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Copies of the request and the EPA’s Fream. Office of Managing Director at upon a schedule of fees that it analysis are available electronically at (202) 418–0408. For additional establishes each year in an annual RME or in hard copy at the above information concerning the Paperwork rulemaking proceeding. As part of our address. Please telephone Matt Rau at Reduction Act information collection modernization efforts, we are able to (312) 886–6524 before visiting the requirements contained in this provide regulatory fee assessments to Region 5 Office. document, contact Judith B. Herman at select categories of regulatees: (1) Cable Dated: February 10, 2005. 202–418–0214, or via the Internet at television operators, (2) media services Norman Niedergang, [email protected]. licensees and (3) commercial mobile radio service (CMRS) licensees. Along Acting Regional Administrator, Region 5. SUPPLEMENTARY INFORMATION: Initial with the fee assessment notices that we [FR Doc. 05–3676 Filed 2–25–05; 8:45 am] Paperwork Reduction Act of 1995 Analysis: This document contains intend to send to these three categories BILLING CODE 6560–50–P proposed information collection of regulatees, we will provide them with requirements. The Commission, as part a ‘‘true-up’’ opportunity to correct, of its continuing effort to reduce update or otherwise rectify their FEDERAL COMMUNICATIONS paperwork burdens, invites the general assessed fee amounts well before the COMMISSION public and the Office of Management actual due date for payment of and Budget (OMB) to comment on the regulatory fees. This ‘‘true-up’’ 47 CFR Part 1 information collection requirements collection of information is necessary [MD Docket No. 05–59; FCC 05–35] contained in this document, as required because it enables regulatees to confirm by the Paperwork Reduction Act of for themselves what their regulatory fee Assessment and Collection of 1995, Public Law 104–13. Public and payment obligations will be, well before Regulatory Fees for Fiscal Year 2005 agency comments are due April 29, their fees are due. The ‘‘true-up’’ 2005. Comments should address: (a) opportunity also serves to provide the AGENCY: Federal Communications Whether the proposed collection of Commission with a higher degree of Commission. information is necessary for the proper certainty in its regulatory fee payment ACTION: Notice of proposed rulemaking. performance of the functions of the expectations for the fiscal year. Adopted: February 11, 2005; SUMMARY: The Commission will revise Commission, including whether the information shall have practical utility; Released: February 15, 2005. its Schedule of Regulatory Fees in order By the Commission: to recover the amount of regulatory fees (b) the accuracy of the Commission’s that Congress has required it to collect burden estimates; (c) ways to enhance Table of Contents for fiscal year 2005. Section 9 of the the quality, utility, and clarity of the I. Introduction Communications Act of 1934, as information collected; and (d) ways to II. Discussion amended, provides for the annual minimize the burden of the collection of A. Development of FY2005 Fees 1. Calculation of Revenue and Fee assessment and collection of regulatory information on the respondents, including the use of automated Requirements fees under sections 9(b)(2) and 9(b)(3), 2. Additional Adjustments to Payment respectively, for annual ‘‘Mandatory collection techniques or other forms of information technology. In addition, Units Adjustments’’ and ‘‘Permitted B. Commercial Mobile Radio Service Amendments’’ to the Schedule of pursuant to the Small Business (CMRS) Messaging Service Regulatory Fees. Paperwork Relief Act of 2002, Public C. Local Multipoint Distribution Service Law 107–198, see 44 U.S.C. 3506(c)(4), (LMDS) DATES: Comments are due March 8, we seek specific comment on how we D. International Bearer Circuits 2005, and reply comments are due might ‘‘further reduce the information E. Multichannel Video Distribution and March 18, 2005. Written comments on collection burden for small business Data Service (MVDDS) the Paperwork Reduction Act proposed concerns with fewer than 25 F. Broadband Radio Service (BRS) / information collection requirements employees.’’ Educational Broadband Service (EBS), (formerly MDS/MMDS and ITFS) must be submitted by the public, Office OMB Control Number: 3060–1064. of Management and Budget (OMB), and G. Regulatory Fees for AM and FM Title: Regulatory Fee Assessment Construction Permits other interested parties on or before True-Ups. April 29, 2005. H. Clarification of Policies and Procedures Form No.: Not applicable. 1. Ad Hoc Issues Concerning Our ADDRESSES: In addition to filing Type of Review: Revision of currently Regulatory Fee Exemption Policies comments with the Secretary, a copy of approved collection. 2. Regulatory Fee Obligations for Digital any comments on the Paperwork Respondents: Businesses or other for- Broadcasters Reduction Act information collection profit entities. 3. Regulatory Fee Obligations for AM requirements contained herein should Estimated Number of Respondents: Expanded Band Broadcasters 4. Effective Date of Payment of Multi-Year be submitted to Judith B. Herman, 1,650. Federal Communications Commission, Wireless Fees Estimated Time Per Response: .25 I. Proposals for Notification, Assessment Room 1–C804, 445 12th Street, SW., hours. and Collection of Regulatory Fees Washington, DC 20554, or via the Frequency of Response: Annually. 1. Interstate Telecommunications Service Internet to [email protected], Estimated Total Annual Burden: 413 Providers (ITSPs) and to Kristy L. LaLonde, OMB Desk hours. 2. Satellite Space Station Licensees Officer, Room 10234 NEOB, 725 17th Estimated Total Annual Costs: $0. 3. Media Services Licensees Street, NW., Washington, DC 20503, via Privacy Act Impact Assessment: This 4. Commercial Mobile Radio Service the Internet to Kristy_L. information collection does not affect (CMRS) Cellular and Mobile Services 5. Cable Television Subscribers [email protected], or via fax at individuals or households; thus, there is 202–395–5167. J. Future Streamlining of the Regulatory no impact under the Privacy Act. Fee Assessment and Collection Process FOR FURTHER INFORMATION CONTACT: Needs and Uses: The Commission III. Procedural Matters Roland Helvajian, Office of Managing collects Congressionally-mandated A. Payment of Regulatory Fees Director at (202) 418–0444 or Rob regulatory fees from its regulatees based 1. De Minimis Fee Payment Liability

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2. Standard Fee Calculations and Payment instances of small fees, such as licenses B. Commercial Mobile Radio Service Dates that are renewed over a multiyear term, (CMRS) Messaging Service B. Enforcement the resulting unit fee was also divided C. Comment Period and Procedures 5. In our FY 2003 Report & Order (68 D. Ex Parte Rules by the term of the license. These unit FR 48445, August 13, 2003), we noted E. Paperwork Reduction Act Analysis fees were then rounded in accordance that in recent years there has been a F. Initial Regulatory Flexibility Analysis with 47 U.S.C. 159(b)(2). significant decline in the number of G. Authority and Further Information 2. Additional Adjustments to Payment CMRS Messaging units—from 40.8 Attachments Units million in FY 1997 to 19.7 million in FY Attachment A Initial Regulatory Flexibility 2003—a decline of 51.7 percent.5 This Analysis 3. In calculating the FY 2005 Attachment B Sources of Payment Unit trend is continuing. For example, in the regulatory fees proposed in Attachment FY 2004 regulatory fee cycle, the Estimates for FY2005 D, we further adjusted the FY2004 list Attachment C Calculation of Revenue number of CMRS Messaging units for Requirements and Pro-Rata Fees of payment units (Attachment B) based which regulatory fees were paid Attachment D FY 2005 Schedule of upon licensee databases and industry declined to 13.5 million. This is Regulatory Fees and trade group projections. Whenever consistent with our Ninth Annual CMRS Attachment E Factors, Measurements, and possible, we verified these estimates Competition Report, which estimates Calculations that Determine Station from multiple sources to ensure the the number of paging-only subscribers Contours and Population Coverages accuracy of these estimates. In some Attachment F FY 2004 Schedule of at the end of 2003 to be 11.2 million instances, Commission licensee 6 Regulatory Fees units. We also note that in recent years databases were used, while in other there have been no significant changes I. Introduction instances, actual prior year payment in the level of regulatory oversight for 1. In this Notice of Proposed records and/or industry and trade this fee category. For these reasons, we Rulemaking (NPRM), we propose to association projections were used in propose to continue our policy of 4 collect $280,098,000 in regulatory fees determining the payment unit counts. maintaining the CMRS Messaging for Fiscal Year (FY) 2005. These fees are Where appropriate, we adjusted and/or subscriber regulatory fee at the rate mandated by Congress and are collected rounded our final estimates to take into calculated in FY 2003 and FY 2004 to to recover the regulatory costs consideration variables that may impact avoid further contributing to the associated with the Commission’s the number of payment units, such as financial hardships associated with a enforcement, policy and rulemaking, waivers and/or exemptions that may be declining subscriber base. filed in FY 2005, and fluctuations in the user information, and international C. Local Multipoint Distribution Service activities.1 number of licensees or station operators due to economic, technical or other (LMDS) II. Discussion reasons. Therefore, when we note that 6. In the FY 2004 NPRM,7 we again A. Development of FY2005 Fees our estimated FY 2005 payment units sought comment on the appropriate fee are based on FY 2004 actual payment classification for LMDS.8 Commenters 1. Calculation of Revenue and Fee units, we may have rounded the number urged the Commission to classify LMDS Requirements for FY 2005 or adjusted it slightly to as a microwave service, arguing that 2. Each fiscal year, the Commission account for these variables. LMDS is operationally, functionally, proportionally allocates the total 4. Additional factors are considered in and legally similar to 24 and 39 GHz amount that must be collected via determining regulatory fees for AM and services in the microwave fee category. regulatory fees (Attachment C).2 For FY FM radio stations. These factors are We rejected this argument because 2005, this allocation was done using FY facility attributes and the population 2004 revenues as a base. From this base, served by the radio station. The 5 See Assessment and Collection of Regulatory calculation of the population served is Fees for Fiscal Year 2003, Report and Order, 18 FCC a revenue amount for each fee category Rcd 15985, 15992, at paragraph 21 (2003) (FY 2003 was calculated. Each fee category was determined by coupling current U.S. Report and Order). then adjusted upward by 2.6 percent to Census Bureau data with technical and 6 Implementation of Section 6002(b) of the reflect the increase in regulatory fees engineering data, as detailed in Omnibus Budget Reconciliation Act of 1993, Attachment E. Consequently, the Annual Report and Analysis of Competitive Market from FY 2004 to FY 2005. These FY Conditions with Respect to Commercial Mobile 2005 amounts were then divided by the population served, as well as the class Services, Ninth Report, FCC 04–216, released Sept. number of payment units in each fee and type of service (AM or FM), 28, 2004, at paragraph 177 (Ninth Annual CMRS category to determine the unit fee.3 In determines the regulatory fee amount to Competition Report). be paid. 7 See Assessment and Collection of Regulatory Fees for Fiscal Year 2004, Notice of Proposed 1 47 U.S.C. 159(a). Rulemaking, 19 FCC Rcd 5795, 5797–8, at 2 It is important to note that the required increase revenue dollar (Interstate Telecommunications paragraph 5 (2004) (FY 2004 NPRM). in regulatory fee payments of approximately 2.6 Service Provider fee). The payment unit is the 8 In the FY 2003 NPRM, we sought comment on percent in FY 2005 is reflected in the revenue that measure upon which the fee is based, such as a the appropriate fee classification of the Local is expected to be collected from each service licensee, regulatee, subscriber fee, etc. Multipoint Distribution Service (LMDS). Some category. Because this expected revenue is adjusted 4 The databases we consulted include, but are not commenters urged that LMDS be classified in the each year by the number of estimated payment limited to, the Commission’s Universal Licensing microwave fee category. We declined to do so units in a service category, the actual fee itself is System (ULS), International Bureau Filing System because technological developments and emerging sometimes increased by a number other than 2.6 (IBFS), and Consolidated Database System (CDBS). commercial applications suggested that usage of percent. For example, in industries where the We also consulted industry sources including but LMDS could evolve differently than services in the number of units is declining and the expected not limited to Television & Cable Factbook by microwave fee category. We recognized, however, revenue is increasing, the impact of the fee increase Warren Publishing, Inc. and the Broadcasting and that ‘‘substantive distinctions did exist between may be greater. Cable Yearbook by Reed Elsevier, Inc., as well as MDS and LMDS, and that they should not be placed 3 In most instances, the fee amount is a flat fee reports generated within the Commission such as in the same fee category.’’ Therefore, we created a per licensee or regulatee. However, in some the Wireline Competition Bureau’s Trends in separate LMDS fee category and stated that we instances the fee amount represents a unit Telephone Service and the Wireless would ‘‘initiate a specific proceeding that addresses subscriber fee (such as for Cable, Commercial Telecommunications Bureau’s Numbering Resource the policies and fee structure governing LMDS and Mobile Radio Service (CMRS) Cellular/Mobile and Utilization Forecast and Annual CMRS Competition other wireless services.’’ See FY 2003 Report and CMRS Messaging), a per unit fee (such as for Report. For additional information on source Order, 18 FCC Rcd 15985, 15988–9, at paragraphs International Bearer Circuits), or a fee factor per material, see Attachment B. 6–10 (2003).

