[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Rules and Regulations]
[Pages 43019-43031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17288]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket Nos. 14-92; 15-121; 15-121; FCC 15-59]


Assessment and Collection of Regulatory Fees for Fiscal Year 2015

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) eliminates the regulatory fee components of two fee 
categories, the amateur radio Vanity Call Sign and the General Mobile 
Radio Service (GMRS); establishes a new Direct Broadcast Satellite 
(DBS) regulatory fee category; provides specific instructions for 
RespOrgs (Responsible Organizations), holders of toll free numbers that 
are subject to regulatory fees, and amends rule provisions to specify 
that debts owed to the Commission that have been delinquent for a 
period of 120 days shall be transferred to the Secretary of the 
Treasury.

DATES: Effective July 21, 2015.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 15-59, MD Docket No. 15-121, adopted on May 20, 2015 and 
released May 21, 2015.

I. Procedural Matters

Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act of 1980 (RFA),\1\ 
the Commission has prepared a Final Regulatory Flexibility Analysis 
(FRFA) relating to this Report and Order.
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    \1\ See 5 U.S.C. 603. The RFA, see 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). 
The SBREFA was enacted as Title II of the Contract with America 
Advancement Act of 1996 (CWAAA).
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Congressional Review Act

    2. The Commission will send a copy of this Report and Order and 
Order to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act. 5 U.S.C. 801(a)(1)(A).

Final Paperwork Reduction Act of 1995 Analysis

    3. This Report and Order does not contain any new or modified 
information collection burden for small business concerns with fewer 
than 25 employees, pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198, see 44 U.S.C. 3506 (c) (4).
    4. Finally, in the Order section of this document, we amend three 
sections of our rules \2\ to conform to the Digital Accountability and 
Transparency Act (DATA Act) concerning when claims should be 
transferred to the Secretary of the Treasury.\3\ In particular, we make 
the ministerial change to our rules to specify that debts owed to the 
Commission that have been delinquent for a period of 120 days shall be 
transferred to the Secretary of the Treasury. The rules previously 
specified transfer of delinquent debt to the Treasury after 180 days.
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    \2\ 47 CFR 1.1911(d), 1.1912(b)(1), 1.1917(c).
    \3\ 31 U.S.C. 3716(c)(6).
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II. Introduction

    5. In the Report and Order, the Commission adopted a proposal from

[[Page 43020]]

our FY 2014 Further Notice of Proposed Rulemaking to add a new 
subcategory in the existing cable television and Internet Protocol TV 
(IPTV) regulatory fee category for direct broadcast satellite (DBS) 
providers.\4\ In addition, we provide specific instructions regarding 
our new regulatory fee requirement for toll free numbers.\5\ We also 
remove amateur radio Vanity Call Signs and General Mobile Radio Service 
(GMRS) from the regulatory fee schedule.\6\ The addition of DBS to the 
cable television and IPTV category and removal of two wireless 
categories from the schedule are permitted amendments to the regulatory 
fee schedule and require Congressional notification.\7\
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    \4\ Assessment and Collection of Regulatory Fees for Fiscal Year 
2014, Report and Order and Further Notice of Proposed Rulemaking, MD 
Docket No. 14-92, 79 FR 63883, 63885-63886, paras. 10-15 (October 
27, 2014).
    \5\ In 2014, the Commission adopted a regulatory fee requirement 
for toll free numbers. See FY 2014 Report and Order, 79 FR 54190, 
54195-54196, paras. 28-31 (September 11, 2014).
    \6\ We sought comment on eliminating these categories in our FY 
2014 NPRM. Assessment and Collection of Regulatory Fees for Fiscal 
Year 2014, Notice of Proposed Rulemaking, Second Further Notice of 
Proposed Rulemaking, and Order, MD Docket No. 14-92, 79 FR 37982, 
37989, para. 38 (July 3, 2014).
    \7\ 47 U.S.C. 159(b)(3)-(4)(requiring Congressional notification 
of permitted amendments not later than 90 days before the effective 
date of such amendment).
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III. Background

    6. The Commission is required by Congress to assess regulatory fees 
each year in an amount that can reasonably be expected to equal the 
amount of its appropriation.\8\ Regulatory fees, assessed each fiscal 
year, are to ``be derived 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. . . 
.'' \9\ Regulatory fees recover direct costs, such as salary and 
expenses; indirect costs, such as overhead functions; and support 
costs, such as rent, utilities, or equipment.\10\ Regulatory fees also 
cover the costs incurred in regulating entities that are statutorily 
exempt from paying regulatory fees,\11\ entities whose regulatory fees 
are waived,\12\ and entities that provide nonregulated services. 
Congress sets the amount the Commission must collect each year in the 
Commission's fiscal year appropriations, and section 9(a)(2) of the 
Communications Act of 1934, as amended (Communications Act or Act) 
requires the Commission to collect fees sufficient to offset the amount 
appropriated.\13\ To calculate regulatory fees, the Commission 
allocates the total collection target, as mandated by Congress each 
year, across all regulatory fee categories. The allocation of fees to 
fee categories is based on the Commission's calculation of full time 
employees (FTEs) \14\ in each regulatory fee category. Historically, 
the Commission has classified FTEs as ``direct'' if the employee is in 
one of the four ``core'' bureaus; otherwise, that employee was 
considered an ``indirect'' FTE.\15\ The total FTEs for each fee 
category includes the direct FTEs associated with that category, plus a 
proportional allocation of the indirect FTEs.
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    \8\ 47 U.S.C. 159(b)(1)(B).
    \9\ 47 U.S.C. 159(b)(1)(A).
    \10\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2004, Report and Order, 69 FR 41028, 4103, para. 11 (July 7, 
2004).
    \11\ 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.
    \12\ 47 CFR 1.1166.
    \13\ 47 U.S.C. 159(a)(2).
    \14\ One FTE, a ``Full Time Equivalent'' or ``Full Time 
Employee,'' 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.
    \15\ The core bureaus are the Wireline Competition Bureau (172 
FTEs), Wireless Telecommunications Bureau (91 FTEs), Media Bureau 
(155 FTEs), and part of the International Bureau (28 FTEs), totaling 
446 ``direct'' FTEs. The ``indirect'' FTEs are the employees from 
the following bureaus and offices: Enforcement Bureau, Consumer & 
Governmental Affairs Bureau, Public Safety and Homeland Security 
Bureau, Chairman and Commissioners' offices, Office of the 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 1,037 ``indirect'' FTEs. These totals are as of 
Oct. 1, 2014 and exclude auctions FTEs.
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    7. Section 9 of the Communications Act requires the Commission to 
make certain changes (i.e., mandatory amendments) to the regulatory fee 
schedule if it ``determines that the Schedule requires amendment to 
comply with the requirements'' of section 9(b)(1)(A).\16\ In addition, 
the Commission must add, delete, or reclassify services in the fee 
schedule to reflect additions, deletions, or changes in the nature of 
its services ``as a consequence of Commission rulemaking proceedings or 
changes in law.'' \17\ These ``permitted amendments'' require 
Congressional notification.\18\ The changes in fees resulting from both 
mandatory and permitted amendments are not subject to judicial 
review.\19\
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    \16\ 47 U.S.C. 159(b)(3).
    \17\ 47 U.S.C. 159(b)(3).
    \18\ 47 U.S.C. 159(b)(4)(B).
    \19\ 47 U.S.C. 159(b)(3). But see Comsat Corp. v. FCC, 114 F.3d 
223, 227 (D.C. Cir. 1997) (``Where, as here, we find that the 
Commission has acted outside the scope of its statutory mandate, we 
also find that we have jurisdiction to review the Commission's 
action.'')
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    8. The Commission continues to improve the regulatory fee process 
by ensuring a more equitable distribution of the regulatory fee burden 
among categories of Commission licensees under the statutory framework 
in section 9 of the Communications Act. For example, in 2013, the 
Commission updated the FTE allocations to more accurately align 
regulatory fees with the costs of Commission oversight and 
regulation,\20\ as recommended in the GAO Report, a report issued by 
the Government Accountability Office (GAO) in 2012.\21\ The Commission 
also reallocated some FTEs from the International Bureau as 
``indirect.'' \22\ Subsequently, in the FY 2014 Report and Order, the 
Commission adopted the new toll free number regulatory fee category 
\23\ and, in the accompanying FY 2014 Further Notice of Proposed 
Rulemaking, the Commission sought additional comment on a new 
regulatory fee category for DBS.\24\ In this Report and Order, we now 
add a subcategory for DBS providers in the cable television and IPTV 
regulatory fee category based on our finding that Media Bureau FTEs 
work on issues and proceedings that include DBS as well as other 
multichannel video programming distributors (MVPDs).
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    \20\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2013, Report and Order, MD Docket No. 13-140, 78 FR 52433, 
52436-52437, paras. 10-15 (August 23, 2013).
    \21\ In 2012, the GAO concluded that the Commission should 
conduct an overall analysis of the regulatory fee categories and 
perform an updated FTE analysis by fee category. GAO ``Federal 
Communications Commission Regulatory Fee Process Needs to be 
Updated,'' GAO-12-686 (Aug. 2012) (GAO Report) at 36, (available at 
http://www.gao.gov/products/GAO-12-686).
    \22\ FY 2013 Report and Order, 78 FR 52433, 52436-52438, paras. 
12-21 (August 23, 2013).
    \23\ FY 2014 Report and Order, 79 FR 54190, 54195-54196, paras. 
28-31 (September 11, 2014).
    \24\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883, 
63885-63886, paras. 10-15 (October 27, 2014).
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IV. Discussion

A. Report and Order

1. Eliminating Regulatory Fee Categories
    9. In the FY 2014 NPRM,\25\ we sought comment on eliminating 
several of the smaller regulatory fee categories such as amateur radio 
Vanity Call Signs \26\ and

