and closed 
on September 21, 2000.\134\ 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.\135\
---------------------------------------------------------------------------

    \130\ 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).
    \131\ 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).
    \132\ 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).
    \133\ 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).
    \134\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
    \135\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

    80. 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.\136\ 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.\137\ The SBA has approved 
these small business size standards for the 900 MHz Service.\138\ 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.\139\ 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.\140\
---------------------------------------------------------------------------

    \136\ 47 CFR 90.814(b)(1).
    \137\ 47 CFR 90.814(b)(1).
    \138\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
Aug. 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.
    \139\ 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).
    \140\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    81. 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

[[Page 24226]]

MHz SMR band qualified as small businesses under the $15 million size 
standard.\141\ 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.\142\ 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.
---------------------------------------------------------------------------

    \141\ 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).
    \142\ See ``800 MHz SMR Service Lower 80 Channels Auction 
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736 
(2000).
---------------------------------------------------------------------------

    82. 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.
    83. 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.\143\ The Commission estimates that most such licensees are 
small businesses under the SBA's small business standard. For census 
data on these entities, see paragraph 65, supra.
---------------------------------------------------------------------------

    \143\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    84. 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.\144\ 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.\145\ 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.\146\ The SBA 
has approved these small size standards.\147\ Auctions of Phase II 
licenses commenced on September 15, 1998, and closed on October 22, 
1998.\148\ 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.\149\ Thirty-
nine small businesses 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.\150\ 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.\151\
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    \144\ 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).
    \145\ Id. at 11068, paras. 291.
    \146\ Id.
    \147\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA, (Jan. 6, 1998).
    \148\ See generally ``220 MHz Service Auction Closes,'' Public 
Notice, 14 FCC Rcd 605 (1998).
    \149\ 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 (1999).
    \150\ See ``Phase II 220 MHz Service Spectrum Auction Closes,'' 
Public Notice, 14 FCC Rcd 11218 (1999).
    \151\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (2002).
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    85. 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 use the broad 
census category, ``Cellular and Other Wireless Telecommunications.'' 
This definition provides that a small entity is any such entity 
employing no more than 1,500 persons.\152\ 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. We note that PLMR licensees generally use the 
licensed facilities in support of other business activities, and 
therefore, it would also be helpful to assess PLMR licensees under the 
standards applied to the particular industry subsector to which the 
licensee belongs.\153\
---------------------------------------------------------------------------

    \152\ See 13 CFR 121.201, NAICS code 517212.
    \153\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------

    86. The Commission's 1994 Annual Report on PLMRs \154\ 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. We 
note that any entity engaged in a commercial activity is eligible to 
hold a PLMR license, and that the revised rules in this context could 
therefore potentially impact small entities covering a great variety of 
industries.
---------------------------------------------------------------------------

    \154\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994, at para. 116.
---------------------------------------------------------------------------

    87. Fixed Microwave Services. Fixed microwave services include 
common carrier,\155\ private operational-fixed,\156\ and broadcast 
auxiliary radio services.\157\ At present, there are approximately 
22,015 common carrier fixed licensees and 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in

[[Page 24227]]

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.\158\ The 
Commission does not have data specifying the number of these licensees 
that have no 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 22,015 or fewer common carrier fixed licensees 
and 61,670 or fewer 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 note, 
however, that the common carrier microwave fixed licensee category 
includes some large entities.
---------------------------------------------------------------------------

    \155\ See 47 CFR 101 et seq. (formerly, Part 21 of the 
Commission's Rules) for common carrier fixed microwave services 
(except Multipoint Distribution Service).
    \156\ 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.
    \157\ 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.
    \158\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    88. 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.\159\ 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.\160\ 
The SBA has approved these small business size standards.\161\ 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.
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    \159\ 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).
    \160\ Id.
    \161\ 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); See Letter to 
Margaret Wiener, Chief, Auctions and Industry Analysis Division, 
Wireless Telecommunications Bureau, FCC, from Hector Barreto, 
Administrator, SBA, (Jan. 18, 2002).
---------------------------------------------------------------------------

    89. 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.\162\ 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.\163\ 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.\164\ The SBA has approved these small 
business size standards in the context of LMDS auctions.\165\ 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.
---------------------------------------------------------------------------

    \162\ 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).
    \163\ 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).
    \164\ 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).
    \165\ See Letter to Dan Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA (Jan. 6, 1998).
---------------------------------------------------------------------------

    90. 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).\166\ 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.\167\ 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.\168\ 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.\169\ The SBA has approved of these 
definitions.\170\ A subsequent auction is not yet scheduled. 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 most, of the licenses may be 
awarded to small businesses.
---------------------------------------------------------------------------

    \166\ See ``Interactive Video and Data Service (IVDS) 
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227 
(1994).
    \167\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330 
(1994).
    \168\ 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).
    \169\ Id.
    \170\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA, (Jan. 6, 1998).
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    91. 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.\171\ 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.\172\ These definitions have been approved by the SBA.\173\ An 
auction for LMS licenses commenced on February 23, 1999, and closed on 
March 5, 1999. Of the 528

[[Page 24228]]

licenses auctioned, 289 licenses were sold to four small businesses.
---------------------------------------------------------------------------

    \171\ 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 para. 20 (1998); see also 47 CFR 
90.1103.
    \172\ 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.
    \173\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
Feb. 22, 1999.
---------------------------------------------------------------------------

    92. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\174\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (BETRS).\175\ In the 
present context, we will use 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.\176\ 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.
---------------------------------------------------------------------------

