[Federal Register Volume 77, Number 96 (Thursday, May 17, 2012)]
[Proposed Rules]
[Pages 29275-29305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11890]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 12-116; FCC 12-48]


Assessment and Collection of Regulatory Fees for Fiscal Year 2012

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 an amount of $339,844,000 that Congress has required 
the Commission to collect for fiscal year 2012. 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: Submit comments on or before May 31, 2012, and reply comments on 
or before June 7, 2012.

ADDRESSES: You may submit comments, identified by MD Docket No. 12-116, 
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.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
     Email: [email protected]. Include MD Docket No. 12-116 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 detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 12-48, MD Docket No. 12-116, adopted 
on May 3, 2012 and released May 4, 2012. The full text of this document 
is available for inspection and copying during normal business hours in 
the FCC Reference Center, 445 12th Street SW., Room CY-A257, Portals 
II, Washington, DC 20554, and may also be purchased from the 
Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street 
SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, 
Inc. via their Web site, http://www.bcpi.com, or call 1-800-378-3160. 
This document is available in alternative formats (computer diskette, 
large print, audio record, and braille). Persons with disabilities who 
need documents in these formats may contact the FCC by email: 
[email protected] or phone: 202-418-0530 or TTY: 202-418-0432.

I. Procedural Matters

A. Ex Parte Rules-Permit-but Disclose Proceeding

    1. This is a ``permit-but-disclose'' proceeding subject to the 
requirements

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of the Commission's ex parte rules.\1\ 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 
required.\2\ Additional rules pertaining to oral and written 
presentations are set forth in Section 1.1206(b) of the Commission's 
rules.
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    \1\ See 47 CFR 1.200 et seq.
    \2\ See 47 CFR 1.1206(b)(2).
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B. Comment Filing Procedures

    2. Comments and Replies. Pursuant to Sections 1.415 and 1.419 of 
the Commission's Rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply 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) by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: http://www.regulations.gov.
     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. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 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 must be addressed to 445 12th Street SW., Washington, DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    3. 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, and/or Adobe 
Acrobat.
    4. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an email to [email protected] or call the Commission'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.

C. Paperwork Reduction Act

    5. This NPRM does not contain proposed or modified information 
collection burden (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).

D. Initial Regulatory Flexibility Analysis

    6. An initial regulatory flexibility analysis (``IRFA'') is 
contained herein. Comments to the IRFA must be identified as responses 
to the IRFA and filed by the deadlines for comments on the Notice of 
Proposed Rulemaking (NPRM). The Commission will send a copy of this 
NPRM, including the IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration.

II. Notice of Proposed Rulemaking

III. Introduction and Summary

    7. In this Notice of Proposed Rulemaking (``FY 2012 NPRM''), we 
propose to collect $339,844,000 in regulatory fees for Fiscal Year 
(``FY'') 2012, pursuant to Section 9 of the Communications Act of 1934, 
as amended (the ``Act''). Section 9 regulatory 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.\3\ The annual amount of 
regulatory fees to be collected is established each year in the 
Commission's Annual Appropriations Act, which funds the Commission.\4\ 
In this annual regulatory fee proceeding, we retain many of the current 
methods, policies, and procedures for collecting Section 9 regulatory 
fees adopted by the Commission in prior years. Consistent with our 
established practice, we intend to collect these regulatory fees during 
a September 2012 filing window in order to collect the required amount 
by the end of our fiscal year.
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    \3\ 47 U.S.C. 159(a).
    \4\ See the Consolidated Appropriations Act of 2012, Public Law 
112-74 (December 23, 2011).
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    8. This FY 2012 NPRM is one of three Notices of Proposed 
Rulemakings on regulatory fees that the Commission expects to release 
on or before FY 2013. Because of the complexity of the regulatory fee 
issues involved, the Commission will seek comment in phases.
    9. Since 1994 when the first regulatory fees were collected, the 
communications industry has undergone a rapid transformation. At the 
same time, the current method for assessing regulatory fees has changed 
only slightly since its inception in 1994.\5\ In FY 2008, the 
Commission released a Further Notice of Proposed Rulemaking which 
identified some of the issues raised by commenters with regard to the 
need for fundamental reform of our regulatory fee assessment 
methodology.\6\ In our FY 2011 Regulatory Fees Report & Order, we 
stated that we would initiate a further rulemaking to update the record 
on regulatory fee rebalancing, as well as expand the inquiry to include 
new issues and services not covered by the

[[Page 29277]]

FY 2008 Further Notice of Proposed Rulemaking.\7\
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    \5\ 47 U.S.C. 159(a) and 159(b).
    \6\ Assessment and Collection of Regulatory Fees for Fiscal Year 
2008, MD Docket No. 08-65, RM-11312, Report and Order and Further 
Notice of Proposed Rulemaking, 73 FR 50201 (August 26, 2008) at 
paras. 38-41.
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    10. In re-examining the regulatory fee program, as enacted by 
Congress and codified in section 9 of the Communications Act, 47 U.S.C. 
159, the Commission will undertake two separate Notices of Proposed 
Rulemakings (``Reform Proceedings'') which will address the issues in 
two phases. In Phase I, we will primarily consider the allocation 
percentages of core bureaus involved in regulatory fee activity and how 
we calculate these percentages, and in Phase II, we will address other 
outstanding substantive and procedural issues. Given the breadth and 
complexity of the issues involved, the issuance of two separate Notices 
of Proposed Rulemakings will permit more orderly and consistent 
analysis of the issues and facilitate their timely resolution. We will 
issue a Report and Order finalizing our decision on all the issues 
raised in the Reform Proceedings, including new cost allocations and 
revised regulatory fees in sufficient time to allow for their 
implementation in FY 2013.
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    \7\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2011, Report and Order, 26 FCC Rcd 10812 (2011) at para. 28 
(``FY 2011 Report and Order'').
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    11. Although the Commission will reexamine its regulatory fee 
program in two separate Notices of Proposed Rulemakings, the regular 
collections FY 2012 NPRM and the subsequent FY 2012 Report & Order will 
be adopted in sufficient time to collect regulatory fees in FY 2012. 
The proposed FY 2012 regulatory fee rates are listed in the table below 
entitled, ``Table--FY 2012 Schedule of Regulatory Fees.'' In 
calculating these FY 2012 fee rates, the Commission proposes to: (1) 
incorporate the results of the 2010 Census data into our broadcast 
population data, (2) assess a regulatory fee for each facility 
operating either in an analog or digital mode (but not both) for Low 
Power, Class A, and TV Translators/Boosters, (3) maintain the FY 2012 
Interstate Telecommunications Service Provider (ITSP) fee rate at the 
same level as in FY 2011, (4) require regulatees filing a request for a 
refund, waiver, fee reduction, or deferment of payment of an 
application or regulatory fee to use an online filing system rather 
than submitting their requests in hardcopy format, and (5) seek general 
comment on improving our collection procedures and processes.

IV. Notice of Proposed Rulemaking

    12. The Section 9 regulatory fee proceeding is an annual rulemaking 
process for the Commission to collect the required fee amount each 
year. In this FY 2012 NPRM, we propose to retain the section 9 
regulatory fee methodology used in FY 2011 and in prior fiscal years, 
with some adjustments to maintain the FY 2012 ITSP fee rate at the same 
level as in FY 2011. These adjustments are reflected in the ITSP fee 
rate, and in the fee rates of all remaining fee categories listed in 
the table below, ``Table--FY 2012 Schedule of Regulatory Fees.''
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                   FY 2012 Schedule of Regulatory Fees
            [International bearer circuits--submarine cable]
------------------------------------------------------------------------
    Submarine cable systems
  (capacity as of December 31,     Fee amount            Address
             2011)
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<2.5 Gbps......................         $13,250  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
2.5 Gbps or greater, but less            26,500  FCC, International,
 than 5 Gbps.                                     P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
5 Gbps or greater, but less              52,975  FCC, International,
 than 10 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
10 Gbps or greater, but less            105,975  FCC, International,
 than 20 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
20 Gbps or greater.............         211,925  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
------------------------------------------------------------------------

    13. In each fiscal year since FY 1999, the Commission allocated the 
amount appropriated by Congress (e.g., $339,844,000 in FY 2012) across 
the various fee categories, and then divided these allocated amounts by 
the number of estimated payment units in each fee category to determine 
the unit fee.\8\ As in prior years, for cases involving small multiyear 
fees (e.g., licenses that are renewed over a multiyear term), we 
divided the allocated amounts by their respective estimated payment 
units, as well as by the term of the license (5-year or 10-year) to 
determine the unit fee, which was then rounded to be consistent with 
the requirements of section 9(b)(2) of the Act. This process is 
illustrated in the table below, ``Table--Calculation of FY 2012 Revenue 
Requirements and Pro-Rata Fees.''
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    \8\ In many instances, the regulatory fee amount is a flat fee 
per licensee or regulatee. 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 (``ITSP'') fee). The payment unit is the measure 
upon which the fee is based, such as a licensee, regulatee, or 
subscriber fee.
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    14. The list of sources for the estimated FY 2012 payment units 
appears in the Table below entitled, ``Table--Sources of Payment Unit 
Estimates for FY 2012.'' We estimated the number of payment units using 
licensee databases, industry and trade group projections, as well as 
prior year payment information. In some instances, Commission licensee 
databases are used; in other instances, actual prior year payment 
records and/or industry and trade association projections are used in 
determining the payment units.\9\ Where appropriate, we adjusted and 
rounded our final estimates to take into account factors that could 
affect the number of units for which regulatees submit payment. Such 
factors include waivers and exemptions filed in FYs 2011 and 2012, and 
fluctuations in the number of licenses or station operators due to 
economic, technical, or other reasons. Our estimated FY 2012 payment 
units, therefore, are based on the variable factors that are relevant 
to each fee category. The fee rate may also be rounded or adjusted 
slightly to account for these variables.
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    \9\ The databases we consulted are the following: 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 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, as well as 
industry sources including, but not limited to, Television & Cable 
Factbook by Warren Publishing, Inc. and the Broadcasting and Cable 
Yearbook by Reed Elsevier, Inc.
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    In order to calculate individual service fees for FY 2012, we 
adjusted FY 2011 payment units for each service to more accurately 
reflect expected FY 2012 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

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(``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 sought verification for these estimates from multiple sources 
and, in all cases; we compared FY 2012 estimates with actual FY 2011 
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 with sufficient 
accuracy. These include an unknown number of waivers and/or exemptions 
that may occur in FY 2012 and the fact that, in many services, the 
number of actual licensees or station operators fluctuates from time to 
time due to economic, technical, or other reasons. When we note, for 
example, that our estimated FY 2012 payment units are based on FY 2011 
actual payment units, it does not necessarily mean that our FY 2012 
projection is exactly the same number as in FY 2011. We have either 
rounded the FY 2012 number or adjusted it slightly to account for these 
variables.

          Table--Sources of Payment Unit Estimates for FY 2012
------------------------------------------------------------------------
                                             Sources of payment unit
              Fee category                          estimates
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Land Mobile (All), Microwave, 218-219    Based on Wireless
 MHz, Marine (Ship & Coast), Aviation     Telecommunications Bureau
 (Aircraft & Ground), GMRS, Amateur       (``WTB'') projections of new
 Vanity Call Signs, Domestic Public       applications and renewals
 Fixed.                                   taking into consideration
                                          existing Commission licensee
                                          data bases. Aviation
                                          (Aircraft) and Marine (Ship)
                                          estimates have been adjusted
                                          to take into consideration the
                                          licensing of portions of these
                                          services on a voluntary basis.
CMRS Cellular/Mobile Services..........  Based on WTB projection
                                          reports, and FY 2011 payment
                                          data.
CMRS Messaging Services................  Based on WTB reports, and FY
                                          2011 payment data.
AM/FM Radio Stations...................  Based on CDBS data, adjusted
                                          for exemptions, and actual FY
                                          2011 payment units.
UHF/VHF Television Stations............  Based on CDBS data, adjusted
                                          for exemptions, and actual FY
                                          2011 payment units.
AM/FM/TV Construction Permits..........  Based on CDBS data, adjusted
                                          for exemptions, and actual FY
                                          2011 payment units.
LPTV, Translators and Boosters, Class A  Based on CDBS data, adjusted
 Television.                              for exemptions, and actual FY
                                          2011 payment units.
Broadcast Auxiliaries..................  Based on actual FY 2011 payment
                                          units.
BRS (formerly MDS/MMDS)................  Based on WTB reports and actual
LMDS...................................   FY 2011 payment units.
                                         Based on WTB reports and actual
                                          FY 2011 payment units.
Cable Television Relay Service           Based on data from Media
 (``CARS'') Stations.                     Bureau's COALS database and
                                          actual FY 2011 payment units.
Cable Television System Subscribers....  Based on publicly available
                                          data sources for estimated
                                          subscriber counts and actual
                                          FY 2011 payment units.
Interstate Telecommunication Service     Based on FCC Form 499-Q data
 Providers.                               for the four quarters of
                                          calendar year 2010, the
                                          Wireline Competition Bureau
                                          projected the amount of
                                          calendar year 2009 revenue
                                          that will be reported on 2012
                                          FCC Form 499-A worksheets in
                                          April, 2012.
Earth Stations.........................  Based on International Bureau
                                          (``IB'') licensing data and
                                          actual FY 2011 payment units.
Space Stations (GSOs & NGSOs)..........  Based on IB data reports and
                                          actual FY 2011 payment units.
International Bearer Circuits..........  Based on IB reports and
                                          submissions by licensees.
Submarine Cable Licenses...............  Based on IB license
                                          information.
------------------------------------------------------------------------

A. Regulatory Fee Obligations for AM and FM Radio Stations

    15. The fee methodology for AM and FM radio stations is based on a 
number of factors, including facility attributes and the population 
served by each station. The calculation of the population served is 
determined by coupling current United States Census Bureau data with 
technical and engineering data, as detailed in the table below 
entitled, ``Table--Factors, Measurements, and Calculations That 
Determine Station Signal Contours and Associated Population 
Coverages.'' In FY 2012, the Commission will be incorporating the 
results of the 2010 Census data into our broadcast population data. 
These population counts, along with the station's class and type of 
service, are the basis for determining regulatory fees. We invite 
interested parties to comment on incorporating the 2010 Census data 
into our broadcast population data.