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LMDS licenses are, as a factual matter, category ($94,050),10 the per megahertz international bearer circuits the carrier quite different than other Part 101 fixed per unit fee is $0.44, which is based on had the previous year.14 In response to microwave services in the upper a total authorized bandwidth of 1,300 our FY 2004 NPRM, several commenters frequency bands (above 15 GHz). While MHz and estimated units of 165 Block requested that the Commission change these three services are licensed on a A units and 165 Block B units.11 This the regulatory fee regime for geographic basis allowing licensees to methodology of calculating LMDS international carriers.15 In the FY 2004 place multiple stations within the regulatory fees incorporates the Report and Order we found that we authorized service areas, most differences in bandwidth use between needed a more complete record on these microwave stations are currently Block A and Block B licenses, as well issues and stated that we would seek licensed on a site-by-site basis thereby as differences in the number of units comment on them in our 2005 requiring, depending on the frequency between Block A and Block B licenses. regulatory fees proceeding. band, multiple individual licenses to Using the per MHz per unit fee of $0.44, 12. In this proceeding we seek serve a particular geographic area or the regulatory fee for LMDS Block A comment on possible changes to the multiple points therein.9 Even when the licenses is calculated to be $505 per regulatory fees assessed on international fees for LMDS licensees are compared license, and the regulatory fee for LMDS carriers. Specifically we seek comment with the fees for licensees in the 24 and Block B licenses is calculated to be $65 on possible bases, other than active 39 GHz bands, we did not find current per license.12 circuits, for assessing regulatory fees on fee assessments to impose a 9. We seek comment on our proposal international carriers.16 disproportionate burden on LMDS to use the above methodology for 13. Several carriers raised concerns licensees. calculating regulatory fees for LMDS. with the use of international bearer 7. However, we did identify an We are aware of the dramatic one-year circuits as the basis for assessing anomaly in FY 2004 between LMDS increase in regulatory fees that would regulatory fees in the 2004 regulatory Block A and LMDS Block B licenses. result for Block A licensees if we were fee proceeding. They argued that basing Block A licenses are authorized for 1150 to adopt the above per-MHz fees on the number of active circuits an MHz of spectrum, more than seven methodology. Therefore, so as to international carrier has favors older, times the amount of spectrum minimize the impact of the fee increase, lower-capacity systems to the detriment authorized for Block B licenses (150 we seek comment on whether we of newer, higher-capacity systems. MHz). Currently, LMDS regulatory fees should graduate the increase in Specifically the commenters argued that are assessed on a per-license basis. increments over a brief period of years. (1) the Commission’s present Using the authorized bandwidth for 10. Additionally, we seek general methodology does not take into account each license as the basis for comparison, comment on applying the per-MHz the reduced regulation of non-common we noted that the LMDS fee for Block methodology to LMDS Block A and carrier (also known as ‘‘private’’) A licenses in FY2004 was significantly Block B licenses that have been submarine cable operators, and (2) lower on a per megahertz basis than the partitioned and disaggregated. We also imposing fees based on a company’s ‘‘lit fee for Block B licenses. For example, on seek comment on whether to continue and sold’’ (also known as ‘‘active’’) a per MHz basis, Block B licenses, to use a fee calculation process that does bearer circuit capacity is at odds with which are authorized for 150 MHz in not distinguish between LMDS Block A how non-common carrier submarine the 31,000–31,075/31,225–31,300 MHz and LMDS Block B licenses. A fee cable operators actually sell capacity, bands, paid $1.80 per MHz in FY2004, calculation process that does not thereby requiring operators to spend whereas Block A licenses authorized for distinguish between Block A and Block 1150 MHz of spectrum paid $0.24 per B licenses would result in a regulatory 14 Regulatory fees for International Bearer Circuits MHz. Because this anomaly appears to fee of $285 per LMDS license.13 Finally, are to be paid by facilities-based common carriers create a disproportionate fee obligation we seek comment on other proposals to for active international bearer circuits in any on LMDS Block B licenses, on our own transmission facility for the provision of service to address the assessment of regulatory an end user or resale carrier, and also including motion we propose in FY 2005 to fees for LMDS. active circuits to themselves or their affiliates. In exercise our authority pursuant to addition, non-common carrier satellite operators section 9(b)(3) and amend the fee D. International Bearer Circuits must pay a fee for each circuit sold or leased to any schedule to assess LMDS regulatory fees 11. The Commission currently customer, including themselves or their affiliates, other than an international common carrier on a per megahertz basis. This proposed assesses regulatory fees on international authorized by the Commission to provide U.S. action would thereby place fee carriers based on the number of active international common carrier services. Non- assessments on Block A and Block B common carrier submarine cable operators are also licenses more in line with the benefits 10 See Attachment C. to pay fees for any and all international bearer circuits sold on an indefeasible right of use (IRU) 11 The per megahertz per unit fee is calculated as received under the respective licenses basis or leased to any customer, including follows: in terms of their authorized bandwidth, themselves or their affiliates, other than an which varies substantially, as noted 165 Block A units times 1,150 MHz used = international common carrier authorized by the above. 189,750 (total MHz used by Block A licensees). Commission to provide U.S. international common 165 Block B units times 150 MHz used = 24,750 8. Following auctions 17 and 23, half carrier services. See Assessment and Collection of (total MHz used by Block B licensees). Regulatory Fees for Fiscal Year 2001, MD Docket of all of the licenses were Block A Total = 214,500 (total MHz used by Block A & B No. 01–76, Report and Order, 16 FCC Rcd 13525, licenses and half were Block B licenses. licensees). 13593 (2001); Regulatory Fees Fact Sheet: What You Since then, some of the original licenses Per MHz Per Unit Fee = $94,050 divided by Owe—International and Satellite Services Licensees have been divided among other 214,500 = $0.44. for FY 2004 at 3 (released July 2004) (the fact sheet licensees pursuant to the Commission’s 12 LMDS Block A Licenses: $0.44 per MHz per is available on the FCC web-site at: http:// unit times 1,150 MHz bandwidth = $506, rounded hraunfoss.fcc.gov/edocs_public/attachmatch/DOC– license disaggregation and partitioning to $505. LMDS Block B Licenses: $0.44 per MHz per 249904A4.pdf). policies and procedures and others have unit times 150 MHz bandwidth = $66, rounded to 15 See Assessment and Collection of Regulatory been surrendered back to the FCC. $65. Fees for Fiscal Year 2004, Report and Order, 19 FCC Based on the FY 2005 revenue amount 13 A regulatory fee that does not distinguish Rcd 11662, 11671–72, at paragraphs 26–30 (2004) between Block A and Block B LMDS licenses is (FY 2004 Report and Order). to be collected from the LMDS fee calculated as follows: $94,050 (total expected FY 16 Because of the complexity of this issue, we will 2005 revenue) divided by 330 (estimated units) = review the comments and reply comments, but we 9 Id. $285 per license. will not implement any action in FY 2005.

