[Federal Register Volume 86, Number 180 (Tuesday, September 21, 2021)]
[Proposed Rules]
[Pages 52429-52437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20125]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket 21-190; FCC 21-98; FRS 47254]


Assessment and Collection of Regulatory Fees for Fiscal Year 2021

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks comment on two issues that impact regulatory fees. 
First, what methodology should we use to assess regulatory fees on 
unlicensed spectrum users, and second, how should we calculate the fee 
for small satellites that will become a feeable category in FY 2022.

DATES: Submit comments on or before October 21, 2021 and reply comments 
on or before November 5, 2021.

ADDRESSES: Interested parties may file comments and reply comments 
identified by MD Docket No. 21-190, by any of the following methods 
below.
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing.
     Filings can be sent 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.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail

[[Page 52430]]

and Priority Mail) must be sent to 9050 Junction Drive, Annapolis 
Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 45 L Street NE, Washington, DC 20554.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 21-98, MD Docket No. 21-190, adopted 
on August 25, 2021 and released on August 26, 2021. The full text of 
this document is available for inspection and copying during normal 
business hours in the FCC Reference Center, 45 L Street NE, Washington, 
DC 20554, and may also be purchased from the Commission's copy 
contractor, BCPI, Inc., 45 L Street, NE, Washington, DC 20554. 
Customers may contact BCPI, Inc. via their website, http://www.bcpi.com, or call 1-800-378-3160. This document is available in 
alternative formats (computer diskette, large print, audio record, and 
braille). Persons with disabilities who need documents in these formats 
may contact the FCC by email: [email protected] or phone: 202-418-0530 or 
TTY: 202-418-0432. Effective March 19, 2020, and until further notice, 
the Commission no longer accepts any hand or messenger delivered 
filings. This is a temporary measure taken to help protect the health 
and safety of individuals, and to mitigate the transmission of COVID-
19. See FCC Announces Closure of FCC Headquarters Open Window and 
Change in Hand-Delivery Policy, Public Notice, DA 20-304 (March 19, 
2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy. During the time the 
Commission's building is closed to the general public and until further 
notice, if more than one docket or rulemaking number appears in the 
caption of a proceeding, paper filers need not submit two additional 
copies for each additional docket or rulemaking number; an original and 
one copy are sufficient.

I. Procedural Matters

    1. Ex Parte Information. 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 (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. If the presentation consisted 
in whole or in part of the presentation of data or arguments already 
reflected in the presenter's written comments, memoranda, or other 
filings in the proceeding, the presenter may provide citations to such 
data or arguments in his or her prior comments, memoranda, or other 
filings (specifying the relevant page and/or paragraph numbers where 
such data or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with section 1.1206(b) of the Commission's rules. 
In proceedings governed by section 1.49(f) of the Commission's rules 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.
    2. Initial Regulatory Flexibility Analysis. An initial regulatory 
flexibility analysis (IRFA) is contained in this summary. Comments to 
the IRFA must be identified as responses to the IRFA and filed by the 
deadlines for comments on the Notice of Proposed Rulemaking. The 
Commission will send a copy of the Notice of Proposed Rulemaking, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    3. Initial Paperwork Reduction Act of 1995 Analysis. 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).

II. Notice of Proposed Rulemaking

A. New Regulatory Fee Categories

    1. We seek comment on whether we should adopt new regulatory fee 
categories and on ways to improve our regulatory fee process regarding 
any and all categories of service. Some commenters suggest that we 
impose fees on particular industry participants, essentially asking 
that we consider new fee categories, such as unlicensed spectrum users, 
especially large technology companies, to pay regulatory fees. We seek 
comment on the legal basis for assessing regulatory fees on such users, 
consistent with the precedent interpreting our section 9 authority. 
What would be the proposed methodology for assessing regulatory fees on 
unlicensed spectrum users? We note that unlicensed spectrum users 
include a significant number of equipment manufacturers, such as 
appliance and other home goods equipment, many of which neither apply 
for nor require authorization by the Commission. Commenters should also 
explain, to the extent they advocate imposition of regulatory fees on 
either a subset of users or certain entities benefitting from such use, 
how to define any new fee category and how to calculate and assess such 
fees on an annual basis. Alternatively, should the Commission assess 
regulatory fees on large technology companies based on a different 
basis, such as any advantages they receive because of the Commission's 
universal service or other activities? Are there other categories that 
should be added, deleted, or reclassified? In recommending the 
addition, deletion, or reclassification of a fee category, commenters 
should also explain the impact of such addition, deletion or 
reclassification upon other regulatory fee categories and payors. We 
also seek comment on possible methodologies for re-calculating the 
regulatory fee allocation.
    2. Section 9 of the Communications Act requires the Commission's 
methodology for assessing regulatory fees to ``reflect the full-time 
equivalent number of employees within the bureaus and offices of the 
Commission, adjusted to take into account factors that are reasonably 
related to the benefits provided to the payor of the fee by the 
Commission's activities.'' Commenters should specifically discuss how a 
proposed new fee category is consistent with the section 9 requirement 
to base regulatory fees on the number of FTEs