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  Table--Factors, Measurements, and Calculations That Determine Station
           Signal Contours and Associated Population Coverages
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                               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 73.150 and 73.152
 of the Commission's rules.\1\ 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.\2\ 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.
 
                               FM Stations
 
The greater of the horizontal or vertical effective radiated power
 (``ERP'') (kW) and respective height above average terrain (``HAAT'')
 (m) combination was used. Where the antenna height above mean sea level
 (``HAMSL'') was available, it was used in lieu of the average HAAT
 figure to calculate specific HAAT figures for each of 360 radials under
 study. Any available directional pattern information was applied as
 well, to produce a radial-specific ERP figure. The HAAT and ERP figures
 were used in conjunction with the Field Strength (50-50) propagation
 curves specified in 47 CFR 73.313 of the Commission's Rules to predict
 the distance to the principal community (70 dBu (decibel above 1
 microVolt per meter) or 3.17 mV/m) contour for each of the 360
 radials.\3\ 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.
------------------------------------------------------------------------

B. Regulatory Fee Obligations for Digital Low Power, Class A, and TV 
Translators/Boosters

    16. The digital transition to full-service television stations was 
completed on June 12, 2009, but the digital transition for Low Power, 
Class A, and TV Translators/Boosters still remains voluntary, even 
though a transition date of September 1, 2015 has been set for the 
completion of this transition. Historically, we have only considered 
the digital transition in the context of regulatory fees applicable to 
full-service television stations, and not to Low Power, Class A, and TV 
Translators/Boosters. Consequently, the ``digital only'' exemption that 
previously prevailed does not apply to Low Power, Class A, and TV 
Translator/Booster facilities. Because the digital transition in the 
Low Power, Class A, and TV Translator/Booster facilities is still 
voluntary, some of these facilities may transition from analog to 
digital service more rapidly than others. During this period of 
transition, licensees of Low Power, Class A, and TV Translator/Booster 
facilities may be operating in analog mode, in digital mode, or in an 
analog and digital simulcast mode. Therefore, for regulatory fee 
purposes, we conclude that a fee will be assessed for each facility 
operating either in an analog or digital mode. In instances in which a 
licensee is simulcasting in both analog and digital modes, a single 
regulatory fee will be assessed for the analog facility and its 
corresponding digital component. We request comment on this proposal. 
As greater numbers of facilities convert to digital mode, the 
Commission will provide revised instructions on how regulatory fees 
will be assessed.

C. Regulatory Fee Obligations of Interstate Telecommunications Service 
Providers

    17. In our FY 2011 Regulatory Fee Report and Order, we assessed the 
Interstate Telecommunications Service Provider (``ITSP'') industry a 
regulatory fee of $.00375 per revenue dollar. This fee reflects the 
Commission's decision to limit the increase in ITSP regulatory fees 
given the continuing decrease in the revenue base upon which ITSP 
regulatory fees are calculated. In FY 2011, we stated that we would 
rebalance ITSP regulatory fees in the context of more fundamental 
regulatory fee reform, which we will address in the forthcoming Reform 
Proceedings. Because we limited the increase in ITSP regulatory fees in 
FY 2011, and we expect that rebalancing ITSP fees will reduce the 
regulatory fee allocation for the ITSP industry, we propose, as an 
interim measure, to assess FY 2012 ITSP regulatory fees at the same fee 
rate as in FY 2011 (.00375). In addition, consistent with our approach 
in FY 2011, we propose to allocate the remaining revenue requirement 
across all other fee categories. We seek comment on these proposals.

D. Improving Public Information on Waiver Requests and Decisions

    18. To improve the openness and transparency of our fee waiver 
decisions, we will shortly announce improvements in the way that we 
provide public information about the waiver requests that are filed and 
the decisions resolving them. To assist in the implementation of these 
changes, we propose to require regulatees filing a request for a 
refund, waiver, fee reduction, or deferment of payment of an 
application or regulatory fee to use an online filing system rather 
than submitting their requests in hardcopy format. We believe that an 
online filing system will complement other existing online Commission 
systems already in place, such as the Broadcast Radio and Television 
Electronic Filing System (more commonly referred to as CDBS), the Cable 
Operations and Licensing System (COALS), and Consumer Complaint Forms. 
The resulting fee waiver filing system will include such documents as 
the filed request, any relevant supporting documentation, and the 
resulting decision. We propose to apply the provisions of section 0.459 
to requests that electronically filed material be withheld from public 
inspection.\10\ We invite comment from regulatees regarding the 
electronic filing of refund, waiver, fee reduction, and deferment 
requests.
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    \10\ Specifically, Section 0.457(a)(2) through (g) describe, 
inter alia, how confidential material should be submitted 
electronically, what showings must be made to justify withholding 
electronically submitted information from public inspection, and how 
the Commission will resolve confidentiality requests.
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E. Administrative and Operational Issues

    19. In FY 2009, the Commission implemented several changes in

[[Page 29286]]

procedures that simplified the payment and reconciliation processes of 
FY 2009 regulatory fees. In FY 2012, the Commission will continue to 
promote greater use of technology (and less use of paper) in improving 
our regulatory fee notification and collection process. We seek general 
comment on improving our fee collection process.
    20. In FY 2009, we instituted a mandatory filing requirement using 
the Commission's electronic filing and payment system (also known as 
``Fee Filer'').\11\ Licensees filing their annual regulatory fee 
payments were required to begin the process by entering the 
Commission's Fee Filer system with a valid FCC Registration Number 
(``FRN'') and password.\12\ This change was beneficial to both 
licensees and to the Commission. For licensees, the mandatory use of 
Fee Filer eliminates the need to manually complete and submit a 
hardcopy Form 159, and for the Commission, the data in electronic 
format makes it much easier to process payments efficiently and 
effectively. We seek general comment on how to improve the use of Fee 
Filer in filing annual regulatory fees. Because licensees have 
different options when making their regulatory fee payment (by credit 
card, check, wire transfer, etc.), the mandatory requirement to use Fee 
Filer is for the filing of annual regulatory fees using Fee Filer, not 
the payment of regulatory fees through Fee Filer. In the upcoming 
Reform Proceeding, we will examine whether to expand the use of Fee 
Filer for the filing of regulatory fees.
---------------------------------------------------------------------------

    \11\ FY 2009 Report and Order at paras. 20 and 21.
    \12\ Therefore, it is important for licensees to have a current 
and valid FRN address on file in the Commission's Registration 
System (CORES).
---------------------------------------------------------------------------

V. Fee Collection Procedures

    21. Included below are procedural items as well as our current 
payment and collection methods which we have revised over the past 
several years to expedite the processing of regulatory fee payments. We 
do not propose changes to these procedures. Rather, we include them 
here as a useful way of reminding regulatory fee payers and the public 
about these aspects of the annual regulatory fee collection process.

A. Public Notices and Fact Sheets

    22. Each year we post public notices and fact sheets pertaining to 
regulatory fees on our Web site. These documents contain information 
about the payment due date and relevant regulatory fee payment 
procedures. We will continue to post this information on http://transition.fcc.gov/fees/regfees.html, rather than mailing it to 
regulatees.

B. Pre-Bill Notification and Collection of Regulatory Fees

    23. In prior years, the Commission mailed pre-bills via surface 
mail to licensees in select regulatory fee categories: ITSPs, 
Geostationary (``GSO'') and Non-Geostationary (``NGSO'') satellite 
space station licensees,\13\ holders of Cable Television Relay Service 
(``CARS'') licenses, and Earth Station licensees.\14\ The remaining 
regulatees did not receive pre-bills. In our FY 2009 Report and Order, 
the Commission decided to make the information contained in these pre-
bills viewable in Fee Filer, rather than mailing pre-bills to licensees 
via surface mail.\15\ We continued this practice in FY 2010 and FY 2011 
by placing the pre-bill information on Fee Filer, where it could be 
accessed by licensees through the Commission's Web site. Regulatees can 
also look to the Commission's Web site for information on upcoming 
events and deadlines relating to regulatory fees.
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    \13\ Geostationary orbit space station (``GSO'') licensees 
received regulatory fee pre-bills for satellites that (1) were 
licensed by the Commission and operational on or before October 1 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 regulatory fee 
pre-bills for systems that were licensed by the Commission and 
operational on or before October 1 of the respective fiscal year.
    \14\ 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.
    \15\ See FY 2009 Report and Order at paras. 24, 26.
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C. Assessment Notifications

1. Media Services Licensees
    24. Beginning in FY 2003, we sent fee assessment notifications via 
surface mail to media services entities on a per-facility basis.\16\ 
These 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 to be more electronic and 
paperless.\17\ In our FY 2010 Notice of Proposed Rulemaking, we 
proposed to discontinue mailing the media notifications beginning in FY 
2011, relying instead on information on the Commission's Web site and 
the use of the Commission-authorized Web site at www.fccfees.com.\18\ 
In FY 2012, we will continue the practice of not mailing hardcopy 
notification assessment letters to media licensees.
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    \16\ 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.
    \17\ Those refinements include providing licensees with a 
Commission-authorized Web site where they can update or correct any 
information concerning their facilities, and amend their fee-exempt 
status, if need be. The notifications also provide licensees with a 
telephone number to call in the event that they need customer 
assistance.
    \18\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2010, Report and Order, 25 FCC Rcd 9278 at para. 42 (2010) 
(``FY 2010 Report and Order'').
---------------------------------------------------------------------------

2. CMRS Cellular and Mobile Services Assessments
    25. We will continue to follow our current procedures for conveying 
CMRS subscriber counts to providers. We will mail an initial assessment 
letter to Commercial Mobile Radio Service (CMRS) providers using data 
from the Numbering Resource Utilization Forecast (``NRUF'') report that 
is based on ``assigned'' number counts that have been adjusted for 
porting to net Type 0 ports (``in'' and ``out'').\19\ The letter will 
include a listing of the carrier's Operating Company Numbers (``OCNs'') 
upon which the assessment is based.\20\ The letters will not include 
OCNs with their respective assigned number counts, but rather, an 
aggregate total of assigned numbers for each carrier.
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    \19\ 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).
    \20\ Id.
---------------------------------------------------------------------------

    26. A carrier wishing to revise its subscriber count can do so by 
accessing Fee Filer after receiving its initial CMRS assessment letter. 
Providers should follow the prompts in Fee Filer to record their 
subscriber revisions, along with any supporting documentation.\21\ The 
Commission will then review the revised count and supporting 
documentation and either approve or disapprove the submission in Fee 
Filer. If the submission is disapproved, the Commission will attempt to 
contact the provider to afford the provider an opportunity to discuss 
its revised subscriber count and/or provide additional supporting 
documentation. If we receive no response or correction to the initial 
assessment letter, or we do not reverse our initial disapproval of the 
provider's revised count submission, we expect the fee payment to be 
based on

[[Page 29287]]

the number of subscribers listed on the initial assessment letter. Once 
the timeframe for revision has passed, the subscriber counts are final 
and are the basis upon which CMRS regulatory fees are expected to be 
paid. Providers can also view their final subscriber counts online in 
Fee Filer. A final CMRS assessment letter will not be mailed out.
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    \21\ In the supporting documentation, the provider will need to 
state a reason for the change, such as a purchase or sale of a 
subsidiary, the date of the transaction, and any other pertinent 
information that will help to justify a reason for the change.
---------------------------------------------------------------------------

    27. Because some carriers do not file the NRUF report, they may not 
receive an initial assessment letter. In these instances, the carriers 
should 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, 2011), and submit their fee 
payment accordingly. Whether a carrier receives an assessment letter or 
not, the Commission reserves the right to audit the number of 
subscribers for which regulatory fees are paid. In the event that the 
Commission determines that the number of subscribers paid is 
inaccurate, the Commission will bill the carrier for the difference 
between what was paid and what should have been paid.
---------------------------------------------------------------------------

