[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Proposed Rules]
[Pages 34612-34634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13679]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket Nos. 12-201, 13-140, 08-65; FCC 13-74]


Assessment and Collection of Regulatory Fees for Fiscal Year 
2013; Procedures for Assessment and Collection of Regulatory Fees; and 
Assessment and Collection of Regulatory Fees for Fiscal Year 2008

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Federal Communications Commission 
(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 2013. Section 9 of the 
Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees, respectively, for annual 
``Mandatory Adjustments'' and ``Permitted Amendments'' to the Schedule 
of Regulatory Fees.

DATES: Submit comments on or before June 19, 2013, and reply comments 
on or before June 26, 2013.

ADDRESSES: You may submit comments, identified by MD Docket No. 13-140, 
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. 13-140 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 13-74, MD Docket No. 13-140, adopted 
on May 22, 2013 and released May 23, 2013. 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. The Notice of Proposed Rulemaking (FY 2013 NPRM) and Further 
Notice of Proposed Rulemaking (FNPRM) shall be treated as a ``permit-
but-disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making ex parte presentations must file a copy of any 
written presentation or a memorandum summarizing any oral presentation 
within two business days after the presentation (unless a different 
deadline applicable to the Sunshine period applies). Persons making 
oral ex parte presentations are reminded that memoranda summarizing the 
presentation must list all persons attending or otherwise participating 
in the meeting at which the ex parte presentation was made, and 
summarize all data presented and arguments made during the 
presentation. If the presentation consisted in whole or in part of the 
presentation of data or arguments already reflected in the presenter's 
written comments, memoranda, or other filings in the proceeding, the 
presenter may provide citations to such data or arguments in his or her 
prior comments, memoranda, or other filings (specifying the relevant 
page and/or paragraph numbers where such data or arguments can be 
found) in lieu of summarizing them in the memorandum. Documents shown 
or given to Commission staff during ex parte meetings are deemed to be 
written ex parte presentations and must be filed consistent with Sec.  
1.1206(b). In proceedings governed by Sec.  1.49(f) or for which the 
Commission has made available a method of electronic filing, written ex 
parte presentations and memoranda summarizing oral ex parte 
presentations, and all attachments thereto, must be filed through the 
electronic comment filing system available for that proceeding, and 
must be filed in their native format (e.g., .doc, .xml, .ppt, 
searchable .pdf). Participants in this proceeding should familiarize 
themselves with the Commission's ex parte rules.

B. Comment Filing Procedures

    2. Comments and Replies. Pursuant to Sec. Sec.  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.
    [ssquf] 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

[[Page 34613]]

deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    [ssquf] 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.
    [ssquf] 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 and FNPRM document solicits possible proposed 
information collection requirements. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget (OMB) to comment on the 
possible proposed information collection requirements contained in this 
document, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. In addition, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we 
seek specific comment on how we might further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.

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. Introduction and Executive Summary

    7. In the FY 2013 NPRM and FNPRM, two interrelated proceedings, we 
seek comment on the collection of regulatory fees in Fiscal Year (FY) 
2013 and on proposals to more generally reform the Commission's 
policies and procedures for assessing and collecting regulatory fees. 
Specifically, in the FY 2013 NPRM, we seek comment on our annual 
process of assessing regulatory fees to offset the Commission's FY 2013 
appropriation, as directed by Congress. We propose several reforms to 
the process for calculating and collecting the FY 2013 fees. The 
regulatory fees calculated in response to the FY 2013 NPRM will be 
collected later this year. We also seek comment on more long-range 
proposals to reform and revise our regulatory fee schedule after FY 
2013 (for FY 2014 and beyond) to take into account changes in the 
communications industry and in the Commission's regulatory processes 
and staffing in recent years.
    8. The FY 2013 NPRM seeks comment concerning adoption and 
implementation of proposals to reallocate regulatory fees to more 
accurately reflect the subject areas worked on by current Commission 
full time employees (FTEs) \1\ for FY 2013. We seek comment on, among 
other things, reallocating for purposes of regulatory fee calculations: 
Direct FTEs working on Interstate Telecommunications Service Providers 
(ITSPs) and other fee categories to reflect current workloads devoted 
to these subject areas and FTEs in the International Bureau to more 
accurately reflect the Commission's regulation and oversight of the 
International Bureau regulatees. We also seek comment on whether, if 
these proposals are adopted, we should limit any increase in regulatory 
fee assessments to industry segments resulting from such reallocation. 
In addition, we seek comment generally on whether direct and indirect 
FTEs should be allocated differently as described below. Further, we 
seek comment on whether to delay our proposal to reallocate FTEs for 
regulatory fee purposes and, in the interim, maintain the same 
allocation percentages from last year for FY 2013.
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    \1\ One FTE, typically called a ``Full Time Equivalent,'' is a 
unit of measure equal to the work performed annually by a full time 
person (working a 40 hour workweek for a full year) assigned to the 
particular job, and subject to agency personnel staffing limitations 
established by the U.S. Office of Management and Budget. Any 
reference to FTE or ``Full Time Employee'' used herein refers to 
such Full Time Equivalent.
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    9. In addition, we seek comment concerning adoption and 
implementation of proposals for FY 2014 and beyond, which include: (1) 
Combining ITSPs with wireless telecommunications services into one 
regulatory fee category and using revenues as the basis for calculating 
the resulting regulatory fees; (2) using revenues to calculate 
regulatory fees for other industries that now use subscribers as the 
basis for regulatory fee calculations, such as the cable industry; (3) 
consolidating UHF and VHF television stations into one regulatory fee 
category; (4) proposing a regulatory fee for Internet Protocol TV 
(IPTV) at the rate of cable fees; (5) alleviating large fluctuations in 
the fee rate of Multiyear Wireless Services; and (6) determining 
whether the Commission should modify the methodology in collecting 
regulatory fees for regulatees in declining industries (e.g., CMRS 
Messaging). We also clarify that licensees of Digital Low Power, Class 
A, and TV Translators/Boosters should pay only one regulatory fee on 
their analog or digital station, but not on both. As required by 
Treasury and Office of Management and Budget (OMB) initiatives, we also 
announce and seek comment on our proposal to require that all 
regulatory fee payments be made electronically beginning in FY 2014. 
Finally, we state that beginning in FY 2014 the Commission will no 
longer mail out initial regulatory fee assessments to CMRS licensees, 
and we propose to transfer unpaid regulatory fees for collection by the 
Department of the Treasury at the end of the payment period (instead of 
waiting 180 days) beginning in FY 2014.
    10. The attached FNPRM seeks comment on the treatment of non-U.S.-
Licensed Space Stations; Direct Broadcast Satellites; and other 
services, such as broadband, in our regulatory fee process. We invite 
comment on these topics to better inform the Commission on whether and/
or how these services should be assessed under our regulatory fee 
methodology in future years.
    11. We propose to collect $339,844,000 in regulatory fees for 
Fiscal Year (FY) 2013, pursuant to Section 9 of the Communications Act 
of 1934, as amended (the Act or

[[Page 34614]]

Communications Act) and the FY 2013 Continuing Appropriations 
Resolution. Section 9 regulatory fees are mandated by Congress and 
collected to recover the regulatory costs associated with the 
Commission's enforcement, policy and rulemaking, user information, and 
international activities.\2\ Further, as provided by section 9(a)(2), 
the amount of regulatory fees to be collected is established each year 
by Congress,\3\ which directs the Commission to use the fees to offset 
its entire appropriation. For FY 2013, the sequester effectuated by the 
Budget Control Act of 2011 \4\ reduces the agency's permitted FY 2013 
salary and expenses expenditures by $17M to $322,844,000. However, that 
Act does not alter the congressional directive set out in the FY 2012 
appropriation \5\ (and continued in effect in FY 2013 by virtue of the 
Further Continuing Appropriations Act, 2013) to collect $339,844,000 in 
regulatory fees.\6\
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    \2\ 47 U.S.C. 159(a).
    \3\ In FY 2013, the Consolidated and Further Continuing 
Appropriations Act, Public Law 113-6 (2013) at Division F authorizes 
the Commission to collect offsetting regulatory fees at the level 
provided to the Commission's FY 2012 appropriation of $339,844.00. 
See Financial Services and General Government Appropriations Act, 
2012, Division C of Public Law 112-74, 125 Stat. 108-9 (2011).
    \4\ Budget Control Act of 2011, Public Law 112-15, 101, 125 
Stat. 241 (2011) (amending 251 of the Balanced Budget and Emergency 
Deficit Control Act of 1985, Public Law 99-177, 99 Stat. 1037 
(2005).
    \5\ See Financial Services and General Government Appropriations 
Act, 2012, Division C of Public Law 112-74, 125 Stat. 108-9 (2011);
    \6\ Further Continuing Appropriations Act, 2013, Public Law 113-
6, xxx Stat. xxx (2013) at Division F, 1101(c).
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III. Background

    12. We began this regulatory fee reform analysis in the Fiscal Year 
(FY) 2008 Further Notice of Proposed Rulemaking.\7\ In 2012, a report 
on the Commission's regulatory fee program issued by the Government 
Accountability Office (GAO Report) provided further support for a more 
fundamental reevaluation of how to align regulatory fees more closely 
with regulatory costs.\8\ In our FY 2012 NPRM proposing basic changes 
to the current fee assessment process, we incorporated the GAO Report 
into the record and sought comment on it.\9\ To encourage a more robust 
discussion of the record in this docket, the Commission invited all the 
parties who filed comments to the FY 2012 NPRM to further discuss their 
comments and any other regulatory fee reform issues they wished to 
raise with Commission staff. Staff has met with commenters representing 
the wireline, wireless, broadcast, cable, satellite, and submarine 
cable industries. Their additional comments have been summarized in ex 
parte filings and placed in the record of the proceeding in compliance 
with the Commission's rules.\10\ To facilitate a more robust record to 
better inform the Commission as it contemplates further reform of our 
regulatory fee policies and procedures for FY 2013 and beyond, we seek 
comment not only on the issues raised herein, but also on the concerns 
and comments raised by the GAO Report, the issues presented and 
comments filed in response to the FY 2012 NPRM and any issues raised in 
ex parte filings by industry representatives. We anticipate that in the 
Report and Order we will adopt certain proposals discussed herein for 
FY 2013 and other proposals for implementation in FY 2014 and beyond.
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    \7\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2008, Report and Order and Further Notice of Proposed 
Rulemaking, 24 FCC Rcd 6388 (2008) (FY 2008 FNPRM).
    \8\ See GAO, ``Federal Communications Commission Regulatory Fee 
Process Needs to be Updated,'' Aug. 2012, GAO-12-686.
    \9\ Assessment and Collection of Regulatory Fees, Notice of 
Proposed Rulemaking, 27 FCC Rcd 8458 (2012) (FY 2012 NPRM). We cite 
some of the comments filed in response to the FY 2012 NPRM in the 
discussion herein.
    \10\ See, e.g., American Cable Association, Notice of Ex Parte 
Presentation (Feb. 22, 2013); North American Submarine Cable 
Association, MD Docket Nos. 12-201 and 08-65, Notice of Ex Parte 
Presentation (Feb. 15, 2013); Enterprise Wireless Alliance, MD 12-
201 Ex Parte Presentation (Feb. 15, 2013); North American Submarine 
Cable Association, MD Docket Nos. 12-201 and 08-65, Notice of Ex 
Parte Presentation (Mar. 27, 2013).
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IV. Notice of Proposed Rulemaking

A. Regulatory Fee Allocation Process and Need for Reform.

    13. Each year the Commission derives the fees that Congress 
requires it to collect ``by determining the full-time equivalent number 
of employees performing'' these activities ``adjusted to take into 
account factors that are reasonably related to the benefits provided to 
the payer of the fee by the Commission's activities . . . .'' \11\ To 
calculate regulatory fees, the Commission allocates the total amount to 
be collected, among the various regulatory fee categories. Each 
regulatee within a fee category must pay its proportionate share based 
on an objective measure, e.g., revenues, subscribers, or licenses. The 
first step, allocating fees to fee categories, is based on the 
Commission's calculation of the number of FTEs devoted to each 
regulatory fee category. FTEs are categorized as either ``direct'' or 
``indirect.'' An FTE is considered ``direct'' if the employee is in one 
of the core bureaus, i.e., the Wireless Telecommunications Bureau, 
Media Bureau, Wireline Competition Bureau, or International Bureau.\12\ 
If an employee is not assigned to one of those four bureaus, that 
employee is considered an ``indirect'' FTE.\13\ Thus, the total FTEs 
for each fee category includes the direct FTEs associated with that 
category (i.e., the FTEs in the bureau associated with that category), 
plus a proportional allocation of the indirect FTEs. This preliminary 
allocation has been based on the concept that the FTEs in each of those 
four bureaus perform activities related to the service providers 
regulated by those bureaus.
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    \11\ 47 U.S.C. 159(b)(1)(A).
    \12\ The current numbers of direct FTEs are as follows: 
International Bureau, [119]; Media Bureau, [171]; Wireline 
Competition Bureau, [160]; and Wireless Telecommunications Bureau, 
[98]. FTEs involved in Section 309 auctions, [194 FTEs], are not 
included in this analysis because auctions activities are funded 
separately.
    \13\ The ``indirect'' FTEs are the employees from the following 
bureaus and offices: Enforcement Bureau, Consumer and Governmental 
Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman 
and Commissioners' offices, Office of Managing Director, Office of 
General Counsel, Office of the Inspector General, Office of 
Communications Business Opportunities, Office of Engineering and 
Technology, Office of Legislative Affairs, Office of Strategic 
Planning and Policy Analysis, Office of Workplace Diversity, Office 
of Media Relations, and Office of Administrative Law Judges, 
totaling [967] FTEs.
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    14. The current allocations of direct and indirect FTEs are taken 
from FTE data compiled in FY 1998.\14\ A comparison of current FTE 
numbers in the various bureaus to their respective share of the overall 
regulatory fee burden illustrates the need to reexamine the FTE data 
used. For example, the International Bureau currently employs 22 
percent of the Commission's direct FTEs, yet International Bureau 
regulatees contribute 6.3 percent of the total regulatory fee 
collection.\15\ On the other hand, ITSPs, regulated by the Wireline 
Competition Bureau, pay 47 percent of the total annual regulatory fee 
collection, while the Wireline Competition Bureau employs only 29.2 
percent of the Commission's direct FTEs. The proposals herein seek not 
only to address this issue, but also to make the allocation of 
regulatory fee burden more transparent.\16\ Although we seek to better 
align regulatory fees with the level of current regulation, it is 
important to note that there is no statutory requirement that 
regulatory