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time determining if regulatory fees are category is warranted in light of the reflect a carefully crafted balance in applicable based on the Commission’s Commission’s authority to amend the which the Commission affords definition of ‘‘active.’’ fee schedule.21 If a reclassification of the protection to the Direct Broadcast 14. Tyco proposed the following category is proposed, commenters Satellite (DBS) service and the non- changes be made to the regulatory should specifically address the geostationary satellite orbit (NGSO) regime: (1) Separate the non-common Commission rulemakings or changes in fixed-satellite service (FSS) while carrier submarine cable operator law that justify the reclassification. allowing the entrance of MVDDS.24 subcategory from the existing 17. Commenters should address 19. The Commission established international bearer circuit fee category possible alternative methods of MVDDS because it had concluded that by creating a new non-common carrier assessing regulatory fees on a fourth provider in the MVPD submarine cable operator category; (2) international carriers, for example marketplace would generate significant allocate the current revenue whether regulatory fees should be public interest benefits, such as lower requirement for the bearer circuit fee assessed based on the holding of an prices, improved service quality, category between two new fee categories international section 214 authorization increased innovation, and increased based on the regulatory burden of each or a cable landing license. As noted service to unserved or underserved rural new category; and (3) adopt a flat, per- above, Tyco proposed to separate the areas.25 However, the Commission cable-landing-license fee for non- non-common carrier submarine cable found that ‘‘open eligibility for in-region common carrier submarine cable operator subcategory from the existing cable operators [would] pose a operators. Several commenters international bearer circuit fee category, significant likelihood of substantial supported Tyco’s position. Several thereby creating a new non-common competitive harm’’ because ‘‘cable commenters also noted that satellite carrier submarine cable operator operators have a strong incentive to operators provide international bearer category. We seek comment on the Tyco prevent entry by new MVPD circuits on a non-common carrier basis, proposal. Commenters should address providers.’’26 Therefore, cable operators and that circuit fees should include both how to allocate the current international and entities holding attributable non-common carriers as well as private bearer circuit revenue requirement interests in cable operators must divest submarine cable providers. between non-common carrier submarine these interests within ninety days of 15. The Commission concluded in the cable operators and the remaining being granted an MVDDS license whose FY 2004 Report and Order that these circuit fee category. geographic service area significantly arguments warranted further overlaps the cable operator’s service E. Multichannel Video Distribution and consideration, and that a fee system area.27 Data Service (MVDDS) based on cable landing licenses and 20. On January 27, 2004, the international section 214 authorizations, 18. In 2002 the Commission Commission completed the auction of rather than international bearer circuits, established the Multichannel Video the 214 MVDDS licenses (‘‘Auction No. would be administratively simpler for Distribution and Data Service (MVDDS) 53’’), raising (in net bids) a total of both the Commission and carriers.17 The in the 12.2–12.7 GHz band (12 GHz $118,721,835. In this auction, ten Commission also noted that a fee system band),22 totaling 500 megahertz of winning bidders won a total of 192 based on licenses/authorizations could contiguous spectrum that is licensed by MVDDS licenses, which the provide an incentive for carriers to 214 service areas (‘‘MVDs’’). MVDDS Commission issued later in 2004.28 initiate new services and to use new spectrum is used to facilitate the facilities more efficiently.18 delivery of new video and broadband 24 See generally subpart P of 47 CFR Part 101. 16. The assessment of regulatory fees communications services, such as local 25 25 MVDDS Second R&O, 17 FCC Rcd at 9680. on international carriers based on active television programming and high-speed 26 26 Id. Internet access.23 The technical rules 27 47 CFR 101.1412(a). ‘‘Cable operator’’ means a international circuits is set out in the fee company that is franchised to provide cable service, schedule in section 9 of the as defined in 47 CFR 76.1000(e), in all or part of Communications Act.19 The statute 21 On December 15, 2004, counsel for Tyco the MVDDS license area, id. § 101.1412(b). provides the Commission with the Telecommunications (US) Inc. submitted a letter ‘‘Significant overlap’’ occurs when a cable addressing the Commission’s legal authority to operator’s subscribers in the MVDDS license area authority to amend the fee schedule. 47 amend the schedule of regulatory fees pursuant to make up 35 percent or more of the households in U.S.C. 159(b)(3). Section 9(b)(3) requires section 9(b)(3), 47 U.S.C. 159(b)(3). Letter from Kent that MVDDS license area which subscribe to one or the Commission to amend the schedule D. Bressie, Harris, Wiltshire & Grannis, to David more Multichannel Video Program Distributors Krech, FCC, dated December 15, 2004. A copy of (MVPDs), as defined in 47 CFR 76.1000(e). See 47 if the Commission determines that the letter has been placed in the record for this CFR 101.1412(c) and (e). The winning bidder for the amendment is necessary to comply with proceeding. We seek comment on the analysis MVDDS license of the New York service area the general fee authority set forth in presented in the letter. (MVD001), inter alia, requested and received a 270- section 9(b)(1)(A) of the 22 Amendment of Parts 2 and 25 of the day extension of the 90-day divestiture deadline, Commission’s Rules to Permit Operation of NGSO see 47 CFR 101.1412(g)(4), of the Commission’s Communications Act. Section 9(b)(3) FSS Systems Co-Frequency with GSO and MVDDS/cable cross-ownership rule. See DTV also grants the Commission authority to Terrestrial Systems in the Ku-Band Frequency Norwich, LLC, Application for Multichannel Video ‘‘add, delete, or reclassify service in the Range; Amendment of the Commission’s Rules to Distribution and Data Service License, MVD001– Schedule to reflect additions, deletions, Authorize Subsidiary Terrestrial Use of the 12.2– New York, Request for Waiver of Section 12.7 GHz Band by Direct Broadcast Satellite 101.1412(g)(4) of the Commission’s Rules, Order, or changes in the nature of its services Licensees and Their Affiliates; and Applications of File No. 0001618606–MVD001, DA 04–3044 as a consequence of Commission Broadwave USA, PDC Broadband Corporation, and (released September 23, 2004) (DTV Norwich rulemaking proceedings or changes in Satellite Receivers, Ltd. to Provide a Fixed Service Waiver Order). the law.’’ 20 We seek comment on in the 12.2–12.7 GHz Band, ET Docket No. 98–206, 28 See Wireless Telecommunications Bureau Memorandum Opinion and Order and Second Grants Multichannel Video Distribution and Data whether a change to the computation of Report and Order, 17 FCC Rcd 9614, 9680 (2002) Service Licenses, Public Notice, DA 04–2331 fees for the international bearer circuit (MVDDS Second R&O). (released July 27, 2004) (granting 154 licenses); category or a reclassification of the 23 MVDDS licensees may use the 12.2–12.7 GHz Wireless Telecommunications Bureau Grants band for any digital fixed non-broadcast service Multichannel Video Distribution and Data Service

17 (broadcast services are intended for reception of the Licenses to South.Com LLC, DA 04–2547, Public FY 2004 Report and Order at paragraph 29. general public and not on a subscribership basis) Notice, (released August 18, 2004) (granting 37 18 Id. including one-way direct-to-home/office wireless licenses); and DTV Norwich Waiver Order (granting 19 47 U.S.C. 159(g). service. See 47 CFR 101.1407 (Permissible license for MVD001). All of the grants are subject 20 47 U.S.C. 159(b)(3). operations for MVDDS). to conditions.

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MVDDS licenses are issued for a ten- Multipoint Distribution Service (MMDS) G. Regulatory Fees for AM and FM year term beginning on the date the in the 2500–2690 MHz band.33 The Construction Permits 29 initial authorization is granted. actions taken in this proceeding 24. At the inception of our regulatory Licensees must provide ‘‘substantial initiated a fundamental restructuring of fee program in FY 1994, the regulatory service’’ within five years of the grant, the band that will provide both existing fee amount for construction permits was which must be documented at license ITFS and MDS licensees and potential set at an amount that, when compared 30 renewal time. As of the third quarter new entrants with greatly enhanced to licensed stations, was commensurate 2004, MVDDS equipment was still flexibility in order to encourage the to the limited nature of station under development. Because MVDDS highest and best use of spectrum operations under the terms of a spectrum can be used to provide non- domestically and internationally, and construction permit. Each year since FY 31 video, i.e., broadband data services, the growth and rapid deployment of 1994, the unit fee for AM, FM, and full- the Commission concluded that MVDDS innovative and efficient service VHF and UHF television does not fall within the Cable Television communications technologies and construction permits was calculated by and DBS Subscribers regulatory fee services.34 The R&O renamed the MDS determining the proportion of the category, which raises the question of service as the ‘‘Broadband Radio amount to be collected by each whether MVDDS should be established Service’’ (BRS). This new designation respective fee category, divided by the as a new regulatory fee category. connotes a more accurate description of number of estimated units, as illustrated 21. Since MVDDS equipment is still the services we anticipate will develop in Attachment C. However, since the under development, we propose to not in the band.The R&O also renamed the inception of the program in FY 1994, establish regulatory fees for MVDDS as ITFS service as the Educational the amount of fees that we have been a new regulatory fee category in FY Broadband Service’’ (EBS), which more directed to collect each year has steadily 2005. We seek comment on this accurately describes the kinds of the increased, while the number of proposal. In the alternative, if the services that we anticipate will develop estimated payment units for these Commission were to establish regulatory in the band.35 The R&O, among other construction permits has steadily fees for MVDDS in FY 2005, we seek things, implemented geographic area decreased. This combination of comment on equitable ways to assess licensing for all licensees in the band, increasing expected revenue and fees for MVDDS based on the nature of which gives licensees increased decreasing payment units for these this service, such as whether the fee flexibility while greatly reducing construction permits has resulted in a should be flat or be set on a per-MHz administrative burdens on both regulatory unit fee that is higher than basis. We also seek comment on licensees and the Commission. We note that of some licensed stations. whether the Commission should collect that geographic area licensing will 25. To rectify this situation, we the fee on an annual basis, or whether reduce the total number of BRS licenses propose beginning in FY 2005 to set the we should collect