    \22\ See, e.g., Federal Communications Commission, Regulatory 
Fees Fact Sheet: What You Owe--Commercial Wireless Services for FY 
2011 at 1 (released September 2011).
---------------------------------------------------------------------------

3. Submarine Cable Allocation
    28. Because the dollar amount that the Commission is required to 
collect could differ from year to year, the revenue apportionment 
between submarine cable providers and terrestrial/satellite facilities 
needs to be re-calculated each year based on an 87.4/12.6 percent 
allocation, respectively.\23\ Since FY 2009, the Commission has used 
the 87.4/12.6 percent allocation proposed in the Consensus Proposal as 
the percentage upon which to determine the regulatory fee revenue 
amounts for submarine cable providers and terrestrial/satellite 
facilities, respectively.\24\ Each year, the Commission reserves the 
right to revise this 87.4/12.6 allocation. For FY 2012, we do not find 
any basis to alter this 87.4/12.6 percent revenue allocation.
---------------------------------------------------------------------------

    \23\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2008, Second Report and Order, 24 FCC Rcd 4208 at n. 35 (2009) 
(``Submarine Cable Order'').
    \24\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2009, Report and Order, 24 FCC Rcd 10301 at para. 8 (2009) 
(``FY 2009 Report and Order'').
---------------------------------------------------------------------------

D. Streamlined Regulatory Fee Payment Process

1. Cable Television Subscribers
    29. The Commission will 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 
report cable subscriber counts on a per community unit identifier 
(``CUID'') basis.
2. 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, instead 
allowing CMRS providers to pay their regulatory fees only at the 
aggregate subscriber level without having to identify their various 
call signs.\25\ We will continue this practice in FY 2012. In FY 2007, 
we consolidated the CMRS cellular and CMRS mobile fee categories into 
one fee category with a single fee code, 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. This consolidation of fee categories enabled the 
Commission to process payments more quickly and accurately. For FY 
2012, we will continue this practice of combining the CMRS cellular and 
CMRS mobile fee categories into one regulatory fee category.
---------------------------------------------------------------------------

    \25\ 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).
---------------------------------------------------------------------------

3. Interstate Telecommunications Service Providers
    31. In FY 2007, we adopted a proposal to round lines 14 (total 
subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W 
worksheet to the nearest dollar. This revision enabled the Commission 
to process the ITSP regulatory fee payments more quickly because 
rounding was performed in a consistent manner, thereby eliminating 
processing issues. For FY 2012, we will continue to round lines 14 and 
16 when calculating the FY 2012 ITSP fee obligation. In addition, we 
will continue the practice of not mailing out Form 159-W via surface 
mail.

E. Payment of Regulatory Fees

1. Lock Box Bank
    32. All lock box payments to the Commission for FY 2012 will be 
processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC. 
During the regulatory fee season, for those licensees paying by check, 
money order, or by credit card using Form 159-E remittance advice, the 
fee payment and Form 159-E remittance advice should be mailed to the 
following address: Federal Communications Commission, Regulatory Fees, 
P.O. Box 979084, St. Louis, MO 63197-9000. Additional payment options 
and instructions are posted at http://transition.fcc.gov/fees/regfees.html.
2. Receiving Bank for Wire Payments
    33. The receiving bank for all wire payments is the Federal Reserve 
Bank, New York, New York (TREAS NYC). When making a wire transfer, 
regulatees must fax a copy of their Fee Filer generated Form 159-E to 
U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour 
before initiating the wire transfer (but on the same business day), so 
as not to delay crediting their account. Regulatees should discuss 
arrangements (including bank closing schedules) with their bankers 
several days before they plan to make the wire transfer to allow 
sufficient time for the transfer to be initiated and completed before 
the deadline. Complete instructions for making wire payments are posted 
at http://transition.fcc.gov/fees/wiretran.html.
3. De Minimis Regulatory Fees
    34. Regulatees whose total FY 2012 regulatory fee liability, 
including all categories of fees for which payment is due, is less than 
$10 are exempted from payment of FY 2012 regulatory fees.
4. Standard Fee Calculations and Payment Dates
    35. The Commission will accept fee payments made in advance of the 
window for the payment of regulatory fees. The responsibility for 
payment of fees by service category is as follows:
     Media Services: Regulatory fees must be paid for initial 
construction permits that were granted on or before October 1, 2011 for 
AM/FM radio stations, VHF/UHF full service television stations, and 
satellite television stations. Regulatory fees must be paid for all 
broadcast facility licenses granted on or before October 1, 2011. In 
instances where a permit or license is transferred or assigned after 
October 1, 2011, responsibility for payment rests with the holder of 
the permit or license as of the fee due date.
     Wireline (Common Carrier) Services: Regulatory fees must 
be paid for authorizations that were granted on or before October 1, 
2011. In instances where a permit or license is transferred or assigned 
after October 1, 2011, responsibility for payment rests with the holder 
of the permit or license as of the fee due date. We note that audio

[[Page 29288]]

bridging service providers are included in this category.\26\
---------------------------------------------------------------------------

    \26\ Audio bridging services are toll teleconferencing services, 
and audio bridging service providers are required to contribute 
directly to the universal service fund based on revenues from these 
services. On June 30, 2008, the Commission released the InterCall 
Order, in which the Commission stated that InterCall, Inc. and all 
similarly situated audio bridging service providers are required to 
contribute directly to the universal service fund. See Request for 
Review by InterCall, Inc. of Decision of Universal Service 
Administrator, CC Docket No. 96-45, Order, 23 FCC Rcd 10731 (2008) 
(``InterCall Order'').
---------------------------------------------------------------------------

     Wireless Services: CMRS cellular, mobile, and messaging 
services (fees based on number of subscribers or telephone number 
count): Regulatory fees must be paid for authorizations that were 
granted on or before October 1, 2011. The number of subscribers, units, 
or telephone numbers on December 31, 2011 will be used as the basis 
from which to calculate the fee payment. In instances where a permit or 
license is transferred or assigned after October 1, 2011, 
responsibility for payment rests with the holder of the permit or 
license as of the fee due date.
     The first eleven regulatory fee categories in our Schedule 
of Regulatory Fees (see Attachment B) pay ``small multi-year wireless 
regulatory fees.'' Entities pay these regulatory fees in advance for 
the entire amount of their five-year or ten-year term of initial 
license, and only pay regulatory fees again when the license is renewed 
or a new license is obtained. We include these fee categories in our 
Schedule of Regulatory Fees to publicize our estimates of the number of 
``small multi-year wireless'' licenses that will be renewed or newly 
obtained in FY 2012.
     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, 
2011.\27\ Regulatory fees also must be paid for CARS licenses that were 
granted on or before October 1, 2011. In instances where a permit or 
license is transferred or assigned after October 1, 2011, 
responsibility for payment rests with the holder of the permit or 
license as of the fee due date.
---------------------------------------------------------------------------

    \27\ Cable television system operators should compute their 
number of 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 2011, rather than on a count as of December 31, 
2011.
---------------------------------------------------------------------------

     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, 2011. In instances where a permit 
or license is transferred or assigned after October 1, 2011, 
responsibility for payment rests with the holder of the permit or 
license as of the fee due date.
     International Services: Submarine Cable Systems: 
Regulatory fees for submarine cable systems are to be paid on a per 
cable landing license basis based on circuit capacity as of December 
31, 2011. In instances where a license is transferred or assigned after 
October 1, 2011, responsibility for payment rests with the holder of 
the license as of the fee due date. For regulatory fee purposes, the 
allocation in FY 2012 will remain at 87.6 percent for submarine cable 
and 12.4 percent for satellite/terrestrial facilities.
     International Services: Terrestrial and Satellite 
Services: Finally, regulatory fees for International Bearer Circuits 
are to be paid by facilities-based common carriers that have active 
(used or leased) international bearer circuits as of December 31, 2011 
in any terrestrial or satellite 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. ``Active circuits'' 
for these purposes include backup and redundant circuits as of December 
31, 2011. Whether circuits are used specifically for voice or data is 
not relevant for purposes of determining that they are active circuits. 
In instances where a permit or license is transferred or assigned after 
October 1, 2011, responsibility for payment rests with the holder of 
the permit or license as of the fee due date. For regulatory fee 
purposes, the allocation in FY 2012 will remain at 87.6 percent for 
submarine cable and 12.4 percent for satellite/terrestrial facilities.

F. Enforcement

    36. To be considered timely, regulatory fee payments must be 
received and stamped at the lockbox bank by the due date of regulatory 
fees. Section 9(c) of the Act requires us to impose a late payment 
penalty of 25 percent of the unpaid amount to be assessed on the first 
day following the deadline date for filing of these fees.\28\ Failure 
to pay regulatory fees and/or any late penalty will subject regulatees 
to sanctions, including those set forth in section 1.1910 of the 
Commission's rules \29\ and in the Debt Collection Improvement Act of 
1996 (``DCIA'').\30\ We also assess administrative processing charges 
on delinquent debts to recover additional costs incurred in processing 
and handling the related debt pursuant to the DCIA and section 
1.1940(d) of the Commission's rules.\31\ 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.
---------------------------------------------------------------------------

    \28\ 47 U.S.C. 159(c).
    \29\ See 47 CFR 1.1910.
    \30\ Delinquent debt owed to the Commission triggers application 
of the ``red light rule'' which requires offsets or holds on pending 
disbursements. 47 CFR 1.1910. In 2004, the Commission adopted rules 
implementing the requirements of the DCIA. See Amendment of Parts 0 
and 1 of the Commission's Rules, MD Docket No. 02-339, Report and 
Order, 19 FCC Rcd 6540 (2004); 47 CFR part 1, subpart O, Collection 
of Claims Owed the United States.
    \31\ 47 CFR 1.1940(d).
---------------------------------------------------------------------------

    37. 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.\32\ 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).
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    \32\ See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.
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BILLING CODE 6712-01-P

[[Page 29289]]

[GRAPHIC] [TIFF OMITTED] TP17MY12.008


[[Page 29290]]


[GRAPHIC] [TIFF OMITTED] TP17MY12.009

BILLING CODE 6712-01-C

                                                          FY 2011 Radio Station Regulatory Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           FM Classes A,   FM Classes B,
                    Population served                       AM Class A      AM Class B      AM Class C      AM Class D        B1 & C3     C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<= 25,000...............................................            $700            $575            $525            $600            $675            $850
25,001-75,000...........................................           1,400           1,150             800             900           1,350           1,500
75,001-150,000..........................................           2,100           1,450           1,050           1,500           1,850           2,750
150,001-500,000.........................................           3,150           2,450           1,575           1,800           2,875           3,600
500,001-1,200,000.......................................           4,550           3,750           2,625           3,000           4,550           5,300
1,200,001-3,000,00......................................           7,000           5,750           3,950           4,800           7,425           8,500
>3,000,000..............................................           8,400           6,900           5,000           6,000           9,450          11,050
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 29291]]


                   FY 2011 Schedule of Regulatory Fees
            [International Bearer Circuits--Submarine Cable]
------------------------------------------------------------------------
    Submarine Cable Systems
  (capacity as of December 31,    Fee amount            Address
             2010)
------------------------------------------------------------------------
< 2.5 Gbps.....................      $12,825  FCC, International, P.O.
                                               Box 979084, St. Louis, MO
                                               63197-9000.
2.5 Gbps or greater, but less         25,650  FCC, International, P.O.
 than 5 Gbps.                                  Box 979084, St. Louis, MO
                                               63197-9000.
5 Gbps or greater, but less           51,300  FCC, International, P.O.
 than 10 Gbps.                                 Box 979084, St. Louis, MO
                                               63197-9000.
10 Gbps or greater, but less         102,625  FCC, International, P.O.
 than 20 Gbps.                                 Box 979084, St. Louis, MO
                                               63197-9000.
20 Gbps or greater.............      205,225  FCC, International, P.O.
                                               Box 979084, St. Louis, MO
                                               63197-9000.
------------------------------------------------------------------------

Initial Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act (``RFA''),\33\ the 
Commission prepared this Initial Regulatory Flexibility Analysis 
(``IRFA'') of the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice of Proposed 
Rulemaking. 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 Notice of 
Proposed Rulemaking. The Commission will send a copy of the Notice, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.\34\ In addition, the Notice and IRFA (or 
summaries thereof) will be published in the Federal Register.\35\
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    \33\ 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'').
    \34\ 5 U.S.C. 603(a).
    \35\ Id.
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VI. Need for, and Objectives of, the Notice

    2. This rulemaking proceeding was initiated for the Commission to 
obtain comments regarding its proposed amendment to its Schedule of 
Regulatory Fees in the amount of $339,844,000, which is the amount that 
Congress has required the Commission to recover. The Commission seeks 
to collect the necessary amount through its revised Schedule of 
Regulatory Fees in the most efficient manner possible and without undue 
public burden.

