[Federal Register Volume 80, Number 195 (Thursday, October 8, 2015)]
[Proposed Rules]
[Pages 60825-60831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25578]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 15-121; FCC 15-108]


Assessment and Collection of Regulatory Fees for Fiscal Year 2015

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document the Commission revises its Schedule of 
Regulatory Fees to recover an amount of $339,844,000 that Congress has 
required the Commission to collect for fiscal year 2015. Section 9 of 
the Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees under sections 9(b)(2) and 
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and 
``Permitted Amendments'' to the Schedule of Regulatory Fees.

DATES: Comments are due November 9, 2015 and Reply Comments are due 
December 7, 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 
Further Notice of Proposed Rulemaking (FNPRM), FCC 15-108, MD Docket 
No. 15-121, adopted on September 1, 2015 and released on September 2, 
2015.

I. Administrative Matters

A. Initial Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act of 1980 (RFA),\1\ 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(FRFA) relating to this Further Notice of Proposed Rulemaking.
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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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B. Initial Paperwork Reduction Act of 1995 Analysis

    2. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified information collection burden for small business 
concerns with fewer than 25 employees, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

C. Filing Instructions

    3. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    [cir] Filings can be sent by hand or messenger delivery, by 
commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    4. People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).

D. Ex Parte Information

    5. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must list all persons attending or otherwise participating 
in the meeting at which the ex parte presentation was made, and 
summarize all data presented and arguments made

[[Page 60826]]

during the presentation. If the presentation consisted in whole or in 
part of the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda, or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with Sec.  1.1206(b). In proceedings governed by 
Sec.  1.49(f) or for which the Commission has made available a method 
of electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

II. Introduction and Executive Summary

    6. In the Further Notice of Proposed Rulemaking in this docket, we 
seek further comment on changes to our methodology in calculating 
regulatory fees for AM and FM broadcast radio and on reallocating FTEs 
from the Wireline Competition Bureau working on numbering and universal 
service issues.

III. Background

    7. Congress adopted a regulatory fee schedule in 1993 \2\ and 
authorized the Commission to assess and collect annual regulatory fees 
pursuant to the schedule, as amended by the Commission.\3\ As a result, 
the Commission annually reviews the regulatory fee schedule, proposes 
changes to the schedule to reflect changes in the amount of its 
appropriation, and proposes increases or decrease to the schedule of 
regulatory fees.\4\ The Commission makes changes to the regulatory fee 
schedule ``if the Commission determines that the schedule requires 
amendment to comply with the requirements'' \5\ of section 9(b)(1)(A) 
of the Act.\6\ The Commission may also 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.'' Thus, for each fiscal year, 
the proposed fee schedule in the annual Notice of Proposed Rulemaking 
(NPRM) will reflect changes in the amount appropriated for the 
performance of the FCC's regulatory activities, changes in the 
industries represented by the regulatory fee payers, changes in 
Commission FTE levels, and any other issues of relevance to the 
proposed fee schedule.\7\ After receipt and review of comments, the 
Commission issues a Report and Order adopting the fee schedule for the 
fiscal year and sets out the procedures for payment of fees.
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    \2\ 47 U.S.C. 159 (g) (showing original fee schedule prior to 
Commission amendment).
    \3\ 47 U.S.C. 159
    \4\ 47 U.S.C. 159(b)(1)(B).
    \5\ 47 U.S.C. 159(b)(2).
    \6\ 47 U.S.C. 159(b)(1)(A).
    \7\ Section 9(b)(2) discusses mandatory amendments to the fee 
schedule and Section 9(b)(3) discusses permissive amendments to the 
fee schedule. Both mandatory and permissive amendments are not 
subject to judicial review. 47 U.S.C. 159(b)(2) and (3).
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IV. Further Notice of Proposed Rulemaking