[[Page 52431]]

devoted to the oversight and/or regulation of the industry. Further, 
commenters should indicate how the new fee category fits within the 
Commission's current regulatory fee methodology. To the extent 
possible, commenters should support any proposed new fee category with 
data and/or examples necessitating a revision of the Commission's 
current regulatory fees framework.

B. Fees for Small Satellites

    3. In anticipation of listing small satellites for the first time 
on the FY 2022 regulatory fee schedule, we seek comment on several 
proposals pertaining to this new category. In 2019, the Commission 
adopted a new, optional licensing process for small satellites and 
small spacecraft. The Commission also adopted a ``small satellite'' 
regulatory fee subcategory for licensed and operational satellite 
systems authorized under the new process adopted in that proceeding. As 
has been noted in prior year fee proceedings, small satellites 
typically have a number of characteristics that distinguish them from 
traditional NGSO satellite systems, such as having a lower mass, 
shorter duration missions, and more limited spectrum needs.
    4. Commenters suggest that under the streamlined process, less 
agency resources are necessary to process than other systems because 
they are exempt from processing rounds and must certify that their 
operations will not interfere with those of existing operators or 
materially constrain future operators from using the assigned frequency 
band(s). For example, once small satellites are added to the 
Commission's regulatory fee schedule, the NGSO regulatory fee 
allocation be adjusted to a 5/5/90 split among small satellites, less 
complex systems, and other systems, respectively. Another suggestion is 
to assess a fee of 1/20th of the fee for NGSO systems, or a regulatory 
fee of not more than 1/10th of the previously proposed NGSO fee, which 
at the time was calculated to be $22,350.00 for small satellites. One 
commenter believed that such a fee reflected the Commission's costs and 
was fair, but substantial in the amount.
    5. We expect the small satellite fees to be on the FY 2022 fee 
schedule because there are several systems authorized under the small 
satellite process that are beginning operations, and we expect these 
systems to be operating as of the date for assessment of FY 2022 fees. 
FY 2022 will be the first year where regulatory fees are assessed on 
small satellites, and therefore we anticipate that we will continue to 
review regulatory fees for small satellites on an ongoing basis as we 
gain more experience with these licensees and market access grantees.
    6. There are a number of factors to consider in assessing the 
regulatory fee for such systems. There are a number of limitations on 
the benefits that small satellite licensees and market access grantees 
may receive from ongoing activities of the Commission. While small 
satellites may receive interference protection when operating as 
allocated, such satellites must be compatible with existing operations 
in the requested frequency bands and not materially constrain future 
operations of other satellites in those frequency bands. Moreover, 
small satellite licensees are limited to a license term not to exceed 
six years. As such, investments in any particular small satellite 
system are likely to be smaller compared with other types of NGSO 
systems, and therefore the overall benefits to a particular licensee 
from Commission rulemakings and other activities of an ongoing nature 
are also likely to be smaller. These systems are also less likely to be 
involved in ongoing adjudications because of the scope of such systems 
and the fact that they are not authorized under the Commission's 
processing round procedures. Further, as a result of the structure of 
the small satellite process, a single system may have multiple licenses 
or market access grants. There will also only be a few small satellite 
licensees which would commence operations as of the relevant date for 
assessing FY 2022 fees. Given these limitations, and taking into 
consideration the FTE regulatory benefits that may be associated with a 
single license or grant of market access, we make several proposals 
that would result in a fee for small satellites that is low, compared 
to other types of satellites or systems, but will reasonably reflect 
our FTE burden and the benefits received by these fee payors. We start 
with considering the number of FTEs working on oversight for this 
category of operators. Thus, we must estimate the relative number of 
FTEs that are attributable to benefitting small satellite licensees or 
grantees, based on the factors above. We also observe that due to the 
small satellite licensing regulatory framework and the nascent nature 
of these systems, currently, much of the IB FTE time that can be 
associated with small satellites appear to cover small satellite 
application processing.
    7. Given the various considerations above, we seek comment on 
several proposals on the appropriate methodology to calculate the small 
satellite fees. First, we seek comment on setting a fee for each small 
satellite license or market access grant, in such a way that the amount 
would not be dependent on the number of small satellite systems 
operating in a given regulatory period. This type of fee, rather than a 
fee that varies depending on the number of licensees or grantees, may 
be appropriate, since the small satellite process is calibrated to 
shorter duration missions, and therefore the number of small satellite 
systems licensed and operational could fluctuate more significantly 
from year to year than other types of NGSO systems that typically have 
a 15-year license term, creating uncertainty. We seek comment on these 
conclusions. There are several options for setting this type of fee. In 
comparing the actual regulatory work involved, we estimate that for a 
given small satellite system, the FTE activities would be approximately 
1/20th of the FTE activities for a typical system in the category of 
``other'' NGSO systems, similar to the Commission's findings in In the 
FY 2018 Report and Order. Thus, one option would be to tie the small 
satellite fee to the fee allocated for an individual ``other'' NGSO 
system in a given year, and charge any individual small satellite 
licensee or grantee 1/20th of that amount. Or, charge a small satellite 
system (even if authorized under multiple licenses), 1/20th of that 
amount. We recognize, however, that the fee for an individual ``other'' 
NGSO system may vary from year-to-year, and thus the fee for a small 
satellite licensee would be dependent on how many ``other'' NGSO 
systems are authorized and operational in a given year. As an 
alternative, we could set a fee for individual small satellite 
licensees (or systems), based on approximately 1/20th of FY 2021 NGSO 
``other'' systems ($17,178)--and which we could reassess each year to 
ensure that there was some predictability. We seek comment on these 
proposals and other appropriate methodology. Commenters suggesting 
other fee calculation methodologies should discuss how such 
methodologies would reasonably reflect the FTE time spent on regulatory 
activities or an objective measure that corresponds to the benefits of 
FTE time devoted to oversight and regulation of such entities.
    8. Second, we seek comment on whether to allocate a percentage of 
the allocation for space station fees for small satellites. Under this 
proposal, a certain percentage of the space station fees would need to 
be recovered from small satellite regulatory fee payors, and therefore 
the amount would fluctuate depending on the number of payors in