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GMRS.\27\ In the FY 2014 Report and Order, we concluded that we did not 
yet have adequate support to determine whether the cost of recovery and 
burden on small entities outweighed the collected revenue or whether 
eliminating the fee would adversely affect the licensing process.\28\ 
We stated, however, that we would reevaluate this issue in the future. 
Since adoption of the FY 2014 Report and Order, Commission staff have 
had an opportunity to obtain and analyze support concerning the 
collection of fees from these regulatees.
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    \25\ FY 2014 NPRM, 79 FR 37982, 37989, para. 38 (July 3, 2014).
    \26\ Call signs assigned to newly licensed stations, i.e., a 
sequential call sign, are assigned based on the licensee's mailing 
address and class of operator license. 47 CFR 97.17(d). The licensee 
can request a specific unassigned but assignable call sign, known as 
a vanity call sign. 47 CFR 97.19. There is no fee for the sequential 
call sign.
    \27\ GMRS (formerly Class A of the Citizens Radio Service) is a 
personal radio service available for the conduct of an individual's 
personal and family communications. See 47 CFR 95.1. We initially 
proposed eliminating regulatory fees for GMRS in the FY 2008 Report 
and Order and Further Notice. See Assessment and Collection of 
Regulatory Fees for Fiscal Year 2008, Report and Order and Further 
Notice of Proposed Rulemaking, 73 FR 50285, 50290-50291, para 33 
(August 26, 2008) (FY 2008 Report and Order and Further Notice). The 
Commission has an open proceeding to review the Part 95, Personal 
Radio Service rules, which include GMRS. See Review of the 
Commission's Part 95 Personal Radio Services Rules, WT Docket No. 
10-119, Notice of Proposed Rulemaking and Memorandum Opinion and 
Order on Reconsideration, 75 FR 47142, 47143-47144, para. 4 (August 
4, 2010).
    \28\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 26 
(September 11, 2014).
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    10. The GMRS and amateur radio Vanity Call Sign regulatory fee 
categories comprise on average over 20,000 licenses that are newly 
obtained or renewed every five and 10 years, respectively. After five 
years, the GMRS licensee is responsible for renewing the license (or 
cancelling) and the Commission is responsible for maintaining accurate 
records of licenses coming up for renewal--an administrative burden on 
both GMRS users and on the Commission for renewing and maintaining 
records of these licenses. After analyzing the costs of processing fee 
payments for GMRS, we conclude that the Commission's cost of collecting 
and processing this fee exceeds the payment amount of $25. Our costs 
have increased over time and now that the costs exceed the amount of 
the regulatory fee, the increased relative administrative cost supports 
eliminating this regulatory fee category.
    11. The Vanity Call Sign fee category has a small regulatory fee 
($21.40 in FY 2014) for a 10-year license. The Commission often 
receives multiple applications for the same vanity call sign, but only 
one applicant can be issued that call sign. In such cases, the 
Commission issues refunds for all the remaining applicants. In addition 
to staff and computer time to process payments and issue refunds, there 
is an additional expense to issue checks for the applicants who cannot 
be refunded electronically. The Commission spends more resources on 
processing the regulatory fees and issuing refunds than the amount of 
the regulatory fee payment. As our costs now exceed the regulatory fee, 
we are eliminating this regulatory fee category.
    12. The Commission will therefore eliminate the GMRS and Vanity 
Call Sign regulatory fee categories after the required congressional 
notification is provided.\29\ Once eliminated, these licensees will no 
longer be financially burdened with such payments and the Commission 
will no longer incur these administrative costs that exceed the fee 
payments. The revenue that the Commission would otherwise collect from 
these regulatory fee categories will be proportionally assessed on 
other wireless fee categories. This is a ``permitted amendment'' as 
defined in section 9(b)(3) of the Act, which, pursuant to section 
9(b)(4)(B, must be submitted to Congress at least 90 days before it 
becomes effective.\30\
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    \29\ After the 90-day notification period for a permitted 
amendment, these two fee categories will be eliminated. We will not 
be issuing refunds to licensees who have paid the regulatory fee 
prior to the elimination of the fee.
    \30\ 47 U.S.C. 159(b)(3).
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2. Toll Free Numbers
    13. Toll free numbers, defined in section 52.101(f) of our 
rules,\31\ allow callers to reach the called party without being 
charged for the call. Instead, the charge for the call is paid by the 
called party (the toll free subscriber).\32\ Prior to the FY 2014 
Report and Order, the Commission did not assess regulatory fees on toll 
free numbers based on the assumption that the entities controlling the 
numbers--wireline and wireless common carriers--were paying regulatory 
fees based on either revenues or subscribers.\33\ In the FY 2014 NPRM, 
we observed this was no longer the case because many toll free numbers 
are now controlled or managed by RespOrgs \34\ that are not common 
carriers.\35\ In the FY 2014 Report and Order, we adopted a regulatory 
fee obligation for toll free numbers beginning in FY 2015, finding that 
the Commission has both the legal authority and responsibility to 
assess regulatory fees on toll free numbers.\36\ This regulatory fee 
assessed on RespOrgs for toll free numbers managed by a RespOrg,\37\ is 
payable for all toll free numbers unless calls from only other 
countries can be completed using those toll free numbers.\38\ This 
regulatory fee is assessed on RespOrgs for each working, assigned, 
reserved, in transit, or any other status of toll free number as 
defined in section 52.103 of the Commission's rules. Interstate 
Telecommunications Service Providers (ITSPs) that are RespOrgs and 
RespOrgs that are not ITSPs will be responsible for this regulatory 
fee.
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    \31\ Toll free numbers are telephone numbers for which the toll 
charges for completed calls are paid by the toll free subscriber. 
See 47 CFR 52.101(f). These are 800, 888, 877, 866, 855, and 844 
numbers. SMS/800 (or the 800 Service Management System) is a 
centralized system that performs toll free number management. For a 
list of RespOrgs on the SMS/800, Inc. Web site, see http://www.sms800.com/Controls/NAC/Serviceprovider.aspx.
    \32\ 47 U.S.C. 52.101 (e), (f).
    \33\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 28, 
Footnote 76 (citing Universal Service Contribution Methodology, 
Further Notice of Proposed Rulemaking, 77 FR 33896, 33923, para. 227 
(June 7, 2012).
    \34\ A RespOrg is a company that manages toll free telephone 
numbers for subscribers. RespOrgs use the SMS/800 data base to 
verify the availability of specific numbers and to reserve the 
numbers for subscribers. See 47 CFR 52.101(b).
    \35\ FY 2014 NPRM, 79 FR 37982, 37992, para. 57, Footnote 91 
(citing, inter alia, Telseven, LLC, Calling 10, LLC, Patrick Hines 
a/k/a P. Brian Hines, Notice of Apparent Liability for Forfeiture, 
27 FCC Rcd 15558, 15560, para. 3 (2012) (various corporations, 
including non-common carrier RespOrgs, owned and controlled by 
Patrick Hines, controlled approximately one million toll free 
numbers for Hines' ``directory assistance'' operation.))
    \36\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 28-29 
(September 11, 2014) (summarizing the legal rationale for adoption 
of a fee on toll free numbers and the FTEs involved in toll free 
issues) (citing Toll Free Access Codes, Second Report and Order and 
Further Notice of Proposed Rulemaking, CC Docket No. 95-155, 62 FR 
20126, 20127 (April 25, 1997) (Toll Free Second Report and Order) 
(Sections 201(b) and 251(e) of the Act ``empower the Commission to 
ensure that toll free numbers . . . are allocated in an equitable 
and orderly manner that serves the public interest.'')).
    \37\ The proposed fee rate for toll free numbers for FY 2015 is 
in Table C (FY 2015 Notice of Proposed Rulemaking).
    \38\ See FY 2014 Report and Order, 79 FR 54190, 54195-54196, 
para. 30 (September 11, 2014).
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    14. The decision in 2014 to expand the pool of regulatory fee 
obligations to all RespOrgs created a system in which there are now 
numerous entities that play a role in toll free number administration 
and are required to pay annual regulatory fees but are not common 
carriers and therefore may lack familiarity with the Commission's 
rules. In the FY 2014 Report and Order, we did not adopt a specific 
enforcement mechanism to address circumstances where RespOrgs do not 
make regulatory fee payments but instead, sought further comment on the 
additional procedures