[[Page 34615]]

fees offset only the actual costs of regulating each service. In fact, 
the FY 2013 Further Continuing Resolution requires that the Commission 
collect an amount of regulatory fees sufficient to offset its entire 
appropriation. Thus the total benefit received by any particular 
regulatee from Commission actions will not necessarily correlate 
directly with the quantity of Commission resources used for that 
regulatee's benefit.\17\ For example, regulatory fees also cover the 
costs the Commission incurs in regulating entities that are statutorily 
exempt from paying regulatory fees,\18\ entities whose regulatory fees 
are waived,\19\ and entities that provide nonregulated services, as 
well other Commission activities, such as consumer-related services.
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    \14\ FY 2012 NPRM, 27 FCC Rcd at 8461, para. 8.
    \15\ See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
    \16\ The GAO noted the lack of transparency of the regulatory 
fee process, and was particularly concerned with the regulatory fee 
allocations for the International Bureau and the Wireline 
Competition Bureau, see GAO Report at p. 23.
    \17\ FY 2004 Report and Order, 19 FCC Rcd at 11667, para. 11.
    \18\ Id. For example, governmental and nonprofit entities are 
exempt from regulatory fees under section 9(h) of the Act. 47 U.S.C. 
159(h); 47 CFR 1.1162.
    \19\ 47 CFR 1.1166.
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    15. As discussed in the FY 2012 NPRM, the FY 1998 FTE data may no 
longer fairly and accurately reflect the time that Commission employees 
devote to these activities.\20\ Using updated \21\ FTE data (without 
other significant changes in our methodology) would reduce the 
percentage of regulatory fees allocated to Wireline Competition Bureau 
regulatees from 47 percent to 29.2 percent and increase the percentage 
of fees allocated to International Bureau regulatees from 6.3 percent 
to 22 percent.\22\ Therefore, substituting current FTE data for FY 1998 
FTE data would subject some international service providers to 
significant fee increases.\23\ In determining how to update the FTE 
data to more accurately reflect the current composition of the 
Commission, we recognize that not only can the regulatory fees not be 
calculated to reflect the exact costs of each regulated industry, but 
such direct relationship of costs to each industry is not consistent 
with the statutory mandate to allocate based on the FTEs performing the 
enumerated functions in each named bureau. Nevertheless, we find that 
it is consistent with section 9 of the Act to better align, to the 
extent feasible, these regulatory fees with the current costs of 
Commission oversight and regulation of each industry group. 
Specifically, a more accurate alignment of FTE work to subject matter 
promotes the requirement in section 9 to ensure the benefits provided 
to the payor of the fee are consistent with the Commission's 
activities.\24\
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    \20\ FY 2012 NPRM, 27 FCC Rcd at 8464, para. 12.
    \21\ The FTEs used herein are determined as of Sept. 30, 2012.
    \22\ FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25.
    \23\ Id.
    \24\ 47 U.S.C. 159.
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    16. The GAO Report concluded that, due to changes in the 
communications industry and in the Commission during the past 15 years, 
the Commission should perform an updated FTE analysis, determine 
whether the fee categories should be revised, and increase the 
transparency of the regulatory fee process.\25\ For this purpose, we 
examine whether these functions and activities performed by FTEs in the 
International Bureau, often to the benefit of multiple categories of 
regulatees, warrant considering only a portion of the International 
Bureau as a ``core bureau.'' We also examine whether wireline and 
wireless telecommunications services should be combined into a single 
new category.
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    \25\ GAO Report at 36.
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B. Discussion

1. Changes to the Interstate Telecommunications Service Providers 
(ITSPs) Fee Category
    17. One of the primary issues discussed in the FY 2012 NPRM is how 
to fairly allocate the FTEs for ITSPs, which are the Wireline 
Competition Bureau fee payors.\26\ ITSPs--interexchange carriers 
(IXCs), incumbent local exchange carriers (LECs), toll resellers, and 
other IXC service providers--use end-user revenues to calculate 
regulatory fee assessments based on the reported revenue in the FCC 
Form 499-A, filed April 1 of each year with the prior year's interstate 
and international revenue.\27\ As stated previously, in FY 2012, ITSPs 
paid 47 percent of the total regulatory fees collection, even though 
the Wireline Competition Bureau employees comprised 29.2 percent of the 
Commission's direct FTEs. In addition, since ITSPs pay regulatory fees 
based on revenues, the regulatory fee assessment rates for ITSPs 
generally have increased over time due to a declining revenue base in 
that industry segment.\28\ At the same time, wireless revenues have 
increased significantly, in part due to substitution of wireless 
services for wireline services. Nevertheless, as wireless revenues have 
increased, the proportion of all regulatory fees paid by wireless 
providers has not significantly increased. Thus, our regulatory fee 
methodology has not kept pace with the changes in both the 
communications industry and within the Commission. We seek comment on 
reallocating the direct FTEs for ITSP for FY 2013, based on current 
FTEs in the core bureaus, which would significantly decrease the 
regulatory fee allocation for ITSPs. We propose this reallocation in 
conjunction with a reallocation of International Bureau FTEs, as 
explained in more detail below. We also seek comment on revising our 
methodology to account for changes in the wireless and wireline 
industries by making additional changes to the ITSP fee category for FY 
2014, such as combining wireless and wireline into a new ITSP category, 
as discussed below.
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    \26\ See FY 2012 NPRM, 27 FCC Rcd at 8467, para. 25.
    \27\ The Commission has separated revenues listed on Form 499-A 
into two fee categories: ITSP providers and non-ITSP providers. 
Providers that derive a predominant amount of their revenues from 
Lines 412(e), 420(d), and 420(e) on FCC Form 499-A are ITSP 
providers and subject to ITSP regulatory fees. Those providers that 
do not derive their revenues predominantly from Lines 412(e), 
420(d), and 420(e) on FCC Form 499-A, non-ITSP providers, paid a 
regulatory fee calculated differently, such as by number of 
subscribers.
    \28\ Wireline revenues have not decreased for all carriers. 
Verizon, for example, reported for 2012 that ``Consumer wireline 
revenues grew by 3.2 percent for the year--the best in a decade--
fueled by double-digit growth in FiOS.'' Verizon 2012 Annual Report 
at p. 3.
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    18. Currently wireless and wireline telecommunications services are 
in separate regulatory fee categories. The Independent Telephone and 
Telecommunications Alliance (ITTA) proposes that the Commission assess 
all voice service providers on the basis of revenues to ensure that 
like services are treated in a similar manner.\29\ We agree with ITTA 
that wireless services are comparable to wireline services in many ways 
and therefore both encompass similar regulatory policies and programs, 
such as universal service and number portability.\30\ As wireless 
services are increasingly displacing wireline services, we seek comment 
on whether it would be fair to combine both services into one category 
by including all wireless and wireline FTEs in the same allocation to 
arrive at one uniform regulatory fee rate for ITSP and wireless 
providers, assessed based on revenues.
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    \29\ ITTA Comments at 3.
    \30\ The GAO Report discussed using revenues for assessing 
wireless providers' regulatory fees, as proposed by ITTA. See GAO 
Report at 19-20.
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    19. Under section 9 of the Communications Act, the Commission must 
make certain changes to the regulatory fee schedule if it ``determines 
that the Schedule requires amendment to comply with the requirements'' 
of section 9(b)(1)(A).\31\ The Commission must add, delete, or 
reclassify services in the fee schedule to reflect additions,

[[Page 34616]]

deletions, or changes in the nature of its services ``as a consequence 
of Commission rulemaking proceedings or changes in law.'' \32\ These 
``permitted amendments'' require Congressional notification \33\ and 
resulting changes in fees are not subject to judicial review.\34\ 
Combining wireless and wireline FTEs in the same allocation, for a new 
ITSP category, would be such a ``permitted amendment'' requiring 
Congressional notification. Therefore, if adopted, this allocation 
change would not take effect until FY 2014.
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    \31\ 47 U.S.C. 159(b)(3).
    \32\ 47 U.S.C. 159(b)(3).
    \33\ 47 U.S.C. 159(b)(4)(B).
    \34\ 47 U.S.C. 159(b)(3).
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    20. We recognize, however, that carriers whose regulatory fees are 
calculated on the basis of revenues, instead of subscribers, may have 
an incentive to allocate more of their revenues to data services in 
order to reduce their regulatory fees.\35\ Therefore, we invite 
commenters to also discuss whether there are alternate ways to assess 
regulatory fees for wireless and wireline telecommunications services 
to achieve fair, sustainable, and predictable results, such as moving 
both industry groups to another common objective measure as the basis 
for calculating regulatory fees, and what such common measure should 
be.
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    \35\ We do not currently assess regulatory fees on broadband 
revenues.
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2. Reallocation of FTEs
    21. The GAO Report recommended that the Commission reexamine the 
activities performed by FTEs in the various bureaus.\36\ This Notice of 
Proposed Rulemaking is responsive to the GAO's recommendation. 
Adjusting the allocation fee category percentages and rates to reflect 
current FTEs, without further examining precisely what regulatory 
functions these FTEs are performing would result in an incomplete 
reexamination of the issues involved in updating our FTE allocations. 
Moreover, using updated FTE calculations without other significant 
changes in our methodology would subject some classes of regulatees to 
significant fee increases.
---------------------------------------------------------------------------

    \36\ GAO Report at 36.
---------------------------------------------------------------------------

    22. While we are required by section 9 of the Act to calculate 
regulatory fees based on an allocation of FTEs, we are not required to 
use the same methodology year after year. We tentatively conclude that 
our methodology of using the direct and indirect FTEs based on the four 
core bureaus and supporting bureaus and offices should be revised to 
more accurately reflect the direct and indirect costs for those 
regulatees. Such revisions should take into account the impact on all 
regulatees, because any change in the allocation of the total 
regulatory fee amount for one category of fee payors necessarily 
affects the fees paid by payors in all the other fee categories. The 
GAO Report noted the disparity in the allocation for the International 
Bureau, the Wireline Competition Bureau, and the Wireless 
Telecommunications Bureau.\37\ The current FTE allocations, as of 
September 30, 2012, and the FTE allocations what would result from our 
reallocation proposals are shown in the table below.
---------------------------------------------------------------------------

    \37\ See GAO Report at 14-15.

                        TABLE 1--Direct and Indirect FTE Allocations/Current and Proposed
----------------------------------------------------------------------------------------------------------------
                                                                                            Effective FY 2013
                                                                                           allocation resulting
                                                                                          from the reallocation
    Bureaus (all FTE amounts shown exclude auctions-funded        Current allocations     proposal in this NPRM,
                          employees)                              based on 1998 direct    applying proposed cap
                                                                 FTE analysis (percent)    of 7.5% on fee rate
                                                                                              increases \38\
                                                                                                (percent)
----------------------------------------------------------------------------------------------------------------
International Bureau..........................................                      6.3                     5.99
Media Bureau..................................................                     30.2                    33.33
Wireline Competition Bureau...................................                     46.7               \39\ 41.26
Wireless Telecommunications Bureau............................                     16.8                    19.42
----------------------------------------------------------------------------------------------------------------

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

    \38\ The percentages shown are the estimated allocations for FY 
2013 when the fee rate increases are capped at 7.5%. The actual fees 
to be paid for FY 2013 may be affected by additional factors, such 
as number of subscribers, revenues, or other units to which the 
capped fee rate will be applied.
    \39\ This result reflects an approximately ten percent (10%) 
reduction in the ITSP fee rate from what it would have been in FY 
2012 but for the off-setting rate freeze for ITSP's applied in our 
FY 2012 Order.
---------------------------------------------------------------------------

    23. We propose to update our FTE analysis using data from September 
30, 2012. The International Bureau, which employs 22 percent of the 
Commission's direct FTEs, currently pays, as illustrated in the table 
above, 6.3 percent of the total regulatory fees. \40\ Conversely, 
ITSPs, based on the current allocation, would pay almost 47 percent of 
the total regulatory fees while the Wireline Competition Bureau employs 
roughly 30 percent of the Commission's direct FTEs. We seek comment on 
how to revise the apportionment of direct and indirect FTEs to reach a 
fair and equitable regulatory fee allocation, under proposals 
including, but not limited to, those described herein. Our proposed 
reallocation, without further reforms or adjustments (such as the caps 
discussed herein at paragraphs 30 and 31) would result in allocation of 
5.92 percent to the International Bureau, 37.50 percent to the Media 
Bureau, 35.09 percent to the Wireline Competition Bureau, and 21.49 
percent to the Wireless Telecommunications Bureau. When these figures 
are adjusted to reflect the proposed 7.5 percent cap on rate increases 
for FY 2013, the resulting effective allocations for FY 2013 are as set 
forth in the far right column in the table above.
---------------------------------------------------------------------------

    \40\ See FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
---------------------------------------------------------------------------

    24. We had previously sought comment on revising the regulatory fee 
schedule, which would thereby increase the amount paid by the 
International Bureau's regulatees to 22 percent of the total.\41\ 
Although our proposals in this proceeding are based, in part, on such a 
reallocation, we believe that, as discussed below, fairness warrants an 
allocation that more closely reflects the appropriate proportion of 
direct costs required for regulation and oversight of International 
Bureau regulatees. Under such an analysis, the regulatory fee 
allocation of these regulatees, should be decreased, rather than 
significantly increased, for the reasons stated herein. When section 9 
was adopted, the total FTEs were to be calculated based on the number 
of FTEs in the Private Radio

[[Page 34617]]

Bureau,\42\ Mass Media Bureau,\43\ and Common Carrier Bureau.\44\ 
Satellites and submarine cable were regulated through the Common 
Carrier Bureau before the International Bureau was created. As 
discussed below, the services offered by regulatees in the Wireline 
Competition Bureau, Wireless Telecommunications Bureau, and Media 
Bureau have evolved and converged over time and, therefore their 
regulation involves many similar issues and generates common Commission 
costs. To cite but one example, wireline, wireless, and cable companies 
compete with each other for customers.\45\
---------------------------------------------------------------------------

    \41\ FY 2012 NPRM, 27 FCC Rcd at 8467, paras. 24-25.
    \42\ The predecessor to the Wireless Telecommunications Bureau.
    \43\ Now the Media Bureau.
    \44\ The predecessor to the Wireline Competition Bureau.
    \45\ Apart from DBS video services, for the most part the 
International Bureau regulatees do not offer the same services as 
the wireline, wireless, and cable companies, although wireline and 
wireless companies use the services, e.g. submarine cables that 
International Bureau regulatees provide.
---------------------------------------------------------------------------