    \174\ The service is defined in section 22.99 of the 
Commission's Rules, 47 CFR 22.99.
    \175\ BETRS is defined in sections 22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \176\ 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    93. Air-Ground Radiotelephone Service.\177\ We have previously used 
the SBA's small business definition applicable to ``Cellular and Other 
Wireless Telecommunications,'' i.e., an entity employing no more than 
1,500 persons.\178\ There are approximately 100 licensees in the Air-
Ground Radiotelephone Service, and under that definition, we estimate 
that almost all of them qualify as small entities under the SBA 
definition. For purpose of assigning Air-Ground Radiotelephone Service 
licenses through competitive bidding, 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 $40 million.\179\ 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 $15 million.\180\ These definitions 
were approved by the SBA.\181\ In May 2006, the Commission completed an 
auction of nationwide commercial Air-Ground Radiotelephone Service 
licenses in the 800 MHz band (Auction No. 65). On June 2, 2006, the 
auction closed with two winning bidders winning two Air-Ground 
Radiotelephone Service licenses. Neither of the winning bidders claimed 
small business status.
---------------------------------------------------------------------------

    \177\ The service is defined in 22.99 of the Commission's Rules, 
47 CFR 22.99.
    \178\ 13 CFR 121.201, NAICS codes 517212.
    \179\ Amendment of Part 22 of the Commission's Rules to Benefit 
the Consumers of Air-Ground Telecommunications Services, Biennial 
Regulatory Review--Amendment of Parts 1, 22, and 90 of the 
Commission's Rules, Amendment of Parts 1 and 22 of the Commission's 
Rules to Adopt Competitive Bidding Rules for Commercial and General 
Aviation Air-Ground Radiotelephone Service, WT Docket Nos. 03-103 
and 05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd 
19663, paras. 28-42 (2005).
    \180\ Id.
    \181\ See Letter from Hector V. Barreto, Administrator, U.S. 
Small Business Administration, to Gary D. Michaels, Deputy Chief, 
Auctions and Spectrum Access Division, Wireless Telecommunications 
Bureau, Federal Communications Commission, dated September 19, 2005.
---------------------------------------------------------------------------

    94. 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, we will use the SBA small business size 
standard for the category ``Cellular and Other Telecommunications,'' 
which is 1,500 or fewer employees.\182\ 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 average gross revenues for the preceding three years 
not to exceed $3 million dollars.\183\ 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.
---------------------------------------------------------------------------

    \182\ 13 CFR 121.201, NAICS code 517212.
    \183\ 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).
---------------------------------------------------------------------------

    95. 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.\184\ 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.\185\ Under that SBA small business size 
standard, a business is small if it has 1,500 or fewer employees.\186\
---------------------------------------------------------------------------

    \184\ This service is governed by Subpart I of Part 22 of the 
Commission's Rules. See 47 CFR 22.1001-22.1037.
    \185\ 13 CFR 121.201, NAICS code 517212.
    \186\ Id.
---------------------------------------------------------------------------

    96. 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.\187\ ``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.\188\ The SBA 
has approved of these definitions.\189\ 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.\190\ Seven winning bidders claimed status as small or very small 
businesses and won 611

[[Page 24229]]

licenses. On May 18, 2005, the Commission completed an auction (Auction 
No. 59) of 4,226 Multiple Address Systems (MAS) licenses in the Fixed 
Microwave Services from the 928/959 and 932/941 MHz bands. Twenty-six 
winning bidders won a total of 2,323 licenses. Of the 26 winning 
bidders in this auction, five claimed small business status and won 
1,891 licenses.
---------------------------------------------------------------------------

    \187\ See Amendment of the Commission's Rules Regarding Multiple 
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para. 
123 (2000).
    \188\ Id.
    \189\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA, (June 4, 1999).
    \190\ See ``Multiple Address Systems Spectrum Auction Closes,'' 
Public Notice, 16 FCC Rcd 21011 (2001).
---------------------------------------------------------------------------

    97. 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 small 
business size standard developed by the SBA would be more appropriate. 
The applicable size standard in this instance appears to be that of 
``Cellular and Other Wireless Telecommunications''. This definition 
provides that a small entity is any such entity employing no more than 
1,500 persons.\191\ 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.
---------------------------------------------------------------------------

    \191\ See 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    98. 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.\192\ For the census category of Paging, Census Bureau data for 
2002 show that there were 807 firms in this category that operated for 
the entire year.\193\ Of this total, 804 firms had employment of 999 or 
fewer employees, and three firms had employment of 1,000 employees or 
more.\194\ Thus, under this category and associated small business size 
standard, the majority of firms can be considered small. For the census 
category of Cellular and Other Wireless Telecommunications, Census 
Bureau data for 2002 show that there were 1,397 firms in this category 
that operated for the entire year.\195\ Of this total, 1,378 firms had 
employment of 999 or fewer employees, and 19 firms had employment of 
1,000 employees or more.\196\ Thus, under this second category and size 
standard, the majority of firms can, again, 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 \197\ and TRW, Inc. It is our understanding that Teligent and 
its related companies have fewer 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.
---------------------------------------------------------------------------