A. Broadcasters' Regulatory Fees

    8. In the FY 2015 NPRM, we sought comment on whether the Commission 
should review the apportionment of regulatory fees among broadcasters. 
We sought comment on whether the Commission should reexamine the number 
of FTEs devoted to the regulation of radio versus television 
broadcasters and adjust the fee paid by radio and television 
broadcasters to more accurately take into account factors related to 
``the benefits provided to the payor of the fee by the Commission's 
activities.'' \8\ NAB filed comments in support of our effort to better 
align fees with the FTEs working on broadcast issues, but observes that 
we have not yet provided information about the relevant FTEs.\9\ We 
have reviewed the categories of work performed by FTEs in the Media 
Bureau, in order to provide further information for commenters on this 
issue. The Media Bureau, consisting of 169 FTEs, develops, recommends, 
and administers the policy and licensing programs for electronic media, 
including cable television, broadcast television, and radio in the 
United States and its territories, and also handles post-licensing 
matters regarding DBS service. The Media Bureau has 25 FTEs in the 
bureau front office, (including staff assigned to Bureau-wide 
administrative support), 51 in the Audio Division, 27 in the Industry 
Analysis Division, 13 in Engineering Division, 29 in the Policy 
Division, and 24 in the Video Division. Some of these FTEs may be 
categorized as auctions-funded, depending on the Commission's auctions 
schedule. All of the Engineering Division FTEs work on cable issues, 
and some FTEs from the Policy and Industry Analysis Divisions also work 
on cable issues. Of the 52 FTEs in the Audio Division, approximately 42 
are assigned to FM and 10 to AM. The 25 FTEs in the Video Division work 
on television issues. We seek further comment on whether and how to 
reform our regulatory fee assessments for broadcasters.
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    \8\ 47 U.S.C. 159(b)(1)(A) (providing for adjustment of the FTE 
allocation to ``take into account factors that are reasonably 
related to the benefits provided to the payor of the fee by the 
Commission's activities, including such factors as service area 
coverage, shared use versus exclusive use, and other factors that 
the Commission determines are necessary in the public interest.'').
    \9\ NAB Comments at 2.
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    9. The Commission assesses regulatory fees on radio broadcasters 
based on type and class of service and on the population they serve. 
Earlier this year we sought comment on whether the dividing points for 
higher fee levels for both television and radio broadcasters remain 
appropriate and observed that ``no single ratio apportions regulatory 
fees among AM and FM radio categories.'' \10\ We seek further comment 
on rationalizing the regulatory fee table for radio broadcasters. 
First, we seek input on including a higher population row in the table, 
dividing radio broadcasters that serve 3,000,001-6,000,000 people from 
those that serve more. Second, we seek input on standardizing the 
incremental increase in fees as radio broadcasters increase the 
population they serve, such as by requiring that fee adjustments 
between tiers monotonically increase as the population served 
increases. Third, we seek input on consistently assessing fees based on 
the relative type and class of service, such as by assessing FM class 
B, C, C0, C1, & C2 stations at twice the rate of AM class C stations, 
and FM class A, B1, & C3 stations assessed at 75 percent more than AM 
class C stations. For AM stations, we seek comment on assessing AM 
class A stations at 60 percent more, AM class B stations at 15 percent 
more, and AM class D stations at 10 percent more than AM class C 
stations (i.e., at roughly the relative rates assessed today). Taking 
these options together, we seek comment on the following potential 
table of regulatory fees for radio broadcasters.
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    \10\ FY 2015 NPRM, 30 FCC Rcd at 5359, para. 13.

[[Page 60827]]



                                                         Proposed Radio Station Regulatory Fees
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                                                                                                                           FM Classes A,   FM Classes B,
                    Population served                       AM Class A      AM Class B      AM Class C      AM Class D        B1 & C3     C, C0, C1 & C2
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<=25,000................................................            $910            $655            $570            $625          $1,000          $1,140
25,001-75,000...........................................           1,370             985             855             940           1,495           1,710
75,001-150,000..........................................           1,825           1,310           1,140           1,255           1,995           2,280
150,001-500,000.........................................           2,735           1,965           1,710           1,880           2,995           3,420
500,001-1,200,000.......................................           4,560           3,280           2,850           3,135           4,990           5,700
1,200,001-3,000,000.....................................           6,840           4,915           4,275           4,705           7,480           8,550
3,000,001-6,000,000.....................................           9,120           6,555           5,700           6,270           9,975          11,400
>6,000,000..............................................          11,400           8,195           7,125           7,840          12,470          14,250
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    10. The Commission assesses regulatory fees on television 
broadcasters based on the markets they serve (1-10:11-25:26-50:51-100: 
Remaining Market). Before the Commission combined the VHF and UHF 
regulatory fee categories, the ratio of regulatory fees for VHF 
stations (then considered the most valuable stations) was roughly 
14:11:7:4:1. Today, it is roughly 10:9:6:3:1. We seek comment on 
readjusting the table to restore the traditional determination that Top 
10 stations should pay about twice what stations in markets 26-50 pay 
(that is, the new ratios would be 12:9:6:3:1). With this change, and 
adjusting to recover the same total regulatory fees as television 
broadcasters pay today, we seek comment on the following potential 
table of regulatory fees for television broadcasters.