it in advance to cover because, in most cases, separate licenses AM, FM, VHF, and UHF construction the term of the license fee when the will no longer be necessary for each permit fee to be no higher than the application for license is filed. transmitter a licensee places in service. regulatory fee associated with the lowest licensed station for that fee category. F. Broadband Radio Service (BRS)/ 23. In the FNPRM, we sought Because there are unit and revenue Educational Broadband Service (EBS), comment on issues relating to regulatory variables in assessing the per-unit (Formerly MDS/MMDS and ITFS) fees.36 We note that, other than regulatory fee, thereby causing the fee to 22. On June 10, 2004, we adopted a renaming our MDS/MMDS regulatory change each fiscal year, it may be Report & Order and Further Notice of fee category to BRS and adjusting its necessary to make revenue adjustments Proposed Rulemaking (R&O and estimated number of payment units, any each fiscal year to keep the per unit FNPRM), 69 FR 72048 (December 10, other changes to the regulatory fee rules regulatory fee for construction permits 2004), and also referred to as the BRS/ we adopt in the BRS/EBS proceeding at the level of the lowest licensed fee for EBS proceeding) 32 that takes important will not be adopted in time to take effect AM, FM, VHF, and UHF stations. We steps to transform our rules and policies in FY 2005. If new regulatory fee rules seek comment on whether construction governing the licensing of the are adopted in the BRS/EBS proceeding, permit fees should be held at the level Instructional Television Fixed Service the Commission will make appropriate of the lowest licensed fee for their (ITFS), the Multipoint Distribution adjustments in the appropriate respective fee categories (e.g. AM, FM, Service (MDS), and the Multichannel regulatory fee cycle, which will VHF, and UHF stations), and whether presumably be the cycle for FY 2006 or 29 any adjustments that have to be made to 47 CFR 101.1413(a). beyond. 30 30 47 CFR 101.1413(b) and (c). hold the construction permit fee at the 31 MVDDS licensees may use this spectrum for level of the lowest respective licensed 33 any digital fixed non-broadcast Service (broadcast The terms MDS and MMDS are often used interchangeably. The Commission coined the term fee should be spread across only a services are intended for reception of the general narrow group of fee categories, such as public and not on a subscribership basis) including ‘‘MDS’’ at a time when it was making only two one-way direct-to-home/office wireless service. channels available for the service, at 2150–2162 AM, FM, VHF, and UHF stations, or Licensees are permitted to provide one-way video MHz. The Commission began using the term across all fee categories. programming and data services on a non-common ‘‘MMDS’’ when formulating rules making carrier and/or on a common carrier basis. Mobile additional channels for the service available in the H. Clarification of Policies and and aeronautical services are not authorized. Two- 2500–2690 MHz band. In discussing this Report & Procedures way services may be provided by using other Order and Further Notice of Proposed Rulemaking, spectrum or media for the return or upstream path. we will use the term ‘‘MDS’’ to signify both 1. Ad Hoc Issues Concerning Our See 47 CFR 101.1407. services. Regulatory Fee Exemption Policies 32 See Amendment of Parts 1, 21, 73, 74 and 101 34 Federal Communications Commission, of the Commission’s Rules to Facilitate the Strategic Plan FY 2003–FY 2008 at 5 (2002) 26. Pursuant to 47 CFR 1.1162, the Provision of Fixed and Mobile Broadband Access, (Strategic Plan). Commission does not establish Educational and Other Advanced Services in the 35 Federal Communications Commission, regulatory fees for applicants, 2150–2162 and 2500–2690 MHz Bands et al, Report Strategic Plan FY 2003–FY 2008 at 5 (2002) & Order and Further Notice of Proposed (Strategic Plan). permittees and licensees who qualify as Rulemaking, 19 FCC Rcd 14165 (2004) (R&O and 36 See R&O and FNPRM, 19 FCC Rcd at 14293– government entities or non-profit FNPRM). 97 paragraphs 351–359. entities. Despite the language of 47 CFR

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1.1162, we still encounter frequent If, however, the license is held by a for-profit regarding experimental stations.38 The uncertainty and comments from parties subsidiary, regulatory fees are owed, even AM Expanded Band was created to with respect to our fee exemption though the University is an exempt entity. reduce interference in the upper policies. Therefore, we believe it would A state pension fund is the majority owner standard band portion of the AM be helpful for us to provide clarification of a for-profit commercial broadcasting firm. spectrum band by allowing stations to 37 The facilities licensed to the for-profit of these policies. broadcasting firm would be subject to voluntarily move their broadcasts from 27. Determination of Fee Code for a regulatory fees, even though it is owned by the standard band to a point above 1605 39 Facility: The fee code is determined by an exempt agency. kHz. the operational status of the facility as 35. Uncertainty about the fee status of of October 1 of each year. This involves 30. Responsible Party, and the Effects AM Expanded Band stations may exist factors such as whether the facility is in of Transfers of Control: The entity because AM Expanded Band radio construction permit status or licensed holding the license for a facility as of service is not among our categories for status and a variety of other factors. the Fee Due Date is responsible for the general exemptions from regulatory fees, Every facility has a fee code. There is no regulatory fee for that facility. Eligibility as defined in 47 CFR 1.1162. While not prorating of regulatory fees. For for a regulatory fee exemption is fitting a general exemption, we clarify example, if a facility is in construction determined by the status of the licensee here that, at this time, licensees of AM permit status as of the close of business as of the Fee Due Date, regardless of the Expanded Band radio stations—stations October 1, but a license is granted on or status of any previous licensee(s). authorized for broadcast in the 1605– after October 2, that facility is 1705 kHz range—are not required to pay considered to be in construction permit 2. Regulatory Fee Obligations for Digital regulatory fees for such stations. status for the entire year. Other facility Broadcasters Licensees that operate a standard band changes during the course of the year, 31. Our current schedule of regulatory AM station (540–1600 kHz) that is such as technical changes, are treated in fees does not include service categories linked to an AM Expanded Band station the same manner. for digital broadcasters. Licensees in the are subject to regulatory fees for their 28. Establishment of Exempt Status: broadcast industry pay regulatory fees standard band station only. State, local, and federal government 36. We also note that our decision not based on their analog facilities. For agencies and IRS-certified not-for-profit to require regulatory fee payments for licensees that broadcast in both the entities are generally exempt from AM Expanded Band stations is not analog and digital formats, the only payment of regulatory fees. The synonymous with giving AM Expanded Commission requires that each exempt regulatory fee obligation at present is for Band radio service a general exemption entity have on file a valid IRS their analog facility. Moreover, a from regulatory fees. Because the Determination Letter or certification licensee that has fully transitioned to movement to the expanded band is from a government authority digital broadcasting and has voluntary and helps to reduce documenting its exempt status. In surrendered its analog spectrum would interference in the standard bandwidth, instances where there is a question have no regulatory fee obligation. we wish to continue our policy of not regarding the exempt status of an entity, 32. At this time, we regard it as subjecting this relatively small group of the FCC may request, at any time, for premature to establish regulatory fee stations to regulatory fees. However, at the entity to submit an IRS obligations for digital broadcasters. some future point when the migration of Determination Letter or certification However, recognizing the Commission’s standard band broadcasters to the from a government authority that initiatives to transition analog Expanded Band has advanced, we will documents its exempt status. broadcasters to digital spectrum, we consider establishing regulatory fee 29. Subsidiaries of Exempt Entities: wish to begin to address these issues requirements for AM Expanded Band The licensee of a facility may be distinct from a regulatory fee perspective, so that stations. from the ultimate owner. Exempt both the Commission and licensees can entities may hold one or more licenses prepare for fee policy changes that may 4. Effective Date of Payment of Multi- for media facilities directly and/or need to occur. Year Wireless Fees through subsidiaries. Facilities licensed 33. Therefore we seek comment on 37. The first eleven fee categories in directly to an exempt entity and its whether and when we should establish our Attachment D, Schedule of exempt subsidiaries are excused from regulatory fee service categories for Regulatory Fees, constitute a general fee the regulatory fee obligation. However, digital broadcasters. In particular, we category known as multi-year wireless licensees that are for-profit subsidiaries seek comment on ways that we could fees. Regulatory fees for this category are of exempt entities are subject to most efficiently and seamlessly adjust generally paid in advance, and for the regulatory fees regardless of the exempt our schedule of regulatory fees to amount of the entire 5-year or 10-year status of the ultimate owner. account for the collection of fee revenue term of the license. Because payment of Examples: A University owns a from digital broadcasters without these regulatory fees is linked to the commercial facility whose profits are used to harming early transitioners to digital date of license renewal (or at the time support the University and/or its programs. spectrum or late transitioners from of a new application), these fees can be If the facility is licensed to the University analog spectrum. paid at any time during the fiscal year. directly, or to an exempt subsidiary of the As a result, there has been some University, it is exempt from regulatory fees. 3. Regulatory Fee Obligations for AM confusion as to the regulatory fee rate Expanded Band Broadcasters that should apply at the time of license 37 In the ensuing discussion, ‘‘facility’’ includes renewal. Current fiscal year regulatory ‘‘station’’ and ‘‘licensee’’ includes ‘‘permittee.’’ 34. AM Expanded Band Radio ‘‘October 1’’ means the close of business on October 1, the first day of the government fiscal year. ‘‘Fee Station: We are aware of uncertainty 38 Definitions regarding AM Expanded Band Due Date’’ means the close of business on the day among licensees as to whether or not stations are listed in many places in the determined to be the final date by which regulatory regulatory fees are owed for AM Commission rules, including 47 CFR 73.14, 73.21, fees must be paid. The Fee Due Date usually occurs Expanded Band radio stations. The 73.30, and 73.37. in August or September. An ‘‘Exempt Entity’’ is a 39 See 47 CFR 73.14, 73.21, 73.30, and 73.37 of legal entity that is relieved of the burden of paying concept of the AM Expanded Band has the Commission’ rules for information regarding annual regulatory fees. its basis in the Commission’s rules AM Expanded Band stations.