    \192\ 13 CFR 121.201, NAICS code 517212.
    \193\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization,'' Table 5, NAICS code 517211 (issued Nov. 2005).
    \194\ 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 for firms with ``1000 
employees or more.''
    \195\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization,'' Table 5, NAICS code 517212 (issued Nov. 2005).
    \196\ 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 for firms with ``1000 
employees or more.''
    \197\ 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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    99. 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.\198\ ``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.\199\ The SBA has approved these definitions.\200\ The Commission 
will not know how many licensees will be small or very small businesses 
until the auction, if required, is held.
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    \198\ 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).
    \199\ 24 GHz Report and Order, 15 FCC Rcd at 16967, para. 77; 
see also 47 CFR 101.538(a)(1).
    \200\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
FCC, from Gary M. Jackson, Assistant Administrator, SBA, (July 28, 
2000).
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    100. 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).\201\ In connection with the 1996 MDS auction, the Commission 
defined ``small business'' as an entity that, together with its 
affiliates, has average gross annual revenues that are not more than 
$40 million for the preceding three calendar years.\202\ The SBA has 
approved of this standard.\203\ The MDS auction resulted in 67 
successful bidders obtaining licensing opportunities for 493 Basic 
Trading Areas (BTAs).\204\ 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. In addition, hundreds of ``pre-auction stations'' were 
licensed to incumbent MDS licensees prior to implementation of 309(j) 
of the Commissions Act of 1934, 47 U.S.C. 309(j).
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    \201\ 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).
    \202\ 47 CFR 21.961(b)(1).
    \203\ See Letter to Margaret Wiener, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, FCC, 
from Gary Jackson, Assistant Administrator for Size Standards, SBA, 
(March 20, 2003) (noting approval of $40 million size standard for 
MDS auction).
    \204\ 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, para. 34 
(1995).
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    101. In addition, the SBA has developed a small business size 
standard for Cable and Other Program Distribution,\205\ which includes 
all such companies generating $12.5 million or less in annual 
receipts.\206\ The Census Bureau defines this category as follows: 
``This industry comprises establishments primarily engaged as third-
party distribution systems for broadcast programming. The 
establishments of this industry deliver visual, aural, or textual 
programming received from cable networks, local television stations, or 
radio networks to

[[Page 24230]]

consumers via cable or direct-to-home satellite systems on a 
subscription or fee basis. These establishments do not generally 
originate programming material.'' \207\ The SBA has developed a small 
business size standard for Cable and Other Program Distribution, which 
is: All such firms having $13.5 million or less in annual 
receipts.\208\ According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year.\209\ Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million.\210\ Thus, under this size standard, the majority of firms 
can be considered small.
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    \205\ 13 CFR 121.201, NAICS code 517510.
    \206\ Id.
    \207\ U.S. Census Bureau, 2002 NAICS Definitions, ``517510 Cable 
and Other Program Distribution''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \208\ 13 CFR 121.201, NAICS code 517510.
    \209\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \210\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    102. Finally, concerning ITFS, we note that educational 
institutions are included in this analysis as small entities.\211\ 
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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    \211\ 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.
---------------------------------------------------------------------------

    103. Television Broadcasting. The Census Bureau defines this 
category as follows: ``This industry comprises establishments primarily 
engaged in broadcasting images together with sound. These 
establishments operate television broadcasting studios and facilities 
for the programming and transmission of programs to the public.''\212\ 
The SBA has created a small business size standard for Television 
Broadcasting entities, which is: Such firms having $13 million or less 
in annual receipts.\213\ According to Commission staff review of the 
BIA Publications, Inc., Master Access Television Analyzer Database as 
of May 16, 2003, about 814 of the 1,220 commercial television stations 
in the United States had revenues of $12 (twelve) million or less. We 
note, however, that in assessing whether a business concern qualifies 
as small under the above definition, business (control) affiliations 
\214\ must be included. Our estimate, therefore, likely overstates the 
number of small entities that might be affected by our action, because 
the revenue figure on which it is based does not include or aggregate 
revenues from affiliated companies.
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    \212\ U.S. Census Bureau, 2002 NAICS Definitions, ``515120 
Television Broadcasting'' (partial definition); http://www.census.gov/epcd/naics02/def/NDEF515.HTM.
    \213\ 13 CFR 121.201, NAICS code 515120.
    \214\ ``Concerns are affiliates of each other when one concern 
controls or has the power to control the other or a third party or 
parties controls or has to power to control both.'' 13 CFR 
21.103(a)(1).
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    104. In addition, an element of the definition of ``small 
business'' is that the entity not be dominant in its field of 
operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific television station is 
dominant in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply do not exclude any television 
station from the definition of a small business on this basis and are 
therefore over-inclusive to that extent. Also as noted, an additional 
element of the definition of ``small business'' is that the entity must 
be independently owned and operated. We note that it is difficult at 
times to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
    105. There are also 2,117 low power television stations 
(LPTV).\215\ Given the nature of this service, we will presume that all 
LPTV licensees qualify as small entities under the above SBA small 
business size standard.
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    \215\ FCC News Release, ``Broadcast Station Totals as of 
September 30, 2005.''
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    106. Radio Broadcasting. The SBA defines a radio broadcast entity 
that has $6 million or less in annual receipts as a small 
business.\216\ Business concerns included in this industry are those 
``primarily engaged in broadcasting aural programs by radio to the 
public.''\217\ According to Commission staff review of the BIA 
Publications, Inc., Master Access Radio Analyzer Database, as of May 
16, 2003, about 10,427 of the 10,945 commercial radio stations in the 
United States have revenue of $6 million or less. We note, however, 
that many radio stations are affiliated with much larger corporations 
with much higher revenue, and that in assessing whether a business 
concern qualifies as small under the above definition, such business 
(control) affiliations \218\ are included.\219\ Our estimate, therefore 
likely overstates the number of small businesses that might be affected 
by our action.
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    \216\ See OMB, North American Industry Classification System: 
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code 
515112).
    \217\ Id.
    \218\ ``Concerns are affiliates of each other when one concern 
controls or has the power to control the other, or a third party or 
parties controls or has the power to control both.'' 13 CFR 
121.103(a)(1).
    \219\ ``SBA counts the receipts or employees of the concern 
whose size is at issue and those of all its domestic and foreign 
affiliates, regardless of whether the affiliates are organized for 
profit, in determining the concern's size.'' 13 CFR 121(a)(4).
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    107. Auxiliary, Special Broadcast and Other Program Distribution 
Services. This service involves a variety of transmitters, generally 
used to relay broadcast programming to the public (through translator 
and booster stations) or within the program distribution chain (from a 
remote news gathering unit back to the station). The Commission has not 
developed a definition of small entities applicable to broadcast 
auxiliary licensees. The applicable definitions of small entities are 
those, noted previously, under the SBA rules applicable to radio 
broadcasting stations and television broadcasting stations.\220\
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    \220\ 13 CFR 121.201, NAICS codes 513111 and 513112.
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    108. The Commission estimates that there are approximately 3,868 FM 
translators and boosters.\221\ The Commission does not collect 
financial information on any broadcast facility, and the Department of 
Commerce does not collect financial information on these auxiliary 
broadcast facilities. We believe that most, if not all, of these 
auxiliary facilities could be classified as small businesses by 
themselves. We also recognize that most commercial translators and 
boosters are owned by a parent station which, in some cases, would be 
covered by the revenue definition of small business entity discussed 
above. These stations would likely have annual revenues that exceed the 
SBA maximum to be designated as a small business ($6.5 million for a 
radio station or $13.0 million for a TV station). Furthermore, they do 
not meet the Small Business Act's definition of a ``small business 
concern'' because they are not independently owned and operated.\222\
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    \221\ FCC News Release, ``Broadcast Station Totals as of 
September 30, 2004.''
    \222\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    109. Cable and Other Program Distribution. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged as third-party distribution systems 
for broadcast programming. The establishments of this industry deliver 
visual, aural, or textual programming received from cable networks, 
local television stations, or radio networks to