VII. Legal Basis

    3. This action, including publication of proposed rules, is 
authorized under sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\36\
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    \36\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
---------------------------------------------------------------------------

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

    4. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted.\37\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \38\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\39\ A ``small business concern'' is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\40\
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    \37\ 5 U.S.C. 603(b)(3).
    \38\ 5 U.S.C. 601(6).
    \39\ 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.''
    \40\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    5. Small Businesses. Nationwide, there are a total of approximately 
29.6 million small businesses, according to the SBA.\41\
---------------------------------------------------------------------------

    \41\ See SBA, Office of Advocacy, ``Frequently Asked 
Questions,'' http://web.sba.gov/faqs (accessed Jan. 2009).
---------------------------------------------------------------------------

    6. Small Organizations. Nationwide, as of 2002, there are 
approximately 1.6 million small organizations.\42\ A ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
\43\
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    \42\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
    \43\ 5 U.S.C. 601(4).
---------------------------------------------------------------------------

    7. 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.'' \44\ Census Bureau data for 
2002 indicate that there were 87,525 local governmental jurisdictions 
in the United States.\45\ We estimate that, of this total, 84,377 
entities were ``small governmental jurisdictions.'' \46\ Thus, we 
estimate that most governmental jurisdictions are small.
---------------------------------------------------------------------------

    \44\ 5 U.S.C. 601(5).
    \45\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2006, Section 8, p. 272, Table 415.
    \46\ We assume that the villages, school districts, and special 
districts are small, and total 48,558. See U.S. Census Bureau, 
Statistical Abstract of the United States: 2006, section 8, p. 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.
---------------------------------------------------------------------------

    8. 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.'' 
\47\ 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.\48\ 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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    \47\ 15 U.S.C. 632.
    \48\ 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).
---------------------------------------------------------------------------

    9. 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

[[Page 29292]]

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\ 1,311 carriers have reported that 
they are engaged in the provision of incumbent local exchange services. 
Of these 1,311 carriers, an estimated 1,024 have 1,500 or fewer 
employees and 287 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 action.
---------------------------------------------------------------------------

    \49\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517110.
    \50\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
Page 5-5 (Aug. 2008) (``Trends in Telephone Service''). This source 
uses data that are current as of November 1, 2006.
---------------------------------------------------------------------------

    10. 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.\51\ According to Commission data,\52\ 1005 carriers have 
reported that they are engaged in the provision of either competitive 
access provider services or competitive local exchange carrier 
services. Of these 1005 carriers, an estimated 918 have 1,500 or fewer 
employees and 87 have more than 1,500 employees. In addition, 16 
carriers have reported that they are ``Shared-Tenant Service 
Providers,'' and all 16 are estimated to have 1,500 or fewer employees. 
In addition, 89 carriers have reported that they are ``Other Local 
Service Providers.'' Of the 89, all have 1,500 or fewer 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 action.
---------------------------------------------------------------------------

    \51\ 13 CFR 121.201, NAICS code 517110.
    \52\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    11. 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.\53\ According to Commission data,\54\ 151 carriers have 
reported that they are engaged in the provision of local resale 
services. Of these, an estimated 149 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 action.
---------------------------------------------------------------------------

    \53\ 13 CFR Sec.  121.201, NAICS code 517310.
    \54\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    12. 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.\55\ According to Commission data,\56\ 815 carriers have 
reported that they are engaged in the provision of toll resale 
services. Of these, an estimated 787 have 1,500 or fewer employees and 
28 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 action.
---------------------------------------------------------------------------

    \55\ 13 CFR 121.201, NAICS code 517310.
    \56\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    13. 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.\57\ According to Commission data,\58\ 526 carriers have 
reported that they are engaged in the provision of payphone services. 
Of these, an estimated 524 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 action.
---------------------------------------------------------------------------

    \57\ 3 CFR 121.201, NAICS code 517110.
    \58\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    14. Interexchange Carriers (``IXCs''). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\59\ According to Commission data,\60\ 300 carriers 
have reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 268 have 1,500 or fewer employees and 
32 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by our action.
---------------------------------------------------------------------------

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

    15. 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.\61\ According to Commission data,\62\ 28 carriers have 
reported that they are engaged in the provision of operator services. 
Of these, an estimated 27 have 1,500 or fewer employees and one has 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of OSPs are small entities that may be affected by our 
action.
---------------------------------------------------------------------------

    \61\ 13 CFR 121.201, NAICS code 517110.
    \62\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    16. 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.\63\ According to Commission data,\64\ 88 carriers have 
reported that they are engaged in the provision of prepaid calling 
cards. Of these, an estimated 85 have 1,500 or fewer employees and 
three have 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 action.
---------------------------------------------------------------------------

    \63\ 13 CFR 121.201, NAICS code 517310.
    \64\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    17. 800 and 800-Like Service Subscribers.\65\ 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.\66\ 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.\67\ According 
to our data, at the end of December 2007, the number of 800

[[Page 29293]]

numbers assigned was 7,860,000; the number of 888 numbers assigned was 
5,210,184; the number of 877 numbers assigned was 4,388,682; and the 
number of 866 numbers assigned was 7,029,116. 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 7,860,000 or fewer 
small entity 800 subscribers; 5,210,184 or fewer small entity 888 
subscribers; 4,388,682 or fewer small entity 877 subscribers, and 
7,029,116 or fewer entity 866 subscribers.
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    \65\ We include all toll-free number subscribers in this 
category.
    \66\ 13 CFR 121.201, NAICS code 517310.
    \67\ ``Trends in Telephone Service'' at Tables 18.4, 18.5, 18.6, 
and 18.7.
---------------------------------------------------------------------------

    18. Satellite Telecommunications and All Other Telecommunications. 
These two economic census categories address the satellite industry. 
The first category has a small business size standard of $15 million or 
less in average annual receipts, under SBA rules.\68\ The second has a 
size standard of $25 million or less in annual receipts.\69\ The most 
current Census Bureau data in this context, however, are from the 
(last) economic census of 2002, and we will use those figures to gauge 
the prevalence of small businesses in these categories.\70\
---------------------------------------------------------------------------

    \68\ 13 CFR 121.201, NAICS code 517410.
    \69\ 13 CFR 121.201, NAICS code 517919.
    \70\ 13 CFR 121.201, NAICS codes 517410 and 517910 (2002).
---------------------------------------------------------------------------

    19. The category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing 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.'' \71\ For this category, Census Bureau data for 
2002 show that there were a total of 371 firms that operated for the 
entire year.\72\ Of this total, 307 firms had annual receipts of under 
$10 million, and 26 firms had receipts of $10 million to 
$24,999,999.\73\ Consequently, we estimate that the majority of 
Satellite Telecommunications firms are small entities that might be 
affected by our action.
---------------------------------------------------------------------------

    \71\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410 
Satellite Telecommunications''; http://www.census.gov/naics/2007/def/ND517410.HTM.
    \72\ 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).
    \73\ Id. An additional 38 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

    20. The second category of All Other Telecommunications comprises, 
inter alia, ``establishments primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems.'' \74\ For 
this category, Census Bureau data for 2002 show that there were a total 
of 332 firms that operated for the entire year.\75\ Of this total, 303 
firms had annual receipts of under $10 million and 15 firms had annual 
receipts of $10 million to $24,999,999.\76\ Consequently, we estimate 
that the majority of All Other Telecommunications firms are small 
entities that might be affected by our action.
---------------------------------------------------------------------------

    \74\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All 
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
    \75\ 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).
    \76\ Id. An additional 14 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

    21. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category.\77\ Prior to that time, such firms 
were within the now-superseded categories of ``Paging'' and ``Cellular 
and Other Wireless Telecommunications.'' \78\ Under the present and 
prior categories, the SBA has deemed a wireless business to be small if 
it has 1,500 or fewer employees.\79\ For the category of Wireless 
Telecommunications Carriers (except Satellite), preliminary data for 
2007 show that there was 11,927 firms operating that year.\80\ While 
the Census Bureau has not released data on the establishments broken 
down by number of employees, we note that the Census Bureau lists total 
employment for all firms in that sector at 281,262.\81\ Since all firms 
with fewer than 1,500 employees are considered small, given the total 
employment in the sector, we estimate that the vast majority of 
wireless firms are small.
---------------------------------------------------------------------------

    \77\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210 
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
    \78\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211 
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S. 
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other 
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \79\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS).
    \80\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 
EC075111 Information: Industry Series: Preliminary Summary 
Statistics for the United States: 2007, NAICS code 517210 (issued 
Oct. 20, 2009), factfinder.census.gov/servlet/IBQTable?-fds_name=EC0700A1&-_clearIBQ=Y&-ds_name=EC075111&-NAICS2007=51721 
(visited Mar. 2, 2011).
    \81\ Id.
---------------------------------------------------------------------------

    22. Auctions. Initially, we note that, as a general matter, the 
number of winning bidders that qualify as small businesses at the close 
of an auction does not necessarily represent the number of small 
businesses currently in service. Also, the Commission does not 
generally track subsequent business size unless, in the context of 
assignments or transfers, unjust enrichment issues are implicated.
    23. Common Carrier Paging. As noted, the SBA has developed a small 
business size standard for Wireless Telecommunications Carriers (except 
Satellite) firms within the broad economic census categories of 
``Cellular and Other Wireless Telecommunications.'' \82\ Since 2007, 
the Census Bureau has placed wireless firms within this new, broad, 
economic census category.\83\ Prior to that time, such firms were 
within the now-superseded categories of ``Paging'' and ``Cellular and 
Other Wireless Telecommunications.'' \84\ Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees.\85\ Because Census Bureau data are not 
yet available for the new category, we will estimate small business 
prevalence using the prior categories and associated data. For the 
category of Paging, data for 2002 show that there were 807 firms that 
operated for the entire year.\86\ Of this total, 804 firms had 
employment of 999 or fewer employees, and three firms had employment of 
1,000 employees or

[[Page 29294]]

more.\87\ For the category of Cellular and Other Wireless 
Telecommunications, data for 2002 show that there were 1,397 firms that 
operated for the entire year.\88\ Of this total, 1,378 firms had 
employment of 999 or fewer employees, and 19 firms had employment of 
1,000 employees or more.\89\ Thus, we estimate that the majority of 
wireless firms are small.
---------------------------------------------------------------------------

    \82\ 13 CFR 121.201, NAICS code 517212.
    \83\ U.S. Census Bureau, 2007 NAICS Definitions, ``517210 
Wireless Telecommunications Categories (Except Satellite)''; http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
    \84\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211 
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S. 
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other 
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \85\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS).
    \86\ 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).
    \87\ 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.''
    \88\ 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).
    \89\ 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.''
---------------------------------------------------------------------------

    24. 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.\90\ 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.\91\ 
The SBA has approved this definition.\92\ An initial auction of 
Metropolitan Economic Area (``MEA'') licenses was conducted in the year 
2000. Of the 2,499 licenses auctioned, 985 were sold.\93\ Fifty-seven 
companies claiming small business status won 440 licenses.\94\ A 
subsequent auction of MEA and Economic Area (``EA'') licenses was held 
in the year 2001. Of the 15,514 licenses auctioned, 5,323 were 
sold.\95\ 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, was held in 2003. Seventy-seven bidders claiming small or very 
small business status won 2,093 licenses.\96\
---------------------------------------------------------------------------

    \90\ 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).
    \91\ Paging Second Report and Order, 12 FCC Rcd at 2811, para. 
179.
    \92\ See Letter from Aida Alvarez, Administrator, SBA, to Amy 
Zoslov, Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau (``WTB''), FCC (Dec. 2, 1998) (``Alvarez 
Letter 1998'').
    \93\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \94\ See id.
    \95\ See ``Lower and Upper Paging Band Auction Closes,'' Public 
Notice, 16 FCC Rcd 21821 (WTB 2002).
    \96\ See ``Lower and Upper Paging Bands Auction Closes,'' Public 
Notice, 18 FCC Rcd 11154 (WTB 2003). The current number of small or 
very small business entities that hold wireless licenses may differ 
significantly from the number of such entities that won in spectrum 
auctions due to assignments and transfers of licenses in the 
secondary market over time. In addition, some of the same small 
business entities may have won licenses in more than one auction.
---------------------------------------------------------------------------

    25. Currently, there are approximately 74,000 Common Carrier Paging 
licenses. According to the most recent Trends in Telephone Service, 281 
carriers reported that they were engaged in the provision of ``paging 
and messaging'' services.\97\ Of these, an estimated 279 have 1,500 or 
fewer employees and two have more than 1,500 employees.\98\ We estimate 
that the majority of common carrier paging providers would qualify as 
small entities under the SBA definition.
---------------------------------------------------------------------------

    \97\ ``Trends in Telephone Service'' at Table 5.3.
    \98\ Id.
---------------------------------------------------------------------------

    26. 2.3 GHz 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.\99\ The 
SBA approved these definitions.\100\ The Commission conducted an 
auction of geographic area licenses in the WCS service in 1997. In the 
auction, seven bidders that qualified as very small business entities 
won licenses, and one bidder that qualified as a small business entity 
won a license.
---------------------------------------------------------------------------