------------------------------------------------------------------------
 Digital TV (47 CFR part 73) VHF and UHF
               commercial                     Before           After
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Markets 1-10............................         $46,825         $55,025
Markets 11-25...........................          43,200          41,270
Markets 26-50...........................          27,625          27,515
Markets 51-100..........................          16,275          13,755
Remaining Markets.......................           4,850           4,585
Construction Permits....................           4,850           4,585
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    11. NAB also observes that after the spectrum incentive auction 
there may be fewer television stations, resulting in material changes 
in the regulatory fee apportionment among the remaining stations.\11\ 
We seek comment on whether, when, and how the Commission should adjust 
its methodology for assessing regulatory fees on televisions stations, 
to respond to such potential changed circumstances consistent with the 
provisions of Section 9 of the Communications Act.
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    \11\ NAB Comments at 7-9.
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B. ITTA's Proposals To Reallocate FTEs

    12. ITTA has suggested that we should consider all cross-cutting 
work throughout the Commission, not just in the International Bureau, 
and we should re-assign certain Wireline Competition Bureau FTEs for 
regulatory fee purposes.\12\ ITTA contends that the Commission should 
make appropriate adjustments to its regulatory fee structure to reflect 
that the work of the Wireline Competition Bureau is no longer primarily 
focused on ITSPs.\13\ According to ITTA, resources expended by Wireline 
Competition Bureau FTEs increasingly benefit other industry 
sectors.\14\ ITTA argues that the Commission's efforts to modernize the 
Lifeline program and to conduct a comprehensive analysis of the special 
access marketplace, for example, generate significant benefits for 
entities that do not pay regulatory fees as ITSPs.\15\
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    \12\ ITTA Comments at 2-5.
    \13\ Id. at 3-4.
    \14\ Id. at 4.
    \15\ Id. at 4-5.
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    13. ITTA has previously proposed that we combine wireless providers 
into the ITSP fee category so that all voice providers pay regulatory 
fees on the same basis.\16\ ITTA continues to endorse this approach and 
contends that such action would be consistent with the Commission's 
decision to incorporate interconnected VoIP providers into the ITSP fee 
category to ensure that such providers are paying their share of 
regulatory fees in connection with the Commission's oversight of voice 
services.\17\
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    \16\ Id. at 3.
    \17\ Id.
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    14. We recognize that there is substantial convergence in the 
telecommunications industry and organizational changes in the 
Commission that may support additional FTE reallocations as ITTA 
contends. Wireless providers are not subject to all of the regulations 
and requirements imposed on ITSPs. However, there are certain rules 
(e.g., universal service), that wireless and wireline services benefit 
from and the Wireline Competition Bureau FTEs provide the oversight and 
regulation of the industry in these areas.\18\ We seek comment on 
ITTA's proposals to (i) combine wireless voice and wireline services 
into the ITSP category and, alternatively, to (ii) re-assign certain 
Wireline Competition Bureau FTEs as indirect for regulatory fee 
purposes. Concerning any reassignment of direct FTEs, we seek comment 
on whether it is reasonable and consistent with section 9 of the Act to 
readjust the assignment of FTEs in the bureau and if the record 
demonstrates the clearest case for reassignment.\19\
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    \18\ 47 CFR 54.900 et seq.
    \19\ FY 2013 Report and Order, 28 FCC Rcd at 12357-58, para. 19.
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    15. Commenters supporting ITTA's proposals should also explain: How 
wireless voice services and wireline services can be combined 
(currently wireless regulatory fees are calculated per subscriber and 
ITSP fees are based on revenues) and how we would determine which and 
how many Wireline Competition Bureau FTEs to reassign as indirect. We 
note that, as ITTA observes, certain issues handled