[[Page 52432]]

the small satellite category. In estimating the percentage, we must 
consider that the number of systems in the small satellite category is 
likely to be small initially. This percentage could be reassessed 
depending on the number of small satellite systems in the category--as 
the benefits to the category as a whole as well as FTE activities would 
increase, as the number of systems increases. For example, if we 
estimate that roughly two to three percent of the total NGSO system 
regulatory FTE activities is comprised of activities for small 
satellites, and allocate two percent of the total NGSO fee to small 
satellites, based on the FY2021 regulatory fee amounts as an example, 
this would allocate approximately $85,888 to the small satellite 
category. Divided among three licenses, for example, this would result 
in regulatory fees of approximately $28,629 per license. We seek 
comment on this approach and generally on the best methods of fee 
calculation. Planet and AWS appear to propose an approach similar to 
this. AWS and Planet suggest an allocation that would be equivalent to 
the allocation for ``less complex'' NGSO systems, for example. We seek 
comment on these proposals as well. To the extent that commenters such 
as AWS propose that the Commission redistribute a percentage solely of 
the ``less complex'' NGSO system fee to systems authorized under the 
streamlined small satellite process, we note that while there may be 
overlap in the types of services being provided in some instances, 
there are also important differences between small satellites and 
``less complex'' and ``other'' NGSO space station systems that we 
believe are likely to necessitate different regulatory fees. For 
example, as noted above, the license or market access term for these 
small systems are designed to be significantly shorter than other 
systems, an individual satellite is limited to an orbital lifetime of 
six years or less, and there is also no replenishment expectancy under 
the small satellite process. Therefore, the scope of such systems is 
inherently limited, as the Commission recognized in the Small Satellite 
Report and Order, when it established a separate fee category for small 
satellites only.
    9. Both proposed fee approaches are estimates of the FTE burden and 
the benefits received by small satellite systems. As noted, we could 
revisit our adopted small satellite fee each year as the number of 
small satellite systems change and we become more familiar with the 
work involved in regulating such systems. We seek comment on how to 
determine that amount each fiscal year to reflect any needed adjustment 
in proportion to the changes to our budget and cost. Would such 
approaches accurately capture the benefits to small satellite fee 
payors? We believe that both proposals reflect a reasonable 
approximation of the International Bureau's total FTE work relative to 
these space station categories and the benefits each system receives. 
We further seek comment, however, on the various factors, such as 
rulemakings, adjudications, and international coordination, that are 
relevant to systems authorized under the Commission's small satellite 
process and the FTE time devoted to those systems.
    10. As indicated above in connection with the proposals, we also 
seek comment on whether we should assess regulatory fees per system or 
differently than other NGSO fee categories, given that a single entity 
may have multiple licenses for the same system, in accordance with the 
structure of the small satellite process. We do not want to discourage 
applicants from applying for multiple licenses, if such an approach is 
a good fit for their system plans, because of potential regulatory 
fees. Therefore, it is important that we account for the fact that one 
system may have multiple associated small satellite licenses or market 
access grants.
    11. Finally, we also seek comment on how we should integrate the 
small satellite fee category into the overall space stations category. 
The total amount to be paid by small satellite regulatory fee payors 
could be either subtracted from the total space station allocation, 
before calculating the GSO/NGSO subcategories, or subtracted from the 
NGSO subcategory before calculating the fees for the subcategories 
among less complex and other NGSO systems. We seek comment on where we 
should place the small satellite category and whether it would be 
appropriate to include it as a third category under space stations, as 
GSO, NGSO, and Small Satellite, or place it as a subcategory under NGSO 
as NGSO Less Complex, NGSO Others, and Small Satellites. We seek 
comment on these and any other alternatives that would best reflect the 
statutory requirements of our regulatory fee authority under section 9 
of the Communications Act and ensure that our actions in assessing 
regulatory fees on small satellite operators are fair, administrable, 
and sustainable.