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fees generally become effective 30 or 60 receivable system as a current debt. A 2. Satellite Space Station Licensees days after publication of the fees Report bill is distinct from an assessment in 44. Last year, for the first time, we & Order in the Federal Register, or in that it is automatically entered into our mailed regulatory fee bills through some instances, 90 days after delivery of financial records as a debt owed to the surface mail to all licensees in our two the Report & Order to Congress. Because Commission. Bills reflect the amount satellite space station service categories. current fiscal year regulatory fees have owed and have a due date of the last day Specifically, geostationary orbit space an effective date, only licensees of the fee payment window. station (‘‘GSO’’) licensees received bills (including new licensees) whose license Consequently, if a bill is not paid by the requesting regulatory fee payment for renewal dates fall on or after this due date, it becomes delinquent and is satellites that (1) were licensed by the effective date pay regulatory fees at the subject to our debt collection Commission and operational on or new rate. Licensees whose license procedures.40 before October 1, 2003; and (2) were not renewal dates fall before the current 41. We are pursuing our billing co-located with and technically year effective date pay regulatory fees at initiatives as part of our effort to identical to another operational satellite the prior year rate, which, in other modernize our financial practices. on October 1, 2003 (i.e., were not words, is the rate currently in effect Eventually, we intend to expand our functioning as a spare satellite). Non- before the new rate becomes effective. billing initiatives to include all geostationary orbit space station I. Proposals for Notification, Assessment regulatory fee service categories. For (‘‘NGSO’’) licensees received bills and Collection of Regulatory Fees now, based on the results of our requesting regulatory fee payment for 38. Each year, we generate public assessment and billing initiatives from systems that were licensed by the notices and fact sheets that notify last year, and the resources currently Commission and operational on or regulatees of the fee payment due date available to us, we propose to proceed before October 1, 2003. and provide additional information with our various FY 2005 initiatives as 45. For FY 2005, we propose to regarding regulatory fee payment follows. continue our billing initiative for our procedures. In prior years, we two satellite space station categories: 1. Interstate Telecommunications GSOs and NGSOs. disseminated these notices and fact Service Providers (ITSPs) sheets to regulatees through surface 46. Finally, we emphasize that the mail. We discontinued this practice two 42. In FY 2001, we began sending pre- bills that we propose to generate for our years ago, informing regulatees that with completed FCC Form 159–W GSO and NGSO licensees will be only the widespread use of the Internet, assessments to carriers in an effort to for the satellite or system aspects of sending public notices by surface mail assist them in paying the Interstate their respective operations. GSO and was not an efficient use of our time and Telecommunications Service Provider NGSO licensees typically have resources. We stated that we can better (ITSP) regulatory fee.41 The fee amount regulatory fee obligations in other serve the public by providing these on FCC Form 159–W was calculated service categories (such as earth general notices on our website, while from the FCC Form 499–A report, which stations, broadcast facilities, etc.), and exploring ways to disseminate specific carriers are required to submit by April we expect satellite operators to meet regulatory fee bills or assessments 1st of each year. Throughout FY 2002 their full fee payment obligations for through surface mail. and FY 2003, we refined the FCC Form their entire portfolio of FCC licenses. 39. Accordingly, in FY 2005 we will 159–W to simplify the regulatory fee We seek comment on our proposal to provide our public notices, fact sheets payment process.42 In FY 2004, we generate regulatory fee bills for our two and all other relevant materials on our generated and mailed the same pre- satellite space station service categories. web site at http://www.fcc.gov/fees/ completed FCC Form 159–W’s to 3. Media Services Licensees regfees.html, just as we have done for carriers under the same dissemination 47. In FY 2003 and FY 2004, we the past several years. As a general procedures, but we informed them that mailed fee assessment postcards to practice, we will not send such we will be treating the amount due on media services entities on a per-facility information through surface mail. Form 159–W as a bill, rather than as an basis. The postcards served to notify However, in the event that regulatees do assessment. Other than the manner in licensees of the date when fee payments not have access to the Internet, we will which Form 159–W payments were are due, the assessed fee amount for the mail public notices and other relevant entered into our financial system, facility, as well as other data attributes materials upon request. Regulatees and carriers experienced no procedural that we used in determining the fee the general public may request such changes regarding the use of the FCC amount.43 We propose to continue our information by contacting the FCC Form 159–W when submitting payment assessment initiative for media services CORES Help Desk at (877) 480–3201, of their FY 2004 ITSP regulatory fees. licensees this year in a similar fashion. Option 4. 43. For FY 2005, we propose to 40. Although last year we did not 48. As was the case last year, we continue our Form 159–W billing send public notices and fact sheets to propose to mail a single round of initiative for ITSPs. We seek comment regulatees en masse, we did send postcards to licensees and their other on this proposal and on ways that we specific regulatory fee assessments or known points of contact listed in CDBS could improve our billing initiative for bills by surface mail to a select group of (Consolidated Database System) and in ITSPs. fee categories. Here, we believe that it is CORES (Commission Registration important to clarify the distinction System), the Commission’s two official 40 between an assessment and a bill. An See 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910. 41 See FY 2001 Report and Order, 16 FCC Rcd 43 Fee assessments were issued for AM and FM assessment is a proposed statement of 13590 (2001) at paragraph 67. See also FCC Public Radio Stations, AM and FM Construction Permits, the amount of regulatory fees owed by Notice—Common Carrier Regulatory Fees (August FM Translators/Boosters, VHF and UHF Television an entity to the Commission (or 3, 2001) at 4. Stations, VHF and UHF Television Construction proposed subscriber count to be 42 Beginning in FY2002, Form 159–W included a Permits, Satellite Television Stations, Low Power payment section at the bottom of the form that Television (LPTV) Stations, and LPTV Translators/ ascribed for purposes of setting the allowed carriers the opportunity to send in Form Boosters. Fee assessments were not issued for entity’s regulatory fee) but it is not 159–W in lieu of completing Form 159 Remittance broadcast auxiliary stations, nor will they be issued entered into the Commission’s accounts Advice Form. for them in FY 2005.

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databases for media services. By doing Numbering Resource Utilization Remittance Advice when making their so, licensees and their other points of Forecast (NRUF) form.45 We proposed regulatory fee payments. contact will all be furnished with the that subscriber data from the NRUF 53. Although two assessment letters same information for each facility in form and the Local Number Portability will be mailed to carriers that have filed question so that they can designate (LNP) database be used to compute and an NRUF form, it is conceivable that among themselves the payer of this assess a regulatory fee obligation. Upon some carriers will not be sent any letters year’s fee. Mailing postcards to all the suggestion of some of our of assessment because they did not file interested parties at different addresses commenters to our NPRM, we decided the NRUF form. For these carriers, we on file for each facility also encourages to provide entities who filed an NRUF again propose to use the methodology 48 all parties to visit our Commission- form an opportunity to revise their that is currently in place for CMRS authorized web site to update or correct subscriber counts before making a Wireless services. They should use their information regarding the station, or to regulatory fee payment.46 We propose to subscriber count as of December 31, certify their fee-exempt status, if continue our procedure of giving 2004 and submit payment accordingly appropriate. The web site will be entities an opportunity to revise their on FCC Form 159. However, whether a available again on-line throughout this subscriber counts again this year by carrier receives a letter of assessment or summer.44 In addition to using the sending two rounds of assessment computes the subscriber count itself, the postcards to direct parties to our letters, an initial assessment and a final Commission reserves the right, under authorized web site for updates and assessment letter. If this exercise again the Communications Act, to audit the corrections, the postcards will also proves to be successful, we will be number of subscribers upon which direct licensees to the telephone number sending these letters next year as regulatory fees are paid. In the event of our FCC CORES Help Desk at (877) ‘‘bills’’, which will have Debt Collection that the Commission determines that the 480–3201, Option 4, where licensees Improvement Act (DCIA) implications if number of subscribers is inaccurate or can call to obtain clarification on the assessment fee based on these that an insufficient reason is given for procedures. We seek comment on our subscriber counts is not paid by the due making a correction on the initial proposal to generate fee assessment date of next year’s regulatory fees. assessment letter, we again propose that postcards for media services entities. 52. As in FY 2004, we again propose we reserve the right to assess the carrier 49. Under our proposal, media to send an assessment letter that is for the difference between what was services licensees would still be based on NRUF data 47 that includes a paid and what should have been paid. required to submit a completed Form list of the carrier’s Operating Company 54. After having the benefit of using 159 with their fee payments, despite Numbers (OCNs) upon which the NRUF data last year, we will clarify having received an assessment postcard. assessment is based. The letters will not some of the issues raised last year. First, We cannot guarantee that your include assigned number counts by we propose to derive the subscriber regulatory fees will be posted accurately OCNs, but rather an aggregate of count from NRUF data based on against your account if a Form 159 is assigned numbers for each carrier. If the ‘‘assigned’’ number counts that have not returned with your fee payment. We number of subscribers on the initial been adjusted for porting to net Type 0 emphasize that the assessment assessment letter differs from the ports (‘‘in’’ and ‘‘out’’), which should postcards that we propose to mail to subscriber count they provided on the reflect a more accurate subscriber count. media services licensees are not to be NRUF form, CMRS cellular and mobile Second, as a result of number pooling, used as a substitute to completing Form service providers can amend their initial many wireless carriers receive their new 159. Rather, we hope licensees will use assessment letter to correctly identify numbers as thousand-number blocks the postcards as a tool to help them their subscriber count as of December and that, within each block, up to 100 complete their Form 159. 31, 2004. Assessment letters that are numbers can be retained by the 50. We also emphasize that the most amended should indicate the specific donating carrier. Because retained important data element that media reason for the change, such as the numbers are reported on the NRUF form services licensees need to include on purchase or the sale of a subsidiary, the as ‘‘assigned’’ to the holder of the their Form 159 is their station’s facility date of the transaction, and any other thousand block, a concern was raised ID. The facility ID is a unique identifier information that will help to justify a last year that this anomaly would result that never changes over the course of a reason for the change. If we receive no in a lower count for the donating carrier station’s existence. Despite the fact that response to our initial assessment letter, and a higher count for the recipient we prominently display a station’s we will assume that the initial carrier. Although we are unable to facility ID on the station’s assessment assessment is correct and will expect correct this anomaly at this time, we postcard, and Form 159 filing the fee payment to be based on the believe our proposal to give carriers an instructions call for each station’s number of subscribers listed on the opportunity to revise their subscriber facility ID and call sign to be provided, initial assessment. We will review all count should alleviate any potential we typically receive many incomplete responses and determine whether a harm resulting from this phenomenon. Form 159s that do not provide the change in the number of subscribers is And finally, because we are requiring facility ID of the station whose fee is warranted. As in previous years, carriers to confirm their subscriber being paid. operators will certify their subscriber counts on an aggregate basis, a carrier should be able to identify its subscriber 4. Commercial Mobile Radio Service counts in Block 30 of the FCC Form 159 count accurately as of December 31, (CMRS) Cellular and Mobile Services 45 See Assessment and Collection of Regulatory 2004, regardless of whether the carrier 51. In our FY2004 NPRM, we Fees for Fiscal Year 2004, Notice of Proposed uses data in the NRUF report, a proposed to mail assessments to Rulemaking, 19 FCC Rcd 5795, 5801, at paragraph Securities and Exchange (SEC) filing, Commercial Mobile Radio Services 20 (2004) (FY 2004 NPRM). the 477 report, or some other certified (CMRS) cellular and mobile service 46 See FY 2004 Report and Order, 19 FCC Rcd 11662, 11676–11677, at paragraphs 48–49 (2004). financial statement. Because we have providers using information from the 47 Our proposal to continue to use NRUF data is subject to action taken in response to a Petition for 48 Federal Communications Commission, 44 The Commission-authorized web site is http: Reconsideration of the FY 2004 Fee Order filed by Regulatory Fees Fact Sheet, ‘‘What You Owe— //www.fccfees.com. Cingular Wireless LLC filed on August 6, 2004. Commercial Wireless Services, July 2004, page 1.