[[Page 24231]]

consumers via cable or direct-to-home satellite systems on a 
subscription or fee basis. These establishments do not generally 
originate programming material.''\223\ The SBA has developed a small 
business size standard for Cable and Other Program Distribution, which 
is: All such firms having $13.5 million or less in annual 
receipts.\224\ According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year.\225\ Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million.\226\ Thus, under this size standard, the majority of firms 
can be considered small.
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    \223\ U.S. Census Bureau, 2002 NAICS Definitions, ``517510 Cable 
and Other Program Distribution''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \224\ 13 CFR 121.201, NAICS code 517510.
    \225\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \226\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    110. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide.\227\ Industry 
data indicate that, of 1,076 cable operators nationwide, all but eleven 
are small under this size standard.\228\ In addition, under the 
Commission's rules, a ``small system'' is a cable system serving 15,000 
or fewer subscribers.\229\ Industry data indicate that, of 7,208 
systems nationwide, 6,139 systems have under 10,000 subscribers, and an 
additional 379 systems have 10,000-19,999 subscribers.\230\ Thus, under 
this second size standard, most cable systems are small.
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    \227\ 47 CFR 76.901(e). The Commission determined that this size 
standard equates approximately to a size standard of $100 million or 
less in annual revenues. Implementation of Sections of the 1992 
Cable Act: Rate Regulation, Sixth Report and Order and Eleventh 
Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
    \228\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \229\ 47 CFR 76.901(c).
    \230\ Warren Communications News, Television & Cable Factbook 
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data 
current as of Oct. 2005). The data do not include 718 systems for 
which classifying data were not available.
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    111. Cable System Operators. 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.''\231\ The Commission has determined that 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.\232\ Industry data indicate that, of 1,076 cable operators 
nationwide, all but ten are small under this size standard.\233\ We 
note that the Commission neither requests nor collects information on 
whether cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million,\234\ and therefore we are unable 
to estimate more accurately the number of cable system operators that 
would qualify as small under this size standard.
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    \231\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
    \232\ 47 CFR 76.901(f); see Public Notice, FCC Announces New 
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001)
    \233\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \234\ 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 Sec.  76.901(f) of the Commission's rules. See 47 CFR 
76.909(b).
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    112. Open Video Services. Open Video Service (OVS) systems provide 
subscription services.\235\ The SBA has created a small business size 
standard for Cable and Other Program Distribution.\236\ This standard 
provides that a small entity is one with $13.5 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 
service.\237\ Affiliates of Residential Communications Network, Inc. 
(RCN) received approval to operate OVS systems in New York City, 
Boston, Washington, D.C., 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.
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    \235\ See 47 U.S.C. 573.
    \236\ 13 CFR 121.201, NAICS code 517510.
    \237\ See http://www.fcc.gov/csb/ovs/csovscer.html (current as 
of March 2002).
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    113. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. The SBA has developed a small 
business size standard for Cable and Other Program Distribution, which 
is: All such firms having $13.5 million or less in annual 
receipts.\238\ According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year.\239\ Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million.\240\ Thus, under this size standard, the majority of firms 
can be considered small.
---------------------------------------------------------------------------

    \238\ 13 CFR 121.201, NAICS code 517510.
    \239\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \240\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    114. Multichannel Video Distribution and Data Service. MVDDS is a 
terrestrial fixed microwave service operating in the 12.2-12.7 GHz 
band. The Commission adopted criteria for defining three groups of 
small businesses for purposes of determining their eligibility for 
special provisions such as bidding credits. It defined a very small 
business as an entity with average annual gross revenues not exceeding 
$3 million for the preceding three years; a small business as an entity 
with average annual gross revenues not exceeding $15 million for the 
preceding three years; and an entrepreneur as an entity with average 
annual gross revenues not exceeding $40 million for the preceding three 
years.\241\ These definitions were approved by the SBA.\242\ On January 
27,