III. Initial Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), 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 Notice of 
Proposed Rulemaking (NPRM). 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 NPRM. The Commission will 
send a copy of the NPRM, including the IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA). In addition, the 
NPRM and IRFA (or summaries thereof) will be published in the Federal 
Register.

A. Need for, and Objectives of, the Proposed Rules

    2. The NPRM seeks comment on a methodology for calculating 
regulatory fees, as required by section 9 of the Communications Act of 
1934, as amended (Communications Act or Act), specifically for small 
satellites. The NPRM seeks comment on various factors, such as 
rulemakings, adjudications, and international coordination, that are 
relevant to systems authorized under the Commission's small satellite 
process, and on the Commission's earlier tentative conclusion that 
approximately 1/20 of FTEs are engaged in ongoing regulatory work 
related to small satellite systems. Specifically, the Commission 
observes that in assessing the regulatory fee for such small satellite 
NGSO systems, there are a number of factors to consider, including the 
fact that a single system may have multiple licenses, and therefore 
multiple call signs. The Commission also seeks comment on whether we 
should adopt new regulatory fee categories and on ways to improve our 
regulatory fee process regarding any and all categories of service. 
Additionally, the Commission notes that there are a number of 
limitations on small satellite licensees and market access grantees 
that limit the benefits such entities may receive from ongoing 
activities of the Commission. The Commission observes that such systems 
are by definition not authorized through processing rounds, and while 
small satellites may receive interference protection when operating in 
frequency bands allocated for the service they are providing, such 
satellites must be compatible with existing operations in the requested 
frequency bands and not materially constrain future operations of other 
satellites in those frequency bands. Moreover, small satellite 
licensees are limited to a license term not to exceed six years. Given 
these limitations, and taking into

[[Page 52433]]

consideration the regulatory benefits that may be associated with a 
single license, the Commission proposes a flat regulatory fee for small 
satellite licenses and market access grants that would be not change 
based on the number of small satellite fee payors in a given fiscal 
year. Specifically, the Commission proposes a flat fee for small 
satellites that would be equal to 1/20th of the fee applicable to each 
NGSO systems in ``other'' NGSO subcategory. The Commission seeks 
comment on this proposal in the NPRM.
    3. This regulatory fee NPRM is needed because the Commission is 
required by Congress to adopt regulatory fees each year ``to recover 
the costs of carrying out the activities described in section 6(a) only 
to the extent, and in the total amounts, provided for in Appropriation 
Acts.'' The objective of the NPRM is to determine a methodology for 
calculating small satellite regulatory fees.