    25. During this technological convergence among wireline, wireless, 
and cable services, the International Bureau's work has expanded beyond 
its regulation of international licensees. It also has unique duties to 
assist bureaus and their regulatees throughout the Commission, and 
represent the Commission on a variety of international issues affecting 
those regulatees. In discharging these duties, the International Bureau 
works on matters including but not limited to spectrum use, cross-
border coordination, broadband deployment, and foreign ownership. At 
the same time, International Bureau licensees have required less 
Commission oversight and regulation. Thus, the International Bureau now 
serves the entire Commission's international needs, not just the 
specific requirements of the International Bureau regulatees. For these 
reasons, we propose that the International Bureau should no longer be 
entirely classified as a ``core bureau'' in the way that the Wireline 
Competition Bureau, Wireless Telecommunications Bureau, and Media 
Bureau are classified today. Below, we seek comment on proposals to 
reallocate the International Bureau FTEs for regulatory fee purposes.
a. Strategic Analysis and Negotiations Division, International Bureau
    26. Consistent with section 9(b) of the Act, any reallocation 
methodology we adopt must be reasonably related to the benefits 
provided to the payor of the fee by the Commission's activities. A 
reallocation that reflects benefits provided to the fee payor will also 
meet our objectives of being fair and sustainable. Revising the 
percentage of the total regulatory fees paid by international service 
providers to reflect the full percentage of direct FTEs in the 
International Bureau would promote fairness if we determined that the 
increase in International Bureau FTEs is due to a corresponding 
increase in FTEs working on regulation and oversight of international 
service providers. If, instead, the increase is attributable to the 
increasing number of International Bureau FTEs performing duties that 
are related to the Commission as a whole or benefit service providers 
regulated by other Bureaus, the fee increase should not be imposed 
solely on international service providers. Rather, it should also be 
allocated to the other regulatory fee categories whose fee payors 
benefit from that work.
    27. For example, the largest division in the International Bureau 
is the Strategic Analysis and Negotiations Division (SAND), which is 
not significantly involved in regulation or oversight of International 
Bureau regulatees. Instead, SAND is responsible for intergovernmental 
and regional leadership, negotiating, and planning--processes that 
benefit offices and bureaus throughout the Commission. SAND oversees 
the Commission's global participation in international forums such as 
the International Telecommunication Union (ITU), including World Radio-
communication Conferences; various regional organizations, such as the 
Asia-Pacific Economic Cooperation, the Inter-American 
Telecommunications Conference, and the Organization for Economic 
Cooperation and Development; and cross-border negotiations with Canada 
and Mexico. These activities cover telecommunications services outside 
of the bureau's direct oversight and regulatory activities, e.g., 
coordination of wireless services with Canada and Mexico.\46\ SAND also 
performs oversight to enable the International Bureau to integrate 
international and bilateral meetings with visits to the Commission by 
foreign regulators and other government officials. SAND is responsible 
for performing economic and policy analyses for the International 
Bureau concerning trends in the international communications markets 
and services. Finally, SAND conducts research and studies concerning 
international regulatory trends, as well as their implications on U.S. 
policy. For these reasons we propose excluding the SAND FTEs from the 
International Bureau for regulatory fee purposes and instead allocating 
them as indirect FTEs.\47\ We seek comment on this proposal.
---------------------------------------------------------------------------

    \46\ See FY 2012 NPRM, 27 FCC Rcd at 8467-68, para. 26.
    \47\ See id., 27 FCC Rcd at 8467-68, paras. 26-27; North 
American Submarine Cable Association Comments at 28.
---------------------------------------------------------------------------

b. Satellite Division, International Bureau
    28. In contrast to SAND, the International Bureau's Satellite 
Division is responsible for the regulation and oversight of satellite 
system licensees, specifically operators of space stations and earth 
stations, by authorizing satellite systems to facilitate deployment of 
satellite services and fostering efficient use of the radio frequency 
spectrum and orbital resources. In addition to the application and 
licensing process, the Satellite Division provides expertise about the 
commercial satellite industry in the domestic spectrum management 
process and advocates U.S. satellite radiocommunication interests in 
international coordinations and negotiations. The Satellite Division is 
also responsible for the process of placing non-U.S.-licensed space 
stations on a ``Permitted List,'' \48\ a process that is similar to the 
application process and allows access to the U.S. market for certain 
non-U.S. licensed satellites.\49\ The Satellite Division also reviews 
market access requests that are not eligible for inclusion on a 
Permitted List.
---------------------------------------------------------------------------

    \48\ See Amendment of the Commission's Regulatory Policies to 
Allow Non-U.S.-Licensed Space Stations to Provide Domestic and 
International Satellite Service in the United States, IB Docket No. 
96-111, First Order on Reconsideration, 15 FCC Rcd 7207 (1999) 
(DISCO II First Reconsideration Order) (adopting the original 
procedure for making changes to the Permitted List). See also 2006 
Biennial Regulatory Review--Revision of Part 25, Establishment of a 
Permitted List Procedure for Ka-band Space Stations, IB Docket 06-
154, Declaratory Order, 25 FCC Rcd 1542 (2010).
    \49\ This is the process used by certain non-U.S.-licensed 
satellite operators to serve customers in the United States. These 
satellite operators may file a petition for a Declaratory Ruling 
seeking approval to provide service in the United States. These 
operators do not pay application fees or regulatory fees to the 
Commission, yet their petitions, together with the information 
required by an application, are analyzed by Satellite Division staff 
and these operators benefit from International Bureau regulatory 
activities.
---------------------------------------------------------------------------

    29. We propose that of all the International Bureau's Satellite 
Division employees whose work involves regulation of International 
Bureau regulatees, we use 25 direct FTEs \50\ to determine the 
regulatory fees for both

[[Page 34618]]

satellite space stations and earth stations.\51\ We seek comment on 
this proposal.
---------------------------------------------------------------------------

    \50\ Indirect FTEs would be allocated to these entities as they 
are for all regulatory fee payors.
    \51\ See Satellite Industry Association Comments at 13.
---------------------------------------------------------------------------

c. Policy Division, International Bureau
    30. The work of the third division in the International Bureau, the 
Policy Division, is multifaceted. The Policy Division work involves 
development of polices in connection with regulation and licensing of 
international facilities and services (including submarine cable 
systems, which provide bearer circuits). The Policy Division conducts 
international spectrum rulemakings, handles applications for transfer 
and assignment of international service providers and implements 
Commission policies designed to protect competition in international 
telecommunications, and promotes lower international calling rates for 
U.S. consumers. It coordinates and provides guidance to and shares its 
expertise with the Commission and other agencies. For example, the 
Policy Division oversees Commission policies involving foreign 
ownership of U.S. telecommunications providers, and in this connection, 
coordinates major mergers and other license applications with U.S. 
agencies on matters relating to national security, law enforcement, 
foreign policy, and trade policy. Many of these functions involve 
wireless and wireline issues and therefore benefit regulatees in other 
Bureaus.\52\ Commenters to the FY 2012 NPRM argued that the Policy 
Division's limited regulation and oversight of submarine cable systems 
does not support the current allocation of 36.08 percent of all the 
International Bureau regulatory fees or 2.28 percent of all regulatory 
fees to the submarine cable industry.\53\
---------------------------------------------------------------------------

    \52\ See Satellite Industry Association Comments at 14.
    \53\ See Joint Reply Comments of International Carrier Coalition 
at 3. See also Telstra Incorporated and Australia-Japan Cable (Guam) 
Limited Comments at 3 (``the Commission's primary regulatory 
activity is the granting of the cable landing license.'').
---------------------------------------------------------------------------

    31. Sixty submarine cable systems are licensed by the Commission, 
including 43 international submarine cable systems.\54\ Submarine cable 
systems transport most of the U.S. international traffic,\55\ including 
Internet broadband, video, other high bandwidth applications, voice 
services (public switched and interconnected VoIP), and non-public, 
private traffic for various international carriers, content and 
Internet providers, corporations, wholesale operators, and governments. 
Large corporate customers include financial and news companies and 
other content providers. Cable capacity is generally sold on an 
indefeasible right of use (IRU) basis for 10-15 year terms and also on 
a long-term lease basis; \56\ therefore, a large increase in regulatory 
fees is likely difficult to recover from customers as a ``pass-
through'' charge.\57\ Commenters responding to the FY 2012 NPRM noted 
that regulatory fee charges in the U.S. are much higher than those 
charged by other countries.\58\ Therefore, substantially increasing the 
regulatory fees paid by submarine cable service providers would serve 
as a disincentive for carriers to land new cables in the U.S. and an 
incentive to land new cables in Mexico and Canada instead. Over time, 
this would result in increased costs to American consumers as well as 
potential national security issues.\59\ These commenters contend that 
if the newer submarine cable systems choose to land in Canada or Mexico 
to avoid our high regulatory fees, eventually almost all international 
traffic will leave from (or arrive into) Canada or Mexico instead of 
the U.S.\60\
---------------------------------------------------------------------------

    \54\ There are 42 international submarine cable systems in 
operation subject to regulatory fees and one more licensed system 
that will become subject to regulatory fees when it becomes 
operational.
    \55\ Submarine cables transport approximately 95 percent of U.S. 
international traffic. See North American Submarine Cable 
Association Comments at 15.
    \56\ See North American Submarine Cable Association Comments at 
4.
    \57\ See id. at 18-19; Telstra Incorporated and Australia-Japan 
Cable (Guam) Limited Comments at 4.
    \58\ The annual regulatory fees charged to submarine cable 
systems are much higher in the U.S. than in other countries. See 
Joint Comments of International Carrier Coalition at 13. Canada 
charges $100 (Canadian) per year. Id. at 14. Several other countries 
charge fees on telecommunications companies that would include 
submarine cable operators, although there is no special category or 
assessment for submarine cable systems; e.g., the United Kingdom 
(.0609% of UK revenues); Spain (less than .2% of revenues in Spain); 
the Netherlands (.077% of revenues in the Netherlands), Argentina 
(.5% of revenues in Argentina); and Australia ($1,000 (Australian) 
plus .00118% Australian revenues. Id. Many other countries, such as 
Japan, Germany, and Mexico, do not charge regulatory fees at all. 
Id. See also North American Submarine Cable Association, MD Docket 
Nos. 12-201 and 08-65, Notice of Ex Parte Presentation (Mar. 27, 
2013) at 3 (``Asia, Hong Kong, Singapore, and Malaysia compete 
fiercely for submarine cable landings to maintain and improve their 
connectivity and support their services industries.'').
    \59\ See, e.g., Joint Comments of International Carrier 
Coalition at 17 (additionally, ``[l]andings outside of the US are 
also outside the reach of US law enforcement authorities and cannot 
be monitored for evidence of criminal or terrorist activity.'').
    \60\ Id.
---------------------------------------------------------------------------

    32. We recognize that submarine cable systems have been subject to 
significant regulatory fee reform recently.\61\ In the Submarine Cable 
Order, the Commission adopted a new submarine cable bearer circuit 
methodology to assess regulatory fees on a cable landing license basis, 
based on the proposal (the ``Consensus Proposal'') of a large group of 
submarine cable operators representing both common carriers and non-
common carriers with both large and small submarine cable systems.\62\ 
This methodology allocates international bearer circuit (IBC) costs 
among service providers without distinguishing between common carriers 
and non-common carriers, by assessing a flat per cable landing license 
fee for all submarine cable systems, with higher fees for larger 
submarine cable systems and lower fees for smaller systems. The 
Submarine Cable Order did not assess a particular regulatory fee for 
the submarine cable systems but instead it adopted a new methodology 
that was considered fairer and easier to administer than the previous 
method of assessing regulatory fees. This recent in-depth review and 
revision of the regulatory fee methodology for submarine cable serves 
as another important factor to consider in determining the appropriate 
allocation of regulatory fees in this proceeding.
---------------------------------------------------------------------------

    \61\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2008, Second Report and Order, 24 FCC Rcd 4208 (2009) 
(Submarine Cable Order).
    \62\ The 15 parties to the Consensus Proposal represented 35 of 
the 42 international submarine cable systems in operation as well as 
three planned systems. Submarine Cable Order, 24 FCC Rcd at 4213, 
para. 11.
---------------------------------------------------------------------------

    33. The 2.28 percent of all regulatory fees submarine cable service 
providers now pay is the sixth highest regulatory fee percentage among 
all fee categories,\63\ notwithstanding the fact that the provision of 
international submarine cable service involves little regulation and 
oversight from the Commission after the initial licensing process. 
Under Part 43 of the Commission's rules, common carriers must file 
Traffic and Revenue Reports regarding international services and, for 
U.S. facilities-based international common carriers, Circuit Status 
Reports for information concerning leased or owned circuits.\64\ Within 
the Policy Division, submarine cable licensing,

[[Page 34619]]

regulation, and oversight is handled by a small number of FTEs during 
each fiscal year.\65\ The Policy Division employees whose work involves 
the regulation of submarine cable systems and bearer circuits, equates 
to only two FTEs. The remaining Policy Division FTEs handle other 
matters involving international issues and, like the SAND FTEs, should 
more accurately be considered indirect FTEs, together with the 
remaining bureau level employees.
---------------------------------------------------------------------------

    \63\ Geostationary Space Stations are higher, at 3.23%, as are 
ITSP (46.66%), CMRS Mobile (14.33%), Cable TV (16.55%), and FM 
Classes B, C, C0, C1, & C2 (2.62%). Of all the International Bureau 
regulatees, (presently, 6.32% of all regulatory fees) the Submarine 
Cable systems pay 36.08%.
    \64\ The Commission recently made changes to the international 
reporting requirements, which have yet to go into effect. See 
Reporting Requirements for U.S. Providers of International 
Telecommunications Services, IB Docket No. 04-112, Second Report and 
Order, 28 FCC Rcd 575 (2013).
    \65\ The Commission, through the International Bureau Policy 
Division, seeks to ensure that the applicant controls one of the 
necessary inputs of the submarine cable system (the wet link, cable 
landing station, or back haul facilities).
---------------------------------------------------------------------------

    34. To summarize, we propose to reclassify SAND's FTEs as indirect 
FTEs and reallocate them among the remaining core bureaus. In light of 
the number of employees in the Satellite Division who work on satellite 
and earth station issues, the number of employees in the Policy 
Division who work on bearer circuits and submarine cable issues, and 
the amount of time Satellite Division and Policy Division employees 
spend on other issues that are not specific to the International Bureau 
regulatees, we estimate that the appropriate number of FTEs to allocate 
as direct for regulatory fee purposes is 27. This calculation factors 
in 25 FTEs from the Satellite Division and 2 from the Policy Division. 
We recognize in reaching this estimate that most of the International 
Bureau FTEs should be considered indirect because their activities 
benefit the Commission as a whole and are not specifically focused on 
International Bureau regulatees. Therefore, we also propose that only a 
total of 27 of the FTEs in the Satellite Division and the Policy 
Division involved in regulation and oversight of International Bureau 
regulatees, i.e., satellites, earth stations, submarine cable, and 
bearer circuits, be considered in the direct International Bureau FTE 
allocation for regulatory fee purposes. All remaining International 
Bureau FTEs would be indirect because their activities benefit the 
Commission as a whole and are not focused on International Bureau 
regulatees. This proposal, if adopted, would be implemented in FY 2013. 
We ask commenters to address the substance and timing of this proposal.
d. Reallocation of Other FTEs
    35. Many Commission functions are not directly attributable to only 
one specific regulated industry; the regulatory fee allocation, 
therefore, has a large number of FTEs that we currently consider 
indirect. As explained in the FY 2012 NPRM, our current approach is to 
distribute these indirect FTEs proportionally across the core bureaus 
according to these bureaus' respective percentages of the Commission's 
total direct FTE costs. As we also noted, this approach is based on the 
view that ``the work of the FTEs in the support bureaus and offices is 
not primarily focused on any one bureau or regulatory fee category, but 
instead services the needs of all four core bureaus.'' Further analysis 
indicates, however, that work of the FTEs in a support bureau may tend 
to focus disproportionately more on some of the core bureaus than 
others and that this focus may shift over time. It might be difficult 
to allocate these indirect FTEs on a task-by-task basis. We seek 
comment on whether the work of indirect FTEs is focused 
disproportionately on one or more core bureaus and if we should 
allocate indirect FTEs among the core bureaus on this basis. For 
example, if a particular support bureau or office routinely does a 
disproportionate amount of work on matters affecting the regulatees of 
a particular core bureau or bureaus, should the allocation of its 
indirect FTEs be adjusted to reflect such focus in its work? We seek 
comment on whether there are any divisions in non-core bureaus that 
should be assigned as indirect FTEs in a different manner or assigned 
as direct FTEs for a particular group of regulatees. We also seek 
comment on whether there are other divisions within the core bureaus 
that should be treated as indirect FTEs instead of as direct FTEs and 
reassigned proportionally among the bureaus.
3. Limitation on Increases of Regulatory Fees
    36. The proposals set forth above will likely reduce the regulatory 
fee assessment for some regulatory fee categories, such as ITSPs and 
regulatees of the International Bureau, significantly, while increasing 
the assessment for many other fee categories. In order to provide a 
reasonable transition to our new allocations and because there are 
unresolved regulatory fee reform issues that may be adopted in FY 2014 
that could further impact these allocations, we propose limiting any 
rate increases resulting from our reallocations for this fiscal year. 
Such a limitation of, for example, 7.5 percent, would prevent 
``unexpected, substantial increases which could severely impact the 
economic wellbeing of these licensees [regulatees].'' \66\ We propose 
implementing such a limitation on the increase in regulatory fee rates, 
before any rounding to the nearest applicable dollar unit as set forth 
in our rules, above FY 2012 fee rates.\67\ This limitation, if adopted, 
would be effective in FY 2013. Below are tables illustrating the impact 
of limiting the increase to 7.5 percent on regulatory fee collection 
and its associated Schedule of Fees. This will allow us to begin the 
transition toward better alignment of regulatory fees with Commission 
work performed, permitting necessary downward adjustment of regulatory 
fees in some sectors without imposing undue economic hardship on 
regulates in other sectors. Limiting increases will, necessarily, limit 
the decrease in fees for other regulatory fee categories, since the 
overall fee collection amount does not change.
---------------------------------------------------------------------------

    \66\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 1997, Report and Order, 12 FCC 17161, 17176, para. 37 (1997).
    \67\ The cap would not limit changes in regulatory fees paid by 
a particular payor resulting from other factors, such as increased 
or decreased revenues, changes in subscriber numbers, number of 
licenses, etc.