[[Page 24232]]

2004, the Commission completed an auction of 214 MVDDS licenses 
(Auction No. 53). In this auction, ten winning bidders won a total of 
192 MVDDS licenses.\243\ Eight of the ten winning bidders claimed small 
business status and won 144 of the licenses. The Commission also held 
an auction of MVDDS licenses on December 7, 2005 (Auction 63). Of the 
three winning bidders who won 22 licenses, two winning bidders, winning 
21 of the licenses, claimed small business status.\244\
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    \241\ Amendment of Parts 2 and 25 of the Commission's Rules to 
Permit Operation of NGSO FSS Systems Co-Frequency with GSO and 
Terrestrial Systems in the Ku-Band Frequency Range; Amendment of the 
Commission's Rules to Authorize Subsidiary Terrestrial Use of the 
12.2-12.7 GHz Band by Direct Boradcast Satellite Licenses and their 
Affiliates; and Applications of Broadwave USA, PDC Broadband 
Corporation, and Satellite Receivers, Ltd. to provide A Fixed 
Service in the 12.2-12.7 GHz Band, ET Docket No. 98-206, Memorandum 
Opinion and Order and Second Report and Order, 17 FCC Rcd 9614, 9711 
para. 252 (2002).
    \242\ See Letter from Hector V. Barreto, Administrator, U.S. 
Small Business Administration, to Margaret W. Wiener, Chief, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, Federal Communications Commission, dated February 13, 2002.
    \243\ See ``Multichannel Video Distribution and Data Service 
Auction Closes,'' Public Notice, 19 FCC Rcd 1834 (2004).
    \244\ See ``Auction of Multichannel Video Distribution and Data 
Service Licenses Closes; Winning Bidders Announced for Auction No. 
63,'' Public Notice, 20 FCC Rcd 19807 (2005).
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    115. Amateur Radio Service. These licensees are held by individuals 
in a noncommercial capacity; these licensees are not small entities.
    116. 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.\245\ 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 average gross revenues 
for the preceding three years not to exceed $3 million dollars.\246\ 
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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    \245\ 13 CFR 121.201, NAICS code 517212.
    \246\ Amendment of the Commission's Rules Concerning Maritime 
Communications, Third Report and Order and Memorandum Opinion and 
Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

    117. 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.\247\ 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).\248\ 
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.\249\ 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.
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    \247\ 47 CFR Part 90.
    \248\ 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.
    \249\ 13 CFR 121.201, NAICS Code 517212.
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    118. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.\250\ There are a total of 
approximately 127,540 licensees in these services. Governmental 
entities \251\ 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.\252\
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    \250\ 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 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.
    \251\ 47 CFR 1.1162.
    \252\ 5 U.S.C. 601(5).
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IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    119. 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 Remittance 
Advice, and pay a regulatory fee based on the number of licenses or 
call signs.\253\ Interstate telephone

[[Page 24233]]

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.
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    \253\ 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.
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    120. 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.
    121. 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.\254\ If payment is not received, new or 
pending applications may be dismissed, and existing authorizations may 
be subject to rescission.\255\ Further, in accordance with the Debt 
Collection Improvement Act of 1996 (DCIA), Public Law 194-134, 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.\256\ Nonpayment of 
regulatory fees is a debt owed the United States pursuant to 31 U.S.C. 
3711 et seq., and the DCIA. 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.\257\
---------------------------------------------------------------------------

    \254\ 47 CFR 1.1164.
    \255\ 47 CFR 1.1164(c).
    \256\ Public Law 104-134, 110 Stat. 1321 (1996).
    \257\ 31 U.S.C. 7701(c)(2)(B).
---------------------------------------------------------------------------

    122. 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.\258\ 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.
---------------------------------------------------------------------------

    \258\ 47 CFR 1.1166.
---------------------------------------------------------------------------

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

    123. 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.\259\ In the NPRM, we have sought comment on alternatives that 
might simplify our fee procedures or otherwise benefit filers, 
including small entities, while remaining consistent with our statutory 
responsibilities in this proceeding.
---------------------------------------------------------------------------

    \259\ 5 U.S.C. 603.
---------------------------------------------------------------------------

    124. The Omnibus Appropriations Act for FY 2007, Public Law 109-
383, 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) 2007.\260\ 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.
---------------------------------------------------------------------------

    \260\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------

    125. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. See, e.g., footnote 253, supra. Also, 
waiver procedures provide regulatees, including small entity 
regulatees, relief in exceptional circumstances. See Section IV, supra.

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

    126. None.

Attachment B--Sources of Payment Unit Estimates for FY 2007

    In order to calculate individual service fees for FY 2007, we 
adjusted FY 2006 payment units for each service to more accurately 
reflect expected FY 2007 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 our Universal Licensing System (ULS), International 
Bureau Filing System (IBFS), Consolidated Database System (CDBS) and 
Cable Operations and Licensing System (COALS), 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 2007 estimates with actual FY 
2006 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 2007 and the fact that, in many services, the 
number of actual licensees or station operators fluctuates from time to 
time due to

[[Page 24234]]

economic, technical or other reasons. Therefore, when we note, for 
example, that our estimated FY 2007 payment units are based on FY 2006 
actual payment units, it does not necessarily mean that our FY 2007 
projection is exactly the same number as FY 2006. It means that we have 
either rounded the FY 2007 number or adjusted it slightly to account 
for these variables.