[[Page 60828]]

in the Wireline Competition Bureau benefit wireless providers, and that 
argument could support reassigning certain Wireline Competition Bureau 
FTEs as Wireless Telecommunications Bureau FTEs for regulatory fee 
purposes.\20\ For example, given the amount of Universal Service 
Lifeline Support distributed to wireless providers, should FTEs who 
work on issues related to such providers be allocated the Wireless 
Telecommunications Bureau for regulatory fee calculations? \21\ 
Alternatively, we also seek comment on adopting a new fee category for 
wireless providers, as a subcategory of the ITSP regulatory fee 
category, based on a percentage Wireline Competition Bureau FTE work 
devoted to work related to these wireless regulatees.\22\
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    \20\ Based on staff analysis, approximately 10 FTEs work on 
high-cost issues, 4 FTEs work on Lifeline issues, 9 FTEs work on E-
rate issues, and 4 FTEs work on Rural Health Care issues. In 
addition approximately 14 FTEs work on numbering issues and/or 
special access.
    \21\ Wireless providers received an estimated $1.4 billion in 
Lifeline disbursements in 2014.
    \22\ See, e.g., FY 2014 NPRM, 29 FCC Rcd at 10782-84, paras. 38-
43.
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V. Regulatory Flexibility Analysis

Initial Regulatory Flexibility Analysis

    16. As required by the Regulatory Flexibility Act (RFA),\23\ the 
Commission prepared this Initial Regulatory Flexibility Analysis (IRFA) 
of the possible significant economic impact on small entities by the 
policies and rules proposed in the Further Notice of Proposed 
Rulemaking (Further Notice). Written comments are requested on this 
IRFA. Comments must be identified as responses to the IRFA and must be 
filed by the deadline for comments on this Further Notice. The 
Commission will send a copy of the Further Notice, including the IRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration 
(SBA).\24\ In addition, the Further Notice and IRFA (or summaries 
thereof) will be published in the Federal Register.\25\
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    \23\ 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), Pub. L. 104-121, Title II, 110 Stat. 847 (1996).
    \24\ 5 U.S.C. 603(a).
    \25\ Id.
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A. Need for, and Objectives of, the Notice

    17. The Further Notice seeks comment regarding adjusting the 
regulatory fees paid by broadcasters, for radio and television. 
Specifically, the Commission seeks comment on the extent of FTEs that 
work on video, cable, DBS, and radio services, and whether the current 
proportion of fees paid by these various fee categories associated with 
these services are still accurate. The level of FTE activity on these 
media services determines the proportion of fees to be paid by each 
media service fee category, which in turn is used to calculate the fee 
amount for each fee category.