            Table 2--Maintain the Same Percentage Allocations as in Prior Years Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              FY 2012      Pro-rated FY    Computed new   Rounded new FY
                Fee category                   FY 2013 Payment    Years       Revenue      2013 revenue       FY 2013          2013         Expected FY
                                                    units                    estimate       requirement   regulatory fee  regulatory fee   2013 revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use).......................              1,400       10         490,000         507,072              36              35         490,000
PLMRS (Shared use)..........................             15,000       10       2,250,000       2,426,700              16              15       2,250,000
Microwave...................................             13,200       10       2,640,000       2,390,480              18              20       2,640,000
218-219 MHz (Formerly IVDS).................                  5       10           3,500           3,622              72              70           3,500
Marine (Ship)...............................              6,550       10         655,000         796,827              12              10         655,000
GMRS........................................              7,900        5         192,500         289,755               7               5         197,500
Aviation (Aircraft).........................              2,900       10         290,000         362,194              12              10         290,000

[[Page 34620]]

 
Marine (Coast)..............................                285       10         142,500         144,878              51              50         142,500
Aviation (Ground)...........................                900       10         135,000         144,878              16              15         135,000
Amateur Vanity Call Signs...................             14,300       10         214,500         217,316            1.52            1.52         217,360
AM Class A \4\..............................                 68        1         250,100         253,978           3,735           3,725         253,300
AM Class B \4\..............................              1,454        1       3,125,875       3,161,850           2,175           2,175       3,162,450
AM Class C \4\..............................                837        1       1,107,975       1,129,223           1,349           1,350       1,129,950
AM Class D \4\..............................              1,406        1       3,698,400       3,742,299           2,662           2,650       3,725,900
FM Classes A, B1 & C3 \4\...................              2,935        1       7,764,750       7,836,522           2,670           2,675       7,851,125
FM Classes B, C, C0, C1 & C2 \4\............              3,110        1       9,513,000       9,611,273           3,090           3,100       9,641,000
AM Construction Permits.....................                 51        1          35,750          28,658             562             560          28,560
FM Construction Permits \1\.................                170        1          84,000         118,614             698             700         119,000
Satellite TV................................                129        1         178,125         181,097           1,404           1,400         180,600
Satellite TV Construction Permit............                  3        1           3,580           3,622           1,207           1,200           3,600
VHF Markets 1-10............................                 22        1       1,761,650       1,804,524          82,024          82,025       1,804,550
VHF Markets 11-25...........................                 23        1       1,836,875       1,880,596          81,765          81,775       1,880,825
VHF Markets 26-50...........................                 39        1       1,512,400       1,549,293          39,725          39,725       1,549,275
VHF Markets 51-100..........................                 61        1       1,255,500       1,290,409          21,154          21,150       1,290,150
VHF Remaining Markets.......................                140        1         798,025         814,033           5,815           5,825         815,500
VHF Remaining Markets.......................                140        1         798,025         814,033           5,815           5,825         815,500
VHF Construction Permits \1\................                  1        1          11,650           5,825           5,825           5,825           5,825
UHF Markets 1-10............................                109        1       3,853,150       3,880,922          35,605          35,600       3,880,400
UHF Markets 11-25...........................                106        1       3,458,250       3,478,876          32,820          32,825       3,479,450
UHF Markets 26-50...........................                135        1       2,959,875       2,977,132          22,053          22,050       2,976,750
UHF Markets 51-100..........................                225        1       2,868,750       2,884,066          12,818          12,825       2,885,625
UHF Remaining Markets.......................                247        1         845,975         852,059           3,450           3,450         852,150
UHF Construction Permits \1\................                  7        1          23,975          24,150           3,450           3,450          24,150
Broadcast Auxiliaries.......................             25,400        1         248,000         254,000              10              10         254,000
LPTV/Translators/Boosters/Class A TV........              3,725        1       1,436,820       1,448,776             389             390       1,452,750
CARS Stations...............................                325        1         178,125         181,097             557             555         180,375
Cable TV Systems............................         60,000,000        1      59,090,000      59,943,108          .99905            1.00      60,000,000
Interstate Telecommunication Service            $39,000,000,000        1     148,875,000     146,250,000        0.003750         0.00375     146,250,000
 Providers..................................
CMRS Mobile Services (Cellular/Public               321,000,000        1      53,210,000      52,821,422          0.1646            0.17      54,570,000
 Mobile)....................................
CMRS Messag. Services.......................          3,000,000        1         272,000         240,000          0.0800           0.080         240,000
BRS \2\.....................................                920        1         451,250         588,800             640             640         588,800
LMDS........................................                170        1         225,625         108,800             640             640         108,800
Per 64 kbps Int'l Bearer Circuits                     4,220,000        1       1,157,602       1,167,825            .277             .28       1,181,600
 Terrestrial (Common) & Satellite (Common &
 Non-Common)................................
Submarine Cable Providers (see chart in                  38.313        1       8,150,984       8,249,219         215,314         215,325       8,249,639
 Table 3) \3\...............................
Earth Stations..............................              3,400        1         893,750         905,485             266             265         901,000
Space Stations (Geostationary)..............                 87        1      11,560,125      11,698,866         134,470         134,475      11,699,325
Space Stations (Non-Geostationary)..........                  6        1         858,900         869,266         144,878         144,875         869,250
                                             -----------------------------------------------------------------------------------------------------------
    ****** Total Estimated Revenue to be      .................  .......     340,568,811     339,521,495  ..............  ..............     341,106,534
     Collected..............................
                                             -----------------------------------------------------------------------------------------------------------
    ****** Total Revenue Requirement........  .................  .......     339,844,000     339,844,000  ..............  ..............     339,844,000
    Difference..............................  .................  .......         724,811        -322,505  ..............  ..............       1,262,534
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher
  than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue
  totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for
  VHF and UHF television stations, respectively.
\2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate
  the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order
  and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ] 6 (2004).
\3\ The chart at the end of Table 3 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from
  the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No.
  08-65, RM-11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of
  Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09-65, MD Docket No. 08-65), released on May 14, 2009.
\4\ The fee amounts listed in the column entitled ``Rounded New FY 2013 Regulatory Fee'' constitute a weighted average media regulatory fee by class of
  service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 3.


   Table 3--Maintain the Same Percentage Allocations as in Prior Years
                  [FY 2013 schedule of regulatory fees]
------------------------------------------------------------------------
                                                             Annual
                     Fee category                        regulatory fee
                                                           (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).                 35
Microwave (per license) (47 CFR part 101)............                 20
218-219 MHz (Formerly Interactive Video Data Service)                 70
 (per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80).........                 10
Marine (Coast) (per license) (47 CFR part 80)........                 50
General Mobile Radio Service (per license) (47 CFR                     5
 part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under                 15
 the Land Mobile category)...........................

[[Page 34621]]

 
PLMRS (Shared Use) (per license) (47 CFR part 90)....                 15
Aviation (Aircraft) (per station) (47 CFR part 87)...                 10
Aviation (Ground) (per license) (47 CFR part 87).....                 15
Amateur Vanity Call Signs (per call sign) (47 CFR                   1.52
 part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR                     .17
 parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20,                 .08
 22, 24 and 90)......................................
Broadband Radio Service (formerly MMDS/MDS) (per                     640
 license) (47 CFR part 27)...........................
Local Multipoint Distribution Service (per call sign)                640
 (47 CFR, part 101)..................................
AM Radio Construction Permits........................                560
FM Radio Construction Permits........................                700
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10.....................................             82,025
    Markets 11-25....................................             81,775
    Markets 26-50....................................             39,725
    Markets 51-100...................................             21,150
    Remaining Markets................................              5,825
    Construction Permits.............................              5,825
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10.....................................             35,600
    Markets 11-25....................................             32,825
    Markets 26-50....................................             22,050
    Markets 51-100...................................             12,825
    Remaining Markets................................              3,450
    Construction Permits.............................              3,450
Satellite Television Stations (All Markets)..........              1,400
Construction Permits--Satellite Television Stations..              1,200
Low Power TV, Class A TV, TV/FM Translators &                        390
 Boosters (47 CFR part 74)...........................
Broadcast Auxiliaries (47 CFR part 74)...............                 10
CARS (47 CFR part 78)................................                555
Cable Television Systems (per subscriber) (47 CFR                   1.00
 part 76)............................................
Interstate Telecommunication Service Providers (per               .00375
 revenue dollar).....................................
Earth Stations (47 CFR part 25)......................                265
Space Stations (per operational station in                       134,475
 geostationary orbit) (47 CFR part 25) also includes
 DBS Service (per operational station) (47 CFR part
 100)................................................
Space Stations (per operational system in non-                   144,875
 geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits--Terrestrial/Satellites                .28
 (per 64KB circuit)..................................
International Bearer Circuits--Submarine Cable.......    See Table Below
------------------------------------------------------------------------


                                      Table 3 (Continued)--FY 2013 Schedule of Regulatory Fees: Maintain Allocation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          FY 2013 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................................................            $750            $625            $575            $650            $700            $875
25,001-75,000...........................................           1,500           1,250             875             975           1,400           1,525
75,001-150,000..........................................           2,250           1,575           1,150           1,625           1,925           2,850
150,001-500,000.........................................           3,375           2,650           1,725           1,950           2,975           3,725
500,001-1,200,000.......................................           4,875           4,075           2,875           3,250           4,725           5,475
1,200,001-3,000,00......................................           7,500           6,250           4,325           5,200           7,700           8,750
>3,000,000..............................................           9,000           7,500           5,475           6,500           9,800          11,375
--------------------------------------------------------------------------------------------------------------------------------------------------------


                   FY 2013 Schedule of Regulatory Fees
            [International bearer circuits--submarine cable]
------------------------------------------------------------------------
    Submarine cable systems
  (capacity as of December 31,     Fee amount            Address
             2012)
------------------------------------------------------------------------
<2.5 Gbps......................         $13,450  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
2.5 Gbps or greater, but less            26,925  FCC, International,
 than 5 Gbps.                                     P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
5 Gbps or greater, but less              53,825  FCC, International,
 than 10 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
10 Gbps or greater, but less            107,675  FCC, International,
 than 20 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.

[[Page 34622]]

 
20 Gbps or greater.............         215,325  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
------------------------------------------------------------------------

    37. We seek comment on the reasonableness of this proposed 
limitation for FY 2013. We also invite comment on higher or lower 
percentages, and whether, rather than a uniform limitation for 
increases to all regulatory fee categories resulting solely from the 
reallocations proposed herein, we should consider different limitations 
for certain industry groups in light of other reform proposals and the 
likely impact on the regulatory fees of such groups. For example, as we 
seek to combine regulatory fees for ITSP and wireless services into one 
category, should we consider a limitation that brings the allocation of 
FTEs for these two groups closer to equal in this fiscal year? Without 
such limitation, would increases for certain regulatory fee categories 
still be fair, taking into account the work of the Commission 
benefiting such payors? Commenters suggesting a different percentage 
for regulatory fee increases applicable to any or all fee categories 
should explain how their proposals would prevent a severe impact on the 
economic wellbeing of regulatees, be consistent with the goals of more 
accurately aligning FTEs with their areas of work, promoting fairness, 
and allowing the Commission to recover its regulatory costs as Congress 
has directed. As we continue with regulatory fee reform in the future, 
we will consider the need for similar limits if significant increases 
in regulatory fee rates occur in any one year as a result of our 
adoption of further reform measures. We, therefore, seek comment on the 
appropriate timeline for fully implementing the reallocation proposed 
herein and whether similar limits to increases in regulatory fee rates 
resulting from such reallocation should be used in FY 2014 and beyond.
4. Interim Measures for FY 2013
    38. We seek comment on whether, in lieu of using updated FTE data 
and implementing the FTE reallocations proposed above in FY 2013, we 
should maintain the allocation percentages we now use for all fee 
categories in FY 2013 and maintain the ITSP fee rate for FY 2013 at 
.00375 per revenue dollar for the third consecutive year. The tables 
below illustrate the impact of this proposal on regulatory fee 
collection, and its associated Schedule of Fees. If we maintained the 
allocation percentages we now use, but did not maintain the ITSP fee 
rate for FY 2013 at .00375, the FY 2013 ITSP fee rate would increase to 
.00409.\68\
---------------------------------------------------------------------------

    \68\ The fee rate of .00409 is based on the current allocation 
percent of 46.67 of our target goal of $339,844,000 with a projected 
ITSP revenue base (calendar year 2012) of $39 billion.