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found subscriber counts reported by reflect the subscriber count for which regulatory fee payments to the carriers on the NRUF form to be very the operator paid FY 2004 regulatory Commission at the end of each fiscal accurate, we propose to continue to use fees; and request that the operator year. Self-reporting and certifying the NRUF report 49 as the basis for our access a Commission-authorized web subscriber counts does not furnish us CMRS cellular/mobile provider site to provide its aggregate count of with data that we can use to audit assessments. basic cable subscribers as of December regulatory fee payments. Therefore, we 31, 2004—the date that the Commission 5. Cable Television Subscribers believe that a cable industry reporting requires operators to use as the basis for requirement specific to regulatory fees 55. Last year, we generated regulatory determining their regulatory fee may be necessary and we are therefore fee assessment letters for that segment of obligations for basic cable subscribers. If seeking comment on the proposal. We the cable television industry that was the number of subscribers as of do not intend to implement any such listed in selected publicly available data December 31, 2004 differs from the reporting requirement for the collection sources. The data sources that we amount paid for last year, operators of FY 2005 regulatory fees. selected for reference were the would be required to provide a brief Broadcasting and Cable Yearbook 2003– explanation for the differing subscriber J. Future Streamlining of the Regulatory 2004 (‘‘Yearbook’’) 50 and industry counts and indicate when the difference Fee Assessment and Collection Process statistics published by the National occurred. Cable operators who do not 62. We continue to welcome Cable and Telecommunications have access to the Internet would be comments on a broad range of options Association (‘‘NCTA’’).51 We also able to contact the FCC CORES Help concerning our commitment to permitted cable operators for the first Desk at (877) 480–3201, Option 4, to reviewing, streamlining and time, regardless of whether or not they provide their subscriber count as of modernizing our statutorily required were listed in the selected data sources, December 31, 2004. We seek comment fee-assessment and collection to make regulatory fee payments based on our proposed assessment initiative. procedures. Our areas of particular on their companies’ aggregate subscriber 58. Some cable operators may not interest included: (1) The process for counts, rather than requiring them to have made regulatory fee payments last notifying licensees about changes in the sub-report subscriber counts on a per year. For example, a new company may annual regulatory fee schedule and how community unit identifier (‘‘CUID’’) have become operational after the first it can be improved; (2) the most basis. day of the fiscal year and therefore they effective way to disseminate regulatory 56. We generated assessment letters did not have a regulatory fee obligation fee assessments and bills, i.e. through for each of the cable operators listed in in FY 2004; or an existing company did surface mail, e-mail, or some other the Yearbook, as well as the 25 largest not make a payment because it filed a mechanism; (3) the fee payment process, multiple-system operators (‘‘MSOs’’), as petition for waiver of regulatory fees for including how the agency’s electronic listed on NCTA’s web page. The cable FY 2004 based on financial hardship. payment system can be improved; and operators that received assessment Regardless of the circumstance, we (4) the timing of fee payments, letters were given the opportunity to emphasize that not receiving a including whether we should alter the respond to the Commission to rectify regulatory fee assessment letter in FY existing fee payment ‘‘window’’ in any their subscriber counts before making 2005 would not excuse an operator from way. their fee payments. The remainder of the obligation to pay FY 2005 regulatory the cable television industry did not fees. We expect payment from all non- III. Procedural Matters receive assessment letters. Regardless of exempt cable operators, not just those A. Payment of Regulatory Fees whether or not a company was listed in that made FY2004 payments and/or the Yearbook or on NCTA’s web page, received assessment letters for FY2005 1. De Minimis Fee Payment Liability all cable operators were instructed to fees. 63. As in the past, regulatees whose base their fee obligations on their basic 59. Actual payment procedures for total FY 2005 regulatory fee liability, subscriber counts as of December 31, cable operators would be the same as including all categories of fees for which 2003, with the understanding that we they were in previous years. Operators payment is due by an entity, amounts to would corroborate the counts with other would continue to complete the FCC less than $10 will be exempted from publicly available data sources. Form 159 Remittance Advice when payment of FY 2005 regulatory fees. 57. This year, we propose to conduct making their payment, and would a similar assessment initiative, but with continue to certify their December 31, 2. Standard Fee Calculations and different procedures. Specifically, we 2004 subscriber count in Block 30 of the Payment Dates will generate fee assessment letters for Form 159. 64. Licensees are reminded that, the cable operators who are on file as 60. Finally, we seek comment on a under our current rules, the having paid regulatory fees last year for proposal to require the cable industry to responsibility for payment of fees by their basic cable subscribers. Under our annually report their basic subscriber service category is as follows: proposal, our letter to each operator counts to the Commission prior to (a) Media Services: The responsibility would announce the due date for paying regulatory fees for the fiscal year for the payment of regulatory fees rests payment of FY 2005 regulatory fees; in question. For example, by June 1st of with the holder of the permit or license a given fiscal year, we would require as of October 1, 2004. However, in 49 Our proposal to continue to use NRUF data is that operators report the number of instances where a license or permit is subject to action taken in response to a Petition for subscribers on December 31st of the transferred or assigned after October 1, Reconsideration of the FY 2004 Fee Order filed by Cingular Wireless LLC filed on August 6, 2004. preceding year. The Commission would 2004, responsibility for payment rests 50 Broadcasting and Cable Yearbook 2003–2004, then use the subscriber counts received with the holder of the license or permit by Reed Elsevier, Inc., Newton, MA, 2003. on June 1st to audit regulatory fee at the time payment is due. Subscriber counts reported in Section C, ‘‘Multiple payments that are collected later in the (b) Wireline (Common Carrier) System Operators, Independent Owners and Cable fiscal year. Services: Fees must be paid for any Systems,’’ page C–3. 51 NCTA maintains an updated list of the 25 61. Currently, subscriber counts are authorization issued on or before largest multiple-system operators at its web site self-reported and certified by cable October 1, 2004. However, where a located at http://www.ncta.com. operators when they make their license or permit is transferred or

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assigned after October 1, 2004, 65. The Commission strongly C. Comment Period and Procedures responsibility for payment rests with the recommends that entities submitting 68. Pursuant to 47 CFR 1.415, 1.419, holder of the license or permit at the more than twenty-five (25) Form 159– interested parties may file comments on time payment is due. C’s use the electronic Fee Filer program or before March 8, 2005, and reply (c) Wireless Services: Commercial when sending their regulatory fee comments on or before March 18, 2005. Mobile Radio Service (CMRS) cellular, payment. The Commission will, for the Comments may be filed using the mobile, and messaging services (fees convenience of payers, accept fee Commission’s Electronic Comment based upon a subscriber, unit or circuit payments made in advance of the Filing System (ECFS) or by filing paper count): Fees must be paid for any normal formal window for the payment copies.53 authorization issued on or before of regulatory fees. 69. Comments filed through the ECFS October 1, 2004. The number of B. Enforcement are sent as an electronic file via the subscribers, units or circuits on Internet to http://www.fcc.gov/e-file/ December 31, 2004 will be used as the 66. As a reminder to all licensees, ecfs.html. Generally, only one copy of basis from which to calculate the fee section 159(c) of the Communications an electronic submission must be filed. payment. For small multi-year wireless Act requires us to impose an additional If multiple docket or rulemaking services, the regulatory fee will be due charge as a penalty for late payment of numbers appear in the caption of this at the time of authorization or renewal any regulatory fee. As in years past, a proceeding, however, commenters must of the license, which is generally for a late payment penalty of 25 percent of submit one electronic copy of the period of five or ten years and paid the amount of the required regulatory comments to each docket or rulemaking throughout the year. fee will be assessed on the first day number referenced in the caption. In (d) Multichannel Video Programming following the deadline date for filing of completing the transmittal screen, Distributor Services (basic cable these fees. Regulatory fee payment must commenters should include their full television subscribers and CARS be received and stamped at the lockbox name, U.S. Postal Service mailing licenses): The number of subscribers on bank by the last day of the regulatory fee address, and the applicable docket or December 31, 2004 will be used as the filing window, and not merely rulemaking number. Parties may also basis from which to calculate the fee 52 postmarked by the last day of the submit an electronic comment by payment. For CARS licensees, fees window. Failure to pay regulatory fees Internet e-mail. To receive filing must be paid for any authorization and/or any late penalty will subject instructions for e-mail comments, issued on or before October 1, 2004. The regulatees to sanctions, including the commenters should send an e-mail to responsibility for the payment of provisions set forth in the Debt [email protected], and should include the regulatory fees for CARS licenses rests Collection Improvement Act of 1996 following words in the body of the with the holder of the permit or license (‘‘DCIA’’). We also assess administrative message, ‘‘get form ’’ A sample form and instances where a CARS license or to recover additional costs incurred in directions will be sent in reply. permit is transferred or assigned after processing and handling the related 70. Parties who choose to file by October 1, 2004, responsibility for debt pursuant to the DCIA and paper must file an original and four payment rests with the holder of the § 1.1940(d) of the Commission’s rules. copies of each filing. If more than one license or permit at the time payment is These administrative processing charges docket or rulemaking number appear in due. the caption of this proceeding, (e) International Services: For earth will be assessed on any delinquent regulatory fee, in addition to the 25 commenters must submit two additional stations and geostationary orbit space copies for each additional docket or stations, payment is calculated on a per percent late charge penalty. Partial underpayments of regulatory fees are rulemaking number. Filings can be hand operational station basis. For non- delivered or by messenger delivery, sent geostationary orbit satellite systems, treated in the following manner. The licensee will be given credit for the by commercial overnight courier, or payment is calculated on a per mailed by first-class mail through the operational system basis. The amount paid, but if it is later determined that the fee paid is incorrect U.S. Postal Service (please note that the responsibility for the payment of Commission continues to experience regulatory fees rests with the holder of or was submitted after the deadline date, the 25 percent late charge penalty delays in receiving U.S. Postal Service the permit or license on October 1, mail). The Commission’s contractor will 2004. However, in instances where a will be assessed on the portion that is submitted after the filing window. receive hand-delivered or messenger- license or permit is transferred or delivered paper filings for the assigned after October 1, 2004, 67. Furthermore, we recently amended our regulatory fee rules Commission’s Secretary at 236 responsibility for payment rests with the Massachusetts Avenue, N.E., Suite 110, holder of the license or permit at the effective November 1, 2004, to provide that we will withhold action on any Washington DC 20002. The filing hours time payment is due. For international at this location are 8 a.m. to 7 p.m. All bearer circuits, payment is calculated on applications or other requests for benefits filed by anyone who is hand deliveries must be held together a per active circuit basis as of December with rubber bands or fasteners. Any 31, 2004. delinquent in any non-tax debts owed to the Commission (including regulatory envelopes must be disposed of before entering the building. Commercial 52 Cable television system operators should fees) and will ultimately dismiss those compute their basic subscribers as follows: Number applications or other requests if overnight mail (other than U.S. Postal of single family dwellings + number of individual payment of the delinquent debt or other Service Express Mail and Priority Mail) households in multiple dwelling unit (apartments, satisfactory arrangement for payment is must be sent to 9300 East Hampton condominiums, mobile home parks, etc.) paying at Drive, Capitol Heights, MD 20743. U.S. the basic subscriber rate + bulk rate customers + not made. See 47 CFR 1.1161(c), courtesy and free service. Note: Bulk-Rate 1.1164(f)(5), and 1.1910. Failure to pay Postal Service first-class mail, Express Customers = Total annual bulk-rate charge divided regulatory fees can also result in the by basic annual subscription rate for individual 53 See Electronic Filing of Documents in households. Operators may base their count on ‘‘a initiation of a proceeding to revoke any Rulemaking Proceedings, 63 FR 24121 (1998), typical day in the last full week’’ of December 2004, and all authorizations held by the available at .