B. Legal Basis

    18. This action, including publication of proposed rules, is 
authorized under Sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\26\
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    \26\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
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C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    19. 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.\27\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \28\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\29\ 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.\30\
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    \27\ 5 U.S.C. 603(b)(3).
    \28\ 5 U.S.C. 601(6).
    \29\ 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.''
    \30\ 15 U.S.C. 632.
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    20. Small Entities. Our actions, over time, may affect small 
entities that are not easily categorized at present. We therefore 
describe here, at the outset, three comprehensive small entity size 
standards that could be directly affected by the proposals under 
consideration.\1\ As of 2009, small businesses represented 99.9 percent 
of the 27.5 million businesses in the United States, according to the 
SBA.\2\ In addition, a ``small organization is generally any not-for-
profit enterprise which is independently owned and operated and not 
dominant in its field.\3\ Nationwide, as of 2007, there were 
approximately 1,621,215 small organizations.\4\ Finally the term 
``small governmental jurisdiction'' is defined generally as 
``governments of cities, towns, townships, villages, school districts, 
or special districts, with a population of less than fifty thousand.\5\ 
Census Bureau data for 2011 indicate that there were 90,056 local 
governmental jurisdictions in the United States.\6\ We estimate that, 
of this total, as many as 89,327 entities may qualify as ``small 
governmental jurisdictions.'' \7\ Thus, we estimate that most local 
government jurisdictions are small.
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    \1\ See 5 U.S.C. 601(3)-(6).
    \2\ See SBA, Office of Advocacy, ``Frequently Asked Questions'', 
available at http://www.sba.gov/faqs/faqindex.cfm?arealD=24.
    \3\ 5 U.S.C. 601(4).
    \4\ See Independent Sector, The New Nonprofit Almanac and Desk 
Reference (2010).
    \5\ 5 U.S.C. 601(5).
    \6\ See SBA, Office of Advocacy, ``Frequently Asked Questions,'' 
available at http.www.sba.gov/sites/default/files.FAQMarch201_Opdf.
    \7\ The 2011 Census Data for small governmental organizations 
are not presented based on the size of the population in each 
organization. As stated above, there were 90,056 local governmental 
organizations in 2011. As a basis for estimating how many of these 
90,056 local organizations were small, we note that there were a 
total of 729 cities and towns (incorporated places and civil 
divisions) with populations over 50,000. See http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk. If we subtract the 729 cities and towns 
that exceed the 50,000 population threshold, we conclude that 
approximately 789, 237 are small.
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    21. 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.'' \8\ 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.\9\ Census data for 2007 
shows that there were 3,188 firms that operated that year. Of this

[[Page 60829]]

total, 3,144 operated with fewer than 1,000 employees.\10\ Thus, under 
this size standard, the majority of firms in this industry can be 
considered small.
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    \8\ See http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
    \9\ See 13 CFR 120.201, NAICS Code 517110.
    \10\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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    22. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is for Wired Telecommunications Carriers as defined in 
paragraph 6 of this IRFA. Under that size standard, such a business is 
small if it has 1,500 or fewer employees.\11\ According to Commission 
data, census data for 2007 shows that there were 3,188 establishments 
that operated that year. Of this total, 3,144 operated with fewer than 
1,000 employees.\12\ The Commission estimates that most providers of 
local exchange service are small entities that may be affected by the 
rules and policies proposed in the Further Notice.
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    \11\ 13 CFR 121.201, NAICS code 517110.
    \12\ See id.
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    23. 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 
IRFA. Under that size standard, such a business is small if it has 
1,500 or fewer employees.\13\ According to Commission data, 3,188 firms 
operated in that year. 1,307 carriers reported that they were incumbent 
local exchange service providers.\14\ Of this total, 3,144 operated 
with fewer than 1,000 employees.\15\ Consequently, the Commission 
estimates that most providers of incumbent local exchange service are 
small businesses that may be affected by the rules and policies 
proposed in the Further Notice. Three hundred and seven (307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers.\16\ Of this total, an estimated 1,006 have 
1,500 or fewer employees.\17\
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    \13\ 13 CFR 121.201, NAICS code 517110.
    \14\ 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).
    \15\ See id.
    \16\ See id.
    \17\ Id.
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    24. 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 IRFA. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\18\ 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.\19\ 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.\20\ Of these 1,442 
carriers, an estimated 1,256 have 1,500 or fewer employees. 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.\21\ In addition, 72 carriers have reported that they are 
Other Local Service Providers.\22\ Of this total, 70 have 1,500 or 
fewer employees.\23\ Consequently, the Commission estimates that most 
providers of competitive local exchange service, competitive access 
providers, Shared-Tenant Service Providers, and Other Local Service 
Providers are small entities that may be affected by rules adopted 
pursuant to the proposals in this Notice.
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    \18\ 13 CFR 121.201, NAICS code 517110.
    \19\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=%20table.
    \20\ See Trends in Telephone Service, at Table 5.3.
    \21\ Id.
    \22\ Id.
    \23\ Id.
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    25. 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 IRFA. The applicable size standard under SBA rules 
is that such a business is small if it has 1,500 or fewer 
employees.\24\ According to Commission data, 359 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services.\25\ Of this total, an estimated 
317 have 1,500 or fewer employees and 42 have more than 1,500 
employees.\26\ Consequently, the Commission estimates that the majority 
of interexchange service providers are small entities that may be 
affected by rules adopted pursuant to the Further Notice.
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    \24\ 13 CFR 121.201, NAICS code 517110.
    \25\ See Trends in Telephone Service, at Table 5.3.
    \26\ Id.
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    26. 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.\27\ Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees.\28\ 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.\29\ 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.\30\ All 193 carriers 
have 1,500 or fewer employees.\31\ Consequently, the Commission 
estimates that the majority of prepaid calling card providers are small 
entities that may be affected by rules adopted pursuant to the Further 
Notice.
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    \27\ http://www.census.gov/cgi-bin/ssd/naics/naicsrch.
    \28\ 13 CFR 121.201, NAICS code 517911.
    \29\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
    \30\ See Trends in Telephone Service, at Table 5.3.
    \31\ Id.
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    27. 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.\32\ 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.\33\ Under this category and the associated 
small business size