    \99\ 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).
    \100\ See Alvarez Letter 1998.
---------------------------------------------------------------------------

    27. 1670-1675 MHz Services. This service can be used for fixed and 
mobile uses, except aeronautical mobile.\101\ An auction for one 
license in the 1670-1675 MHz band was conducted in 2003. The winning 
bidder was not a small entity.
---------------------------------------------------------------------------

    \101\ 47 CFR 2.106; see generally 47 CFR 27.1-.70.
---------------------------------------------------------------------------

    28. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite).\102\ Under the SBA small business size standard, a business 
is small if it has 1,500 or fewer employees.\103\ According to Trends 
in Telephone Service data, 413 carriers reported that they were engaged 
in wireless telephony.\104\ Of these, an estimated 261 have 1,500 or 
fewer employees and 152 have more than 1,500 employees.\105\ Therefore, 
more than half of these entities can be considered small.
---------------------------------------------------------------------------

    \102\ 13 CFR 121.201, NAICS code 517210.
    \103\ Id.
    \104\ ``Trends in Telephone Service'' at Table 5.3.
    \105\ Id.
---------------------------------------------------------------------------

    29. 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 initially defined a ``small 
business'' for C- and F-Block licenses as an entity that has average 
gross revenues of $40 million or less in the three previous years.\106\ 
For Block F licenses, 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 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 claimed small 
business status in the first two C Block auctions.\109\ A total of 93 
bidders that claimed ``small'' and ``very small'' business status won 
licenses in the first auction of the D, E, and F Blocks.\110\ In 1999, 
the Commission completed a subsequent auction of C, D, E, and F Block 
licenses.\111\ Of the 57 winning bidders

[[Page 29295]]

in that auction, 48 claimed small business status and won 277 
licenses.\112\
---------------------------------------------------------------------------

    \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 et al., Report and Order, 11 FCC Rcd 
7824, 7850-52, paras. 57-60 (1996) (``PCS Report and Order''); see 
also 47 CFR 24.720(b).
    \107\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
    \108\ See Alvarez Letter 1998.
    \109\ See Entrepreneurs' C Block Auction Closes, Public Notice, 
DA 96-716 (1996); Entrepreneurs C Block Reauction Closes, Public 
Notice, DA 96-1153 (1996).
    \110\ See Broadband PCS, D, E and F Block Auction Closes, Public 
Notice, Doc. No. 89838 (released Jan. 14, 1997).
    \111\ See C, D, E, and F Block Broadband PCS Auction Closes, 
Public Notice, 14 FCC Rcd 6688 (1999). Before Auction No. 22, the 
Commission established a very small standard for the C Block to 
match the standard used for F Block. Amendment of the Commission's 
Rules Regarding Installment Payment Financing for Personal 
Communications Services (PCS) Licensees, WT Docket No. 97-82, Fourth 
Report and Order, 13 FCC Rcd 15,743, 15,768 para. 46 (1998).
    \112\ See C, D, E, and F Block Broadband PCS Auction Closes, 
Public Notice, 14 FCC Rcd 6688 (1999).
---------------------------------------------------------------------------

    30. In 2001, the Commission completed the auction of 422 C and F 
Block Broadband PCS licenses (Auction 35). Of the 35 winning bidders in 
that auction, 29 claimed small or very small businesses status.\113\ 
Subsequent events concerning that Auction, including judicial and 
agency determinations, resulted in only a portion of those C and F 
Block licenses being available for grant. The Commission completed an 
auction of 188 C Block licenses and 21 F Block licenses in 2005. Of the 
24 winning bidders in that auction, 16 claimed small business status 
and won 156 licenses.\114\ In 2007, the Commission completed an auction 
of licenses in the A, C, and F Blocks.\115\ Of the 12 winning bidders 
in that auction, five claimed small business status and won 18 
licenses.\116\ Most recently, in 2008, the Commission completed the 
auction of C, D, E, and F Block Broadband PCS licenses.\117\ Of the 
eight winning bidders for Broadband PCS licenses in that auction, six 
claimed small business status and won 14 licenses.\118\
---------------------------------------------------------------------------

    \113\ See ``C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
    \114\ See ``Broadband PCS Spectrum Auction Closes; Winning 
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd 
3703 (2005).
    \115\ See ``Auction of Broadband PCS Spectrum Licenses Closes; 
Winning Bidders Announced for Auction No. 71,'' Public Notice, 22 
FCC Rcd 9247 (2007).
    \116\ Id.
    \117\ See Auction of AWS-1 and Broadband PCS Licenses Closes; 
Winning Bidders Announced for Auction 78, Public Notice, 23 FCC Rcd 
12,749 (2008).
    \118\ Id.
---------------------------------------------------------------------------

    31. Advanced Wireless Services. In 2006, the Commission conducted 
its first auction of Advanced Wireless Services licenses in the 1710-
1755 MHz and 2110-2155 MHz bands (``AWS-1''), designated as Auction 
66.\119\ For the AWS-1 bands, the Commission has defined a ``small 
business'' as an entity with average annual gross revenues for the 
preceding three years not exceeding $40 million, and a ``very small 
business'' as an entity with average annual gross revenues for the 
preceding three years not exceeding $15 million.\120\ In Auction 66, 31 
winning bidders identified themselves as very small businesses and won 
142 licenses.\121\ Twenty-six of the winning bidders identified 
themselves as small businesses and won 73 licenses.\122\ In a 
subsequent 2008 auction, the Commission offered 35 AWS-1 licenses.\123\ 
Four winning bidders identifying themselves as very small businesses 
won 17 licenses, and three winning bidders identifying themselves as a 
small business won five AWS-1 licenses.\124\
---------------------------------------------------------------------------

    \119\ See Auction of Advanced Wireless Services Licenses 
Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction No. 
66, AU Docket No. 06-30, Public Notice, 21 FCC Rcd 4562 (2006) 
(``Auction 66 Procedures Public Notice'').
    \120\ See Service Rules for Advanced Wireless Services in the 
1.7 GHz and 2.1 GHz Bands, Report and Order, 18 FCC Rcd 25,162, App. 
B (2003), modified by Service Rules for Advanced Wireless Services 
In the 1.7 GHz and 2.1 GHz Bands, Order on Reconsideration, 20 FCC 
Rcd 14,058, App. C (2005).
    \121\ See Auction of Advanced Wireless Services Licenses Closes; 
Winning Bidders Announced for Auction No. 66, Public Notice, 21 FCC 
Rcd 10,521 (2006) (``Auction 66 Closing Public Notice'')
    \122\ See id.
    \123\ See AWS-1 and Broadband PCS Procedures Public Notice, 23 
FCC Rcd at 7499. Auction 78 also included an auction of broadband 
PCS licenses.
    \124\ See ``Auction of AWS-1 and Broadband PCS Licenses Closes, 
Winning Bidders Announced for Auction 78, Down Payments Due 
September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008, 
Final Payments Due September 23, 2008, Ten-Day Petition to Deny 
Period'', Public Notice, 23 FCC Rcd 12749-65 (2008).
---------------------------------------------------------------------------

    32. Narrowband Personal Communications Services. In 1994, the 
Commission conducted two auctions of Narrowband PCS licenses. For these 
auctions, the Commission defined a ``small business'' as an entity with 
average annual gross revenues for the preceding three years not 
exceeding $40 million.\125\ Through these auctions, the Commission 
awarded a total of 41 licenses, 11 of which were obtained by four small 
businesses.\126\ 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.\127\ 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.\128\ 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.\129\ The SBA has approved 
these small business size standards.\130\ A third auction of Narrowband 
PCS licenses was conducted in 2001. In that auction, five bidders won 
317 (Metropolitan Trading Areas and nationwide) licenses.\131\ Three of 
the winning bidders claimed status as a small or very small entity and 
won 311 licenses.
---------------------------------------------------------------------------

    \125\ 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).
    \126\ See ``Announcing the High Bidders in the Auction of ten 
Nationwide Narrowband PCS Licenses, Winning Bids Total 
$617,006,674,'' Public Notice, PNWL 94-004 (released 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 (released Nov. 9, 1994).
    \127\ 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) (``Narrowband PCS Second Report and 
Order'').
    \128\ Narrowband PCS Second Report and Order, 15 FCC Rcd at 
10476, para. 40.
    \129\ Id.
    \130\ See Alvarez Letter 1998.
    \131\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16 
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------

    33. Lower 700 MHz Band Licenses. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits.\132\ The Commission 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.\133\ 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.\134\ Additionally, the Lower 700 MHz Service had 
a third category of small business status for Metropolitan/Rural 
Service Area (``MSA/RSA'') licenses--``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.\135\ The SBA approved these 
small size standards.\136\ An auction of 740 licenses was conducted in 
2002 (one license in each of the 734 MSAs/RSAs and one license in each 
of the six Economic Area Groupings (EAGs)). Of the 740 licenses 
available for auction, 484 licenses were won by 102 winning bidders. 
Seventy-two of the winning bidders claimed small business, very small 
business, or entrepreneur status and won a total of

[[Page 29296]]

329 licenses.\137\ A second auction commenced on May 28, 2003, closed 
on June 13, 2003, and included 256 licenses.\138\ 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.\139\ In 2005, the Commission completed an auction of 5 
licenses in the lower 700 MHz band (Auction 60). All three winning 
bidders claimed small business status.
---------------------------------------------------------------------------

    \132\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002) (``Channels 52-59 Report and Order'').
    \133\ See Channels 52-59 Report and Order, 17 FCC Rcd at 1087-
88, para. 172.
    \134\ See id.
    \135\ See id, 17 FCC Rcd at 1088, para. 173.
    \136\ See Letter from Aida Alvarez, Administrator, SBA, to 
Thomas Sugrue, Chief, WTB, FCC (Aug. 10, 1999) (``Alvarez Letter 
1999'').
    \137\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
17 FCC Rcd 17272 (WTB 2002).
    \138\ See Lower 700 MHz Band Auction Closes, Public Notice, 18 
FCC Rcd 11,873 (WTB 2003).
    \139\ See id.
---------------------------------------------------------------------------

    34. In 2007, the Commission reexamined its rules governing the 700 
MHz band in the 700 MHz Second Report and Order.\140\ An auction of A, 
B and E block licenses in the Lower 700 MHz band was held in 2008.\141\ 
Twenty winning bidders claimed small business status (those with 
attributable average annual gross revenues that exceed $15 million and 
do not exceed $40 million for the preceding three years). Thirty three 
winning bidders claimed very small business status (those with 
attributable average annual gross revenues that do not exceed $15 
million for the preceding three years).
---------------------------------------------------------------------------

    \140\ Service Rules for the 698-746, 747-762 and 777-792 MHz 
Band, WT Docket No. 06-150, Revision of the Commission's Rules to 
Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC 
Docket No. 94-102, Section 68.4(a) of the Commission's Rules 
Governing Hearing Aid-Compatible Telephone, WT Docket No. 01-309, 
Biennial Regulatory Review--Amendment of Parts 1, 22, 24, 27, and 90 
to Streamline and Harmonize Various Rules Affecting Wireless Radio 
Services, WT Docket No. 03-264, Former Nextel Communications, Inc. 
Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the 
Commission's Rules, WT Docket No. 06-169, Implementing a Nationwide, 
Broadband Interoperable Public Safety Network in the 700 MHz Band, 
PS Docket No. 06-229, Development of Operational, Technical and 
Spectrum Requirements for Meeting Federal, State, and Local Public 
Safety Communications Requirements Through the Year 2010, WT Docket 
No. 96-86, Second Report and Order, 22 FCC Rcd 15289 (2007) (``700 
MHz Second Report and Order'').
    \141\ See Auction of 700 MHz Band Licenses Closes, Public 
Notice, 23 FCC Rcd 4572 (WTB 2008).
---------------------------------------------------------------------------

    35. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and 
Order, the Commission revised its rules regarding Upper 700 MHz band 
licenses.\142\ In 2008, the Commission conducted Auction 73 in which C 
and D block licenses in the Upper 700 MHz band were available.\143\ 
Three winning bidders claimed very small business status (those with 
attributable average annual gross revenues that do not exceed $15 
million for the preceding three years).
---------------------------------------------------------------------------

    \142\ 700 MHz Second Report and Order, 22 FCC Rcd 15,289.
    \143\ See Auction of 700 MHz Band Licenses Closes, Public 
Notice, 23 FCC Rcd 4572 (2008).
---------------------------------------------------------------------------

    36. 700 MHz Guard Band Licenses. In 2000, the Commission adopted 
the 700 MHz Guard Band Report and Order, in which it established rules 
for the A and B block licenses in the Upper 700 MHz band, including 
size standards for ``small businesses'' and ``very small businesses'' 
for purposes of determining their eligibility for special provisions 
such as bidding credits.\144\ 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.\145\ 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.\146\ SBA approval of these definitions is not 
required.\147\ An auction of these licenses was conducted in 2000.\148\ 
Of the 104 licenses auctioned, 96 licenses were won by 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 was held in 
2001. All eight of the licenses auctioned were sold to three bidders. 
One of these bidders was a small business.\149\
---------------------------------------------------------------------------