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Mail, and Priority Mail should be contained in this document, as required Federal Communications Commission. addressed to 445 12th Street, SW., by the Paperwork Reduction Act of Marlene H. Dortch, Washington, DC 20554. All filings must 1995, Public Law 104–13. Public and Secretary. be addressed to the Commission’s agency comments are due April 29, Attachment A—Initial Regulatory Secretary, Marlene H. Dortch, Office of 2005. Comments should address: (a) Flexibility Analysis the Secretary, Federal Communications Whether the proposed collection of Commission. information is necessary for the proper 77. As required by the Regulatory 71. Parties who choose to file by performance of the functions of the Flexibility Act (RFA),57 the Commission paper must also submit their comments Commission, including whether the has prepared this Initial Regulatory on diskette. Two copies of the diskettes information shall have practical utility; Flexibility Analysis (IRFA) of the must be submitted. One copy is to be (b) the accuracy of the Commission’s possible significant economic impact on sent to Qualex International, 445 12th burden estimates; (c) ways to enhance small entities by the policies and rules Street, SW., Room CY–B402, the quality, utility, and clarity of the in the present Notice of Proposed Washington, DC 20554. The other copy information collected; and (d) ways to Rulemaking, In the Matter of is to be sent to Office of Managing minimize the burden of the collection of Assessment and Collection of Director, Federal Communications information on the respondents, Regulatory Fees for Fiscal Year 2004. Commission, 445 12th Street, SW., 1– including the use of automated Written public comments are requested C848, Washington, DC 20554. These collection techniques or other forms of on this IRFA. Comments must be submissions must be in a Microsoft information technology. In addition, identified as responses to the IRFA and WindowsTM-compatible format on a 3.5″ pursuant to the Small Business must be filed by the deadlines for floppy diskette. The diskette should be Paperwork Relief Act of 2002, Public comments provided in paragraph 75. clearly labeled with the commenter’s Law 107–198, see 44 U.S.C. 3506(c)(4), The Commission will send a copy of the name, proceeding (including the lead we seek specific comment on how we NPRM, including the IRFA, to the Chief docket number MD Docket No. 04–73), might ‘‘further reduce the information Counsel for Advocacy of the Small type of pleading (comment or reply collection burden for small business Business Administration.58 In addition, comment), date of submission, and the concerns with fewer than 25 the NPRM and IRFA (or summaries name of the electronic file on the thereof) will be published in the Federal diskette. The label should also include employees.’’ Register.59 the following phrase ‘‘Copy—Not an F. Initial Regulatory Flexibility Analysis Original.’’ Each diskette should contain I. Need for, and Objectives of, the only one party’s pleadings, preferably in 75. As required by the Regulatory Proposed Rules a single electronic file. Flexibility Act,55 we have prepared an 72. The public may view the Initial Regulatory Flexibility Analysis 78. This rulemaking proceeding is documents filed in this proceeding (IRFA) of the possible impact on small initiated to obtain comments concerning during regular business hours in the entities of the proposals suggested in the Commission’s proposed amendment FCC Reference Center, Federal this document. The IRFA is set forth as of its Schedule of Regulatory Fees in the Communications Commission, Room Attachment A. Written public amount of $280,098,000, the amount CY–A257, 445 12th Street, SW., comments are requested with respect to that Congress has required the Washington, DC 20554, and through the the IRFA. These comments must be filed Commission to recover. The Commission’s Electronic Comment in accordance with the same filing Commission seeks to collect the Filing System (ECFS) http:// deadlines for comments on the rest of necessary amount through its proposed www.gullfoss2.fcc.gov/prod/ecfs/ the NPRM, and must have a separate Schedule of Regulatory Fees in the most comsrch_v2.cgi. Those seeking materials and distinct heading, designating the efficient manner possible and without undue public burden. in alternative formats (computer comments as responses to the IRFA. The diskette, large print, audio recording, Consumer Information Bureau, II. Legal Basis and Braille) should contact Brian Millin Reference Information Center, shall at (202) 418–7426 voice, (202) 418–7365 send a copy of this NPRM, including the 79. This action, including publication TTY, or [email protected]. IRFA, to the Chief Counsel for Advocacy of proposed rules, is authorized under sections (4)(i) and (j), 9, and 303(r) of D. Ex Parte Rules of the Small Business Administration, in accordance with the Regulatory the Communications Act of 1934, as amended.60 73. This is a permit-but-disclose Flexibility Act. notice and comment rulemaking III. Description and Estimate of the G. Authority and Further Information proceeding. Ex Parte presentations are Number of Small Entities to Which the permitted, except during the Sunshine Proposed Rules Will Apply Agenda period, provided they are 76. Authority for this proceeding is disclosed pursuant to the Commission’s contained in sections 4(i) and (j), 8, 9, 80. The RFA directs agencies to rules.54 and 303(r) of the Communications Act provide a description of, and where of 1934, as amended. It is ordered that feasible, an estimate of the number of E. Paperwork Reduction Act Analysis 56 this NPRM is adopted. It is further small entities that may be affected by 74. This document contains proposed ordered that the Commission’s the proposed rules and policies, if modified information collection Consumer Information Bureau, requirements. The Commission, as part Reference Information Center, shall 57 5 U.S.C. 603. The RFA, 5 U.S.C. 601–612 has of its continuing effort to reduce send a copy of this NPRM, including the been amended by the Contract With America paperwork burdens, invites the general Initial Regulatory Flexibility Analysis, Advancement Act of 1996, Public Law 104–121, public and the Office of Management to the Chief Counsel for Advocacy of the 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory and Budget (OMB) to comment on the Small Business Administration. Enforcement Fairness Act of 1996 (SBREFA). information collection requirements 58 5 U.S.C. 603(a). 55 See 5 U.S.C. 603. 59 Id. 54 47 CFR 1.1203 and 1.1206(b). 56 47 U.S.C. 154(i)– (P28P1.XXX)(j), 159, & 303(r). 60 47 U.S.C. 154(i) and (j), 159, and 303(r).