[[Page 60830]]

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.\34\ Of this 
total, an estimated 211 have 1,500 or fewer employees.\35\ 
Consequently, the Commission estimates that the majority of local 
resellers are small entities that may be affected by rules adopted 
pursuant to the proposals in this Further Notice.
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    \32\ 13 CFR 121.201, NAICS code 517911.
    \33\ Id.
    \34\ See Trends in Telephone Service, at Table 5.3.
    \35\ Id.
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    28. 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.\36\ 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.\37\ 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.\38\ Of this total, an estimated 857 have 1,500 
or fewer employees.\39\ Consequently, the Commission estimates that the 
majority of toll resellers are small entities that may be affected by 
our proposals in the Further Notice.
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    \36\ 13 CFR 121.201, NAICS code 517911.
    \37\ Id.
    \38\ See Trends in Telephone Service, at Table 5.3.
    \39\ Id.
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    29. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard for small businesses specifically applicable 
to Other Toll Carriers. This category includes toll carriers that do 
not fall within the categories of interexchange carriers, operator 
service providers, prepaid calling card providers, satellite service 
carriers, or toll resellers. The closest applicable NAICS Code category 
is for Wired Telecommunications Carriers, as defined in paragraph 6 of 
this IRFA. Under that size standard, such a business is small if it has 
1,500 or fewer employees.\40\ 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.\41\ Thus, under this category and the 
associated small business size standard, the majority of Other Toll 
Carriers can be considered small. According to Commission data, 284 
companies reported that their primary telecommunications service 
activity was the provision of other toll carriage.\42\ Of these, an 
estimated 279 have 1,500 or fewer employees.\43\ Consequently, the 
Commission estimates that most Other Toll Carriers are small entities 
that may be affected by the rules and policies adopted pursuant to the 
Further Notice.
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    \40\ 13 CFR 121.201, NAICS code 517110.
    \41\ Id.
    \42\ See Trends in Telephone Service, at Table 5.3.
    \43\ Id.
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    30. 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.\44\ 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.\45\ Of this total, an estimated 261 have 1,500 or fewer 
employees.\46\ 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.
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    \44\ NAICS Code 517210. See http://www.census.gov/cgi-bin/ssd/naics/naiscsrch.
    \45\ See Trends in Telephone Service, at Table 5.3.
    \46\ Id.
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    31. Cable Television and other Subscription Programming.\47\ 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.'' \48\ The SBA has developed a small 
business size standard for this category, which is: All such firms 
having 1,500 or fewer employees.\49\ 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.\50\ Thus under this size standard, the 
majority of firms offering cable and other program distribution 
services can be considered small and may be affected by rules adopted 
pursuant to the Further Notice.
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    \47\ 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, were 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 the FY 2015 NPRM. 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. Hence 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.
    \48\ 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.
    \49\ 13 CFR 121.201, NAICS code 517110.
    \50\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US-51SSSZ5&prodType=Table.
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    32. Cable Companies and Systems. The Commission has developed its 
own small business size standards for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers nationwide.\51\ Industry data 
indicate that there are currently 4,600 active cable systems in