                      Table 4--Revised FTE (as of 9/30/12) Allocations,\5\ Fee Rate Increases Capped at 7.5%, Prior to Rounding \6\
                                             [Calculation of FY 2013 Revenue Requirements and Pro-Rata Fees]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              FY 2012      Pro-rated FY     Uncapped FY      Rounded &
                Fee category                   FY 2013 Payment    Years       Revenue      2013 revenue        2013       capped FY 2013    Expected FY
                                                    units                    estimate       requirement   regulatory fee  regulatory fee   2013 revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use).......................              1,400       10         490,000         606,762              43              40         560,000
PLMRS (Shared use)..........................             15,000       10       2,250,000       2,903,790              19              15       2,250,000
Microwave...................................             13,200       10       2,640,000       2,860,449              22              20       2,640,000
218-219 MHz (Formerly IVDS).................                  5       10           3,500           4,334              87              75           3,750
Marine (Ship)...............................              6,550       10         655,000         953,483              15              10         655,000
GMRS........................................              7,700        5         192,500         346,721               4               5         395,000
Aviation (Aircraft).........................              2,900       10         290,000         433,401              15              10         290,000
Marine (Coast)..............................                285       10         142,500         173,361              61              55         156,750
Aviation (Ground)...........................                900       10         135,000         173,361              19              15         135,000
Amateur Vanity Call Signs...................             14,300       10         214,500         260,041            1.82            1.61         230,230
AM Class A \4\..............................                 68        1         250,100         295,438           4,345           4,350         295,800
AM Class B \4\..............................              1,454        1       3,125,875       3,671,874           2,525           2,275       3,307,850
AM Class C \4\..............................                837        1       1,107,975       1,308,369           1,563           1,375       1,150,875
AM Class D \4\..............................              1,406        1       3,698,400       4,347,161           3,092           2,575       3,620,450
FM Classes A, B1 & C3 \4\...................              2,935        1       7,764,750       8,989,760           3,063           2,750       8,071,250
FM Classes B, C, C0, C1 & C2 \4\............              3,110        1       9,513,000      11,057,826           3,556           3,375      10,496,250
AM Construction Permits.....................                 51        1          35,750          42,205             828             590          30,090
FM Construction Permits \1\.................                170        1          84,000         422,054           2,483             750         127,500
Satellite TV................................                129        1         178,125         211,027           1,636           1,525         196,725
Satellite TV Construction Permit............                  3        1           3,580           4,221           1,407             960           2,880
VHF Markets 1-10............................                 22        1       1,761,650       2,364,840         107,493          86,075       1,893,650
VHF Markets 11-25...........................                 23        1       1,836,875       2,452,884         106,647          78,975       1,816,425
VHF Markets 26-50...........................                 39        1       1,512,400       2,031,796          52,097          42,775       1,668,225
VHF Markets 51-100..........................                 61        1       1,255,500       1,757,986          28,819          22,500       1,372,500
VHF Remaining Markets.......................                140        1         798,025       1,023,545           7,311           6,250         875,000
VHF Construction Permits \1\................                  1        1          11,650          42,205          42,205           6,250           6,250
UHF Markets 1-10............................                109        1       3,853,150       4,177,004          38,321          38,000       4,142,000
UHF Markets 11-25...........................                106        1       3,458,250       3,709,111          34,992          35,000       3,710,000
UHF Markets 26-50...........................                135        1       2,959,875       3,159,479          23,404          23,400       3,159,000
UHF Markets 51-100..........................                225        1       2,868,750       3,053,435          13,571          13,575       3,054,375
UHF Remaining Markets.......................                247        1         845,975         917,906           3,716           3,675         907,725
UHF Construction Permits \1\................                  7        1          23,975         295,438          42,205           3,675          25,725
Broadcast Auxiliaries.......................             25,400        1         248,000         337,644              13              10         254,000
LPTV/Translators/Boosters/Class A TV........              3,725        1       1,436,820       1,688,218             453             415       1,545,875

[[Page 34623]]

 
CARS Stations...............................                325        1         178,125         211,085             649             510         165,750
Cable TV Systems............................         60,000,000        1      59,090,000      69,868,996           1.164            1.02      61,200,000
Interstate Telecommunication Service            $39,000,000,000        1     148,875,000     119,251,260       0.0030577         0.00359     140,010,000
 Providers..................................
CMRS Mobile Services (Cellular/Public               321,000,000        1      53,210,000      63,253,310          0.1899            0.18      57,780,000
 Mobile)....................................
CMRS Messag. Services.......................          3,000,000        1         272,000         240,000          0.0800           0.080         240,000
BRS \2\.....................................                920        1         451,250         693,442             754             510         469,200
LMDS........................................                170        1         225,625         130,020             765             510          86,700
Per 64 kbps Int'l Bearer Circuits                     4,220,000        1       1,157,602       1,030,004            .244             .23         970,600
 Terrestrial (Common) & Satellite (Common &
 Non-Common)................................
Submarine Cable Providers (see chart in                  38.313        1       8,150,984       7,246,703         189,145         191,475       7,335,886
 Table 5) \3\...............................
Earth Stations..............................              3,400        1         893,750         795,837             234             250         850,000
Space Stations (Geostationary)..............                 87        1      11,560,125      10,282,217         118,186         119,600      10,405,200
Space Stations (Non-Geostationary...........                  6        1         858,900         764,004         127,334         128,825         772,950
                                             -----------------------------------------------------------------------------------------------------------
    Total Estimated Revenue to be Collected.  .................  .......     340,568,811     339,844,006  ..............  ..............     339,332,436
    Total Revenue Requirement...............  .................  .......     339,844,000     339,844,000  ..............  ..............     339,844,000
                                             -----------------------------------------------------------------------------------------------------------
        Difference..........................  .................  .......         724,811               6  ..............  ..............       (511,564)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher
  than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue
  totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for
  VHF and UHF television stations, respectively.
\2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate
  the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order
  and FNPRM of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, ] 6 (2004).
\3\ The chart at the end of Table 5 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from
  the adoption of the following proceedings: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order (MD Docket No.
  08-65, RM-11312), released March 24, 2009; and Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of
  Regulatory Fees for Fiscal Year 2008, Notice of Proposed Rulemaking and Order (MD Docket No. 09-65, MD Docket No. 08-65), released on May 14, 2009.
\4\ The fee amounts listed in the column entitled ``Rounded New FY 2012 Regulatory Fee'' constitute a weighted average media regulatory fee by class of
  service. The actual FY 2013 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 5.
\5\ The allocation percentages represent FTE data as of September 30, 2012, and include the proposal to use 27 Direct FTEs (rather than 119 FTEs) for
  the International Bureau.
\6\ The ITSP and international services fee categories received a fee rate reduction.


 Table 5--Revised FTE (as of 9/30/12) Allocations,\5\ Fee Rate Increases
                  Capped at 7.5%, Prior to Rounding \6\
                  [FY 2013 Schedule of regulatory fees]
------------------------------------------------------------------------
                                                             Annual
                     Fee category                        regulatory fee
                                                           (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).                 40
Microwave (per license) (47 CFR part 101)............                 20
218-219 MHz (Formerly Interactive Video Data Service)                 75
 (per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80).........                 10
Marine (Coast) (per license) (47 CFR part 80)........                 55
General Mobile Radio Service (per license) (47 CFR                     5
 part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under                 15
 the Land Mobile category)...........................
PLMRS (Shared Use) (per license) (47 CFR part 90)....                 15
Aviation (Aircraft) (per station) (47 CFR part 87)...                 10
Aviation (Ground) (per license) (47 CFR part 87).....                 15
Amateur Vanity Call Signs (per call sign) (47 CFR                   1.61
 part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR                     .18
 parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20,                 .08
 22, 24 and 90)......................................
Broadband Radio Service (formerly MMDS/MDS) (per                     510
 license) (47 CFR part 27)...........................
Local Multipoint Distribution Service (per call sign)                510
 (47 CFR, part 101)..................................
AM Radio Construction Permits........................                590
FM Radio Construction Permits........................                750
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10.....................................             86,075
    Markets 11-25....................................             78,975
    Markets 26-50....................................             42,775
    Markets 51-100...................................             22,500
    Remaining Markets................................              6,250
    Construction Permits.............................              6,250
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10.....................................             38,000
    Markets 11-25....................................             35,000
    Markets 26-50....................................             23,400

[[Page 34624]]

 
    Markets 51-100...................................             13,575
    Remaining Markets................................              3,675
    Construction Permits.............................              3,675
Satellite Television Stations (All Markets)..........              1,525
Construction Permits--Satellite Television Stations..                960
Low Power TV, Class A TV, TV/FM Translators &                        415
 Boosters (47 CFR part 74)...........................
Broadcast Auxiliaries (47 CFR part 74)...............                 10
CARS (47 CFR part 78)................................                510
Cable Television Systems (per subscriber) (47 CFR                   1.02
 part 76)............................................
Interstate Telecommunication Service Providers (per               .00359
 revenue dollar).....................................
Earth Stations (47 CFR part 25)......................                250
Space Stations (per operational station in                       119,600
 geostationary orbit) (47 CFR part 25) also includes
 DBS Service (per operational station) (47 CFR part
 100)................................................
Space Stations (per operational system in non-                   128,825
 geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits--Terrestrial/Satellites                .23
 (per 64KB circuit)..................................
International Bearer Circuits--Submarine Cable.......    See Table Below
------------------------------------------------------------------------


                                      Table 5 (Continued)--FY 2013 Schedule of Regulatory Fees: Fee Rate Increases
                                                         [Capped at 7.5%, prior to rounding \6\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          FY 2013 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................................................            $775            $650            $600            $675            $750            $950
25,001-75,000...........................................           1,575           1,325             925           1,025           1,525           1,675
75,001-150,000..........................................           2,375           1,650           1,200           1,725           2,100           3,100
150,001-500,000.........................................           3,550           2,800           1,800           2,050           3,250           4,025
500,001-1,200,000.......................................           5,125           4,275           3,000           3,425           5,150           5,950
1,200,001-3,000,00......................................           7,900           6,550           4,525           5,450           8,375           9,525
>3,000,000..............................................           9,475           7,875           5,725           6,825          10,700          12,375
--------------------------------------------------------------------------------------------------------------------------------------------------------


         FY 2013 Schedule of Regulatory Fees: Fee Rate Increases
                 [Capped at 7.5%, Prior to Rounding \6\]
------------------------------------------------------------------------
International bearer circuits--
submarine cable submarine cable
    systems (capacity as of        Fee amount            Address
       December 31, 2012)
------------------------------------------------------------------------
< 2.5 Gbps.....................         $11,975  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
2.5 Gbps or greater, but less            23,925  FCC, International,
 than 5 Gbps.                                     P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
5 Gbps or greater, but less              47,875  FCC, International,
 than 10 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
10 Gbps or greater, but less             95,750  FCC, International,
 than 20 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
20 Gbps or greater.............         191,475  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
------------------------------------------------------------------------

5. Revenue Based Regulatory Fee Assessments
    39. In addition to using revenues to calculate regulatory fees for 
the wireless industry, discussed above, we invite comment on whether 
revenues would be a more appropriate measure for other industries in FY 
2014 or future years. For example, should the Commission use revenues 
instead of number of subscribers in determining the regulatory fee for 
the cable industry? Would revenues be a more appropriate measure for 
calculating regulatory fees for the satellite industry? If so, how 
should the Commission account for satellite revenue from foreign 
sources? Commenters should address whether foreign revenues would be 
relevant if we assessed fees in that manner. Commenters also should 
discuss how we would determine the revenues for companies that do not 
file a FCC Form 499-A, what information should be provided to the 
Commission, and whether such information would require confidential 
treatment. Conversely, we seek comment on whether it would be fairer 
and more sustainable to assess more fee categories

[[Page 34625]]

on some other basis, such as subscribers.

C. Other Telecommunications Regulatory Fee Issues

1. Regulatory Fee Obligations for Digital Low Power, Class A, and TV 
Translators/Boosters
    40. 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 with a 
transition date of September 1, 2015. Historically, we have considered 
the digital transition only in the context of regulatory fees 
applicable to full-service television stations, and not to Low Power, 
Class A, and TV Translators/Boosters. 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 clarify that we are assessing a fee 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. As greater numbers of facilities 
convert to digital mode, the Commission will provide revised 
instructions on how regulatory fees will be assessed.
2. Combining UHF/VHF Television Media Regulatory Fees
    41. Regulatory fees for full-service television stations are 
calculated based on two, five-tiered market segments for Ultra High 
Frequency (UHF) and Very High Frequency (VHF) television stations, 
respectively. There is also a construction permit fee category for UHF 
and VHF. After the transition to digital television on June 12, 2009, 
we received comment on this issue, suggesting that the Commission 
combine the UHF and VHF regulatory fee categories.\69\ Combining UHF 
and VHF full-service television stations into a single five-tiered fee 
category (by market size) would in effect eliminate any distinctions 
between UHF and VHF services.
---------------------------------------------------------------------------

    \69\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2010, Report and Order, 25 FCC Rcd 9278, 9285-86, at paras. 18-
20 (2010) (FY 2010 Report and Order) (Fireweed Communications argued 
that we should base the regulatory fee structure on three tiers; Sky 
Television, LLC, Spanish Broadcasting System, Inc., and Sarkes 
Tarzian argued that instead of six separate categories for both VHF 
and UHF we should combine them into six categories based on market 
size and thus eliminate any distinction between VHF and UHF.). See 
also Notice of Ex Parte Presentation, filed by Sarkes Tarzian, Inc. 
and Sky Television, LLC (Feb. 15, 2013) (arguing that VHF stations 
are less desirable than UHF stations and it was unfair to have 
higher fees for such stations; instead the fee category should be 
combined.).
---------------------------------------------------------------------------

    42. Historically, analog VHF channels (channels 1-13) have been 
coveted for their greater prestige and larger audience, and thus the 
regulatory fees assessed on VHF stations have been higher than the 
regulatory fees assessed for UHF (channels 14 and above) stations in 
the same market area. Conversely, digital VHF channels are less 
desirable than digital UHF channels, and thus there may no longer be a 
basis on which to assess higher regulatory fees for VHF channels. 
Combining VHF and UHF into one fee category would eliminate the current 
fee disparity between UHF and VHF television stations. We propose that 
the UHF and VHF full service television station categories be combined 
into one fee category, divided into tiers based on market size, with 
one resulting rate. This proposal, if adopted, will be implemented in 
FY 2014. We seek comment on this proposal.