------------------------------------------------------------------------
             Fee category              Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, 218-219  Based on Wireless
 MHz, Marine (Ship & Coast), Aviation   Telecommunications Bureau (WTB)
 (Aircraft & Ground), GMRS, Amateur     projections of new applications
 Vanity Call Signs, Domestic Public     and renewals taking into
 Fixed.                                 consideration existing
                                        Commission licensee databases.
                                        Aviation (Aircraft) and Marine
                                        (Ship) estimates have been
                                        adjusted to take into
                                        consideration the licensing of
                                        portions of these services on a
                                        voluntary basis.
CMRS Mobile Services.................  Based on Wireless
                                        Telecommunications Bureau
                                        reports.
CMRS Messaging Services..............  Based on Wireless
                                        Telecommunications Bureau
                                        Competition Report findings.
AM/FM Radio Stations.................  Based on CDBS data, adjusted for
                                        exemptions, and actual FY 2006
                                        payment units.
UHF/VHF Television Stations..........  Based on CDBS data, adjusted for
                                        exemptions, and actual FY 2006
                                        payment units.
AM/FM/TV Construction Permits........  Based on CDBS data, adjusted for
                                        exemptions, and actual FY 2006
                                        payment units.
LPTV, Translators and Boosters, Class  Based on CDBS data, adjusted for
 A Television.                          exemptions, and actual FY 2006
                                        payment units.
Broadcast Auxiliaries................  Based on actual FY 2006 payment
                                        units.
BRS (formerly MDS/MMDS)..............  Based on Wireless
                                        Telecommunications Bureau
                                        reports and actual FY 2006
                                        payment units.
Cable Television Relay Service (CARS)  Based on data from Media Bureau's
 Stations.                              COALS database and actual FY
                                        2006 payment units.
Cable Television System Subscribers..  Based on publicly available data
                                        sources for estimated subscriber
                                        counts and actual FY 2006
                                        payment units.
Interstate Telecommunication Service   Based on actual FY 2006
 Providers.                             interstate revenues reported on
                                        Telecommunications Reporting
                                        Worksheet, adjusted for FY 2007
                                        revenue growth/decline for
                                        industry, and projections by the
                                        Wireline Competition Bureau.
Earth Stations.......................  Based on International Bureau
                                        reports and actual FY 2006
                                        payment units.
Space Stations (GSOs & NGSOs)........  Based on International Bureau
                                        reports and actual FY 2006
                                        payment units.
International Bearer Circuits........  Based on International Bureau
                                        reports and actual FY 2006
                                        payment units.
International HF Broadcast Stations,   Based on International Bureau
 International Public Fixed Radio       reports and actual FY 2006
 Service.                               payment units.
------------------------------------------------------------------------


                                       Attachment C--Calculation of FY 2007 Revenue Requirements and Pro-Rata Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Pro-rated FY
                                             FY 2007  payment                 FY 2006      2007 revenue    Computed new   Rounded new FY    Expected FY
                Fee category                       units         Years        revenue       requirement       FY 2007          2007        2007 revenue
                                                                             estimate          \261\      regulatory fee  regulatory fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use)......................             1,250         10         440,000         426,300              34              35         437,500
PLMRS (Shared use).........................            15,500         10       2,500,000       2,422,162              16              15       2,325,000
Microwave..................................             4,350         10       1,700,000       1,647,070              38              40       1,740,000
218-219 MHz (Formerly IVDS)................                 3         10           1,650           1,599              53              55           1,650
Marine (Ship)..............................             8,000         10         800,000         775,092              10              10         800,000
GMRS.......................................            16,000          5         425,000         411,768               5               5         400,000
Aviation (Aircraft)........................             8,800         10         300,000         290,659               3               5         440,000
Marine (Coast).............................               360         10         120,000         116,264              32              30         108,000
Aviation (Ground)..........................             1,650         10         150,000         145,330               9              10         165,000
Amateur Vanity Call Signs..................            14,700         10         177,116         171,601            1.17            1.17         171,990
AM Class A.................................                68          1         217,350         210,428           3,095           3,100         210,800
AM Class B.................................             1,567          1       2,619,500       2,534,141           1,617           1,625       2,546,375
AM Class C.................................               937          1         921,500         890,541             950             950         890,150
AM Class D.................................             1,705          1       3,095,750       2,994,982           1,757           1,750       2,983,750
FM Classes A, B1 & C3......................             3,027          1       6,519,500       6,311,615           2,085           2,075       6,281,025
FM Classes B, C, C0, C1 & C2...............             3,002          1       7,924,300       7,675,996           2,557           2,550       7,655,100
AM Construction Permits....................                65          1          37,525          26,003             400             400          26,000
FM Construction Permits \262\..............               205          1         115,000         117,898             575             575         117,875
Satellite TV...............................               125          1         141,450         137,046           1,096           1,100         137,500
Satellite TV Construction Permit...........                 3          1           1,710           1,657             552             550           1,650
VHF Markets 1-10...........................                43          1       2,850,100       2,765,285          64,309          64,300       2,764,900
VHF Markets 11-25..........................                61          1       2,914,275       2,827,462          46,352          46,350       2,827,350
VHF Markets 26-50..........................                77          1       2,465,625       2,392,781          31,075          31,075       2,392,775
VHF Markets 51-100.........................               115          1       2,372,200       2,300,839          20,007          20,000       2,300,000
VHF Remaining Markets......................               198          1       1,045,200       1,012,657           5,114           5,125       1,014,750
VHF Construction Permits...................                 3          1          30,600          15,377           5,126           5,125          15,375
UHF Markets 1-10...........................                91          1       1,846,750       1,787,645          19,644          19,650       1,788,150
UHF Markets 11-25..........................                76          1       1,528,000       1,478,819          19,458          19,450       1,478,200
UHF Markets 26-50..........................               115          1       1,284,075       1,242,489          10,804          10,800       1,242,000
UHF Markets 51-100.........................               168          1       1,092,000       1,056,977           6,292           6,300       1,058,400
UHF Remaining Markets......................               183          1         331,925         321,590           1,757           1,750         320,250