[[Page 60831]]

the United States.\52\ Of this total, all but ten cable operators 
nationwide are small under the 400,000-subscriber size standard.\53\ In 
addition, under the Commission's rate regulation rules, a ``small 
system'' is a cable system serving 15,000 or fewer subscribers.\54\ 
Current Commission records show 4,600 cable systems nationwide.\55\ Of 
this total, 3,900 cable systems have less than 15,000 subscribers, and 
700 systems have 15,000 or more subscribers, based on the same 
records.\56\ Thus, under this standard as well, we estimate that most 
cable systems are small entities.
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    \51\ 47.CFR 76.901(e).
    \52\ August 15, 2015 Report from the Media Bureau based on data 
contained in the Commission's Cable Operations And Licensing System 
(COALS). See www/fcc.gov/coals.
    \53\ See SNL KAGAN at www.snl.com/interactiveX/topcableMSOs 
aspx?period2015Q1&sortcol=subscribersbasic&sortorder=desc.
    \54\ 47 CFR76.901(c).
    \55\ See footnote 2, supra.
    \56\ August 5, 2015 report from the Media Bureau based on its 
research in COALS. See www.fcc.gov/coals.
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    33. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent of all subscribers in the United States and is not affiliated 
with any entity or entities whose gross annual revenues in the 
aggregate exceed $250,000,000 are approximately 52,403,705 cable video 
subscribers in the United States today.\57\ Accordingly, an operator 
serving fewer than 524,037 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all its affiliates, do not exceed $250 million in the aggregate.\58\ 
Based on available data, we find that all but nine incumbent cable 
operators are small entities under this size standard.\59\ We note that 
the Commission neither requests nor collects information on whether 
cable system operators are affiliated with entities whose gross annual 
revenues exceed $250 million.\60\ Although it seems certain that some 
of these cable system operators are affiliated with entities whose 
gross annual revenues exceed $250,000,000, we are unable at this time 
to estimate with greater precision the number of cable system operators 
that would qualify as small cable operators under the definition in the 
Communications Act.
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    \57\ See SNL KAGAN at www.snl.com/interactivex/MultichannelIndustryBenchmarks.aspx.
    \58\ 47.901(f) and notes ff. 1, 2, and 3.
    \59\ See SNL KAGAN at www.snl.com/Interactivex/TopCable 
MSOs.aspx.
    \60\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's 
finding that the operator does not qualify as a small cable operator 
pursuant to section 76.901(f) of the Commission's rules. See 47 CFR 
76.901(f).
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    34. 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.\61\ 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.\62\ 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.\63\ Thus, a majority of ``All Other 
Telecommunications'' firms potentially affected by the proposals in the 
Further Notice can be considered small.
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    \61\ http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.
    \62\ 13 CFR 121.201; NAICs Code 517919.
    \63\ http://factfinder.census.gov/faces/tableservices.jasf/pages/productview.xhtml?pid+ECN_2007_US.51SSSZ4&prodType=table.
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D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    35. This Further Notice does not propose any changes to the 
Commission's current information collection, reporting, recordkeeping, 
or compliance requirements.

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

    36. 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.\64\
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    \64\ 5 U.S.C. 603(c)(1) through (c)(4).
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    37. This Further Notice seeks comment on the Commission's 
regulatory fee collection for radio and television broadcasters, 
including comment on exempting smaller broadcasters from regulatory 
fees. Specifically, the Commission seeks comment on the extent of FTEs 
that work on video, cable, DBS, and radio services, and whether the 
current proportion of fees paid by these various fee categories 
associated with these services are still accurate. The level of FTE 
activity on these media services determines the proportion of fees to 
be paid by each media service fee category, which in turn is used to 
calculate the fee amount for each fee category. Since this determines 
the fee rate for big and small media companies, the Commission is 
sensitive to the impact of any changes in the proportion of FTE 
activity on companies in the media industry.

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

    38. None.

VI. Ordering Clauses

    39. 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 
Further Notice of Proposed Rulemaking is hereby adopted.
    40. It is further ordered that this Further Notice of Proposed 
Rulemaking comments are due November 9, 2015 and reply comments are due 
December 7, 2015.
    41. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the U.S. Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch.
Secretary.
[FR Doc. 2015-25578 Filed 10-7-15; 8:45 am]
BILLING CODE 6712-01-P