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for enforcement in such instances.\39\ Instead of adopting additional 
enforcement procedures at this time, however, we direct SMS/800, 
Inc.\40\ to provide the necessary outreach to the RespOrgs, through its 
tariff, Web site, or otherwise, to advise them that: ``The Federal 
Communications Commission (FCC) has adopted a regulatory fee category 
for toll free numbers, assessed for each toll free number managed by a 
Responsible Organization (RespOrg). This regulatory fee, assessed on 
RespOrgs for toll free numbers managed by a RespOrg, is payable for all 
toll free numbers unless calls from only other countries can be 
completed using those toll free numbers. A RespOrg that fails to pay 
the regulatory fee assessed by the FCC will be subject to penalties.'' 
\41\
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    \39\ FY 2014 Report and Order, 79 FR 63883, 63885, paras. 8-9 
(October 27, 2014).
    \40\ SMS/800, Inc. provides administration and routing for all 
toll free numbers in North America. The Commission has the ultimate 
authority over numbering resources and oversees the SMS Tariff and 
SMS/800 Board. See 47 U.S.C. 251 (e)(1); see generally Toll Free 
Service Access Codes, CC Docket No. 95-155; Petition to Change the 
Composition of SMS/800, Inc., WC Docket No. 12-260, 28 FCC Rcd 15328 
(2013) (SMS Reauthorization Order). Previously the Commission 
required SMS/800, Inc. to include language prohibiting toll free 
number hoarding and warehousing in the SMS Tariff. See Toll Free 
Service Access Codes, Second Report and Order and Further Notice of 
Proposed Rulemaking, 62 FR 20126, 20127, para. 1 (April 25, 1997).
    \41\ See Toll Free Second Report and Order, 62 FR 20126 (April 
25, 1997) (``We also may limit any RespOrg's allocation of toll free 
numbers or possibly decertify it as a RespOrg under section 
251(e)(1) or section 4(i) [of the Communications Act].'')
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    15. The imposition of a regulatory fee on RespOrgs is a new rule, 
adopted in the FY 2014 Report and Order, and non-common carriers may be 
unfamiliar with our regulatory fee process and unaware that 
delinquencies can result in penalties imposed by SMS/800, Inc., 
penalties imposed by the Commission pursuant to the Debt Collection 
Improvement Act of 1996 (DCIA), and/or enforcement action by the 
Enforcement Bureau, pursuant to delegated authority, or by the 
Commission.\42\ As a result, OMD will coordinate with SMS/800, Inc. to 
ensure that all RespOrgs owing regulatory fees have sufficient 
information about this process and opportunity to pay the regulatory 
fee before the RespOrg is placed in red light status and enforcement 
procedures are initiated.\43\
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    \42\ The Commission has a number of generally applicable 
mechanisms to ensure collection of delinquent debt which would also 
apply to RespOrgs. See generally FY 2014 Report and Order, 79 FR 
54190, 54199, paras. 47-48 (September 11, 2014) (summarizing the 
late payment penalty on unpaid regulatory fees under 47 U.S.C. 
159(c), the red-light rule set forth in section 1.1910 of the 
Commission's rules, 47 CFR 1.1910, and additional provisions 
contained in the Debt Collection Improvement Act of 1996 (DCIA), 31 
U.S.C. 3701 et seq., See Amendment of Parts 0 and 1 of the 
Commission's Rules, MD Docket No. 02-339, Report and Order, 69 FR 
27843 (May 17, 2004); 47 CFR part 1, subpart O, Collection of Claims 
Owed the United States).
    \43\ Hypercube Telecom contends that the consumer end-users 
would be affected by our enforcement action against a RespOrg. 
Hypercube Telecom Reply Comments at 3-5. The notifications that are 
part of our delinquent bill collection process will give RespOrgs 
multiple opportunities to pay any delinquency before enforcement 
action.
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    16. The basis for identifying the toll free number count upon which 
a regulatory fee will be assessed for each RespOrg will be derived from 
data provided by SMS/800, Inc.\44\ The toll free number data will be 
determined by the toll free number count as of or around December 31st 
of each year. In addition to maintaining contact information with SMS/
800, Inc., RespOrgs are also responsible for: (i) Obtaining an FRN (FCC 
Registration Number); \45\ (ii) maintaining current contact information 
in the Commission Registration System (CORES); \46\ (iii) reviewing the 
Commission's Regulatory Fees Home Page for updates on regulatory fees; 
\47\ and (iv) making timely regulatory fee payments using the 
Commission's Electronic Filing and Payment System (Fee Filer) located 
at: www.fcc.gov/feefiler. SMS/800, Inc. will provide the Commission 
with up-to-date contact information for the RespOrgs as needed to 
facilitate the timely payment of regulatory fees for toll free numbers. 
Under our bill collection procedures, delinquent RespOrgs will receive 
notice from the Commission before the matter is referred to the 
Enforcement Bureau for enforcement action and/or penalties imposed by 
SMS/800, Inc.
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    \44\ SMS/800, Inc. observes that some of its billing and contact 
information may contain additional proprietary and confidential data 
and that it would require the Commission to ensure the 
confidentiality of any such information provided. See SMS/800, Inc. 
Comments at 6. If SMS/800, Inc. is unable to provide the necessary 
information without including any confidential information it should 
submit, along with the responsive information and/or documents, a 
statement in accordance with section 0.459 of the Commission's 
rules. 47 CFR 0.459.
    \45\ Commission FRN numbers can be obtained by registering in 
the Commission's Registration System (CORES) located at: https://apps.fcc.gov/coresWeb/publicHome.do.
    \46\ Commission's Registration System (CORES) located at: 
https://apps.fcc.gov/coresWeb/publicHome.do.
    \47\ The Commission's Regulatory Fees Home Page is located at: 
http://www.fcc.gov/regfees.
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    17. Any payments RespOrgs must pay SMS/800, Inc. for toll free 
number management and administration are unrelated to regulatory fees 
assessed by the Commission. Payment of regulatory fees to the 
Commission does not relieve a RespOrg from any payment obligations to 
SMS/800, Inc.
3. Direct Broadcast Satellite Providers
    18. DBS service is a nationally distributed subscription service 
that delivers video and audio programming via satellite to a small 
parabolic ``dish'' antenna at the subscriber's location. DBS providers 
are multichannel video programming distributors (MVPDs), as defined in 
section 602(13) of the Act.\48\ These operators of U.S. licensed 
geostationary space stations, which are used to provide one-way 
subscription video service to consumers in the United States, currently 
pay a fee per U.S.-licensed satellite under the category ``Space 
Station (Geostationary Orbit)'' in the regulatory fee schedule based on 
the International Bureau FTEs work associated with satellite 
regulation. Cable television and IPTV, also MVPDs, similarly provide 
subscription video services to consumers in the United States. These 
regulated entities pay a regulatory fee per subscriber under the fee 
category ``Cable TV System, Including IPTV.'' \49\ In the Further 
Notice of Proposed Rulemaking accompanying the FY 2014 Report and 
Order, the Commission proposed to adopt a fee to recover the costs 
incurred by the Media Bureau for regulation of DBS.\50\ Under our 
proposal, DBS providers would be subject to two regulatory fees. The 
first fee would recover the burden of regulation and oversight by 
International Bureau FTEs incurred as a result of its operation of 
satellites, and the other fee would recover the burden of regulation 
and oversight by Media Bureau FTEs as a result of DBS status as a MVPD. 
We conclude that DBS providers are subject to regulation and oversight 
of the Media Bureau and should share in the Media Bureau FTE burden 
attributed to MVPDs. Accordingly, pursuant to section 9(b)(3), we amend 
the regulatory fee schedule to replace the category ``Cable TV System, 
Including IPTV'' with the ``Cable TV System, Including IPTV and DBS'' 
category. This category will now have two rates: One for DBS (a 
subcategory) and another for cable television and IPTV.
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    \48\ 47 U.S.C. 522(13).
    \49\ In FY 2014, the regulatory fee for ``Cable TV System, 
Including IPTV'' was $0.99 per subscriber. FY 2014 Report and Order, 
79 FR 54190, 54208-54212 (September 11, 2014). Cumulatively, the 
Cable TV System, Including IPTV fee category paid $64.35 million in 
regulatory fees for FY 2014.
    \50\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883, 
63886-63887, paras. 10-15 (October 27, 2014).
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    19. Background. The Commission has considered the appropriate 
methodology for assessing regulatory fees on DBS providers on multiple 
occasions. The

[[Page 43023]]