B. Legal Basis

    4. This action, including publication of proposed rules, is 
authorized under sections (4)(i) and (j), 159, and 303(r) of the 
Communications Act of 1934, as amended.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed 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. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. 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.
    6. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three broad groups of small entities that could be directly 
affected herein. First, while there are industry specific size 
standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the Small Business 
Administration's (SBA) Office of Advocacy, in general a small business 
is an independent business having fewer than 500 employees. These types 
of small businesses represent 99.9% of all businesses in the United 
States, which translates to 30.7 million businesses.
    7. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2018, there were 
approximately 571,709 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    8. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 36,931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments--independent school 
districts with enrollment populations of less than 5ll governmental 
jurisdictions.''
    9. 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 Voice over internet Protocol (VoIP) services, wired (cable 
and IPTV) 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.'' 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. U.S. Census Bureau data for 2012 show that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Thus, under this size standard, the majority of 
firms in this industry can be considered small.
    10. 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 Wired Telecommunications Carriers. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. U.S. Census Bureau data for 2012 show that there 
were 3,117 firms that operated for the entire year. Of that total, 
3,083 operated with fewer than 1,000 employees. Thus under this 
category and the associated size standard, the Commission estimates 
that the majority of local exchange carriers are small entities.
    11. 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. Under the applicable SBA size 
standard, such a business is small if it has 1,500 or fewer employees. 
U.S. Census Bureau data for 2012 indicate that 3,117 firms operated the 
entire year. Of this total, 3,083 operated with fewer than 1,000 
employees. Consequently, the Commission estimates that most providers 
of incumbent local exchange service are small businesses that may be 
affected by our actions. According to Commission data, one thousand 
three hundred and seven (1,307) Incumbent Local Exchange Carriers 
reported that they were incumbent local exchange service providers. Of 
this total, an estimated 1,006 have 1,500 or fewer employees. Thus, 
using the SBA's size standard the majority of incumbent LECs can be 
considered small entities.
    12. 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 and under that size standard, such a 
business is small if it has 1,500 or fewer employees. U.S. Census 
Bureau data for 2012 indicate that 3,117 firms operated during that 
year. Of that

[[Page 52434]]

number, 3,083 operated with fewer than 1,000 employees. Based on these 
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. 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. Also, 72 carriers have reported that they are Other 
Local Service Providers. Of this total, 70 have 1,500 or fewer 
employees. 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.
    13. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
Interexchange Carriers. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers. The applicable size standard under 
SBA rules is that such a business is small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms 
operated for the entire year. Of that number, 3,083 operated with fewer 
than 1,000 employees. According to internally developed Commission 
data, 359 companies reported that their primary telecommunications 
service activity was the provision of interexchange services. Of this 
total, an estimated 317 have 1,500 or fewer employees. Consequently, 
the Commission estimates that the majority of interexchange service 
providers are small entities.
    14. 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. Establishments in this 
industry resell telecommunications; they do not operate transmission 
facilities and infrastructure. Mobile virtual network operators (MVNOs) 
are included in this industry. 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. U.S. Census Bureau data for 2012 show that 1,341 firms 
provided resale services during that year. Of that number, 1,341 
operated with fewer than 1,000 employees. 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, 193 carriers have reported that they are engaged in the provision 
of prepaid calling cards. All 193 carriers have 1,500 or fewer 
employees. Consequently, the Commission estimates that the majority of 
prepaid calling card providers are small.
    15. Local Resellers. The SBA has not developed a small business 
size standard specifically for Local Resellers. The SBA category of 
Telecommunications Resellers is the closest NAICs code category for 
local resellers. The Telecommunications Resellers 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. Establishments in this industry resell 
telecommunications; they do not operate transmission facilities and 
infrastructure. Mobile virtual network operators (MVNOs) are included 
in this industry. Under the SBA's size standard, such a business is 
small if it has 1,500 or fewer employees. U.S. Census Bureau data from 
2012 show that 1,341 firms provided resale services during that year. 
Of that number, all operated with fewer than 1,000 employees. 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, 213 carriers have reported that they are 
engaged in the provision of local resale services. Of these, an 
estimated 211 have 1,500 or fewer employees and two have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of local resellers are small entities.
    16. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers. The Telecommunications Resellers 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. Establishments in this 
industry resell telecommunications; they do not operate transmission 
facilities and infrastructure. MVNOs are included in this industry. 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. 2012 Census Bureau data 
show that 1,341 firms provided resale services during that year. Of 
that number, 1,341 operated with fewer than 1,000 employees. 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. Of this total, an 
estimated 857 have 1,500 or fewer employees. Consequently, the 
Commission estimates that the majority of toll resellers are small 
entities.
    17. 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. U.S. Census Bureau data for 2012 show that 
there were 3,117 firms that operated that year. Of this total, 3,083 
operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small. According to Commission data, 284 companies reported that their 
primary telecommunications service activity was the provision of other 
toll carriage. Of these, an estimated 279 have 1,500 or fewer 
employees. Consequently, the Commission estimates that most Other Toll 
Carriers are small entities.
    18. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching

[[Page 52435]]

and transmission facilities to provide communications via the airwaves. 
Establishments in this industry have spectrum licenses and provide 
services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. 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, U.S. 
Census Bureau data for 2012 show that there were 967 firms that 
operated for the entire year. Of this total, 955 firms had employment 
of 999 or fewer employees and 12 had employment of 1,000 employees or 
more. Thus under this category and the associated size standard, the 
Commission estimates that the majority of wireless telecommunications 
carriers (except satellite) are small entities.
    19. Television Broadcasting. This Economic Census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound.'' These establishments operate television 
broadcast studios and facilities for the programming and transmission 
of programs to the public. These establishments also produce or 
transmit visual programming to affiliated broadcast television 
stations, which in turn broadcast the programs to the public on a 
predetermined schedule. Programming may originate in their own studio, 
from an affiliated network, or from external sources. The SBA has 
created the following small business size standard for such businesses: 
Those having $41.5 million or less in annual receipts. The 2012 
Economic Census reports that 751 firms in this category operated in 
that year. Of that number, 656 had annual receipts of $25,000,000 or 
less. Based on this data we therefore estimate that the majority of 
commercial television broadcasters are small entities under the 
applicable SBA size standard.
    20. The Commission has estimated the number of licensed commercial 
television stations to be 1,377. Of this total, 1,258 stations (or 
about 91 percent) had revenues of $41.5 million or less, according to 
Commission staff review of the BIA Kelsey Inc. Media Access Pro 
Television Database (BIA) on November 16, 2017, and therefore these 
licensees qualify as small entities under the SBA definition. In 
addition, the Commission has estimated the number of licensed 
noncommercial educational television stations to be 384. 
Notwithstanding, the Commission does not compile and otherwise does not 
have access to information on the revenue of NCE stations that would 
permit it to determine how many such stations would qualify as small 
entities. There are also 2,300 low power television stations, including 
Class A stations (LPTV) and 3,681 TV translator stations. Given the 
nature of these services, we will presume that all of these entities 
qualify as small entities under the above SBA small business size 
standard.
    21. In assessing whether a business concern qualifies as ``small'' 
under the above definition, business (control) affiliations must be 
included. Our estimate, therefore, likely overstates the number of 
small entities that might be affected by our action, because the 
revenue figure on which it is based does not include or aggregate 
revenues from affiliated companies. In addition, another element of the 
definition of ``small business'' requires that an entity not be 
dominant in its field of operation. We are unable at this time to 
define or quantify the criteria that would establish whether a specific 
television broadcast station is dominant in its field of operation. 
Accordingly, the estimate of small businesses to which rules may apply 
does not exclude any television station from the definition of a small 
business on this basis and is therefore possibly over-inclusive. Also, 
as noted above, an additional element of the definition of ``small 
business'' is that the entity must be independently owned and operated. 
The Commission notes that it is difficult at times to assess these 
criteria in the context of media entities and its estimates of small 
businesses to which they apply may be over-inclusive to this extent.
    22. Radio Stations. This Economic Census category ``comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public. Programming may originate in their own studio, 
from an affiliated network, or from external sources.'' The SBA has 
established a small business size standard for this category as firms 
having $41.5 million or less in annual receipts. Economic Census data 
for 2012 show that 2,849 radio station firms operated during that year. 
Of that number, 2,806 firms operated with annual receipts of less than 
$25 million per year, 17 with annual receipts between $25 million and 
$49,999,999 million and 26 with annual receipts of $50 million or more. 
Therefore, based on the SBA's size standard the majority of such 
entities are small entities.
    23. According to Commission staff review of the BIA/Kelsey, LLC's 
Media Access Pro Radio Database as of January 2018, about 11,261 (or 
about 99.9 percent) of 11,383 commercial radio stations had revenues of 
$41.5 million or less and thus qualify as small entities under the SBA 
definition. The Commission has estimated the number of licensed 
commercial AM radio stations to be 4,633 stations and the number of 
commercial FM radio stations to be 6,738, for a total number of 11,371. 
We note the Commission has also estimated the number of licensed 
noncommercial (NCE) FM radio stations to be 4,128. Nevertheless, the 
Commission does not compile and otherwise does not have access to 
information on the revenue of NCE stations that would permit it to 
determine how many such stations would qualify as small entities. We 
also note, that in assessing whether a business entity qualifies as 
small under the above definition, business control affiliations must be 
included. The Commission's estimate therefore likely overstates the 
number of small entities that might be affected by its action, because 
the revenue figure on which it is based does not include or aggregate 
revenues from affiliated companies. In addition, to be determined a 
``small business,'' an entity may not be dominant in its field of 
operation. We further note, that it is difficult at times to assess 
these criteria in the context of media entities, and the estimate of 
small businesses to which these rules may apply does not exclude any 
radio station from the definition of a small business on these basis, 
thus our estimate of small businesses may therefore be over-inclusive. 
Also, as noted above, an additional element of the definition of 
``small business'' is that the entity must be independently owned and 
operated. The Commission notes that it is difficult at times to assess 
these criteria in the context of media entities and the estimates of 
small businesses to which they apply may be over-inclusive to this 
extent.
    24. Cable Companies and Systems (Rate Regulation). The Commission 
has also developed its own small business size standards, for the 
purpose of cable rate regulation. Under the Commission's rules, a 
``small cable company'' is one serving 400,000 or fewer subscribers 
nationwide. Industry data indicate that there are 4,600 active cable 
systems in the United States. Of this total, all but five cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Commission records show 4,600 cable systems nationwide. Of this total, 
3,900 cable systems have fewer than 15,000 subscribers, and 700 systems 
have 15,000 or more subscribers, based on the same records. Thus, under 
this standard