    \144\ 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) (``700 MHz Guard Band Report and Order'').
    \145\ See 700 MHz Guard Band Report and Order, 15 FCC Rcd at 
5343, para. 108.
    \146\ See id.
    \147\ See id., 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).
    \148\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
    \149\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

    37. Specialized Mobile Radio. The Commission adopted small business 
size standards for the purpose of determining eligibility for bidding 
credits in auctions of Specialized Mobile Radio (SMR) geographic area 
licenses in the 800 MHz and 900 MHz bands. The Commission defined a 
``small business'' as an entity that, together with its affiliates and 
controlling principals, has average gross revenues not exceeding $15 
million for the preceding three years.\150\ The Commission defined a 
``very small business'' as an entity that together with its affiliates 
and controlling principals, has average gross revenues not exceeding $3 
million for the preceding three years.\151\ The SBA has approved these 
small business size standards for both the 800 MHz and 900 MHz SMR 
Service.\152\ The first 900 MHz SMR auction was completed in 1996. 
Sixty bidders claiming that they qualified as small businesses under 
the $15 million size standard won 263 licenses in the 900 MHz SMR band. 
In 2004, the Commission held a second auction of 900 MHz SMR licenses 
and three winning bidders identifying themselves as very small 
businesses won 7 licenses.\153\ The auction of 800 MHz SMR licenses for 
the upper 200 channels was conducted in 1997. Ten bidders claiming that 
they qualified as small or very small businesses under the $15 million 
size standard won 38 licenses for the upper 200 channels.\154\ A second 
auction of 800 MHz SMR licenses was conducted in 2002 and included 23 
BEA licenses. One bidder claiming small business status won five 
licenses.\155\
---------------------------------------------------------------------------

    \150\ 47 CFR 90.810, 90.814(b), 90.912.
    \151\ 47 CFR 90.810, 90.814(b), 90.912.
    \152\ See Alvarez Letter 1999.
    \153\ See 900 MHz Specialized Mobile Radio Service Spectrum 
Auction Closes: Winning Bidders Announced,'' Public Notice, 19 FCC 
Rcd. 3921 (WTB 2004).
    \154\ 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).
    \155\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    38. The auction of the 1,053 800 MHz SMR licenses for the General 
Category channels was conducted in 2000. Eleven bidders who won 108 
licenses for the General Category channels in the 800 MHz SMR band 
qualified as small or very small businesses.\156\ In an auction 
completed in 2000, a total of 2,800 Economic Area licenses in the lower 
80 channels of the 800 MHz SMR service were awarded.\157\ Of the 22 
winning bidders, 19 claimed small or very small business status and won 
129 licenses. Thus, combining all three auctions, 41 winning bidders 
for geographic licenses in the 800 MHz SMR band claimed to be small 
businesses.
---------------------------------------------------------------------------

    \156\ 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).
    \157\ See, ``800 MHz SMR Service Lower 80 Channels Auction 
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736 
(2000).
---------------------------------------------------------------------------

    39. 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

[[Page 29297]]

or 900 MHz geographic area SMR pursuant to extended implementation 
authorizations, nor how many of these providers have annual revenues 
not exceeding $15 million. One firm has over $15 million in revenues. 
In addition, we do not know how many of these firms have 1500 or fewer 
employees.\158\ 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.
---------------------------------------------------------------------------

    \158\ See generally 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    40. 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 Wireless Telecommunications Carriers 
(except Satellite).\159\ This category provides that a small business 
is a wireless company employing no more than 1,500 persons.\160\ The 
Commission estimates that most such licensees are small businesses 
under the SBA's small business standard.
---------------------------------------------------------------------------

    \159\ Id.
    \160\ Id.
---------------------------------------------------------------------------

    41. 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 
licenses are assigned by auction, where mutually exclusive applications 
are accepted. In the 220 MHz Third Report and Order, the Commission 
adopted small business size standards for defining ``small'' and ``very 
small'' businesses for the purpose of determining their eligibility for 
special provisions such as bidding credits, which are discounts on a 
winning bids.\161\ that the Commission defined a ``small business'' as 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues not exceeding $15 million for 
the preceding three years.\162\ The Commission defined a ``very small 
business'' 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.\163\ The SBA has approved 
these small size standards.\164\ The first auction of Phase II licenses 
was conducted in 1998.\165\ In that auction, 908 licenses were offered 
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.\166\ 
Thirty-nine small or very small businesses won 373 licenses in the 
first 220 MHz auction. A second auction in 1999 offered 225 licenses: 
216 EA licenses and 9 EAG licenses. Fourteen companies claiming very 
small business status won 158 licenses.\167\ 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.\168\ In 2007, the Commission conducted a fourth auction of 
the 220 MHz licenses, designated as Auction 72.\169\ Auction 72 offered 
94 Phase II 220 MHz Service licenses.\170\ In this auction, five 
winning bidders won a total of 76 licenses.\171\ Two winning bidders 
that identified themselves as very small businesses won 56 of the 76 
licenses. One winning bidder that identified itself as a small business 
won 5 licenses.
---------------------------------------------------------------------------

    \161\ 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).
    \162\ Id. at 11068, para. 291.
    \163\ Id.
    \164\ See Letter from Aida Alvarez, Administrator, SBA, to 
Daniel Phythyon, Chief, WTB, FCC (Jan. 6, 1998) (``Alvarez to 
Phythyon Letter 1998'').
    \165\ See generally ``220 MHz Service Auction Closes,'' Public 
Notice, 14 FCC Rcd 605 (1998).
    \166\ 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).
    \167\ See ``Phase II 220 MHz Service Spectrum Auction Closes,'' 
Public Notice, 14 FCC Rcd 11218 (1999).
    \168\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (2002).
    \169\ See ``Auction of Phase II 220 MHz Service Spectrum 
Scheduled for June 20, 2007, Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction 72, 
Public Notice, 22 FCC Rcd 3404 (2007).
    \170\ Id.
    \171\ See ``Auction of Phase II 220 MHz Service Spectrum 
Licenses Closes, Winning Bidders Announced for Auction 72, Down 
Payments due July 18, 2007, FCC Forms 601 and 602 due July 18, 2007, 
Final Payments due August 1, 2007, Ten-Day Petition to Deny Period, 
Public Notice, 22 FCC Rcd 11573 (2007).
---------------------------------------------------------------------------

    42. 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, Wireless Telecommunications Carriers (except 
Satellite). This definition provides that a small entity is any such 
entity employing no more than 1,500 persons.\172\ 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.\173\
---------------------------------------------------------------------------

    \172\ See 13 CFR 121.201, NAICS code 517210.
    \173\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------

    43. As of March 2010, there were 424,162 PLMR licensees operating 
921,909 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 any revised rules in this context could therefore 
potentially impact small entities covering a great variety of 
industries.
    44. Fixed Microwave Services. Fixed microwave services include 
common carrier,\174\ private operational-fixed,\175\ and broadcast 
auxiliary radio services.\176\ At present, there are approximately 
22,015 common carrier fixed licensees and 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the 
microwave services. The Commission has not created a size standard for 
a small business specifically with respect to fixed

[[Page 29298]]

microwave services. For purposes of this analysis, the Commission uses 
the SBA small business size standard for the category Wireless 
Telecommunications Carriers (except Satellite), which is 1,500 or fewer 
employees.\177\ 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.
---------------------------------------------------------------------------

    \174\ See 47 CFR 101 et seq. for common carrier fixed microwave 
services (except Multipoint Distribution Service).
    \175\ 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.
    \176\ 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.
    \177\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    45. 39 GHz Service. The Commission adopted small business size 
standards for 39 GHz licenses. A ``small business'' is defined as an 
entity that, together with its affiliates and controlling principals, 
has average gross revenues not exceeding $40 million in the preceding 
three years.\178\ A ``very small business'' is defined as an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues of not more than $15 million for the preceding 
three years.\179\ The SBA has approved these small business size 
standards.\180\ In 2000, the Commission conducted an auction of 2,173, 
39 GHz licenses. A total of 18 bidders who claimed small or very small 
business status won 849 licenses.
---------------------------------------------------------------------------

    \178\ 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).
    \179\ Id.
    \180\ See Letter from Aida Alvarez, Administrator, SBA, to 
Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis 
Division, WTB, FCC (Feb. 4, 1998); see Letter from Hector Barreto, 
Administrator, SBA, to Margaret Wiener, Chief, Auctions and Industry 
Analysis Division, WTB, FCC (Jan. 18, 2002).
---------------------------------------------------------------------------

    46. 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.\181\ The Commission established small business size 
standards for LMDS licenses. It defined a ``small business'' as an 
entity that has average gross revenues of not more than $40 million in 
the three preceding years and defined a ``very small business'' as an 
entity that, together with its affiliates, has average gross revenues 
of not more than $15 million for the three preceding years.\182\ The 
SBA approved these small business size standards for auctions of LMDS 
licenses.\183\ In 1998, an auction of 986 LMDS licenses was conducted. 
A total of 93 winning bidders that qualified as small or very small 
businesses won approximately 664 licenses. In 1999, the Commission 
conducted an auction of 161 LMDS licenses. and in this auction, 32 
small and very small businesses won 119 licenses.
---------------------------------------------------------------------------

    \181\ 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) (``LMDS Second Report and 
Order'').
    \182\ See LMDS Second Report and Order, 12 FCC Rcd at 12689-90, 
para. 348.
    \183\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------

    47. 218-219 MHz Service. The first auction of 218-219 MHz Service 
(previously referred to as the Interactive and Video Data Service or 
IVDS) licenses resulted in 178 entities winning licenses for 594 
Metropolitan Statistical Areas (``MSAs'').\184\ Of the 594 licenses, 
567 were won by 167 entities qualifying as a small business. For that 
auction, the Commission 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.\185\ In the 218-219 MHz Report and Order and Memorandum 
Opinion and Order, the Commission revised its small business size 
standards for the 218-219 MHz Service and 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.\186\ The Commission defined a very small business 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.\187\ The SBA has approved these definitions.\188\
---------------------------------------------------------------------------

    \184\ See ``Interactive Video and Data Service (IVDS) 
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227 
(1994).
    \185\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330 
(1994).
    \186\ 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).
    \187\ Id.
    \188\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------

    48. Location and Monitoring Service (``LMS''). Multilateration LMS 
systems use non-voice radio techniques to determine the location and 
status of mobile radio units. For auctions of LMS licenses, the 
Commission has defined a ``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.\189\ 
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.\190\ These 
definitions have been approved by the SBA.\191\ An auction of LMS 
licenses was conducted in 1999. Of the 528 licenses auctioned, 289 
licenses were sold to four small businesses.
---------------------------------------------------------------------------

    \189\ 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) (``Automatic 
Vehicle Monitoring Systems Second Report and Order''); see also 47 
CFR 90.1103.
    \190\ Automatic Vehicle Monitoring Systems Second Report and 
Order, 13 FCC Rcd at 15192, para. 20; see also 47 CFR 90.1103.
    \191\ See Alvarez Letter 1998.
---------------------------------------------------------------------------

    49. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\192\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (``BETRS'').\193\ In the 
present context, we will use the SBA's small business size standard 
applicable to Wireless Telecommunications Carriers (except Satellite), 
i.e., an entity employing no more than 1,500 persons.\194\ 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 
our action.
---------------------------------------------------------------------------

    \192\ The service is defined in 22.99 of the Commission's rules, 
47 CFR 22.99.
    \193\ BETRS is defined in 22.757 and 22.759 of the Commission's 
rules, 47 CFR 22.757 and 22.759.
    \194\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    50. Air-Ground Radiotelephone Service.\195\ The Commission has 
previously used the SBA's small business definition applicable to 
Wireless Telecommunications Carriers (except Satellite), i.e., an 
entity employing no more than 1,500 persons.\196\ There are 
approximately 100

[[Page 29299]]

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 purposes 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.\197\ 
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.\198\ These 
definitions were approved by the SBA.\199\ In 2006, the Commission 
completed an auction of nationwide commercial Air-Ground Radiotelephone 
Service licenses in the 800 MHz band (Auction 65). The auction closed 
with two winning bidders winning two Air-Ground Radiotelephone Services 
licenses. Neither of the winning bidders claimed small business status.
---------------------------------------------------------------------------

    \195\ The service is defined in 22.99 of the Commission's rules, 
47 CFR 22.99.
    \196\ 13 CFR 121.201, NAICS codes 517210.
    \197\ 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 through 42 (2005).
    \198\ Id.
    \199\ See Letter from Hector V. Barreto, Administrator, SBA, to 
Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access 
Division, WTB, FCC (Sept. 19, 2005).
---------------------------------------------------------------------------