original fee schedule adopted by Congress in 1993, when the DBS service 
was a nascent industry,\51\ did not include a specific fee category for 
DBS providers.\52\ The Commission recognized this and declined to adopt 
a regulatory fee for DBS until fiscal year 1996.\53\ In the FY 1996 
NPRM, the Commission determined that including the fledgling DBS 
service in the regulatory fee imposed on geostationary orbit 
geosynchronous satellite category best reflected the regulatory burden 
born by the Commission at that time.\54\ In the 2005,\55\ 2006,\56\ and 
2008 \57\ regulatory fee proceedings, the Commission also considered 
whether DBS should pay a subscriber-based regulatory fee related to 
Media Bureau oversight instead of being included in the geosynchronous 
satellite category related to International Bureau oversight. In those 
proceedings, the Commission either declined to adopt a change or made 
no decision on the issue. In the FY 2005 Report and Order, in declining 
to make a change, the Commission noted its FY 2005 NPRM had not 
contained a proposal on the issue.\58\ In the FY 2006 Report and Order, 
the Commission decided not to change the fee. In the FY 2009 Report and 
Order, the Commission declined to address the issue raised in the FY 
2008 Report and Order and Further Notice.\59\
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    \51\ Implementation of Section 9 of the Communications Act, 
Assessment and Collection of Regulatory Fees for the 1994 Fiscal 
Year, Report and Order, 59 FR 30984, 30994, para. 85 (June 16, 1994) 
(FY 1994 Report and Order) (declining to adopt a regulatory fee for 
DBS under the Mass Media fees and noting that DBS service is not 
expected to be offered prior to the time for calculating fee 
payments for FY 1994).
    \52\ In the Appendix to the FY 1994 Report and Order published 
in the Federal Register, the Commission noted that DBS was not 
included in the original fee schedule adopted by Congress and 
observed ``that the omission of DBS and FM translators and boosters 
was inadvertent and that Congress did not intend to exempt all DBS 
permittees and licensees and licensees of FM translators and 
boosters from regulatory fees as these services result in the 
Commission incurring costs for necessary regulatory functions. . . . 
we intend to add regulatory fee categories for DBS licenses and for 
FM translators and boosters. . . .'' 59 FR 30984, 31006, note 2.
    \53\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 1996, Report and Order, 61 FR 36629, 36652, para 35 in Appendix 
F (July 12, 1996) (FY 1996 Report and Order) (imposing regulatory 
fee for the first time on DBS relying on the analysis in the FY 1996 
NPRM); Assessment and Collection of Regulatory Fees for Fiscal Year 
1996, Notice of Proposed Rulemaking, 61 FR 16432, 16436, para. 
41(April 15, 1996) (FY 1996 NPRM) (proposing to assess DBS licensees 
the fee applicable to all geostationary orbit geosynchronous 
satellite licensees and, therefore, to include DBS for regulatory 
fee purposes in the Space Station fee category).
    \54\ FY 1996 NPRM, 61 FR 16432, 16436, para.41 (April 15, 1996).
    \55\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2005, Report and Order and Order on Reconsideration, 70 FR 
41967, 41969, para 11 (July 21, 2005) (FY 2005 Report and Order). In 
2005, the Commission declined to adopt changes in the regulatory fee 
assessment methodology for DBS providers in response to the comments 
of the National Cable and Telecommunications Association and 
American Cable Association. Id. The FY 2005 NPRM did not contain a 
proposal on this issue. See generally, Assessment and Collection of 
Regulatory Fees for Fiscal Year 2005, Notice of Proposed Rulemaking, 
70 FR 9575 (February 28, 2005).
    \56\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2006, Report and Order, 71 FR 43842, 43844-43845, paras. 10-16 
(August 2, 2006) (FY 2006 Report and Order) (declining to change the 
DBS regulatory fee from a per operational space station fee to a 
subscriber based fee); Assessment and Collection of Regulatory Fees 
for Fiscal Year 2006, Notice of Proposed Rulemaking, 71 FR 17410, 
17411-17412, para. 8 (June 6, 2006) (FY 2006 NPRM) (seeking comment 
on the appropriate regulatory fee structure for both cable operators 
and DBS providers).
    \57\ FY 2008 Report and Order and Further Notice, 73 FR 50285, 
50290, para. 26 (August 26, 2008) (seeking comment on whether the 
Commission should impose the same per subscriber fee on DBS that 
cable providers pay, or continue to assess a space station 
regulatory fee for the DBS industry and a subscriber-based structure 
for the cable industry).
    \58\ FY 2005 Report and Order, 70 FR 41967, 41969, para. 11 
(July 21, 2005).
    \59\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2009, Report and Order, 74 FR 40089, 40089, para 3 (August 11, 
2009) (FY 2009 Report and Order) (the Commission noted that the 
remaining outstanding issues from the FY 2008 Report and Order and 
Further Notice would be decided at a later time).
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    20. In August of 2012, the GAO Report concluded that regulatory fee 
reform at the Commission was long overdue.\60\ The GAO Report observed, 
among other things, that questions had been raised by commenters 
regarding whether the Commission's regulatory fee analysis was based on 
a ``valid FTE analysis'' of Media Bureau FTEs work related to the MVPDs 
including DBS.\61\ Following the GAO Report, in the fiscal year 2013 
regulatory fee proceeding, the Commission considered and adopted a 
number of significant regulatory fee reforms such as updating the FTEs 
allocated to each of the core bureaus and reclassifying most of the 
International Bureau FTEs as indirect.\62\ The Commission also adopted 
other reforms such as broadening the cable television category to 
include IPTV providers as a ``permitted amendment.'' \63\ As part of 
its overall analysis of the cable television systems category, the 
Commission considered a change to the DBS fee schedule.\64\ While the 
Commission declined to do so in 2013 to allow additional time to 
examine the proposal as part of larger reform efforts, the Commission 
noted its intent to revisit the issue in the future.\65\ In 2014, the 
Commission again proposed to adopt a fee to recover the costs incurred 
by the Media Bureau for regulation of DBS in the FY 2014 NPRM and the 
FY 2014 Further Notice of Proposed Rulemaking.\66\ Alternatively, the 
Commission sought comment on whether Media Bureau FTEs working on DBS 
issues be assigned to the International Bureau as direct FTEs or 
assigned as indirect FTEs for regulatory fee purposes.\67\
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    \60\ See note 22, supra. We have adopted significant regulatory 
fee reforms in our annual regulatory fee proceedings in response to 
the GAO Report. See, e.g., FY 2013 Report and Order, 78 FR 52433, 
52436, para. 12-14 (August 23, 2013) (using current FTE data to 
calculate regulatory fees).
    \61\ GAO Report at 18-20.
    \62\ See FY 2013 Report and Order, 78 FR 52433, 52436-52438, 
para. 12-22 (August 23, 2013).
    \63\ FY 2013 Report and Order, 78 FR 52433, 52439, 52444, paras. 
31, 36 (August 23, 2013).
    \64\ FY 2013 Report and Order, 78 FR 52433, 52443-52444, paras. 
35-36 (August 23, 2013); Assessment and Collection of Regulatory 
Fees for Fiscal Year 2013, Notice of Proposed Rulemaking and Further 
Notice of Proposed Rulemaking, 78 FR 34612, 34627-34628, paras. 56-
58 (June 10, 2013) (FY 2013 NPRM).
    \65\ FY 2013 Report and Order, 78 FR 52433, 52439, para. 31 
(August 23, 2013) (``We will continue to examine these suggestions 
as we continue our regulatory fee reform, as well as our proposals 
that we do not reach in this Report and Order: To combine the ITSP 
and wireless categories, to use revenues in calculating all 
regulatory fees, and to include DBS providers in a new MVPD 
category. We find additional time is necessary and appropriate to 
examine these proposals under Section 9 of the Communications Act 
and analyze how these proposals account for changes in the 
communications industry and the Commission's regulatory processes 
and staffing.'') (footnotes omitted) and para. 33.
    \66\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883, 
63885-63886, paras. 10-15 (October 27, 2014); FY 2014 NPRM, 79 FR 
37982, 37990-37991, paras. 47-52 (July 3, 2014).
    \67\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883, 
63886, para. 13 (October 27, 2014).
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    21. Discussion. Under section 9 of the Act, the Commission may make 
a permitted amendment to the fee schedule if it ``determines that the

[[Page 43024]]

Schedule requires amendment to comply with the requirements of'' 
paragraph (1)(A) which mandates that the Commission allocate fees to 
cover the costs of certain regulatory activities in accordance with the 
benefits provided to the payor and other factors that the Commission 
determines are in the public interest.\68\ The statute also provides, 
however, that, ``[i]n making such amendments, the Commission shall add, 
delete, or reclassify services in the Schedule to reflect additions, 
deletions or changes in the nature of its services as a consequence of 
Commission rulemaking proceedings or changes in law.'' \69\ We have 
conducted a review of the Media Bureau work devoted to MVPD matters and 
find that the recommendations in the GAO Report were correct.\70\ 
Analysis of the oversight and regulation of MVPDs (including the DBS 
industry) by the Media Bureau in various rulemaking proceedings reveal 
a cumulative effect of changes in law that have taken effect since the 
Commission adopted the current DBS regulatory fee structure in 1996. 
Due to these changes, we find that the DBS providers should be included 
in the same fee category as the other MVPDs, such as cable television 
and IPTV. There are certain rules that both DBS providers and cable 
operators including IPTV are subject to, and Media Bureau FTEs provide 
the oversight and regulation of the DBS industry as required by these 
rules.\71\ For example, DBS providers (and cable television operators) 
are permitted to file program access complaints \72\ and complaints 
seeking relief under the retransmission consent good faith rules.\73\ 
In addition, DBS providers are subject to MVPD requirements such as 
those pertaining to program carriage \74\ and the requirement to 
negotiate retransmission consent in good faith.\75\ More recently, the 
Commission adopted a host of requirements that apply to all MVPDs and 
thus equally apply to DBS providers as part of its implementation of 
the Commercial Advertisement Loudness Mitigation Act (CALM Act),\76\ 
the Twenty-First Century Communications and Video Accessibility Act of 
2010 (CVAA),\77\ as well as the Satellite Television Extension and 
Localism Act (STELA) Reauthorization Act of 2014 (STELAR).\78\ These 
regulatory developments increased the amount of regulatory activity by 
the Media Bureau FTEs involving regulation and oversight of MVPDs, 
including the DBS providers. The Media Bureau has been responsible for 
adopting many of these regulations and overseeing the MVPD industry. As 
MVPDs, DBS providers actively participate in Media Bureau proceedings 
involving MVPD oversight and regulation.\79\
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    \68\ 47 U.S.C. 159(b)(3).
    \69\ 47 U.S.C. 159(b)(3).
    \70\ The GAO Report did not have a specific recommendation with 
respect to the DBS regulatory fee, but observed that the National 
Cable and Telecommunications Association had argued that our 
regulatory fee process was competitively disadvantaging the cable 
television industry. GAO Report at 18-19. Competition per se is not 
part of the permitted amendment analysis; however, in this case the 
Media Bureau FTEs work on MVPD issues that include DBS.
    \71\ See, e.g., 47 CFR 76.65(b); 76.1000-1004; 47 U.S.C. 618(b).
    \72\ 47 U.S.C. 548; 47 CFR 76.1000-1004.
    \73\ 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).
    \74\ 47 U.S.C. 536; 47 CFR 76.1300-1302.
    \75\ 47 U.S.C. 325(b)(3)(C)(iii); 47 CFR 76.65(a)-(b).
    \76\ See Implementation of the Commercial Advertisement, 
Loudness Mitigation (CALM) Act, Report and Order, 77 FR 40276 (July 
9, 2012) (CALM Act Report and Order).
    \77\ Public Law 111-260, 124 Stat. 2751 (2010). See also 
Amendment of Twenty-First Century Communications and Video 
Accessibility Act of 2010, Public Law 111-265, 124 Stat. 2795 (2010) 
(making corrections to the CVAA); 47 CFR part 79.
    \78\ The STELA Reauthorization Act of 2014 (STELAR), 102, Public 
Law 113-200, 128 Stat. 2059, 2060-62 (2014) (codified at 47 U.S.C. 
338(1)). The STELAR was enacted on Dec. 4, 2014 (H.R. 5728, 113th 
Cong.). Implementation of Section 102 of the STELA Reauthorization 
Act of 2014, Notice of Proposed Rulemaking, MB Docket No. 15-71, FCC 
15-34 (rel. Mar. 26, 2015) proposes satellite television ``market 
modification'' rules to implement section 102 of STELAR.
    \79\ NCTA and ACA Comments at 7, 10-11; ITTA Comments at 3. 
DIRECTV and DISH filed comments and ex parte statements in numerous 
Commission proceedings, in the Media Bureau dockets as well as other 
dockets. As of Mar. 17, 2015, in the past 12 months, DIRECTV filed 
109 comments and ex parte statements in Media Bureau (and other) 
dockets. There are other proceedings, such as mergers, in which 
DIRECTV and DISH have participated. Regardless of whether the 
proceeding is merger-related or pertains strictly to MVPD 
regulation, DBS participation, and Media Bureau staff involvement, 
support our conclusion that DBS providers should be added to the 
cable television and IPTV category.
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    22. DIRECTV and DISH disagree that a permitted amendment is 
justified, contending that there has been no ``meaningful increase in 
the regulation of DBS.'' \80\ To the contrary, as discussed above, 
implementation of the CALM Act, CVAA, and STELAR should alone provide 
adequate justification for a permitted amendment in this case. A 
permitted amendment under section 9(b)(3), however, does not require a 
sudden increase in regulation or oversight over a defined period of 
time. Circumstances have changed in the almost 20 years since the 
Commission first addressed the issue of DBS regulatory fees.\81\ At the 
time we adopted a DBS regulatory fee, it was a fledging service where 
the business model was uncertain and there were questions concerning 
whether it would operate as a subscription based service or a free to 
air broadcaster.\82\ The first DBS satellite was not launched until 
1993 and did not become operational until 1994.\83\ In 2015, however, 
DBS had developed into a large MVPD \84\ and as such significant Media 
Bureau FTE resources are used in regulation and oversight of DBS. The 
GAO Report correctly noted that an evaluation of Media Bureau FTEs was 
long overdue \85\ and the result of such evaluation leads us to the 
conclusion that the Media Bureau FTEs regulate the DBS industry 
together with the other MVPDs. Thus, there is no reasonable basis to 
exclude DBS providers from sharing in the cost of MVPD oversight and 
regulation. With this Report and Order, we recognize the changes in 
fact and law since the adoption of the DBS fee in 1996 cumulatively 
require us to adopt a permitted amendment to ensure that DBS providers 
contribute equitably to the FTE burden of MVPD oversight.\86\
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    \80\ DIRECTV and DISH Comments at 8-9.
    \81\ The Commission's annual MVPD Competition Report provides a 
history of MVPD services. Annual Assessment of the Status of 
Competition in the Market for the Delivery of Video Programming, 
Report, 9 FCC Rcd 7442 (1994) (First Report); 11 FCC Rcd 2060 (1996) 
(Second Report); 12 FCC Rcd 4358 (1997) (Third Report); 13 FCC Rcd 
1034 (1998) (Fourth Report); 13 FCC Rcd 24284 (1998) (Fifth Report); 
15 FCC Rcd 978 (2000) (Sixth Report); 16 FCC Rcd 6005 (2001) 
(Seventh Report); 17 FCC Rcd 1244 (2002) (Eighth Report); 17 FCC Rcd 
26901 (2002) (Ninth Report); 19 FCC Rcd 1606 (2004) (Tenth Report); 
20 FCC Rcd 2755 (2005) (Eleventh Report); 21 FCC Rcd 2503 (2006) 
(Twelfth Report); 24 FCC Rcd 542 (2007) (Thirteenth Report); 27 FCC 
Rcd 8610 (2012) (Fourteenth Report); 28 FCC Rcd 10496 (2013) 
(Fifteenth Report).
    \82\ FY 1996 Report and Order, 61 FR 36629, 36652, Appendix F, 
para. 35 (July 12, 1996). DBS space stations applicants must 
indicate in their license application whether they seek to operate 
on a broadcast or non-broadcast basis, which affects the length of 
their license terms. Inquiry into the Development of Regulatory 
Policy in regard to Direct Broadcast Satellites for the Period 
Following the 1982 Regional Administrative Radio Conference, Report 
and Order, 90 FCC 2d 676 (1982), aff'd sub nom National Association 
of Broadcasters v. F.C.C., 740 F.2d 1190 (1984). To date, neither 
DIRECTV nor DISH has elected to operate as a broadcaster.
    \83\ First Report, 59 FR 64657, 64659, paras. 21-22 (December 
15, 1994).
    \84\ Fifteenth Report, 28 FCC Rcd at 10546-49, paras. 110-117 
(describing DBS MVPD business models and competitive strategies).
    \85\ GAO Report at 17-20.
    \86\ 47 U.S.C. 159(b)(3). See, e.g., 47 CFR 76.65(b); 76.1000-
1004; Part 79; 47 U.S.C. 618(b).
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    \23.\ We also reject the argument raised by DIRECTV and DISH that 
section 9 of the Act requires us to ``show that DBS and cable occupy a 
comparable number of FTEs.'' \87\ The commenters' argument that DBS is 
not involved in certain matters such as petitions for effective