                            Table 6--Proposed Combined UHF/VHF Digital Television Fee
                      [Based on Figures from Table 2, Allocation % Same as in Prior Years]
----------------------------------------------------------------------------------------------------------------
                                                                  Pro-rated rev.   Rounded FY12      Expected
                 Combined fee category                    Units        req.             fee           revenue
----------------------------------------------------------------------------------------------------------------
Digital Television Markets 1-10........................      131      $5,685,446         $43,400      $5,685,400
Digital Television Markets 11-25.......................      129       5,359,471          41,550       5,359,950
Digital Television Markets 26-50.......................      174       4,526,425          26,025       4,528,350
Digital Television Markets 51-100......................      286       4,174,475          14,600       4,175,600
Digital Television Remaining Markets...................      387       1,666,092           4,300       1,664,100
Digital Television Construction Permits................        8          34,400           4,300          34,400
----------------------------------------------------------------------------------------------------------------

3. Internet Protocol TV (IPTV)
    43. IPTV is digital television delivered through a high speed 
Internet connection, instead of through traditional formats such as 
cable or terrestrial broadcast. IPTV service generally is offered 
bundled with the customer's Internet and telephone or VoIP services. In 
the FY 2008 Report and Order we sought comment on whether this video 
service should be subject to regulatory fees, and if so, should the 
IPTV provider count this service for regulatory fee purposes in the 
same manner as cable services, which is on a per subscriber basis.\70\ 
By assessing regulatory fees on cable services but not on IPTV, we may 
place cable providers at a competitive disadvantage. Commenters should 
discuss whether IPTV is sufficiently similar to cable services to be 
included in the same regulatory fee category and to be assessed 
regulatory fees in the same manner. This proposal, if adopted, would be 
implemented in FY 2014.
---------------------------------------------------------------------------

    \70\ FY 2008 FNPRM, 24 FCC Rcd at 6406-07, paras. 48-49.
---------------------------------------------------------------------------

4. Multi-Year Wireless Services
    44. Multi-year wireless services is a fee category that encompasses 
various different wireless services (e.g., microwave, land mobile) 
whose regulatory fees are paid up front only at the time that the five-
year or 10-year license is renewed. Most of these multi-year wireless 
licenses are 10-year licenses. The number of licensees seeking renewal 
or filing new applications for licenses (the unit count) could 
fluctuate dramatically from one year to the next as companies go out of 
business, directly impacting the fee rate for that year. Further, 
because the time between license renewals is 10 years, the regulatory 
fee amount paid can also increase or decrease substantially from one 
renewal to the next because of unit fluctuations and changes in the 
annual appropriation from one year to the next. We seek comment on 
appropriate steps to take, if any, when the fee rate in this

[[Page 34626]]

fee category fluctuates dramatically from one year to the next because 
of changes in the unit count. These proposals, if adopted, would be 
implemented in FY 2014.
5. Commercial Mobile Radio Service (CMRS) Messaging
    45. CMRS Messaging Service, which replaced the CMRS One-Way Paging 
fee category in 1997, includes all narrowband services.\71\ Initially, 
as a measure to provide relief to the paging industry, the Commission 
froze the regulatory fee for this fee category at the FY 2002 level, 
setting an applicable rate at $0.08 per subscriber beginning in FY 
2003.\72\ At that time we noted that CMRS Messaging units had 
significantly declined from 40.8 million in FY 1997 to 19.7 million in 
FY 2003--a decline of 51.7 percent.\73\ Commenters argued this decline 
in subscribership was not just a temporary phenomenon, but a lasting 
one. Commenters further argued that, because the messaging industry is 
spectrum-limited, geographically localized, and very cost sensitive, it 
is difficult for this industry to pass on increases in costs to its 
subscribers.\74\
---------------------------------------------------------------------------

    \71\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 1997, Report and Order, 12 FCC Rcd 17161, 17184-85, para. 60 
(1997) (FY 1997 Report and Order).
    \72\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2003, Report and Order, 18 FCC Rcd 15985, 15992, para. 22 
(2003) (FY 2003 Report and Order).
    \73\ FY 2003 Report and Order, 18 FCC Rcd 15992, para. 21. The 
subscriber base in the paging industry declined 92 percent from 40.8 
million to 3.2 million between FY 1997 and FY 2012, according to FY 
2012 collection data, as of Sept. 30, 2012. See FY 2010 Report and 
Order at note 8.
    \74\ FY 2003 Report and Order, 18 FCC Rcd 15992, para. 22.
---------------------------------------------------------------------------

    46. The decline in subscribership for this industry raises a more 
fundamental issue: Whether the Commission should modify the methodology 
in collecting regulatory fees from entities in declining industries. 
For industries such as paging, our methodology may be burdensome on the 
industry and of negligible value to the Commission, due to the 
administrative burden of assessing the fee on many very small 
companies. We seek comment on whether to modify the way in which we 
assess fees from providers in declining industries and how to define a 
declining industry. Commenters should discuss whether there are other 
similarly situated categories that need regulatory fee relief. 
Proposals, if adopted, would be implemented in FY 2014.

D. Administrative Issues

1. Electronic Filing and Payment System
    47. In FY 2009, the Commission implemented several procedural 
changes that simplified the payment and reconciliation processes for FY 
2009 regulatory fees. The Commission's current regulatory fee 
collection procedures can be found in the Report and Order on 
Assessment and Collection of Regulatory Fees for FY 2012.\75\
---------------------------------------------------------------------------

    \75\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2012, Report and Order, 27 FCC Rcd 8390, 8395-97, paras. 17-20, 
24-26 (2012) (FY 2012 Report and Order).
---------------------------------------------------------------------------

    48. In FY 2013, the Commission will continue to promote greater use 
of technology (and less use of paper) in improving our regulatory fee 
notification and collection process. These changes, and the dates on 
which they will take place, are discussed in more detail below. 
Specifically, as of October 1, 2013, we will no longer accept paper and 
transfer electronic invoicing and receivables collection to the 
Treasury in FY 2014. Finally, in FY 2014, we will no longer mail out 
initial CMRS assessments, and will instead require licensees to log 
into the Commission's Web site to view and revise their subscriber 
counts.
2. Discontinuation of Mail Outs of Initial CMRS Assessments
    49. In FY 2014, as part of the Commission's effort to become more 
``paperless,'' the Commission will no longer mail out its initial CMRS 
assessments, but will require licensees to log into the Commission's 
Web site to view and revise their subscriber counts. A system currently 
exists for providers to revise their CMRS subscriber counts 
electronically, and it is possible that this system can be expanded to 
include letters that can be downloaded to serve as the initial CMRS 
assessment letter. The Commission will provide more details in future 
announcements as this system is developed.
3. Discontinuation of Paper and Check Transactions Beginning October 1, 
2013
    50. Together with the U.S. Department of Treasury, the Commission 
is taking further steps to meet the OMB Open Government Directive.\76\ 
A component part of the Treasury's current flagship initiative pursuant 
to this Directive is moving to a paperless Treasury, which includes 
related activities in both disbursing and collecting select federal 
government payments and receipts.\77\ Going paperless is expected to 
produce cost savings, reduce errors, and improve efficiencies across 
government. Accordingly, beginning on October 1, 2013, the Commission 
will no longer accept checks (including cashier's checks) and the 
accompanying hardcopy forms (e.g., Form 159's, Form 159-B's, Form 159-
E's, Form 159-W's) for the payment of regulatory fees. This new 
paperless procedure will require that all payments be made by credit 
card, wire transfer, or ACH payment. Any other form of payment (e.g., 
checks) will be rejected and sent back to the payor. This change will 
affect all payments for regulatory fees made on or after that October 
1, 2013.\78\
---------------------------------------------------------------------------

    \76\ Office of Management and Budget (OMB) Memorandum M-10-06, 
Open Government Directive, Dec. 8, 2009; see also http://www.whitehouse.gov/the-press-office/2011/06/13/executive-order-13576-delivering-efficient-effective-and-accountable-gov.
    \77\ See U.S. Department of the Treasury, Open Government Plan 
2.1, Sep. 2012.
    \78\ Payors should note that this change will mean that, to the 
extent certain entities have, to date, paid both regulatory fees and 
application fees at the same time via paper check, they will no 
longer be able to do so, as the regulatory fees payment via paper 
check will no longer be accepted.
---------------------------------------------------------------------------

    51. Currently, the Commission is working with Treasury to implement 
procedures that will reduce manual and subscale accounts receivables, 
reduce hidden costs associated with collections, and increase 
recoveries. We anticipate measurable enhancements in our program 
achieved by reducing our delinquency rate, increasing collections, and 
reducing costs. Under section 9 of the Act, Commission rules, and the 
debt collection laws, a licensee's regulatory fee is due on the first 
day of the fiscal year and payable at a date established by our annual 
regulatory fee Report and Order. The Commission will work with Treasury 
to facilitate end-to-end billing and collections capabilities for our 
receivables in the pre-delinquency stage and seeks to implement these 
changes in FY 2014. Under these revised procedures, the Commission will 
begin transferring appropriate receivables (unpaid regulatory fees) to 
Treasury at the end of the payment period instead of waiting for a 
period of 180 days from the date of delinquency to transfer a 
delinquent debt to Treasury for further collection action.\79\ 
Accordingly, we anticipate that transfer to Treasury will occur much 
earlier than it now does. Regulatees, however, likely will not see 
substantial change in the current procedures of how they are required 
to pay the fee for FY 2013 and FY 2014. After the date on which the FY 
2014 payment fee window closes; however, if a FY 2013 receivable is 
past due, we

[[Page 34627]]

expect some changes in notification procedures and in the process by 
which to submit payments to Treasury or its designated financial agent. 
Consistent with those anticipated modifications and any future Treasury 
procedure, the Commission expects it will modify its informative 
guidance and amend its rules. We invite comments on this proposed 
change.
---------------------------------------------------------------------------

    \79\ See 31 U.S.C. 3711(g); 31 CFR 285.12; 47 CFR 1.1917.
---------------------------------------------------------------------------

V. Further Notice of Proposed Rulemaking

    52. Above we seek comment concerning regulatory reforms we believe 
may potentially be adopted in FY 2013 or FY 2014.\80\ The FNPRM below 
invites comment on proposals and issues that require additional time 
for consideration and implementation. Accordingly, we seek comment on 
the viability of these proposals and whether they should be implemented 
in future years.
---------------------------------------------------------------------------

    \80\ As noted above, some of these proposals, if adopted, would 
be effective in FY 2013 and others in FY 2014.
---------------------------------------------------------------------------

A. Non-U.S.-Licensed Space Stations Serving the United States

    53. The Commission's goal in assessing satellite regulatory fees is 
to recover all of the costs associated with satellite regulatory 
activities and to distribute these costs fairly among fee payers. To 
recover the costs associated with policy and rulemaking activities 
associated with space stations, section 1.1156 of the Commission's 
rules includes ``Space Station (Geostationary Orbit)'' and ``Space 
Stations (Non-Geostationary Orbit)'' in the regulatory fee 
schedule.\81\ These fees are assessed only for U.S.-licensed space 
stations. Regulatory fees are not assessed for non-U.S.-licensed space 
stations that provide service to customers in the United States.\82\
---------------------------------------------------------------------------

    \81\ 47 CFR 1.1156.
    \82\ This issue was raised in the FY 1999 Report and Order where 
the Commission observed that that the legislative history provides 
that only space stations licensed under Title III--which does not 
include non-U.S.-licensed satellite operators--may be subject to 
regulatory fees. Assessment and Collection of Regulatory Fees for 
Fiscal Year 1999, Report and Order, 14 FCC Rcd 9896, 9882, para. 39 
(1999) (FY 1999 Report and Order).
---------------------------------------------------------------------------

    54. The Commission's policies, regulations, international, user 
information, and enforcement activities all benefit non-U.S. licensed 
satellite operators that access the U.S. market. Rulemaking proceedings 
establishing authorization procedures or service rules for satellite 
services apply both to U.S. licensed satellites and non-U.S. licensed 
satellites providing service in the United States.\83\ A non-U.S. 
licensed satellite operator may file a petition for a declaratory 
ruling seeking Commission approval to provide service in the United 
States. The International Bureau evaluates this petition for 
consistency with the Commission's legal and technical requirements in 
the same manner as the Bureau evaluates the application for an FCC 
space station license and, on the basis of this review, imposes any 
appropriate conditions for the grant of market access. Once the non-
U.S. licensed space stations are granted access to earth stations in 
the United States, the grant is recorded together with any conditions 
of access, in the International Bureau Filing System. After a grant of 
market access, the operations of non-U.S. space stations with U.S. 
licensed earth stations are also monitored to ensure that their 
operators satisfy all conditions placed on their grant of U.S. market 
access, including space station implementation milestones and 
operational requirements, and are subject to enforcement action if the 
conditions are not met. Despite the regulatory benefits provided by the 
Commission to non-U.S. licensed satellite systems serving the United 
States they do not incur the regulatory fees (or application fees) paid 
by U.S.-licensed satellite systems. As a result, U.S.-licensed space 
station operators, which are assessed these fees by the Commission and 
compete with the non-U.S. licensed operators, may be at a competitive 
disadvantage.
---------------------------------------------------------------------------

    \83\ See, e.g., Establishment of Policies and Service Rules for 
the Broadcasting-Satellite Service at the 17.3-17.8 GHz Frequency 
Band and at the 17.7-17.8 GHz Frequency Band Internationally, and at 
the 24.75-25.25 GHz Frequency Band for Fixed Satellite Services 
Providing Feeder Links to the Broadcasting-Satellite Service for the 
Satellite Services Operating Bi-Directionally in the 17.3-17.8 GHz 
Frequency Band, IB 06-123, Report and Order and Further Notice of 
Proposed Rulemaking, 22 FCC Rcd 8842 (2007).
---------------------------------------------------------------------------

    55. We therefore seek comment on whether regulatory fees should be 
assessed on non-U.S. licensed space station operators providing service 
in the United States. Commenters should discuss whether the Commission 
should revisit the Commission's 1999 conclusion that the regulatory fee 
category for Space Stations (Geostationary Orbit) and Space Stations 
(Non-Geostationary Orbit) in section 1.1156(a) of the Commission's 
rules covers only Title III license holders.\84\ Commenters that 
advocate assessing regulatory fees on non-U.S. licensed space stations 
providing service in the United States should propose how the fees 
should be calculated and applied, particularly in instances where the 
non-U.S. licensed space station operator accesses the U.S. market 
solely through an application by a U.S.-licensed earth station operator 
to list the non-U.S. licensed space station as a point of 
communication. Commenters should also provide specific information as 
to whether other countries already assess regulatory fees in one form 
or another on U.S. licensed satellite systems accessing their markets. 
Would assessing regulatory fees on non-U.S. licensed space stations 
encourage foreign countries to assess such fees on U.S. licensed space 
stations? If so, would that place U.S. licensed space stations at a 
competitive disadvantage in the marketplace?
---------------------------------------------------------------------------

    \84\ FY 1999 Report and Order, 14 FCC Rcd at 9882, para. 39.
---------------------------------------------------------------------------

B. Video Services--Direct Broadcast Satellite (DBS)

    56. DBS programming is similar to cable services; it differs in 
that the programming is not transmitted terrestrially by cable but 
instead by satellites stationed in geosynchronous orbit. DBS operators 
are considered multichannel video programming distributors (MVPDs), 
pursuant to section 522(13) of the Act.\85\ DBS operators are licensed 
as geostationary satellite operators and currently pay a per-
geostationary orbit (GSO) satellite regulatory fee but do not pay a 
per-subscriber regulatory fee.\86\ We seek comment on whether 
regulatory fees paid by DBS providers should be calculated on the same 
basis as cable television system operators and cable antenna relay 
system licensees, based on Media Bureau FTEs. In this regard, we note 
that there are regulatory similarities between these providers; for 
example, DBS providers may file program access complaints \87\ and 
complaints seeking relief under the retransmission consent good faith 
rules; \88\ and they must comply with the Commercial Advertisement 
Loudness Mitigation Act (CALM Act),\89\ the Twenty-First Century Video 
Accessibility Act (CVAA),\90\ and the closed captioning and video 
description rules.
---------------------------------------------------------------------------

    \85\ 47 U.S.C. 522(13). An MVPD is a service provider delivering 
video programming services, such as cable television operators, DBS 
providers, and wireline video providers.
    \86\ Previously, the Commission declined to adopt the same per-
subscriber fee for DBS. See FY 2005 Report and Order, 20 FCC Rcd at 
12264, paras. 10-11.
    \87\ 47 U.S.C. 548; 47 CFR 76.1000-1004.
    \88\ 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).
    \89\ See Implementation of the Commercial Advertisement, 
Loudness Mitigation (CALM) Act, Report and Order, 26 FCC Rcd 17222 
(2011).
    \90\ 47 U.S.C. 618(b).
---------------------------------------------------------------------------