    51. Aviation and Marine Radio Services. There are approximately 
26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast) 
licensees.\200\ The Commission has not developed a small business size 
standard specifically applicable to all licensees. For purposes of this 
analysis, we will use the SBA small business size standard for the 
category Wireless Telecommunications Carriers (except Satellite), which 
is 1,500 or fewer employees.\201\ We are unable to determine how many 
of those licensed fall under this standard. For purposes of our 
evaluations in this analysis, we estimate that there are up to 
approximately 62,969 licensees that are small businesses under the SBA 
standard.\202\ In 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 VHF Public Coast 
licenses, 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 exceeding $15 million 
dollars. In addition, it defined a ``very small'' business as one that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not exceeding $3 million 
dollars.\203\ The Commission also made available Automated Maritime 
Telecommunications System (``AMTS'') licenses in Auctions 57 and 
61.\204\ Winning bidders could claim status as a very small business or 
a very small business. For AMTS, the Commission defined a very small 
business as an entity with attributed average annual gross revenues 
that do not exceed $3 million for the preceding three years, and 
defined a small business as an entity with attributed average annual 
gross revenues not exceeding $15 million for the preceding three 
years.\205\ Three of the winning bidders in Auction 57 qualified as 
small or very small businesses, and three winning bidders in Auction 61 
qualified as very small businesses.
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    \200\ Vessels that are not required by law to carry a radio and 
do not make international voyages or communications are not required 
to obtain an individual license. See Amendment of Parts 80 and 87 of 
the Commission's Rules to Permit Operation of Certain Domestic Ship 
and Aircraft Radio Stations Without Individual Licenses, Report and 
Order, WT Docket No. 96-82, 11 FCC Rcd 14849 (1996).
    \201\ 13 CFR 121.201, NAICS code 517210.
    \202\ A licensee may have a license in more than one category.
    \203\ 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).
    \204\ See ``Automated Maritime Telecommunications System 
Spectrum Auction Scheduled for September 15, 2004, Notice and Filing 
Requirements, Minimum Opening Bids, Upfront Payments and Other 
Auction Procedures,'' Public Notice, 19 FCC Rcd 9518 (WTB 2004); 
``Auction of Automated Maritime Telecommunications System Licenses 
Scheduled for August 3, 2005, Notice and Filing Requirements, 
Minimum Opening Bids, Upfront Payments and Other Auction Procedures 
for Auction No. 61,'' Public Notice, 20 FCC Rcd 7811 (WTB 2005).
    \205\ 47 CFR 80.1252.
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    52. 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.\206\ There is presently 1 licensee 
in this service. We do not have information whether that licensee would 
qualify as small under the SBA's small business size standard for 
Wireless Telecommunications Carriers (except Satellite) services.\207\ 
Under that SBA small business size standard, a business is small if it 
has 1,500 or fewer employees.\208\
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    \206\ This service is governed by Subpart I of Part 22 of the 
Commission's rules. See 47 CFR 22.1001-22.1037.
    \207\ 13 CFR 121.201, NAICS code 517210.
    \208\ Id.
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    53. 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. The Commission defines a small business for MAS 
licenses as an entity that has average gross revenues of less than $15 
million in the preceding three calendar years.\209\ A 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.\210\ The SBA has approved these 
definitions.\211\ 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 March 5, 2010, 
there were over 11,500 MAS station authorizations. In 2001, an auction 
of 5,104 MAS licenses in 176 EAs was conducted in 2001.\212\ Seven 
winning bidders claimed status as small or very small businesses and 
won 611 licenses. In 2005, the Commission completed an auction (Auction 
59) of 4,226 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.
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    \209\ See Amendment of the Commission's Rules Regarding Multiple 
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, para. 
123 (2000).
    \210\ Id.
    \211\ See Alvarez Letter 1999.
    \212\ See ``Multiple Address Systems Spectrum Auction Closes,'' 
Public Notice, 16 FCC Rcd 21011 (2001).
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    54. With respect to 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

[[Page 29300]]

that of Wireless Telecommunications Carriers (except Satellite). This 
definition provides that a small entity is any such entity employing no 
more than 1,500 persons.\213\ 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.
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    \213\ See 13 CFR 121.201, NAICS code 517210.
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    55. 1.4 GHz Band Licensees. The Commission conducted an auction of 
64 1.4 GHz band licenses in the paired 1392-1395 MHz and 1432-1435 MHz 
bands, and in the unpaired 1390-1392 MHz band in 2007.\214\ For these 
licenses, the Commission defined ``small business'' as an entity that, 
together with its affiliates and controlling interests, had average 
gross revenues not exceeding $40 million for the preceding three years, 
and a ``very small business'' as an entity that, together with its 
affiliates and controlling interests, has had average annual gross 
revenues not exceeding $15 million for the preceding three years.\215\ 
Neither of the two winning bidders claimed small business status.\216\
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    \214\ See ``Auction of 1.4 GHz Bands Licenses Scheduled for 
February 7, 2007,'' Public Notice, 21 FCC Rcd 12393 (WTB 2006); 
``Auction of 1.4 GHz Band Licenses Closes; Winning Bidders Announced 
for Auction No. 69,'' Public Notice, 22 FCC Rcd 4714 (2007) 
(``Auction No. 69 Closing PN'').
    \215\ Auction No. 69 Closing PN, Attachment C.
    \216\ See Auction No. 69 Closing PN.
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    56. 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 Wireless 
Telecommunications Carriers (except Satellite). This category provides 
that such a company is small if it employs no more than 1,500 
persons.\217\ The 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 \218\ 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.
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    \217\ 13 CFR 121.201, NAICS code 517210.
    \218\ 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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    57. Future 24 GHz Licensees. With respect to new applicants for 
licenses in the 24 GHz band, for the purpose of determining eligibility 
for bidding credits, the Commission established three small business 
definitions. An ``entrepreneur'' is defined as an entity that, together 
with controlling interests and affiliates, has average annual gross 
revenues for the three preceding years not exceeding $40 million.\219\ 
A ``small business'' is defined as an entity that, together with 
controlling interests and affiliates, has average annual gross revenues 
for the three preceding years not exceeding $15 million.\220\ A ``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.\221\ 
The SBA has approved these definitions.\222\ In a 2004 auction of 24 
GHz licenses, three winning bidders won seven licenses. Two of the 
winning bidders were very small businesses that won five licenses.
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    \219\ 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)(3).
    \220\ 24 GHz Report and Order, 15 FCC Rcd at 16967 para. 77; see 
also 47 CFR 101.538(a)(2).
    \221\ 24 GHz Report and Order, 15 FCC Rcd at 16967 para. 77; see 
also 47 CFR 101.538(a)(1).
    \222\ See Letter from Gary M. Jackson, Assistant Administrator, 
SBA, to Margaret W. Wiener, Deputy Chief, Auctions and Industry 
Analysis Division, WTB, FCC (July 28, 2000).
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    58. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (``MDS'') and Multichannel Multipoint Distribution 
Service (``MMDS'') systems, provide two-way high speed data operations 
using the microwave frequencies of the Broadband Radio Service 
(``BRS'') and Educational Broadband Service (``EBS'') (previously 
referred to as the Instructional Television Fixed Service 
(``ITFS'')).\223\ Some BRS systems, known as ``wireless cable'', 
transmit video programming to subscribers. In connection with the 1996 
BRS auction, the Commission established a size standard that defined a 
``small business'' as an entity that had annual average gross revenues 
of no more than $40 million in the preceding three years.\224\ The BRS 
auctions resulted in 67 successful bidders obtaining licensing 
opportunities for 493 Basic Trading Areas (``BTAs''). Of the 67 winning 
bidders, 61 met the definition of a small business. At this time, we 
estimate that of the 61 small businesses that won BRS licenses in the 
1996 auction, 48 remain small business licensees. BRS also includes 
licensees of stations authorized prior to the 1996 auction. In addition 
to the 48 small businesses that hold BTA authorizations, there are 
approximately 392 incumbent BRS licensees that are considered small 
entities.\225\ In 2008, the Commission adopted three small business 
definitions for BRS, for the purpose of determining eligibility for 
bidding credits. A ``small business'' is defined as an entity with 
attributed average annual gross revenues that do not exceed $40 million 
for the preceding three years. A ``very small business'' is defined as 
an entity with attributed average annual gross revenues that do not 
exceed $15 million for the preceding three years. An ``entrepreneur'' 
is defined as an entity with attributed average annual gross revenues 
that do not exceed $3 million for the preceding three years.\226\ In 
2009, the Commission conducted Auction 86, which offered 78 BRS 
licenses.\227\ Auction 86 concluded with the sale of 61 licenses.\228\ 
Of the ten winning bidders, three bidders that claimed small business 
status won 7 licenses, and two bidders that claimed entrepreneur status 
won six licenses. After adding the number of small businesses that won 
licenses in the Commission's BRS auctions to the approximately 392 
incumbent BRS licensees who are considered small entities, we estimate 
that there are currently approximately 445 BRS licensees that are 
defined as small businesses under either the SBA or the Commission's 
rules.
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    \223\ 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, MM Docket No. 94-131 and PP Docket No. 93-253, 
Report and Order, 10 FCC Rcd 9589, 9593, para. 7 (1995) (``MDS 
Auction R&O'').
    \224\ 47 CFR 21.961(b)(1).
    \225\ 47 U.S.C. 309(j). Hundreds of stations were licensed to 
incumbent MDS licensees prior to implementation of Section 309(j) of 
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-
auction licenses, the applicable standard is SBA's small business 
size standard.
    \226\ 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, WT Docket No. 03-66, Fourth 
Memorandum Opinion and Order and Second Further Notice of Proposed 
Rulemaking, 23 FCC Rcd 5992, 6007 para. 28 (2008) (``BRS/EBS 4th 
MO&O & 2nd FNPRM'').
    \227\ Auction of Broadband Radio Service (BRS) Licenses, 
Scheduled for October 27, 2009, Notice and Filing Requirements, 
Minimum Opening Bids, Upfront Payments, and Other Procedures for 
Auction 86, Public Notice, 24 FCC Rcd 8277 (2009).
    \228\ Auction of Broadband Radio Service Licenses Closes, 
Winning Bidders Announced for Auction 86, Down Payments Due November 
23, 2009, Final Payments Due December 8, 2009, Ten-Day Petition to 
Deny Period, Public Notice, 24 FCC Rcd 13572 (2009).
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    59. Television Broadcasting. This Economic Census category 
``comprises

[[Page 29301]]

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.'' \229\ The SBA has created the following small business size 
standard for Television Broadcasting firms: those having $14 million or 
less in annual receipts.\230\ The Commission has estimated the number 
of licensed commercial television stations to be 1,387.\231\ In 
addition, according to Commission staff review of the BIA Advisory 
Services, LLC's Media Access Pro Television Database on March 28, 2012, 
about 950 of an estimated 1,300 commercial television stations (or 
approximately 73 percent) had revenues of $14 million or less.\232\ We 
therefore estimate that the majority of commercial television 
broadcasters are small entities.
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    \229\ U.S. Census Bureau, 2007 NAICS Definitions, ``515120 
Television Broadcasting'' (partial definition); http://www.census.gov/naics/2007/def/ND515120.HTM#N515120.
    \230\ 13 CFR 121.201, NAICS code 515120 (updated for inflation 
in 2010).
    \231\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 6, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf.
    \232\ We recognize that BIA's estimate differs slightly from the 
FCC total given supra.
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    60. We note, however, that in assessing whether a business concern 
qualifies as small under the above definition, business (control) 
affiliations \233\ 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. 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 
does not exclude any television station from the definition of a small 
business on this basis and is therefore possibly over-inclusive to that 
extent.
---------------------------------------------------------------------------

    \233\ ``[Business 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).
---------------------------------------------------------------------------

    61. In addition, the Commission has estimated the number of 
licensed noncommercial educational (NCE) television stations to be 
396.\234\ These stations are non-profit, and therefore considered to be 
small entities.\235\
---------------------------------------------------------------------------

    \234\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 6, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf.
    \235\ See generally 5 U.S.C. 601(4), (6).
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    62. In addition, there are also 2,528 low power television 
stations, including Class A stations (LPTV).\236\ Given the nature of 
these services, we will presume that all LPTV licensees qualify as 
small entities under the above SBA small business size standard.
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    \236\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 6, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf.
---------------------------------------------------------------------------

    63. Radio Broadcasting. This Economic Census category ``comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public. Programming may originate in their own studio, 
from an affiliated network, or from external sources.'' \237\ The SBA 
has established a small business size standard for this category, which 
is: Such firms having $7 million or less in annual receipts.\238\ 
According to Commission staff review of BIA Advisory Services, LLC's 
Media Access Pro Radio Database on March 28, 2012, about 10,759 (97%) 
of 11,102 commercial radio stations had revenues of $7 million or less. 
Therefore, the majority of such entities are small entities.
---------------------------------------------------------------------------

    \237\ U.S. Census Bureau, 2007 NAICS Definitions, ``515112 Radio 
Stations''; http://www.census.gov/naics/2007/def/ND515112.HTM#N515112.
    \238\ 13 CFR 121.201, NAICS code 515112 (updated for inflation 
in 2010).
---------------------------------------------------------------------------