[[Page 43025]]

competition,\88\ or other requirements that do not pertain to DBS,\89\ 
demonstrates that DBS is not identical to cable television. It does 
not, however, refute our conclusion that a significant number of Media 
Bureau FTEs work on MVPD issues that include DBS.\90\ The Commission 
has determined in other proceedings that services that are not 
technologically identical nevertheless warrant placement in the same 
regulatory fee category. Other fee categories, such as Interstate 
Telecommunications Service Providers (ITSP), also include a range of 
carriers that may not be regulated identically.\91\ For example, when 
interconnected Voice over Internet Protocol (VoIP) providers were added 
to the ITSP category in a permitted amendment the Commission observed 
that ``the costs and benefits associated with our regulation of 
interconnected VoIP providers are not identical as those associated 
with regulating interstate telecommunications service and CMRS.'' \92\ 
The Commission stated that ``Section 9 is clear, however, that 
regulatory fee assessments are based on the burden imposed on the 
Commission, not benefits realized by regulatees.'' \93\ Concerning many 
aspects of MVPD regulation, Media Bureau FTEs bear the same burden 
regardless of the specific technology used by the service provider. 
Thus, although DBS is not identical to cable television and IPTV, the 
services all receive oversight and regulation as a result of the work 
of Media Bureau FTEs on MVPD issues. The burden imposed on the 
Commission is therefore similar.
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    \87\ DIRECTV and DISH Comments at 11 & Reply Comments at 4-9.
    \88\ DIRECTV and DISH Comments at 12.
    \89\ DIRECTV and DISH Comments at 12 (these are (1) a 
requirement to encrypt the basic service tier, (2) the viewability 
requirements in sections 614 and 615 of the Act, and (3) the 
requirement to include certain digital interfaces on high definition 
set-top boxes).
    \90\ See, e.g., Closed Captioning Report and Order, 79 FR 17911 
(March 31, 2014), 79 FR 17093 (March 31, 2014); CALM Act Report and 
Order, 77 FR 40276 (July 9, 2012); 76.1000-1004; part 79; 47 U.S.C. 
618(b).
    \91\ ITSP, regulated by the Wireline Competition Bureau, 
includes interexchange carriers (IXCs), incumbent local exchange 
carriers (LECs), toll resellers, Voice over Internet Providers 
(VoIP), and other service providers, all of which involve different 
degrees of regulatory oversight. See NCTA and ACA Comments at 9 & 
Reply Comments at 8-9.
    \92\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2007, Report and Order and Further Notice of Proposed 
Rulemaking, 72 FR 45908, 45912, para. 19 (August 16, 2007) (FY 2007 
Report and Order).
    \93\ FY 2007 Report and Order, 72 FR 45908, 45912, para. 19 
(August 16, 2007).
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    24. DIRECTV and DISH also observe that there are more cable 
operators and cable systems than DBS operators, and that the cable 
industry has a larger filing and recordkeeping requirement than 
DBS.\94\ While we agree that the two DBS providers and their trade 
association had fewer filings than the top 25 cable operators and their 
two trade associations (combined), we are not persuaded that this 
demonstrates a lack of Media Bureau oversight and regulation of the DBS 
industry.\95\ We are therefore including DBS providers into the same 
regulatory fee category as cable television and IPTV because many Media 
Bureau issues involve the entire MVPD industry. We find that it is 
appropriate under section 9 of the Act to recover the costs associated 
with Media Bureau FTE work.\96\ As we explain below, however, DBS will 
have an opportunity to raise questions concerning the rate calculation 
between it and other members of the same fee category for fiscal year 
2015 and in the future.\97\ The video programming and distribution 
industry continues to change \98\ and the appropriate allocation 
between and among regulatees with respect to Media Bureau FTEs working 
on MVPD issues may change over time as different regulatory and legal 
issues are presented to the Commission.
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    \94\ DIRECTV and DISH Comments at 13. DIRECTV and DISH compare 
the number of filings in our electronic comment filing system (ECFS) 
and observe that over a two year period DIRECTV and DISH and their 
trade association filed 4,870 pages in 401 proceedings and the top 
25 cable companies and their two trade associations filed 93,673 
pages in 2,217 proceedings. DIRECTV and DISH Comments at 13, note 
53.
    \95\ In the 12 months prior to Mar. 17, 2015, Comcast 
Corporation (the largest cable company in the country) had 297 total 
ECFS filings, DIRECTV had 109, and DISH Network had 134 (some 
filings were by DIRECTV and DISH together), a not unexpected 
relative volume of ECFS filings for the top three MVPDs in the 
country.
    \96\ 47 U.S.C. 159(a)(1).
    \97\ Even when an industry has oversight generally by one 
organizational unit within the Commission, we are sensitive to the 
fact that balance between members of the same industry may require 
adjustments to FTE allocations. See, e.g., recent changes in FTE 
allocations between space station and earth stations even though 
such systems are may operate in the same spectrum and be part of the 
same telecommunication system. FY 2014 Report and Order, 79 FR 
54190, 54192-54193, paras. 11-15 (September 11, 2014).
    \98\ See, e.g., Promoting Innovation and Competition in the 
Provision of Multichannel Video Programming Distribution Services, 
Notice of Proposed Rulemaking, 29 FCC Rcd 15995 (2014) (seeking 
comment on, inter alia, expanding the definition of MVPD to include 
providers of multiple linear streams of video programming, 
regardless of the technology used to distribute it.)
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    25. To the extent that DIRECTV and DISH are suggesting by these 
arguments that the number of FTEs dedicated to a service is wholly 
determinative of their regulatory fees, we disagree. Although the 
statute requires us to calculate FTEs initially, we are also required 
to ``adjust[]'' that number ``to take into account factors that are 
reasonably related to the benefits provided to the payor of the fee by 
the Commission's activities.'' \99\ Since DBS providers generally 
benefit from the regulatory activities of the Media Bureau, much like 
cable operators and IPTV providers, the Commission can attribute Media 
Bureau FTEs to DBS providers and require them to pay Media Bureau 
regulatory fees.
---------------------------------------------------------------------------

    \99\ 47 U.S.C. 159(b)(1)(A).
---------------------------------------------------------------------------