[[Page 52436]]

as well, we estimate that most cable systems are small entities.
    25. 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 
one 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.'' As of 2019, there were 
approximately 48,646,056 basic cable video subscribers in the United 
States. Accordingly, an operator serving fewer than 486,460 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. Based on available data, we find that 
all but five cable operators are small entities under this size 
standard. 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. Therefore, 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.
    26. Direct Broadcast Satellite (DBS) Service. 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 is included in SBA's economic census 
category ``Wired Telecommunications Carriers.'' The Wired 
Telecommunications Carriers 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 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. The SBA determines that a wireline business is small if 
it has fewer than 1,500 employees. U.S. Census Bureau data for 2012 
indicates that 3,117 wireline companies were operational during that 
year. Of that number, 3,083 operated with fewer than 1,000 employees. 
Based on that data, we conclude that the majority of wireline firms are 
small under the applicable SBA standard. Currently, however, only two 
entities provide DBS service, which requires a great deal of capital 
for operation: DIRECTV (owned by AT&T) and DISH Network. DIRECTV and 
DISH Network each report annual revenues that are in excess of the 
threshold for a small business. Accordingly, we must conclude that 
internally developed FCC data are persuasive that, in general, DBS 
service is provided only by large firms.
    27. All Other Telecommunications. The ``All Other 
Telecommunications'' category is comprised of establishments primarily 
engaged in providing specialized telecommunications services, such as 
satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing internet services or 
voice over internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry. The 
SBA has developed a small business size standard for All Other 
Telecommunications, which consists of all such firms with annual 
receipts of $35 million or less. For this category, U.S. Census Bureau 
data for 2012 shows that there were 1,442 firms that operated for the 
entire year. Of those firms, a total of 1,400 had annual receipts less 
than $25 million and 15 firms had annual receipts of $25 million to 
$49,999,999. Thus, the Commission estimates that the majority of ``All 
Other Telecommunications'' firms potentially affected by our action can 
be considered small.
    28. RespOrgs. Responsible Organizations, or RespOrgs, are entities 
chosen by toll free subscribers to manage and administer the 
appropriate records in the toll free Service Management System for the 
toll free subscriber. Although RespOrgs are often wireline carriers, 
they can also include non-carrier entities. Therefore, in the 
definition herein of RespOrgs, two categories are presented, i.e., 
Carrier RespOrgs and Non-Carrier RespOrgs.
    29. Carrier RespOrgs. Neither the Commission, the U.S. Census, nor 
the SBA have developed a definition for Carrier RespOrgs. Accordingly, 
the Commission believes that the closest NAICS code-based definitional 
categories for Carrier RespOrgs are Wired Telecommunications Carriers, 
and Wireless Telecommunications Carriers (except satellite).
    30. The U.S. Census Bureau defines Wired Telecommunications 
Carriers 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.'' 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. U.S. Census Bureau data for 2012 show that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Based on that data, we conclude that the majority 
of Carrier RespOrgs that operated with wireline-based technology are 
small.
    31. The U.S. Census Bureau defines Wireless Telecommunications 
Carriers (except satellite) as 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. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. Census data for 2012 show 
that 967 Wireless Telecommunications Carriers operated in that year. Of 
that number, 955 operated with less than 1,000 employees. Based on that 
data, we conclude that the majority of Carrier RespOrgs that operated 
with wireless-based technology are small.
    32. Non-Carrier RespOrgs. Neither the Commission, the U.S. Census, 
nor the SBA have developed a definition of Non-Carrier RespOrgs. 
Accordingly, the