[[Page 24235]]

 
UHF Construction Permits \1\...............                22          1          33,725          38,517           1,751           1,750          38,500
Broadcast Auxiliaries......................            27,000          1         240,000         232,528               9              10         270,000
LPTV/Trans-lators/Boosters/Class A TV......             3,400          1       1,218,000       1,180,077             347             345       1,173,000
CARS Stations..............................               780          1         148,750         144,119             185             185         144,300
Cable TV Systems...........................        64,500,000          1      49,770,000      48,220,399         0.74760            0.75      48,375,000
Interstate Tele-communication Service          51,000,000,000          1     140,184,000     135,819,336      0.00266312         0.00266     135,660,000
 Providers.................................
CMRS Mobile Services (Cellular/Public             229,000,000          1      42,000,000      40,596,052           0.177            0.18      41,220,000
 Mobile)...................................
CMRS Messaging Services....................         7,500,000          1         520,000         600,077            0.08            0.08         600,000
BRS........................................             1,300          1         485,925         425,139             327             325         422,500
LMDS.......................................               410          1          90,750         134,077             327             325         133,250
International Bearer Circuits..............         6,500,000          1       7,791,000       7,548,425            1.16            1.16       7,540,000
International Public Fixed.................                 1          1           1,925           1,865           1,865           1,875           1,875
Earth Stations.............................             3,900          1         752,500         729,071             187             185         721,500
International HF Broadcast.................                 5          1           4,100           3,972             794             795           3,975
Space Stations (Geostationary).............                86          1       9,693,975       9,392,151         109,211         109,200       9,391,200
Space Stations (Non-Geostationary..........                 6          1         721,350         698,891         116,482         116,475         698,850
****** Total Estimated Revenue to be         ................  .........     299,624,101     290,274,768  ..............  ..............     291,035,465
 Collected.................................
****** Total Revenue Requirement...........  ................  .........     298,771,000     290,295,160  ..............  ..............     290,295,160
Difference.................................  ................  .........         853,101        (20,392)  ..............  ..............         740,305
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

    \261\ -0.028369018 factor applied based on the amount Congress 
designated for recovery through regulatory fees (Pub. L. 109-108 and 
47 U.S.C. 159(a)(2)).
    \262\ The AM and FM Construction Permit revenues and the VHF and 
UHF Construction Permit revenues were adjusted to set the regulatory 
fee to an amount no higher than the lowest licensed fee for that 
class of service.

       Attachment D--Proposed FY 2007 Schedule of Regulatory Fees
------------------------------------------------------------------------
                                                              Annual
                      Fee category                        regulatory fee
                                                            (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90)....              35
Microwave (per license) (47 CFR part 101)...............              40
218-219 MHz (Formerly Interactive Video Data Service)                 55
 (per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............              10
Marine (Coast) (per license) (47 CFR part 80)...........              30
General Mobile Radio Service (per license) (47 CFR part                5
 95)....................................................
Rural Radio (47 CFR part 22) (previously listed under                 15
 the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90).......              15
Aviation (Aircraft) (per station) (47 CFR part 87)......               5
Aviation (Ground) (per license) (47 CFR part 87)........              10
Amateur Vanity Call Signs (per call sign) (47 CFR part              1.17
 97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts               .18
 20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22,             .08
 24 and 90).............................................
Broadband Radio Service (formerly MMDS/ MDS) (per                    325
 license) (47 CFR part 21)..............................
Local Multipoint Distribution Service (per call sign)                325
 (47 CFR, part 101).....................................
AM Radio Construction Permits...........................             400
FM Radio Construction Permits...........................             575
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10........................................          64,300
    Markets 11-25.......................................          46,350
    Markets 26-50.......................................          31,075
    Markets 51-100......................................          20,000

[[Page 24236]]

 
    Remaining Markets...................................           5,125
    Construction Permits................................           5,125
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10........................................          19,650
    Markets 11-25.......................................          19,450
    Markets 26-50.......................................          10,800
    Markets 51-100......................................           6,300
    Remaining Markets...................................           1,750
    Construction Permits................................           1,750
Satellite Television Stations (All Markets).............           1,100
Construction Permits--Satellite Television Stations.....             550
Low Power TV, Class A TV, TV/FM Translators & Boosters               345
 (47 CFR part 74).......................................
Broadcast Auxiliaries (47 CFR part 74)..................              10
CARS (47 CFR part 78)...................................             185
Cable Television Systems (per subscriber) (47 CFR part               .75
 76)....................................................
Interstate Telecommunication Service Providers (per               .00266
 revenue dollar)........................................
Earth Stations (47 CFR part 25).........................             185
Space Stations (per operational station in geostationary         109,200
 orbit) (47 CFR part 25) also includes DBS Service (per
 operational station) (47 CFR part 100).................
Space Stations (per operational system in non-                   116,475
 geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit).            1.16
International Public Fixed (per call sign) (47 CFR part            1,875
 23)....................................................
International (HF) Broadcast (47 CFR part 73)...........             795
------------------------------------------------------------------------