    26. DIRECTV and DISH also argue that because we declined to include 
DBS in the cable television and IPTV regulatory fee category 
previously, we must provide a reasoned explanation for changing our fee 
determination.\100\ We agree that it serves the public interest to 
explain our rationale. A prior decision, however, does not preclude us 
from making a different determination in light of the facts and 
circumstances presented to the Commission in 2015. When the Commission 
first determined to include DBS in the geosynchronous satellite 
regulatory fee, DBS was a new service with an uncertain business model. 
Imposing a subscription based fee derived from Media Bureau FTEs risked 
failing to compensate the Commission for the substantive work 
regulating DBS as a satellite industry.\101\ When we examined the issue 
again in 2005, 2006, and 2008, contemporaneously there was a 
significant amount of regulatory work being done by the International 
Bureau related to making new spectrum available for satellite based 
video services.\102\ Thus, it is not surprising that the Commission 
concluded in 2006 that the existing methodology

[[Page 43026]]

adequately ensured recovery of International Bureau FTE burden of 
oversight and regulation. Further, removing DBS from the geosynchronous 
satellite regulatory fee category at a time when that fee category bore 
the burden of substantial rulemakings relating to new satellite 
spectrum would have been a complex issue. While the burden of new 
satellite rulemakings was not mentioned by the Commission in the FY 
2006 Report and Order, review of the context in which decisions are 
made is appropriate here. Further, in the past, changes to the DBS 
regulatory fee was frequently described as either a fee assessed based 
on International Bureau FTEs or a fee based on Media Bureau FTEs. In 
contrast, our proposal presents a more nuanced approach of recognizing 
that the work of both the International Bureau FTEs and the Media 
Bureau FTEs provide oversight and regulation of DBS. As a result, while 
the decisions made in the past are understandable in their context, we 
are not bound to disregard the FTE burden born by the Media Bureau in 
regulating DBS as a MVPD simply because we previously declined to 
change the methodology of assessing fees on DBS providers.
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    \100\ DIRECTV and DISH Comments at 15-17 & Reply Comments at 10-
11.
    \101\ FY 1996 NPRM, 61 FR 16432, 16436, para. 41 (April 15, 
1996) (``Moreover, because DBS licensees are not restricted to the 
provision of video programming, but rather may provide various non-
video services, we concluded that a facility-based fee would ensure 
that each DBS licensee contributed equitably to the cost of DBS 
regulation without the need to impose possibly burdensome and overly 
intrusive reporting requirements necessary to gather information 
identifying the services offered by individual DBS operators.'')
    \102\ Establishment of Policies and Service Rules for the 
Broadcasting Satellite Service at the 17.3-17.7 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 and for 
the Broadcasting Satellite Service Operating Bidirectionally in the 
17.3-17.7 GHz Frequency Band, Notice of Proposed Rulemaking, 72 FR 
46939 (August 22, 2007), Report and Order and Further Notice of 
Proposed Rulemaking, 72 FR 50000 (August 29, 2007); Amendment of the 
Commission's Policies and Rules for Processing Applications in the 
Direct Broadcast Satellite Service, Notice of Proposed Rulemaking, 
21 FCC Rcd 9443 (2006). See Thirteenth Report, 74 FR 11102, at para. 
(March 16, 2009).
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    27. Regulatory fee reform is a logistical challenge due to the time 
constraints in regulatory fee proceedings which typically must be 
completed in a year in order to satisfy our statutory mandate. 
Unfortunately, at times we must decline to adopt a proposal or take an 
incremental approach, not because a proposal lacks merit, but simply 
because there is insufficient time to address the substantive comments 
raised in the record in the time allotted.\103\ In this instance, 
however, we have the benefit of comments regarding this issue from the 
FY 2013 NPRM, the FY 2014 NPRM, and the FY 2014 Further Notice of 
Proposed Rulemaking. As a result, unlike prior review of this issue, we 
have had more time within which to review the significant issue of 
adopting an additional fee category for DBS providers. The GAO Report 
also brought new focus to conducting the necessary analysis of Media 
Bureau FTEs as part of our overall regulatory fee reform.\104\ Had the 
Commission performed this analysis of Media Bureau FTEs and regulation 
and oversight of DBS earlier, we may have reached this result at that 
time. The Commission may update its regulatory fee methodology when, 
among other things, it is supported by updated data, analysis, and 
changes in the regulation and oversight of the industry. As the GAO 
Report observed, it is important to ``regularly update analyses to 
ensure that fees are set based on relevant information.'' \105\
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    \103\ See, e.g., FY 2006 Report and Order, 71 FR 43842, 43845, 
para 16 (August 6, 2006) (``Finally, as a practical matter, we do 
not have sufficient time available to modify the section 9 
regulatory fee classification and methodology as proposed by NCTA 
and still comply with the 90-day congressional notification 
requirement before we start our regulatory fee collections in the 
August/September time frame.'')
    \104\ See, e.g., FY 2013 Report and Order, 78 FR 52433, 52436, 
paras. 12-14 (August 23, 2013).
    \105\ GAO Report at 12.
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    28. Finally, DISH and DIRECTV contend that a ``fee increase will 
cause rate shock'' \106\ and argue that we must explain the basis of 
any regulatory fee increase exceeding 7.5 percent relying upon a cap we 
adopted for FY 2013.\107\ We note first that it is somewhat premature 
to address this concern since the rate for DBS providers is merely 
proposed in the accompanying NPRM, and DISH and DIRECTV, the two DBS 
providers, may provide comments on the rate for this year and in 
subsequent years. As to the substance of the complaint, we note that 
this cap was adopted due to the significant regulatory fee changes 
adopted that year and our concern on the impact on small entities; 
neither DISH nor DIRECTV claim that they are small entities. We are not 
required to adopt a cap every year and we are not seeking comment on 
such a cap for FY 2015 in our NPRM above. Due to their concern that the 
regulatory fee would have such an impact on their customers, we have 
decided to phase in the DBS fee and introduce it initially as a 
subcategory of the cable television and IPTV category.\108\ This phased 
approach is consistent with the interim approach the Commission took in 
the FY 2013 Report and Order to ``avoid sudden and large changes in the 
amount of fees'' \109\ and addresses DIRECTV and DISH's concerns.\110\
---------------------------------------------------------------------------

    \106\ DIRECTV and DISH Comments at 11.
    \107\ DIRECTV and DISH Comments at 15-17 & Reply Comments at 10-
11.
    \108\ Commenters propose a three-year phase-in period. See NCTA 
and ACA Comments at 14-15.
    \109\ FY 2013 Report and Order, 78 FR 52433, 52439, para. 28 
(August 23, 2013).
    \110\ In FY 2014, DIRECTV and DISH paid approximately $2.49 
million in international regulatory fees for 20 satellites and 141 
earth stations. Assuming these DBS providers pay for the same number 
of satellite and earth station units, the Commission estimates that 
in FY 2015 their total fees paid would be $2.72 million (satellites 
and earth stations) plus $2.72 million (media services) for a total 
of $5.44 million.
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    29. We also note that we sought comment on whether the operator of 
the satellite or the provider of DBS service should be the entity that 
pays the regulatory fee.\111\ As the fee is based on subscriber 
numbers, the DBS service provider would be the entity with this 
information and it would be more efficient for those DBS providers to 
be responsible for the regulatory fee. For purposes of calculating 
regulatory fees, the subscriber count includes single family dwellings 
as well as individuals in multiple dwelling units (e.g., apartments, 
condominiums, mobile home parks) based on the formula in the footnote 
below.\112\
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    \111\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 
63883, 63886, para. 13 (October 27, 2014).
    \112\ DBS providers, cable television system operators, and IPTV 
providers should compute their number of basic subscribers as 
follows: Number of single family dwellings + number of individual 
households in multiple dwelling unit (apartments, condominiums, 
mobile home parks, etc.) paying at the basic subscriber rate + bulk 
rate customers + courtesy and free service. Note: Bulk-Rate 
Customers = Total annual bulk-rate charge divided by basic annual 
subscription rate for individual households. Providers and operators 
may base their count on ``a typical day in the last full week'' of 
December 2014, rather than on a count as of December 31, 2014.
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    30. In the FY 2014 Further Notice of Proposed Rulemaking, we 
further sought comment on whether, in lieu of a permitted amendment, 
Media Bureau FTEs working on DBS issues should be assigned to the 
International Bureau as direct FTEs or assigned as indirect FTEs.\113\ 
These alternatives would, in some ways, allocate the Media Bureau FTEs 
for regulatory fee purposes in a way that is fairer than the current 
allocation. DBS providers would be paying regulatory fees for some of 
the Media Bureau FTEs, if reallocated as direct FTEs to the 
International Bureau. If we reallocated some Media Bureau FTEs as 
indirect, the regulatory fee burden would be spread among all 
regulatory fee payors, which would relieve the burden on the cable 
television and IPTV industry. Although these two alternatives would 
serve to reallocate a portion of the Media Bureau FTEs, such 
reallocation would either shift the burden to all International Bureau 
regulatees or to all regulatory fee payors, instead of to the DBS 
providers. Thus, although those two alternative proposals might be an 
improvement over the status quo, including DBS in the same category as 
cable television and IPTV, and basing the regulatory fee on Media 
Bureau FTEs, is the more straightforward and equitable approach because 
the DBS regulation and oversight is done by the Media Bureau FTEs.
---------------------------------------------------------------------------

    \113\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 
63883, 63886, para. 13 (October 27, 2014).
---------------------------------------------------------------------------

    31. Under section 9 of the Act, the Commission must add, delete, or 
reclassify services in the fee schedule to reflect additions, 
deletions, or changes in the nature of its services ``as a

[[Page 43027]]

consequence of Commission rulemaking proceedings or changes in law.'' 
\114\ As explained above, after analyzing the oversight and regulation 
of MVPDs (including DBS) by the Media Bureau in various rulemaking 
proceedings, MVPDs (including DBS providers) are subject to increased 
regulation and oversight due to changes in law, and therefore DBS 
should be included in the same fee category as cable television and 
IPTV, as a permitted amendment. Since two different sets of FTE 
resources are involved, the Commission is assessing two separate fees 
on DBS providers, a satellite fee based on International Bureau FTEs 
and a fee based on Media Bureau FTEs, assessed per DBS subscriber. This 
adoption of a fee subcategory for DBS within the cable television and 
IPTV category is a permitted amendment as defined in section 9(b)(3) of 
the Act, which, pursuant to section 9(b)(4)(B), must be submitted to 
Congress at least 90 days before it becomes effective.\115\
---------------------------------------------------------------------------