    64. We note, however, that in assessing whether a business concern 
qualifies as small under the above size standard, business affiliations 
must be included.\239\ In addition, to be determined to be a ``small 
business,'' the entity may not be dominant in its field of 
operation.\240\ We note that it is difficult at times to assess these 
criteria in the context of media entities, and our estimate of small 
businesses may therefore be over-inclusive.
---------------------------------------------------------------------------

    \239\ ``Concerns and entities are affiliates of each other when 
one controls or has the power to control the other, or a third party 
or parties controls or has the power to control both. It does not 
matter whether control is exercised, so long as the power to control 
exists.'' 13 CFR 121.103(a)(1) (an SBA regulation).
    \240\ 13 CFR 121.102(b) (an SBA regulation).
---------------------------------------------------------------------------

    65. 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.\241\
---------------------------------------------------------------------------

    \241\ 13 CFR 121.201, NAICS codes 515112 and 515120.
---------------------------------------------------------------------------

    66. The Commission estimates that there are approximately 6,099 FM 
translators and boosters.\242\ 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 ($7.0 million for a 
radio station or $14.0 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. \243\
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    \242\ See supra note 294.
    \243\ See 15 U.S.C. 632.
---------------------------------------------------------------------------

    67. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' \244\ The SBA has developed a small business size 
standard for this category, which is: All such firms having 1,500 or 
fewer employees. To gauge small business prevalence for these cable 
services we must, however, use current census data that are based on 
the previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: All such firms having 
$13.5 million or less in annual receipts.\245\ According to Census 
Bureau

[[Page 29302]]

data for 2002, there were a total of 1,191 firms in this previous 
category that operated for the entire year.\246\ 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.\247\ Thus, 
the majority of these firms can be considered small.
---------------------------------------------------------------------------

    \244\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \245\ 13 CFR 121.201, NAICS code 517110.
    \246\ 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).
    \247\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    68. 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.\248\ Industry 
data indicate that, of 1,076 cable operators nationwide, all but eleven 
are small under this size standard.\249\ In addition, under the 
Commission's rules, a ``small system'' is a cable system serving 15,000 
or fewer subscribers.\250\ Industry data indicate that, of 6,635 
systems nationwide, 5,802 systems have under 10,000 subscribers, and an 
additional 302 systems have 10,000-19,999 subscribers.\251\ Thus, under 
this second size standard, most cable systems are small.
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    \248\ 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).
    \249\ 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.
    \250\ 47 CFR 76.901(c).
    \251\ Warren Communications News, Television & Cable Factbook 
2008, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data 
current as of Oct. 2007). The data do not include 851 systems for 
which classifying data were not available.
---------------------------------------------------------------------------

    69. 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.'' \252\ 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.\253\ Industry data indicate that, of 1,076 cable operators 
nationwide, all but ten are small under this size standard.\254\ 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,\255\ 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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    \252\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
    \253\ 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).
    \254\ 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.
    \255\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's 
finding that the operator does not qualify as a small cable operator 
pursuant to section 76.901(f) of the Commission's rules. See 47 CFR 
76.909(b).
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    70. Open Video Systems. The open video system (``OVS'') framework 
was established in 1996, and is one of four statutorily recognized 
options for the provision of video programming services by local 
exchange carriers.\256\ The OVS framework provides opportunities for 
the distribution of video programming other than through cable systems. 
Because OVS operators provide subscription services,\257\ OVS falls 
within the SBA small business size standard covering cable services, 
which is ``Wired Telecommunications Carriers.'' \258\ The SBA has 
developed a small business size standard for this category, which is: 
All such firms having 1,500 or fewer employees. To gauge small business 
prevalence for such services we must, however, use current census data 
that are based on the previous category of Cable and Other Program 
Distribution and its associated size standard; that size standard was: 
All such firms having $13.5 million or less in annual receipts.\259\ 
According to Census Bureau data for 2002, there were a total of 1,191 
firms in this previous category that operated for the entire year.\260\ 
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.\261\ Thus, the majority of cable firms can be considered 
small. In addition, we note that the Commission has certified some OVS 
operators, with some now providing service.\262\ Broadband service 
providers (``BSPs'') are currently the only significant holders of OVS 
certifications or local OVS franchises.\263\ The Commission does not 
have financial or employment information regarding the entities 
authorized to provide OVS, some of which may not yet be operational. 
Thus, again, at least some of the OVS operators may qualify as small 
entities.
---------------------------------------------------------------------------

    \256\ 47 U.S.C. 571(a)(3)-(4). See Annual Assessment of the 
Status of Competition in the Market for the Delivery of Video 
Programming, Thirteenth Annual Report, 24 FCC Rcd 542, 606 para. 135 
(2009) (``Thirteenth Annual Cable Competition Report'').
    \257\ See 47 U.S.C. 573.
    \258\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \259\ 13 CFR 121.201, NAICS code 517110.
    \260\ 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).
    \261\ Id. An additional 61 firms had annual receipts of $25 
million or more.
    \262\ A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
    \263\ See Thirteenth Annual Cable Competition Report, 24 FCC Rcd 
at 606-07 para. 135. BSPs are newer firms that are building state-
of-the-art, facilities-based networks to provide video, voice, and 
data services over a single network.
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    71. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. This cable service is defined 
within the broad economic census category of Wired Telecommunications 
Carriers; that category is defined as follows: ``This industry 
comprises establishments primarily engaged in operating and/or 
providing access to transmission facilities and infrastructure that 
they own and/or lease for the transmission of voice, data, text, sound, 
and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' \264\ The SBA has developed a small business size 
standard for this category, which is: All such firms having 1,500 or 
fewer employees. To gauge small business prevalence for cable services 
we must, however, use current census data that are based on the 
previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: All such firms having 
$13.5 million or less in annual receipts.\265\ According to Census 
Bureau data for 2002, there were a total of 1,191 firms in this 
previous category that

[[Page 29303]]

operated for the entire year.\266\ 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.\267\ Thus, the majority of 
these firms can be considered small.
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    \264\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \265\ 13 CFR 121.201, NAICS code 517110.
    \266\ 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).
    \267\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    72. 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 defines 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.\268\ These definitions were approved by the SBA.\269\ On January 
27, 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.\270\ 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.\271\
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    \268\ 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 Broadcast 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).
    \269\ See Letter from Hector V. Barreto, Administrator, U.S. 
Small Business Administration, to Margaret W. Wiener, Chief, 
Auctions and Industry Analysis Division, WTB, FCC (Feb.13, 2002).
    \270\ See ``Multichannel Video Distribution and Data Service 
Auction Closes,'' Public Notice, 19 FCC Rcd 1834 (2004).
    \271\ 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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    73. Amateur Radio Service. These licensees are held by individuals 
in a noncommercial capacity; these licensees are not small entities.
    74. 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 Wireless Telecommunications Carriers (except Satellite), 
which is 1,500 or fewer employees.\272\ 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 VHF Public Coast licenses, the Commission defines 
a ``small'' business as an entity that, together with controlling 
interests and affiliates, has average gross revenues for the preceding 
three years not to exceed $15 million. In addition, a ``very small'' 
business is defined as an entity that, together with controlling 
interests and affiliates, has average gross revenues for the preceding 
three years not to exceed $3 million.\273\ 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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    \272\ 13 CFR 121.201, NAICS code 517210.
    \273\ Amendment of the Commission's Rules Concerning Maritime 
Communications, Third Report and Order and Memorandum Opinion and 
Order, 13 FCC Rcd 19853 (1998).
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    75. 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.\274\ 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'').\275\ 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 Wireless Telecommunications 
Carriers (except Satellite), pursuant to which a small entity is 
defined as employing 1,500 or fewer persons.\276\ 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 our action.
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    \274\ 47 CFR Part 90.
    \275\ 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.
    \276\ 13 CFR 121.201, NAICS Code 517210.
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    76. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.\277\

[[Page 29304]]

There are a total of approximately 127,540 licensees in these services. 
Governmental entities \278\ 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.\279\
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    \277\ 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 through 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 through 90.55.
    \278\ 47 CFR 1.1162.
    \279\ 5 U.S.C. 601(5).
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    77. Internet Service Providers. The 2007 Economic Census places 
these firms, whose services might include voice over Internet protocol 
(VoIP), in either of two categories, depending on whether the service 
is provided over the provider's own telecommunications connections 
(e.g. cable and DSL, ISPs), or over client-supplied telecommunications 
connections (e.g. dial-up ISPs). The former are within the category of 
Wired Telecommunications Carriers,\280\ which has an SBA small business 
size standard of 1,500 or fewer employees.\281\ The latter are within 
the category of All Other Telecommunications,\282\ which has a size 
standard of annual receipts of $25 million or less.\283\ The most 
current Census Bureau data for all such firms, however, are the 2002 
data for the previous census category called Internet Service 
Providers.\284\ That category had a small business size standard of $21 
million or less in annual receipts, which was revised in late 2005 to 
$23 million. The 2002 data show that there were 2,529 such firms that 
operated for the entire year.\285\ Of those, 2,437 firms had annual 
receipts of under $10 million, and an additional 47 firms had receipts 
of between $10 million and $24,999,999.\286\ Consequently, we estimate 
that the majority of ISP firms are small entities.
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    \280\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'', http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \281\ 13 CFR 121.201, NAICS code 517110 (updated for inflation 
in 2008).
    \282\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All 
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
    \283\ 13 CFR 121.201, NAICS code 517919 (updated for inflation 
in 2008).
    \284\ U.S. Census Bureau, ``2002 NAICS Definitions, ``518111 
Internet Service Providers''; http://www.census.gov/eped/naics02/def/NDEF518.HTM.
    \285\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 518111 (issued Nov. 2005).
    \286\ An additional 45 firms had receipts of $25 million or 
more.
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    78. The ISP industry has changed dramatically since 2002. The 2002 
data cited above may therefore include entities that no longer provide 
Internet access service and may exclude entities that now provide such 
service. To ensure that this (IRFA/FRFA) describes the universe of 
small entities that our action might affect, we discuss in turn several 
different types of entities that might be providing Internet access 
service.
    79. We note that, although we have no specific information on the 
number of small entities that provide Internet access service over 
unlicensed spectrum, we include these entities in our IRFA/FRFA.

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

    80. 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, and pay a regulatory fee based on the number of 
licenses or call signs.\287\ In some instances, licensees may decide to 
submit an FCC Form 159 Remittance Advice. Interstate telephone service 
providers must compute their annual regulatory fee based on their 
interstate and international end-user revenue using information they 
already supply to the Commission in compliance with the Form 499-A, 
Telecommunications Reporting Worksheet. 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. 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 submit a 
regulatory fee payment, and it can be completed by the employees 
responsible for an entity's business records.
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    \287\ See 47 CFR 1.1162 for the general exemptions from 
regulatory fees. E.g., 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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    81. As discussed previously in this Notice of Proposed Rulemaking, 
the Commission concluded in its FY 2009 regulatory fee cycle that 
licensees filing their annual regulatory fee payments must begin the 
process by entering the Commission's Fee Filer system with a valid FRN 
and password. In some instances, it will be necessary to use a specific 
FRN and password that is linked to a particular regulatory fee bill. 
Going forward, the submission of hardcopy Form 159 documents will not 
be permitted for making a regulatory fee payment during the regulatory 
fee cycle. By requiring licensees to use Fee Filer to begin the 
regulatory fee payment process, errors resulting from illegible 
handwriting on hardcopy Form 159's will be reduced, and the Commission 
will be able to create an electronic record of licensee payment 
attributes that are more easily traceable than payments that were 
previously mailed in with a hardcopy Form 159.
    82. 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.\288\ If payment is not received, new or pending 
applications may be dismissed, and existing authorizations may be 
subject to rescission.\289\ Further, in accordance with the DCIA, 
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.\290\ Nonpayment of 
regulatory fees is a debt owed to 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

[[Page 29305]]

entity being denied a federal loan or loan guarantee pending before 
another federal agency until such obligations are paid.\291\
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    \288\ 47 CFR 1.1164.
    \289\ 47 CFR 1.1164(c).
    \290\ Public Law 104-134, 110 Stat. 1321 (1996).
    \291\ 31 U.S.C. 7701(c)(2)(B).
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    83. 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.\292\ 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 (e.g. 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.
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    \292\ 47 CFR 1.1166.
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X. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    84. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its approach, which may 
include the following four alternatives, among others: (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.\293\ In this NPRM, we seek 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.
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    \293\ 5 U.S.C. 603.
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    85. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. Also, waiver procedures provide regulatees, 
including small entity regulatees, relief in exceptional circumstances. 
We note that small entities should be assisted by our implementation of 
the Fee Filer program, and that we have continued our practice of 
exempting fees whose total sum owed is less than $10.00.

XI. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    None.

XII. Ordering Clauses

    38. 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.
    39. 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 U.S. Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-11890 Filed 5-16-12; 8:45 am]
BILLING CODE 6712-01-P