[[Page 52437]]

Commission believes that the closest NAICS code-based definitional 
categories for Non-Carrier RespOrgs are ``Other Services Related to 
Advertising'' and ``Other Management Consulting Services.''
    33. The U.S. Census defines Other Services Related to Advertising 
as comprising establishments primarily engaged in providing advertising 
services (except advertising agency services, public relations agency 
services, media buying agency services, media representative services, 
display advertising services, direct mail advertising services, 
advertising material distribution services, and marketing consulting 
services). The SBA has established a size standard for this industry as 
annual receipts of $16.5 million dollars or less. Census data for 2012 
show that 5,804 firms operated in this industry for the entire year. Of 
that number, 5,612 operated with annual receipts of less than $10 
million. Based on that data we conclude that the majority of Non-
Carrier RespOrgs who provide toll-free number (TFN)-related advertising 
services are small.
    34. The U.S. Census defines Other Management Consulting Services as 
establishments primarily engaged in providing management consulting 
services (except administrative and general management consulting; 
human resources consulting; marketing consulting; or process, physical 
distribution, and logistics consulting). Establishments providing 
telecommunications or utilities management consulting services are 
included in this industry. The SBA has established a size standard for 
this industry of $16.5 million dollars or less. Census data for 2012 
show that 3,683 firms operated in this industry for that entire year. 
Of that number, 3,632 operated with less than $10 million in annual 
receipts. Based on this data, we conclude that a majority of non-
carrier RespOrgs who provide TFN-related management consulting services 
are small.
    35. In addition to the data contained in the four (see above) U.S. 
Census NAICS code categories that provide definitions of what services 
and functions the Carrier and Non-Carrier RespOrgs provide, Somos, the 
trade association that monitors RespOrg activities, compiled data 
showing that as of July 1, 2016 there were 23 RespOrgs operational in 
Canada and 436 RespOrgs operational in the United States, for a total 
of 459 RespOrgs currently registered with Somos.

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

    36. This NPRM does not propose any changes to the Commission's 
current information collection, reporting, recordkeeping, or compliance 
requirements. Licensees, including small entities, will be required to 
pay application fees after such fees are adopted.

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

    37. 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.
    38. The NPRM seeks comment on a methodology to calculate regulatory 
fees for small satellites. These small satellite systems are NGSOs; 
however, the Commission is proposing assessing a much smaller 
regulatory fee than the fee currently assessed on other NGSO systems. 
This new methodology would minimize the impact on small entities 
because the fee would be much lower than the existing NGSO fee. We also 
seek comment on whether we should adopt new regulatory fee categories 
and on ways to improve our regulatory fee process regarding any and all 
categories of service. We also seek comment on possible methodologies 
for re-calculating the regulatory fee allocation.
    39. In addition, the Commission has taken steps to minimize the 
economic impact on small entities by adopting a de minimis threshold 
under the section 9(e)(2) exemption in the Act. Under the section 
9(e)(2) exemption, a regulatee is exempt from paying regulatory fees if 
the sum total of all of its annual regulatory fee liabilities is $1,000 
or less for the fiscal year. The threshold applies only to filers of 
annual regulatory fees, not regulatory fees paid through multi-year 
filings.

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

    40. None.

IV. Ordering Clauses

    41. Accordingly, it is ordered that, pursuant to the authority 
found in sections 4(i) and (j), 9, 9A, and 303(r) of the Communications 
Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 159, 159A, and 
303(r), this Notice of Proposed Rulemaking is hereby adopted.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2021-20125 Filed 9-20-21; 8:45 am]
BILLING CODE 6712-01-P