    \114\ 47 U.S.C. 159(b)(3).
    \115\ 47 U.S.C. 159(b)(4)(B).
---------------------------------------------------------------------------

    32. In the Order portion of the rulemaking, the Commission makes 
ministerial changes to sections 1.911(d), 1.1912(b)(1), and 1.1917(c) 
of the Commission's rules \116\ to conform to the Digital 
Accountability and Transparency Act (DATA Act).\117\ In particular, the 
Commission amends the rule provisions to specify that debts owed to the 
Commission that have been delinquent for a period of 120 days shall be 
transferred to the Secretary of the Treasury.\118\ These amendments are 
to conform the Commission's rules to the DATA Act and the notice and 
comment and effective date provisions of the Administrative Procedure 
Act are inapplicable.\119\
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    \116\ 47 CFR 1.1911(d), 1.1912(b)(1), 1.1917(c).
    \117\ 31 U.S.C. 3716(c)(6).
    \118\ The full text of the new rules is contained in the Rule 
Change section of this document.
    \119\ 5 U.S.C. 553(b)(3)(A).
---------------------------------------------------------------------------

Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA),\120\ an Initial Regulatory Flexibility Analysis (IRFA) 
was included in the Report and Order and Further Notice of Proposed 
Rulemaking.\121\ The Commission sought written public comment on these 
proposals including comment on the IRFA. This Final Regulatory 
Flexibility Analysis (FRFA) conforms to the IRFA.\122\
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    \120\ 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).
    \121\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 2014, Report and Order and Further Notice of Proposed 
Rulemaking, MD Docket No. 14-92, 79 FR 63883 (October 27, 2014) 
(Further Notice).
    \122\ 5 U.S.C. 604.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Report and Order

    2. In this Report and Order, we eliminate two categories from the 
regulatory fee schedule: Amateur radio Vanity Call Signs and General 
Mobile Radio Service (GMRS). We also include direct broadcast satellite 
(DBS) providers in the cable television and IPTV regulatory fee 
category, as a subcategory. To aid in the implementation of new 
regulatory fees for Responsible Organizations (RespOrgs) adopted in the 
fiscal year 2014 proceeding, we direct the Managing Director to 
coordinate with SMS/800, Inc. to ensure that all RespOrgs owing 
regulatory fees have sufficient information about this process and 
opportunity to pay the regulatory fee before the RespOrg is placed in 
red light status and enforcement procedures are initiated.
    3. Our regulatory fee for DBS providers, adopted herein, will 
include DBS providers in the category of cable television operators and 
IPTV providers, but at a lower regulatory fee rate. This rule was 
adopted because the Media Bureau staff spend approximately as much time 
working on issues that include DBS as cable television and IPTV. For 
the most part, the rules and policies addressed by the Media Bureau 
include DBS and cable television, as well as IPTV. Under section 9 of 
the Commission's rules, the DBS industry should contribute to these 
regulatory fees, otherwise the cable television and IPTV industries are 
paying for costs that should be shared with DBS.

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

    4. None.

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

    5. 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.\123\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \124\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\125\ 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.\126\ Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.\127\
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    \123\ 5 U.S.C. 603(b)(3).
    \124\ 5 U.S.C. 601(6).
    \125\ 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.''
    \126\ 15 U.S.C. 632.
    \127\ See SBA, Office of Advocacy, ``Frequently Asked 
Questions,'' http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf.
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    6. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``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 communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' \128\ 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.\129\ Census data for 
2007 shows that there were 3,188 firms that operated that year. Of this 
total, 3,144 operated with less than 1,000 employees.\130\ Thus, under 
this size standard, the majority of firms in this industry can be 
considered small.
---------------------------------------------------------------------------

    \128\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
    \129\ See 13 CFR 120.201, NAICS Code 517110.
    \130\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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    7. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small

[[Page 43028]]

businesses specifically applicable to local exchange services. The 
closest applicable NAICS Code category is Wired Telecommunications 
Carriers as defined in paragraph 6 of this FRFA. Under the applicable 
SBA size standard, such a business is small if it has 1,500 or fewer 
employees.\131\ According to Commission data, census data for 2007 
shows that there were 3,188 firms that operated that year. Of this 
total, 3,144 operated with fewer than 1,000 employees.\132\ The 
Commission therefore estimates that most providers of local exchange 
carrier service are small entities that may be affected by the rules 
adopted.
---------------------------------------------------------------------------

    \131\ 13 CFR 121.201, NAICS code 517110.
    \132\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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    8. Incumbent LECs. Neither the Commission nor the SBA has developed 
a small business size standard specifically for incumbent local 
exchange services. The closest applicable NAICS Code category is Wired 
Telecommunications Carriers as defined in paragraph 6 of this FRFA. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\133\ According to Commission data, 3,188 firms 
operated in that year. Of this total, 3,144 operated with fewer than 
1,000 employees.\134\ Consequently, the Commission estimates that most 
providers of incumbent local exchange service are small businesses that 
may be affected by the rules and policies adopted. Three hundred and 
seven (307) Incumbent Local Exchange Carriers reported that they were 
incumbent local exchange service providers.\135\ Of this total, an 
estimated 1,006 have 1,500 or fewer employees.\136\
---------------------------------------------------------------------------

    \133\ 13 CFR 121.201, NAICS code 517110.
    \134\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \135\ 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).
    \136\ Id.
---------------------------------------------------------------------------

    9. 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 NAICS Code category is Wired 
Telecommunications Carriers, as defined in paragraph 6 of this FRFA. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\137\ U.S. Census data for 2007 indicate that 3,188 
firms operated during that year. Of that number, 3,144 operated with 
fewer than 1,000 employees.\138\ Based on this data, the Commission 
concludes that the majority of Competitive LECS, CAPs, Shared-Tenant 
Service Providers, and Other Local Service Providers, are small 
entities. 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.\139\ Of these 1,442 
carriers, an estimated 1,256 have 1,500 or fewer employees.\140\ 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.\141\ Also, 72 carriers have reported that they are Other 
Local Service Providers.\142\ Of this total, 70 have 1,500 or fewer 
employees.\143\ Consequently, based on internally researched FCC data, 
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 the rules adopted.
---------------------------------------------------------------------------

    \137\ 13 CFR 121.201, NAICS code 517110.
    \138\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \139\ See Trends in Telephone Service, at tbl. 5.3.
    \140\ Id.
    \141\ Id.
    \142\ Id.
    \143\ Id.
---------------------------------------------------------------------------

    10. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined in 
paragraph 6 of this FRFA. The applicable size standard under SBA rules 
is that such a business is small if it has 1,500 or fewer 
employees.\144\ U.S. Census data for 2007 indicates that 3,188 firms 
operated during that year. Of that number, 3,144 operated with fewer 
than 1,000 employees.\145\ According to internally developed Commission 
data, 359 companies reported that their primary telecommunications 
service activity was the provision of interexchange services.\146\ Of 
this total, an estimated 317 have 1,500 or fewer employees.\147\ 
Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities that may be affected 
by the rules adopted.
---------------------------------------------------------------------------

    \144\ 13 CFR 121.201, NAICS code 517110.
    \145\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \146\ See Trends in Telephone Service, at Table 5.3.
    \147\ Id.
---------------------------------------------------------------------------

    11. 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 NAICS Code category for 
prepaid calling card providers is Telecommunications Resellers. This 
industry comprises establishments engaged in purchasing access and 
network capacity from owners and operators of telecommunications 
networks and reselling wired and wireless telecommunications services 
(except satellite) to businesses and households. Mobile virtual 
networks operators (MVNOs) are included in this industry.\148\ Under 
the applicable SBA size standard, such a business is small if it has 
1,500 or fewer employees.\149\ U.S. 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.\150\ 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.\151\ All 
193 carriers have 1,500 or fewer employees.\152\ Consequently, the 
Commission estimates that the majority of prepaid calling card 
providers are small entities that may be affected by the rules adopted.
---------------------------------------------------------------------------

    \148\ http://www.census.gov/cgi-bin/ssd/naics/naicsrch.
    \149\ 13 CFR 121.201, NAICS code 517911.
    \150\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \151\ See Trends in Telephone Service, at Table 5.3.
    \152\ Id.
---------------------------------------------------------------------------

    12. 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.\153\ 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.\154\ Under this category

[[Page 43029]]

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.\155\ Of this total, an 
estimated 211 have 1,500 or fewer employees.\156\ Consequently, the 
Commission estimates that the majority of local resellers are small 
entities that may be affected by the rules adopted.
---------------------------------------------------------------------------

    \153\ 13 CFR 121.201, NAICS code 517911.
    \154\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \155\ See Trends in Telephone Service, at tbl. 5.3.
    \156\ Id.
---------------------------------------------------------------------------

    13. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers, and 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.\157\ 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.\158\ 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.\159\ Of this total, an estimated 
857 have 1,500 or fewer employees.\160\ Consequently, the Commission 
estimates that the majority of toll resellers are small entities that 
may be affected by the rules adopted.
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    \157\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \158\ Id.
    \159\ Trends in Telephone Service, at Table 5.3.
    \160\ Id.
---------------------------------------------------------------------------

    14. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition 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 NAICS Code category is for 
Wired Telecommunications Carriers as defined in paragraph 6 of this 
FRFA. Under the applicable SBA size standard, such a business is small 
if it has 1,500 or fewer employees.\161\ Census data for 2007 shows 
that there were 3,188 firms that operated that year. Of this total, 
3,144 operated with fewer than 1,000 employees.\162\ Thus, under this 
category and the associated small business size standard, the majority 
of Other Toll Carriers can be considered small. According to internally 
developed Commission data, 284 companies reported that their primary 
telecommunications service activity was the provision of other toll 
carriage.\163\ Of these, an estimated 279 have 1,500 or fewer 
employees.\164\ Consequently, the Commission estimates that most Other 
Toll Carriers are small entities that may be affected by the rules and 
policies adopted.
---------------------------------------------------------------------------