FY 2007 Schedule of Regulatory Fees (continued)

                                      FY 2007 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
                                                                                                      FM Classes
         Population Served           AM Class A   AM Class B   AM Class C   AM Class D   FM Classes   B, C, C0,
                                                                                         A, B1 & C3    C1 & C2
----------------------------------------------------------------------------------------------------------------
<=25,000..........................          625          475          400          475          575          725
25,001--75,000....................        1,225          925          600          725        1,150        1,250
75,001--150,000...................        1,825        1,150          800        1,200        1,600        2,300
150,001--500,000..................        2,750        1,950        1,200        1,425        2,475        3,000
500,001--1,200,000................        3,950        2,975        2,000        2,375        3,900        4,400
1,200,001--3,000,00...............        6,075        4,575        3,000        3,800        6,350        7,025
>3,000,000........................        7,275        5,475        3,800        4,750        8,075        9,125
----------------------------------------------------------------------------------------------------------------

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 Sec. Sec.  73.150 
and 73.152 of the Commission's rules.\263\ 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 \264\. Using the 
calculated horizontal radiation values, and the retrieved soil 
conductivity data, the distance to the principal community (5 mV/m) 
contour was predicted for each of the 360 radials. The resulting 
distance to principal community 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 principal community coverage area.
---------------------------------------------------------------------------

    \263\ 47 CFR 73.150 and 73.152.
    \264\ 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

[[Page 24237]]

the Field Strength (50-50) propagation curves specified in 47 CFR 
73.313 of the Commission's rules to predict the distance to the 
principal community (70 dBu (decibel above 1 microVolt per meter) or 
3.17 mV/m) contour for each of the 360 radials.\265\ The resulting 
distance to principal community 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 principal community coverage 
area.
---------------------------------------------------------------------------

    \265\ 47 CFR 73.313.
---------------------------------------------------------------------------

Attachment F--FY 2006 Schedule of Regulatory Fees

------------------------------------------------------------------------
                                                              Annual
                      Fee category                        regulatory fee
                                                             (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90)....              20
Microwave (per license) (47 CFR part 101)...............              85
218-219 MHz (Formerly Interactive Video Data Service)                 55
 (per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............              10
Marine (Coast) (per license) (47 CFR part 80)...........              20
General Mobile Radio Service (per license) (47 CFR part                5
 95)....................................................
Rural Radio (47 CFR part 22) (previously listed under                 10
 the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90).......              10
Aviation (Aircraft) (per station) (47 CFR part 87)......               5
Aviation (Ground) (per license) (47 CFR part 87)........              10
Amateur Vanity Call Signs (per call sign) (47 CFR part              2.08
 97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts               .20
 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 license             275
 sign) (47 CFR part 21).................................
Local Multipoint Distribution Service (per call sign)                275
 (47 CFR, part 101).....................................
AM Radio Construction Permits...........................             395
FM Radio Construction Permits...........................             575
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10........................................          64,775
    Markets 11-25.......................................          47,775
    Markets 26-50.......................................          32,875
    Markets 51-100......................................          20,450
    Remaining Markets...................................           5,025
    Construction Permits................................           3,400
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10........................................          20,750
    Markets 11-25.......................................          19,100
    Markets 26-50.......................................          10,975
    Markets 51-100......................................           6,500
    Remaining Markets...................................           1,775
    Construction Permits................................           1,775
Satellite Television Stations (All Markets).............           1,150
Construction Permits--Satellite Television Stations.....             570
Low Power TV, TV/FM Translators & Boosters (47 CFR part              420
 74)....................................................
Broadcast Auxiliary (47 CFR part 74)....................              10
CARS (47 CFR part 78)...................................             175
Cable Television Systems (per subscriber) (47 CFR part               .79
 76)....................................................
Interstate Telecommunication Service Providers (per               .00264
 revenue dollar)........................................
Earth Stations (47 CFR part 25).........................             215
Space Stations (per operational station in geostationary         111,425
 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-                   120,225
 geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits (per active 64KB circuit).            1.47
International Public Fixed (per call sign) (47 CFR part            1,925
 23)....................................................
International (HF) Broadcast (47 CFR part 73)...........             820
------------------------------------------------------------------------

FY 2006 Schedule of Regulatory Fees (continued)

                                      FY 2006 Radio Station Regulatory Fees
----------------------------------------------------------------------------------------------------------------
                                                                                                      FM Classes
         Population served           AM Class A   AM Class B   AM Class C   AM Class D   FM Classes   B, C, C0,
                                                                                         A, B1 & C3    C1 & C2
----------------------------------------------------------------------------------------------------------------
<=25,000..........................          625          500          400          475          575          750
25,001-75,000.....................        1,225          950          600          725        1,150        1,325
75,001-150,000....................        1,850        1,200          800        1,200        1,575        2,450
150,001-500,000...................        2,775        2,025        1,200        1,425        2,450        3,200

[[Page 24238]]

 
500,001-1,200,000.................        4,000        3,100        2,000        2,375        3,875        4,700
1,200,001-3,000,00................        6,150        4,750        3,000        3,800        6,325        7,500
>3,000,000........................        7,375        5,700        3,800        4,750        8,050        9,750
----------------------------------------------------------------------------------------------------------------

 [FR Doc. E7-8366 Filed 5-1-07; 8:45 am]
BILLING CODE 6712-01-P