    57. There are also regulatory differences between cable operators 
and DBS operators, however. There are only

[[Page 34628]]

two DBS operators in the Nation, while there are 1,141 cable operators 
and 6,635 cable systems. Each cable operator must keep certain records 
for each of its cable systems; e.g., Political,\91\ Equal Employment 
Opportunity,\92\ Commercial Records on Children's Programs,\93\ Proof-
of-Performance Test Data,\94\ Signal Leakage Logs and Repair 
Records,\95\ Aeronautical Notifications,\96\ Leased Access,\97\ 
Principal Headend Location,\98\ Availability of Signals,\99\ Operator 
Interests in Video Programming,\100\ Emergency Alert System Tests and 
Activation,\101\ Complaint Resolution,\102\ Regulatory,\103\ and the 
Sponsorship Identification.\104\ (DBS operators also are required to 
keep Political, Equal Employment Opportunity, Commercial Records on 
Children's Programs files, and Emergency Alert System Tests and 
Activation files.)
---------------------------------------------------------------------------

    \91\ 47 CFR 76.1701.
    \92\ 47 CFR 76.1702.
    \93\ 47 CFR 76.1703.
    \94\ 47 CFR 76.1704.
    \95\ 47 CFR 76.1706.
    \96\ 47 CFR 76.1804.
    \97\ 47 CFR 76.1707.
    \98\ 47 CFR 76.1708.
    \99\ 47 CFR 76.1709.
    \100\ 47 CFR 76.1710.
    \101\ 47 CFR 76.1711.
    \102\ 47 CFR 76.1713.
    \103\ 47 CFR 76.1714.
    \104\ 47 CFR 76.1715.
---------------------------------------------------------------------------

    58. For FY 2012, cable service providers paid approximately $0.95 
per subscriber in regulatory fees.\105\ The two DBS providers, DirectTV 
and DISH Network, paid much lower regulatory fees on a per subscriber 
basis, and their regulatory fees were based on International Bureau 
FTEs, not Media Bureau FTEs. We seek comment on whether the DBS 
providers should instead pay regulatory fees that are comparable to the 
regulatory fees paid by cable service providers; i.e., based on the 
Media Bureau FTEs. To that end, because DBS providers benefit directly 
from the work not only of the International Bureau, but also the Media 
Bureau, should a portion of Media Bureau FTEs be allocated to DBS 
providers? Or is there some alternative way to more fairly assess 
regulatory fees to DBS and cable providers? Commenters should also 
discuss whether we should require both DBS and cable operators to pay 
regulatory fees based on revenues, and, if so, how we would collect 
revenue information from these entities.
---------------------------------------------------------------------------

    \105\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2012, Report and Order, 27 FCC Rcd at Attachment C (2012) (FY 
2012 Order).
---------------------------------------------------------------------------

C. Other Services

    59. Should additional regulatory fee categories be added to the 
regulatory fee schedule set forth in section 9? If so, what categories 
should be added, and why? \106\ To the extent that licensees offer 
services that are regulated by more than one core bureau, how would the 
addition of new fee categories affect the allocation of FTEs by core 
bureau?
---------------------------------------------------------------------------

    \106\ In our FY 2012 NPRM, for example, we sought comment on 
whether the Commission has authority, under section 9, to include 
broadband as a fee category, and asked how the costs of any such 
additional fee categories should be assessed. We continue to seek 
comment on this issue, specifically, and more generally: Are there 
other fee categories that should be added?
---------------------------------------------------------------------------

VI. Conclusion

    60. We are confident the FY 2013 NPRM and FNPRM propose a portfolio 
of options to achieve our goal for revising the regulatory fee schedule 
in order to fairly address the changing and converging communications 
industry, changes in the Commission's regulatory processes since 
established in 1994, and the recommendations in the GAO Report. We 
invite and encourage interested parties to submit comments in response 
to numerous proposals discussed above so that a robust record is 
created to better inform the Commission as it examines reforming the 
regulatory fee structure.

VII. Additional Tables

TABLE 7--Sources of Payment Unit Estimates for FY 2013

    In order to calculate individual service fees for FY 2013, we 
adjusted FY 2012 payment units for each service to more accurately 
reflect expected FY 2013 payment liabilities. We obtained our updated 
estimates through a variety of means. For example, we used Commission 
licensee databases, actual prior year payment records and industry and 
trade association projections when available. The databases we 
consulted include our Universal Licensing System (``ULS''), 
International Bureau Filing System (``IBFS''), Consolidated Database 
System (``CDBS'') and Cable Operations and Licensing System 
(``COALS''), as well as reports generated within the Commission such as 
the Wireline Competition Bureau's Trends in Telephone Service and the 
Wireless Telecommunications Bureau's Numbering Resource Utilization 
Forecast.
    We sought verification for these estimates from multiple sources 
and, in all cases; we compared FY 2013 estimates with actual FY 2012 
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 2013 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 2013 payment units are based on FY 2012 
actual payment units, it does not necessarily mean that our FY 2013 
projection is exactly the same number as in FY 2012. We have either 
rounded the FY 2013 number or adjusted it slightly to account for these 
variables.

Table 8--Factors, Measurements, and Calculations That Determines Station
           Signal Contours and Associated Population Coverages
------------------------------------------------------------------------
         Fee category              Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave,  Based on Wireless Telecommunications
 218-219 MHz, Marine (Ship &    Bureau (``WTB'') projections of new
 Coast), Aviation (Aircraft &   applications and renewals taking into
 Ground), GMRS, Amateur         consideration existing Commission
 Vanity Call Signs, Domestic    licensee data bases. Aviation (Aircraft)
 Public Fixed.                  and Marine (Ship) estimates have been
                                adjusted to take into consideration the
                                licensing of portions of these services
                                on a voluntary basis.
CMRS Cellular/Mobile Services  Based on WTB projection reports, and FY
                                12 payment data.
CMRS Messaging Services......  Based on WTB reports, and FY 12 payment
                                data.
AM/FM Radio Stations.........  Based on CDBS data, adjusted for
                                exemptions, and actual FY 2012 payment
                                units.
UHF/VHF Television Stations..  Based on CDBS data, adjusted for
                                exemptions, and actual FY 2012 payment
                                units.
AM/FM/TV Construction Permits  Based on CDBS data, adjusted for
                                exemptions, and actual FY 2012 payment
                                units.

[[Page 34629]]

 
LPTV, Translators and          Based on CDBS data, adjusted for
 Boosters, Class A Television.  exemptions, and actual FY 2012 payment
                                units.
Broadcast Auxiliaries........  Based on actual FY 2012 payment units.
BRS (formerly MDS/MMDS)......  Based on WTB reports and actual FY 2012
                                payment units.
LMDS.........................  Based on WTB reports and actual FY 2012
                                payment units.
Cable Television Relay         Based on data from Media Bureau's COALS
 Service (``CARS'') Stations.   database and actual FY 2012 payment
                                units.
Cable Television System        Based on publicly available data sources
 Subscribers.                   for estimated subscriber counts and
                                actual FY 2011 payment units.
Interstate Telecommunication   Based on FCC Form 499-Q data for the four
 Service Providers.             quarters of calendar year 2012, the
                                Wireline Competition Bureau projected
                                the amount of calendar year 2012 revenue
                                that will be reported on 2013 FCC Form
                                499-A worksheets in April, 2013.
Earth Stations...............  Based on International Bureau (``IB'')
                                licensing data and actual FY 2012
                                payment units.
Space Stations (GSOs & NGSOs)  Based on IB data reports and actual FY
                                2012 payment units.
International Bearer Circuits  Based on IB reports and submissions by
                                licensees.
Submarine Cable Licenses.....  Based on IB license information.
------------------------------------------------------------------------

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, phase, 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 augmented 
standard if pertinent, horizontal plane radiation pattern was 
calculated using techniques and methods specified in sections 73.150 
and 73.152 of the Commission's rules.\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 2010 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 2010 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.

        Table 9--Reference to FY 2012 Schedule of Regulatory Fees
------------------------------------------------------------------------
                                                              Annual
                      Fee category                        regulatory fee
                                                            (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90)....              35
Microwave (per license) (47 CFR part 101)...............              20
218-219 MHz (Formerly Interactive Video Data Service)                 70
 (per license) (47 CFR part 95).........................
Marine (Ship) (per station) (47 CFR part 80)............              10
Marine (Coast) (per license) (47 CFR part 80)...........              50
General Mobile Radio Service (per license) (47 CFR part                5
 95)....................................................
Rural Radio (47 CFR part 22) (previously listed under                 15
 the Land Mobile category)..............................
PLMRS (Shared Use) (per license) (47 CFR part 90).......              15
Aviation (Aircraft) (per station) (47 CFR part 87)......              10
Aviation (Ground) (per license) (47 CFR part 87)........              15
Amateur Vanity Call Signs (per call sign) (47 CFR part              1.50
 97)....................................................
CMRS Mobile/Cellular Services (per unit) (47 CFR parts               .17
 20, 22, 24, 27, 80 and 90).............................
CMRS Messaging Services (per unit) (47 CFR parts 20, 22,             .08
 24 and 90).............................................
Broadband Radio Service (formerly MMDS/MDS) (per                     475
 license) (47 CFR part 27)..............................
Local Multipoint Distribution Service (per call sign)                475
 (47 CFR, part 101).....................................
AM Radio Construction Permits...........................             550
FM Radio Construction Permits...........................             700

[[Page 34630]]

 
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10........................................          80,075
    Markets 11-25.......................................          73,475
    Markets 26-50.......................................          39,800
    Markets 51-100......................................          20,925
    Remaining Markets...................................           5,825
    Construction Permits................................           5,825
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10........................................          35,350
    Markets 11-25.......................................          32,625
    Markets 26-50.......................................          21,925
    Markets 51-100......................................          12,750
    Remaining Markets...................................           3,425
    Construction Permits................................           3,425
Satellite Television Stations (All Markets).............           1,425
Construction Permits--Satellite Television Stations.....             895
Low Power TV, Class A TV, TV/FM Translators & Boosters               385
 (47 CFR part 74).......................................
Broadcast Auxiliaries (47 CFR part 74)..................              10
CARS (47 CFR part 78)...................................             475
Cable Television Systems (per subscriber) (47 CFR part               .95
 76)....................................................
Interstate Telecommunication Service Providers (per               .00375
 revenue dollar)........................................
Earth Stations (47 CFR part 25).........................             275
Space Stations (per operational station in geostationary         132,875
 orbit) (47 CFR part 25) also includes DBS Service (per
 operational station) (47 CFR part 100).................
Space Stations (per operational system in non-                   143,150
 geostationary orbit) (47 CFR part 25)..................
International Bearer Circuits--Terrestrial/Satellites                .26
 (per 64KB circuit).....................................
International Bearer Circuits--Submarine Cable..........       See Table
                                                                   Below
------------------------------------------------------------------------


                                                Table 9 (Continued)--FY 2012 Schedule of Regulatory Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          FY 2012 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................................................            $725            $600            $550            $625            $700            $875
25,001--75,000..........................................           1,475           1,225             850             950           1,425           1,550
75,001--150,000.........................................           2,200           1,525           1,125           1,600           1,950           2,875
150,001--500,000........................................           3,300           2,600           1,675           1,900           3,025           3,750
500,001--1,200,000......................................           4,775           3,975           2,800           3,175           4,800           5,525
1,200,001--3,000,000....................................           7,350           6,100           4,200           5,075           7,800           8,850
>3,000,000..............................................           8,825           7,325           5,325           6,350           9,950          11,500
--------------------------------------------------------------------------------------------------------------------------------------------------------


                   FY 2012 Schedule of Regulatory Fees
            [International Bearer Circuits--Submarine Cable]
------------------------------------------------------------------------
    Submarine cable systems
  (capacity as of December 31,     Fee amount            Address
             2011)
------------------------------------------------------------------------
< 2.5 Gbps.....................         $13,300  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
2.5 Gbps or greater, but less           $26,600  FCC, International,
 than 5 Gbps.                                     P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
5 Gbps or greater, but less             $53,200  FCC, International,
 than 10 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
10 Gbps or greater, but less           $106,375  FCC, International,
 than 20 Gbps.                                    P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
20 Gbps or greater.............        $212,750  FCC, International,
                                                  P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
------------------------------------------------------------------------


[[Page 34631]]

VIII. Initial Regulatory Flexibility Analysis

    61. As required by the Regulatory Flexibility Act (RFA),\107\ 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 (FY 
2013 NPRM) and FNPRM of Proposed Rulemaking (FNPRM) (collectively, 
``Notice''). Written comments are requested on this IRFA. Comments must 
be identified as responses to the IRFA and must be filed by the 
deadline for comments on this Notice. The Commission will send a copy 
of the Notice, including the IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration (SBA).\108\ In addition, the Notice 
and IRFA (or summaries thereof) will be published in the Federal 
Register.\109\
---------------------------------------------------------------------------

    \107\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended 
by the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
    \108\ 5 U.S.C. 603(a).
    \109\ Id.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Notice

    62. In the FY 2013 NPRM we seek comment on our annual process of 
assessing regulatory fees to cover the Commission's costs to offset the 
Commission's Fiscal Year (FY) 2013 appropriation, as directed by 
Congress. The regulatory fees calculated in response to the FY 2013 
NPRM will be collected later this year. We also seek comment in the FY 
2013 NPRM on reforming and revising our regulatory fee schedule for FY 
2013 and beyond to take into account changes in the communications 
industry and changes in the Commission's regulatory processes and 
staffing in recent years.
    63. The FY 2013 NPRM seeks comment concerning adoption and 
implementation of proposals to reallocate regulatory fees to more 
accurately reflect the subject areas worked on by current Commission 
FTEs for FY 2013. As such, we seek comment on, among other things, 
reallocating: (1) direct FTEs currently allocated to the Interstate 
Telecommunications Service Providers (ITSPs) fee category and other fee 
categories to reflect current workloads devoted to these subject areas; 
and (2) FTEs in the International Bureau to more accurately reflect the 
Commission's regulation and oversight of the International Bureau 
regulatees. If these proposals are adopted, we also seek comment on 
limiting any increase in assessments to 10 percent or some other amount 
to avoid fee shock to industry segments paying higher regulatory fees 
as a result of reallocation. We ask whether direct FTEs in other 
Bureaus should be reclassified as indirect and reallocated or, 
conversely, whether FTEs currently allocated as indirect should be 
reallocated differently or reclassified as direct and reallocated 
accordingly. Finally, we seek comment on whether to delay our proposal 
to reallocate FTEs and, in the interim, maintain the same allocation 
percentages from last year for FY 2013, including the current .00375 
rate for ITSP regulatees.
    64. The FNPRM seeks comment concerning adoption and implementation 
of proposals for FY 2014 and beyond, which include: (1) Combining 
Interstate Telecommunications Service Providers (ITSPs) with wireless 
telecommunications services, using revenues as the basis for 
calculating regulatory fees; (2) using revenues to calculate regulatory 
fees for industries that now use subscribers, such as the wireless and 
cable industries; (3) eliminating the regulatory fee component 
pertaining to General Mobile Radio Service; (4) clarifying that 
licensees of Digital Low Power, Class A, and TV Translators/Boosters 
should pay only one regulatory fee on their analog or digital station, 
but not both; (5) consolidating the UHF and VHF Television stations 
into one fee category; (6) proposing a fee for Internet Protocol TV 
(IPTV) at the rate of cable fees; (7) alleviating large fluctuations in 
the fee rate of Multiyear Wireless Services; and (8) providing fee 
relief for declining industries (e.g., CMRS Messaging). Finally, the 
FNPRM seeks comment on the treatment of non-U.S.-Licensed Space 
Stations; Direct Broadcast Satellites; and other services, such as 
broadband in our regulatory fee process. We invite comment on these 
topics to better inform the Commission concerning whether and/or how 
these services should be assessed under our regulatory fee methodology 
in future years. The Notice also makes two administrative changes to 
the regulatory fee collection process and propose a third. 
Specifically, as required by Treasury and OMB initiatives, we announce 
that effective in FY 2013 all regulatory fee payments must be made 
electronically. We also state that beginning in FY 2014 the Commission 
will no longer mail out initial regulatory fee assessments to CMRS 
licensees. Finally, we propose to refer to the Department of the 
Treasury end-to-end billing and collection beginning in FY 2014.