    \161\ 13 CFR 121.201, NAICS code 517110.
    \162\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \163\ Trends in Telephone Service, at Table 5.3.
    \164\ Id.
---------------------------------------------------------------------------

    15. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves, such as cellular services, paging services, wireless internet 
access, and wireless video services.\165\ The appropriate size standard 
under SBA rules is that such a business is small if it has 1,500 or 
fewer employees. For this industry, Census data for 2007 show that 
there were 1,383 firms that operated for the entire year. Of this 
total, 1,368 firms had fewer than 1,000 employees. Thus under this 
category and the associated size standard, the Commission estimates 
that the majority of wireless telecommunications carriers (except 
satellite) are small entities. Similarly, according to internally 
developed 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) services.\166\ Of this total, an estimated 261 have 1,500 or 
fewer employees.\167\ Consequently, the Commission estimates that 
approximately half of these firms can be considered small. Thus, using 
available data, we estimate that the majority of wireless firms can be 
considered small.
---------------------------------------------------------------------------

    \165\ NAICS Code 517210. See http://www.census.gov/cgi-bin/ssd/naics/naiscsrch.
    \166\ Trends in Telephone Service, at Table 5.3.
    \167\ Id.
---------------------------------------------------------------------------

    16. Cable Television and Other Subscription Programming.\168\ 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.'' \169\ The SBA has developed a small 
business size standard for this category, which is: all such firms 
having 1,500 or fewer employees.\170\ Census data for 2007 shows that 
there were 3,188 firms that operated that year. Of this total, 3,144 
had fewer than 1,000 employees.\171\ 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.
---------------------------------------------------------------------------

    \168\ In 2014, ``Cable and Other Subscription Programming,'' 
NAICS Code 515210, replaced a prior category, now obsolete, which 
was called ``Cable and Other Program Distribution.'' Cable and Other 
Program Distribution, prior to 2014, was placed under NAICS Code 
517110, Wired Telecommunications Carriers. Wired Telecommunications 
Carriers is still a current and valid NAICS Code Category. Because 
of the similarity between ``Cable and Other Subscription 
Programming'' and ``Cable and other Program Distribution,'' we will, 
in this proceeding, continue to use Wired Telecommunications Carrier 
data based on the U.S. Census. The alternative of using data 
gathered under Cable and Other Subscription Programming (NAICS Code 
515210) is unavailable to us for two reasons. First, the size 
standard established by the SBA for Cable and Other Subscription 
Programming is annual receipts of $38.5 million or less. Thus to use 
the annual receipts size standard would require the Commission 
either to switch from existing employee based size standard of 1,500 
employees or less for Wired Telecommunications Carriers, or else 
would require the use of two size standards. No official approval of 
either option has been granted by the Commission as of the time of 
the release of this Regulatory Fees NPRM and its associated Report 
and Order and Order. Second, the data available under the size 
standard of $38.5 million dollars or less is not applicable at this 
time, because the only currently available U.S. Census data for 
annual receipts of all businesses operating in the NAICS Code 
category of 515210 (Cable and other Subscription Programming) 
consists only of total receipts for all businesses operating in this 
category in 2007 and of total annual receipts for all businesses 
operating in this category in 2012. The data do not provide any 
basis for determining, for either year, how many businesses were 
small because they had annual receipts of $38.5 million or less. See 
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51I2&prodType=table.
    \169\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition), (Full definition 
stated in paragraph 6 of this IRFA) available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
    \170\ 13 CFR 121.201, NAICS code 517110.
    \171\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US-51SSSZ5&prodType=Table.
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    17. Cable Companies and Systems. The Commission has developed its 
own small business size standards, for the

[[Page 43030]]

purpose of cable rate regulation. Under the Commission's rules, a 
``small cable company'' is one serving 400,000 or fewer subscribers, 
nationwide.\172\ Industry data indicate that at the end of June 2012, 
1,141 cable companies were in operation.\173\ Of this total, all but 
ten cable operators were small under this size standard. In addition, 
under the Commission's rules, a ``small system'' is a cable system 
serving 15,000 or fewer subscribers.\174\ Industry data indicate that 
of 4,945 systems nationwide, 4,380 systems have fewer than 20,000.\175\ 
Thus, under this second size standard, most cable systems are small and 
may be affected by the rules adopted.
---------------------------------------------------------------------------

    \172\ 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, 60 FR 35854, 35855, 
para. 7 (July 12, 1995).
    \173\ NCTA, Industry Data, Number of Cable Operating Companies. 
See http://www.ncta.com/Statistics.aspx.
    \174\ See 47 CFR 76.901(c).
    \175\ The number of active, registered cable systems comes from 
the Commission's Cable Operations Licensing System (COALS) database 
on August 28, 2013.
---------------------------------------------------------------------------

    18. All Other Telecommunications. ``All Other Telecommunications'' 
is defined as follows: This U.S. industry is comprised of 
establishments that are primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing Internet services or voice over Internet 
protocol (VoIP) services via client-supplied telecommunications 
connections are also included in this industry.\176\ The SBA has 
developed a small business size standard for ``All Other 
Telecommunications,'' which consists of all such firms with gross 
annual receipts of $32.5 million or less.\177\ For this category, 
census data for 2007 show that there were 2,383 firms that operated for 
the entire year. Of these firms, a total of 2,346 had gross annual 
receipts of less than $25 million.\178\ Thus, a majority of ``All Other 
Telecommunications'' firms potentially affected by the rules adopted 
can be considered small.
---------------------------------------------------------------------------

    \176\ http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.
    \177\ 13 CFR 121.201; NAICS Code 517919.
    \178\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
---------------------------------------------------------------------------

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

    19. This Report and Order does not adopt any new reporting, 
recordkeeping, or other compliance requirements, other than the 
requirement that DBS providers pay regulatory fees based on Media 
Bureau FTEs, as a subcategory of the cable television operators and 
IPTV category. These two companies are already subject to our 
regulatory fee requirements.

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

    20. 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.\179\
---------------------------------------------------------------------------

    \179\ 5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

    21. This Report and Order does not adopt any new reporting 
requirements. Therefore no adverse economic impact on small entities 
will be sustained based on reporting requirements. There will be a 
regulatory fee increase on DBS providers, but these companies are not 
small entities. We are also advising SMS/800, Inc. to provide 
information to Responsible Organizations, or RespOrgs, to ensure that 
they comply with their new previously adopted regulatory fee 
requirements. These entities may be small entities; however, the 
regulatory fee per toll free number is very small and could easily be 
paid and then passed on to the subscriber if the number is in use, in 
which case compliance would not be an issue. (We also note that there 
is a previously adopted de minimis threshold of $500, per year.) If the 
toll free number is not used by a subscriber, the RespOrg can either 
choose to pay the regulatory fee or return the toll free number to the 
800/SMS, Inc. database. The Commission expends resources to address 
toll free issues, and so parties should either be responsible for the 
payment of the resources used or the toll free numbers should be 
returned for others to use.
    22. 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. 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. 
See 47 CFR 1.1166.

F. Federal Rules That May Duplicate, Overlap, or Conflict

    23. None.

V. Ordering Clauses

    24. 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 Report and Order and Order 
is hereby adopted.
    25. It is further ordered that Part 1 of the Commission's rules are 
amended as set forth in paragraph 32 and in the rule change section of 
this document, effective upon publication in the Federal Register.
    26. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the U.S. 
Small Business Administration.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 1 as follows:

PART 1--PRACTICE AND PROCEDURE

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

    Authority:  15 U.S.C. 79 et seq., 47 U.S.C. 151, 154(i), 154(j), 
155, 157, 225, 303, and 309.

Subpart O--Collection of Claims Owed the United States

0
2. Revise Sec.  1.1911(d) to read as follows:

[[Page 43031]]

Sec.  1.1911  Demand for payment.

* * * * *
    (d) The Commission may, as circumstances and the nature of the debt 
permit, include in demand letters such items as the Commission's 
willingness to discuss alternative methods of payment; its policies 
with respect to the use of credit bureaus, debt collection centers, and 
collection agencies; the Commission's remedies to enforce payment of 
the debt (including assessment of interest, administrative costs and 
penalties, administrative garnishment, the use of collection agencies, 
Federal salary offset, tax refund offset, administrative offset, and 
litigation); the requirement that any debt delinquent for more than 120 
days be transferred to the Department of the Treasury for collection; 
and, depending on applicable statutory authority, the debtor's 
entitlement to consideration of a waiver. Where applicable, the debtor 
will be provided with a period of time (normally not more than 15 
calendar days) from the date of the demand in which to exercise the 
opportunity to request a review.
* * * * *

0
3. Revise Sec.  1.1912(b)(1) to read as follows:


Sec.  1.1912  Collection by administrative offset.

* * * * *
    (b) Mandatory centralized administrative offset. (1) The Commission 
is required to refer past due, legally enforceable nontax debts which 
are over 120 days delinquent to the Treasury for collection by 
centralized administrative offset. Debts which are less than 120 days 
delinquent also may be referred to the Treasury for this purpose. See 
FCCS for debt certification requirements.
* * * * *

0
4. Revise Sec.  1.1917(c) to read as follows:


Sec.  1.1917  Referrals to the Department of Justice and transfer of 
delinquent debt to the Secretary of Treasury.

* * * * *
    (c) All non-tax debts of claims owed to the Commission that have 
been delinquent for a period of 120 days shall be transferred to the 
Secretary of the Treasury. Debts which are less than 120 days 
delinquent may also be referred to the Treasury. Upon such transfer the 
Secretary of the Treasury shall take appropriate action to collect or 
terminate collection actions on the debt or claim. A debt is past-due 
if it has not been paid by the date specified in the Commission's 
initial written demand for payment or applicable agreement or 
instrument (including a post-delinquency payment agreement) unless 
other satisfactory payment arrangements have been made.

[FR Doc. 2015-17288 Filed 7-20-15; 8:45 am]
 BILLING CODE 6712-01-P