B. Legal Basis

    65. 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.\110\
---------------------------------------------------------------------------

    \110\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
---------------------------------------------------------------------------

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

    66. 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.\111\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \112\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\113\ 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.\114\
---------------------------------------------------------------------------

    \111\ 5 U.S.C. 603(b)(3).
    \112\ 5 U.S.C. 601(6).
    \113\ 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.''
    \114\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    67. Small Businesses. Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.\115\
---------------------------------------------------------------------------

    \115\ See SBA, Office of Advocacy, ``Frequently Asked 
Questions,'' http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf.
---------------------------------------------------------------------------

    68. Wired Telecommunications Carriers. The SBA has developed a 
small business size standard for Wired Telecommunications Carriers, 
which consists of all such companies having 1,500 or fewer employees. 
Census data for 2007 shows that there were 31,996 establishments that 
operated that year. Of those 31,996, 1,818 operated with more than 100 
employees, and 30,178 operated with fewer than 100 employees.\116\ 
Thus, under this size standard, the majority of firms can be considered 
small.
---------------------------------------------------------------------------

    \116\ See id.
---------------------------------------------------------------------------

    69. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA

[[Page 34632]]

has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\117\ According to Commission data, census data for 
2007 shows that there were 31,996 establishments that operated that 
year. Of those 31,996, 1,818 operated with more than 100 employees, and 
30,178 operated with fewer than 100 employees.\118\ The Commission 
estimates that most providers of local exchange service are small 
entities that may be affected by the rules and policies proposed in the 
FNPRM.
---------------------------------------------------------------------------

    \117\ 13 CFR 121.201, NAICS code 517110.
    \118\ See id.
---------------------------------------------------------------------------

    70. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable 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.\119\ According to Commission data, 1,307 carriers reported 
that they were incumbent local exchange service providers.\120\ Of 
these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees 
and 301 have more than 1,500 employees.\121\ Consequently, the 
Commission estimates that most providers of incumbent local exchange 
service are small businesses that may be affected by the rules and 
policies proposed in the FNPRM.
---------------------------------------------------------------------------

    \119\ 13 CFR 121.201, NAICS code 517110.
    \120\ See Trends in Telephone Service, Federal Communications 
Commission, Wireline Competition Bureau, Industry Analysis and 
Technology Division at Table 5.3 (Sept. 2010) (Trends in Telephone 
Service).
    \121\ Id.
---------------------------------------------------------------------------

    71. Competitive Local Exchange Carriers (Competitive LECs), 
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.\122\ According to Commission data, 1,442 carriers reported 
that they were engaged in the provision of either competitive local 
exchange services or competitive access provider services.\123\ Of 
these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees 
and 186 have more than 1,500 employees.\124\ In addition, 17 carriers 
have reported that they are Shared-Tenant Service Providers, and all 17 
are estimated to have 1,500 or fewer employees.\125\ In addition, 72 
carriers have reported that they are Other Local Service 
Providers.\126\ Of the 72, seventy have 1,500 or fewer employees and 
two have more than 1,500 employees.\127\ 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 rules adopted pursuant to the proposals in this FNPRM.
---------------------------------------------------------------------------

    \122\ 13 CFR 121.201, NAICS code 517110.
    \123\ See Trends in Telephone Service, at table. 5.3.
    \124\ Id.
    \125\ Id.
    \126\ Id.
    \127\ Id.
---------------------------------------------------------------------------

    72. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically 
applicable to interexchange services. The applicable size standard 
under SBA rules is for the Wired Telecommunications Carriers. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees.\128\ According to Commission data, 359 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services.\129\ Of these 359 companies, an 
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 
employees.\130\ Consequently, the Commission estimates that the 
majority of interexchange service providers are small entities that may 
be affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \128\ 13 CFR 121.201, NAICS code 517110.
    \129\ See Trends in Telephone Service, at table 5.3.
    \130\ Id.
---------------------------------------------------------------------------

    73. 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.\131\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1000 employees and one operated with more than 1,000.\132\ 
Thus under this category and the associated small business size 
standard, the majority of these prepaid calling card providers can be 
considered small entities. According to Commission data, 193 carriers 
have reported that they are engaged in the provision of prepaid calling 
cards.\133\ Of these, all 193 have 1,500 or fewer employees and none 
have more than 1,500 employees.\134\ Consequently, the Commission 
estimates that the majority of prepaid calling card providers are small 
entities that may be affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \131\ 13 CFR 121.201, NAICS code 517911.
    \132\ Id.
    \133\ See Trends in Telephone Service, at table 5.3.
    \134\ Id.
---------------------------------------------------------------------------

    74. 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.\135\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1000 employees and one operated with more than 1,000.\136\ 
Under this category and the associated small business size standard, 
the majority of these local resellers can be considered small entities. 
According to Commission data, 213 carriers have reported that they are 
engaged in the provision of local resale services.\137\ Of these, an 
estimated 211 have 1,500 or fewer employees and two have more than 
1,500 employees.\138\ Consequently, the Commission estimates that the 
majority of local resellers are small entities that may be affected by 
rules adopted pursuant to the proposals in this FNPRM.
---------------------------------------------------------------------------

    \135\ 13 CFR 121.201, NAICS code 517911.
    \136\ Id.
    \137\ See Trends in Telephone Service, at table 5.3.
    \138\ Id.
---------------------------------------------------------------------------

    75. 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.\139\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1,000 employees and one operated with more than 1,000.\140\ 
Thus, under this category and the associated small business size 
standard, the majority of these resellers can be considered small 
entities. According to Commission data, 881 carriers have reported that 
they are engaged in the provision of toll resale services.\141\ Of 
these, an estimated 857 have 1,500 or fewer employees and 24

[[Page 34633]]

have more than 1,500 employees.\142\ Consequently, the Commission 
estimates that the majority of toll resellers are small entities that 
may be affected by our proposals in the FNPRM.
---------------------------------------------------------------------------

    \139\ 13 CFR 121.201, NAICS code 517911.
    \140\ Id.
    \141\ Trends in Telephone Service, at table 5.3.
    \142\ Id.
---------------------------------------------------------------------------

    76. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard for small businesses specifically applicable 
to Other Toll Carriers. This category includes toll carriers that do 
not fall within the categories of interexchange carriers, operator 
service providers, prepaid calling card providers, satellite service 
carriers, or toll resellers. The closest applicable size standard under 
SBA rules is for Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\143\ Census data for 2007 shows that there were 31,996 
establishments that operated that year. Of those 31,996, 1,818 operated 
with more than 100 employees, and 30,178 operated with fewer than 100 
employees.\144\ Thus, under this category and the associated small 
business size standard, the majority of Other Toll Carriers can be 
considered small. According to Commission data, 284 companies reported 
that their primary telecommunications service activity was the 
provision of other toll carriage.\145\ Of these, an estimated 279 have 
1,500 or fewer employees and five have more than 1,500 employees.\146\ 
Consequently, the Commission estimates that most Other Toll Carriers 
are small entities that may be affected by the rules and policies 
adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \143\ 13 CFR 121.201, NAICS code 517110.
    \144\ Id.
    \145\ Trends in Telephone Service, at table 5.3.
    \146\ Id.
---------------------------------------------------------------------------

    77. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the SBA has recognized wireless firms within this new, broad, 
economic census category.\147\ Prior to that time, such firms were 
within the now-superseded categories of Paging and Cellular and Other 
Wireless Telecommunications.\148\ Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees.\149\ For this category, census data for 
2007 show that there were 11,163 establishments that operated for the 
entire year.\150\ Of this total, 10,791 establishments had employment 
of 999 or fewer employees and 372 had employment of 1000 employees or 
more.\151\ Thus, under this category and the associated small business 
size standard, the Commission estimates that the majority of wireless 
telecommunications carriers (except satellite) are small entities that 
may be affected by our proposed action.
---------------------------------------------------------------------------

    \147\ 13 CFR 121.201, NAICS code 517210.
    \148\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211 
Paging,'' available at http://www.census.gov/cgibin/sssd/naics/naicsrch?code=517211&search=2002%20NAICS%20Search; U.S. Census 
Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other Wireless 
Telecommunications,'' available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517212&search=2002%20NAICS%20Search.
    \149\ 13 CFR 121.201, NAICS code 517210. The now-superseded, 
pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 517211 and 
517212 (referring to the 2002 NAICS).
    \150\ U.S. Census Bureau, Subject Series: Information, Table 5, 
``Establishment and Firm Size: Employment Size of Firms for the 
United States: 2007 NAICS Code 517210'' (issued Nov. 2010).
    \151\ Id. Available 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 
``100 employees or more.''
---------------------------------------------------------------------------

    78. Similarly, according to Commission data, 413 carriers reported 
that they were engaged in the provision of wireless telephony, 
including cellular service, Personal Communications Service (PCS), and 
Specialized Mobile Radio (SMR) Telephony services.\152\ Of these, an 
estimated 261 have 1,500 or fewer employees and 152 have more than 
1,500 employees.\153\ Consequently, the Commission estimates that 
approximately half or more of these firms can be considered small. 
Thus, using available data, we estimate that the majority of wireless 
firms can be considered small.
---------------------------------------------------------------------------

    \152\ Trends in Telephone Service, at table 5.3.
    \153\ Id.
---------------------------------------------------------------------------

    79. Cable Television and other Program Distribution. 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.'' \154\ The SBA has developed a small 
business size standard for this category, which is: all such firms 
having 1,500 or fewer employees.\155\ Census data for 2007 shows that 
there were 31,996 establishments that operated that year. Of those 
31,996, 1,818 had more than 100 employees, and 30,178 operated with 
fewer than 100 employees. Thus under this size standard, the majority 
of firms offering cable and other program distribution services can be 
considered small and may be affected by rules adopted pursuant to the 
FNPRM.
---------------------------------------------------------------------------

    \154\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition), available at 
http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517110&search=2007%20NAICS%20Search.
    \155\ 13 CFR 121.201, NAICS code 517110.
---------------------------------------------------------------------------

    80. Cable Companies and Systems. The Commission has 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.\156\ Industry 
data indicate that, of 1,076 cable operators nationwide, all but eleven 
are small under this size standard.\157\ In addition, under the 
Commission's rules, a ``small system'' is a cable system serving 15,000 
or fewer subscribers.\158\ 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.\159\ Thus, under 
this second size standard, most cable systems are small and may be 
affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \156\ See 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. See Implementation of Sections 
of the 1992 Cable Television Consumer Protection and Competition 
Act: Rate Regulation, MM Docket Nos. 92-266, 93-215, Sixth Report 
and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 
7408, para. 28 (1995).
    \157\ 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.
    \158\ See 47 CFR 76.901(c).
    \159\ WARREN COMMUNICATIONS NEWS, TELEVISION & CABLE FACTBOOK 
2006, ``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.
---------------------------------------------------------------------------

    81. All Other Telecommunications. The Census Bureau defines this 
industry as including ``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,

[[Page 34634]]

satellite systems. Establishments providing Internet services or Voice 
over Internet Protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry.'' 
\160\ The SBA has developed a small business size standard for this 
category; that size standard is $30.0 million or less in average annual 
receipts.\161\ According to Census Bureau data for 2007, there were 
2,623 firms in this category that operated for the entire year.\162\ Of 
these, 2478 establishments had annual receipts of under $10 million and 
145 establishments had annual receipts of $10 million or more.\163\ 
Consequently, we estimate that the majority of these firms are small 
entities that may be affected by our action. In addition, some small 
businesses whose primary line of business does not involve provision of 
communications services hold FCC licenses or other authorizations for 
purposes incidental to their primary business. We estimate that there 
are many entities that hold private wireless licenses, but we do not 
have a reliable estimate of how many of these entities are small 
businesses.
---------------------------------------------------------------------------

    \160\ U.S. Census Bureau, ``2007 NAICS Definitions: 517919 All 
Other Telecommunications,'' available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517919&search=2007%20NAICS%20Search.
    \161\ 13 CFR 121.201, NAICS code 517919.
    \162\ U.S. Census Bureau, 2007 Economic Census, Subject Series: 
Information, Table 4, ``Establishment and Firm Size: Receipts Size 
of Firms for the United States: 2007 NAICS Code 517919'' (issued 
Nov. 2010).
    \163\ Id.
---------------------------------------------------------------------------

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

    82. This Notice seeks comment on changes to the Commission's 
current regulatory fee methodology and schedule which may result in 
additional information collection, reporting, and recordkeeping 
requirements. Specifically, the Notice seeks comment on using revenues 
instead of subscribers in our regulatory fee procedures. If adopted, 
this would require entities that do not currently file a Form 499-A to 
provide the Commission with revenue information. The Notice also seeks 
comment on adding categories to our regulatory fee schedule by changing 
the treatment of non-U.S.-Licensed Space Stations; Direct Broadcast 
Satellites; IPTV; and other services, such as broadband in our 
regulatory fee process. If adopted, those entities that currently do 
not pay regulatory fees--non-U.S.-Licensed Space Stations, IPTV, and 
other service providers--would be required to pay regulatory fees to 
the Commission and DBS providers would pay regulatory fees in a 
different category.

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

    83. 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.\164\
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    \164\ 5 U.S.C. 603(c)(1)-(c)(4).
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    84. With respect to reporting requirements, the Commission is aware 
that some of the proposals under consideration will impact small 
entities by imposing costs and administrative burdens if these entities 
will be required to calculate regulatory fees under a different 
methodology. For example, if the Commission were to adopt a revenue-
based approach for calculating regulatory fees, certain entities that 
currently do not report revenues to the Commission--or that only report 
some revenues and not others-- would have to report such information.
    85. The NPRM seeks to reform the regulatory fee methodology. We do 
not propose increasing or imposing a regulatory fee burden on small 
entities, unless it would be specifically in furtherance of the reform 
measures proposed. If our proposals in this Notice result in fee 
increases to small entities, above the annual fee increases that 
generally occur each year, we intend to mitigate any inequities that 
might result from such increases, by, for example, limiting the annual 
increase in regulatory fees. In keeping with the requirements of the 
Regulatory Flexibility Act, we have considered certain alternative 
means of mitigating the effects of fee increases to a particular 
industry segment. One option is to avoid significant fee increases, 
which is also proposed in the NPRM. Another option is to provide 
interim adjustments, by phasing in the new fees over a period of time. 
The Commission seeks comment on the abovementioned, and any other, 
means and methods that would minimize any significant economic impact 
of our proposed rules on small entities. In addition, the Commission's 
rules provide a process by which regulatory fee payors may seek waivers 
or other relief on the basis of financial hardship. 47 CFR 0.1166

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

    86. None.

X. Ordering Clauses

    87. 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.
    88. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the 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.
Gloria J Miles,
Federal Register Liaison.
[FR Doc. 2013-13679 Filed 6-7-13; 8:45 am]
BILLING CODE 6712-01-P