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adopted.61 The RFA generally defines of Advocacy contends that, for RFA either competitive access provider the term ‘‘small entity’’ as having the purposes, small incumbent local services or competitive local exchange same meaning as the terms ‘‘small exchange carriers are not dominant in carrier services. Of these 609 carriers, an business,’’ ‘‘small organization,’’ and their field of operation because any such estimated 458 have 1,500 or fewer ‘‘small governmental jurisdiction.’’ 62 In dominance is not ‘‘national’’ in scope.70 employees and 151 have more than addition, the term ‘‘small business’’ has We have therefore included small 1,500 employees. In addition, 16 the same meaning as the term ‘‘small incumbent local exchange carriers in carriers have reported that they are business concern’’ under the Small this RFA analysis, although we ‘‘Shared-Tenant Service Providers,’’ and Business Act.63 A ‘‘small business emphasize that this RFA action has no all 16 are estimated to have 1.500 or concern’’ is one which: (1) Is effect on Commission analyses and fewer employees. In addition, 35 independently owned and operated; (2) determinations in other, non-RFA carriers have reported that they are is not dominant in its field of operation; contexts. ‘‘Other Local Service Providers.’’ Of the and (3) satisfies any additional criteria 85. Incumbent Local Exchange 35, an estimated 34 have 1,500 or fewer established by the SBA.64 Carriers (LECs). Neither the Commission employees and one has more than 1,500 81. Small Businesses. Nationwide, nor the SBA has developed a small employees. Consequently, the there are a total of 22.4 million small business size standard specifically for Commission estimates that most businesses, according to SBA data.65 incumbent local exchange services. The providers of competitive local exchange 82. Small Organizations. Nationwide, appropriate size standard under SBA service, competitive access providers, there are approximately 1.6 million rules is for the category Wired ‘‘Shared-Tenant Service Providers,’’ and small organizations.66 Telecommunications Carriers. Under ‘‘Other Local Service Providers’’ are 83. Small Governmental Jurisdictions. that size standard, such a business is small entities that may be affected by The term ‘‘small governmental small if it has 1,500 or fewer our proposed action. jurisdiction’’ is defined as ‘‘governments employees.71 According to Commission 87. Local Resellers. The SBA has 72 of cities, towns, townships, villages, data, 1,337 carriers have reported that developed a small business size school districts, or special districts, with they are engaged in the provision of standard for the category of a population of less than fifty incumbent local exchange services. Of Telecommunications Resellers. Under thousand.’’ 67 As of 1997, there were these 1,337 carriers, an estimated 1,032 that size standard, such a business is approximately 87,453 governmental have 1,500 or fewer employees and 305 small if it has 1,500 or fewer jurisdictions in the United States.68 This have more than 1,500 employees. employees.75 According to Commission number includes 39,044 county Consequently, the Commission data,76 133 carriers have reported that governments, municipalities, and estimates that most providers of they are engaged in the provision of townships, of which 37,546 incumbent local exchange service are local resale services. Of these, an (approximately 96.2%) have small businesses that may be affected by estimated 127 have 1,500 or fewer populations of fewer than 50,000, and of our proposed action. employees and six have more than 1,500 86. Competitive Local Exchange which 1,498 have populations of 50,000 employees. Consequently, the Carriers (CLECs), Competitive Access or more. Thus, we estimate the number Commission estimates that the majority Providers (CAPs), ‘‘Shared-Tenant of small governmental jurisdictions of local resellers are small entities that Service Providers,’’ and ‘‘Other Local overall to be 84,098 or fewer. may be affected by our proposed action. Service Providers.’’ Neither the 84. We have included small 88. Toll Resellers. The SBA has Commission nor the SBA has developed incumbent local exchange carriers in developed a small business size a small business size standard this present RFA analysis. As noted standard for the category of above, a ‘‘small business’’ under the specifically for these service providers. The appropriate size standard under Telecommunications Resellers. Under RFA is one that, inter alia, meets the that size standard, such a business is pertinent small business size standard SBA rules is for the category Wired Telecommunications Carriers. Under small if it has 1,500 or fewer (e.g., a telephone communications 77 that size standard, such a business is employees. According to Commission business having 1,500 or fewer data,78 625 carriers have reported that employees), and ‘‘is not dominant in its small if it has 1,500 or fewer employees.73 According to Commission they are engaged in the provision of toll field of operation.’’ 69 The SBA’s Office data,74 609 carriers have reported that resale services. Of these, an estimated they are engaged in the provision of 590 have 1,500 or fewer employees and 61 5 U.S.C. 603(b)(3). 35 have more than 1,500 employees. 62 5 U.S.C. 601(6). 70 Consequently, the Commission 63 5 U.S.C. 601(3) (incorporating by reference the Letter from Jere W. Glover, Chief Counsel for definition of ‘‘small-business concern’’ in the Small Advocacy, SBA, to William E. Kennard, Chairman, estimates that the majority of toll Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. FCC (May 27, 1999). The Small Business Act resellers are small entities that may be 601(3), the statutory definition of a small business contains a definition of ‘‘small-business concern,’’ affected by our proposed action. which the RFA incorporates into its own definition applies ‘‘unless an agency, after consultation with of ‘‘small business.’’ See 15 U.S.C. 632(a) (Small 89. Payphone Service Providers the Office of Advocacy of the Small Business Business Act); 5 U.S.C. 601(3) (RFA). SBA Administration and after opportunity for public (PSPs). Neither the Commission nor the regulations interpret ‘‘small business concern’’ to comment, establishes one or more definitions of SBA has developed a small business include the concept of dominance on a national such term which are appropriate to the activities of basis. See 13 CFR 121.102(b). size standard specifically for payphone the agency and publishes such definition(s) in the 71 13 CFR 121.201, North American Industry services providers. The appropriate size Federal Register.’’ Classification System (NAICS) code 517110 64 standard under SBA rules is for the 15 U.S.C. 632. (changed from 513310 in October 2002). 65 See SBA, Programs and Services, SBA category Wired Telecommunications 72 FCC, Wireline Competition Bureau, Industry Carriers. Under that size standard, such Pamphlet No. CO–0028, at page 40 (July 2002). Analysis and Technology Division, ‘‘Trends in 66 Independent Sector, The New Nonprofit Telephone Service’’ at Table 5.3, Page 5–5 (Aug. Almanac & Desk Reference (2002). 2003) (hereinafter ‘‘Trends in Telephone Service’’). 75 13 CFR 121.201, NAICS code 517310 (changed 67 5 U.S.C. 601(5). This source uses data that are current as of from 513330 in October 2002). 68 U.S. Census Bureau, Statistical Abstract of the December 31, 2001. 76 ‘‘Trends in Telephone Service’’ at Table 5.3. United States: 2000, Section 9, pages 299–300, 73 13 CFR 121.201, NAICS code 517110 (changed 77 13 CFR 121.201, NAICS code 517310 (changed Tables 490 and 492. from 513310 in October 2002). to 513330 in October 2002). 69 15 U.S.C. 632. 74 ‘‘Trends in Telephone Service’’ at Table 5.3. 78 ‘‘Trends in Telephone Service’’ at Table 5.3.

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a business is small if it has 1,500 or employees.85 According to Commission annual receipts.90 For the first category fewer employees.79 According to data,86 37 carriers have reported that of Satellite Telecommunications, Commission data,80 761 carriers have they are engaged in the provision of Census Bureau data for 1997 show that reported that they are engaged in the prepaid calling cards. Of these, an there were a total of 324 firms that provision of payphone services. Of estimated 36 have 1,500 or fewer operated for the entire year.91 Of this these, an estimated 757 have 1,500 or employees and one has more than 1,500 total, 273 firms had annual receipts of fewer employees and four have more employees. Consequently, the under $10 million, and an additional 24 than 1,500 employees. Consequently, Commission estimates that the majority firms had receipts of $10 million to the Commission estimates that the of prepaid calling card providers are $24,999,999. Thus, the majority of majority of payphone service providers small entities that may be affected by Satellite Telecommunications firms can are small entities that may be affected our proposed action. be considered small. by our proposed action. 95. The second category—Other 93. 800 and 800-Like Service 90. Interexchange Carriers (IXCs). Telecommunications—includes Subscribers.87 Neither the Commission Neither the Commission nor the SBA ‘‘establishments primarily engaged in nor the SBA has developed a small has developed a small business size * * * providing satellite terminal business size standard specifically for standard specifically for providers of stations and associated facilities 800 and 800-like service (‘‘toll free’’) interexchange services. The appropriate operationally connected with one or size standard under SBA rules is for the subscribers. The appropriate size more terrestrial communications category Wired Telecommunications standard under SBA rules is for the systems and capable of transmitting Carriers. Under that size standard, such category Telecommunications Resellers. telecommunications to or receiving a business is small if it has 1,500 or Under that size standard, such a telecommunications from satellite fewer employees.81 According to business is small if it has 1,500 or fewer systems.’’ 92 According to Census 88 Commission data,82 261 carriers have employees. The most reliable source Bureau data for 1997, there were 439 reported that they are engaged in the of information regarding the number of firms in this category that operated for provision of interexchange service. Of these service subscribers appears to be the entire year.93 Of this total, 424 firms these, an estimated 223 have 1,500 or data the Commission collects on the had annual receipts of $5 million to fewer employees and 38 have more than 800, 888, and 877 numbers in use.89 $9,999,999 and an additional six firms 1,500 employees. Consequently, the According to our data, at the end of had annual receipts of $10 million to Commission estimates that the majority January, 1999, the number of 800 $24,999,990. Thus, under this second of IXCs are small entities that may be numbers assigned was 7,692,955; the size standard, the majority of firms can affected by our proposed action. number of 888 numbers assigned was be considered small. 91. Operator Service Providers (OSPs). 7,706,393; and the number of 877 96. Wireless Service Providers. The Neither the Commission nor the SBA numbers assigned was 1,946,538. We do SBA has developed a small business has developed a small business size not have data specifying the number of size standard for wireless firms within standard specifically for operator these subscribers that are not the two broad economic census service providers. The appropriate size independently owned and operated or categories of ‘‘Paging’’ 94 and ‘‘Cellular standard under SBA rules is for the have more than 1,500 employees, and and Other Wireless category Wired Telecommunications thus are unable at this time to estimate Telecommunications.’’95 Under both Carriers. Under that size standard, such with greater precision the number of toll SBA categories, a wireless business is a business is small if it has 1,500 or free subscribers that would qualify as small if it has 1,500 or fewer employees. fewer employees.83 According to small businesses under the SBA size For the census category of Paging, Commission data,84 23 carriers have standard. Consequently, we estimate Census Bureau data for 1997 show that reported that they are engaged in the that there are 7,692,955 or fewer small there were 1,320 firms in this category, provision of operator services. Of these, entity 800 subscribers; 7,706,393 or total, that operated for the entire year.96 an estimated 22 have 1,500 or fewer fewer small entity 888 subscribers; and Of this total, 1,303 firms had employees and one has more than 1,500 1,946,538 or fewer small entity 877 employment of 999 or fewer employees, employees. Consequently, the subscribers. and an additional 17 firms had Commission estimates that the majority 94. International Service Providers. employment of 1,000 employees or of OSPs are small entities that may be The Commission has not developed a affected by our proposed action. 90 13 CFR.121.201, NAICS codes 517410 and small business size standard specifically 517910 (changed from 513340 and 513390 in 92. Prepaid Calling Card Providers. for providers of international service. October 2002). Neither the Commission nor the SBA The appropriate size standards under 91 U.S. Census Bureau, 1997 Economic Census, has developed a small business size SBA rules are for the two broad Subject Series: Information, ‘‘Establishment and standard specifically for prepaid calling categories of Satellite Firm Size (Including Legal Form of Organization),’’ card providers. The appropriate size Table 4, NAICS code 513340 (issued October 2000). Telecommunications and Other 92 Office of Management and Budget, North standard under SBA rules is for the Telecommunications. Under both American Industry Classification System, page 513 category Telecommunications Resellers. categories, such a business is small if it (1997) (NAICS code 513390, changed to 517910 in Under that size standard, such a has $12.5 million or less in average October 2002). business is small if it has 1,500 or fewer 93 U.S. Census Bureau, 1997 Economic Census, Subject Series: Information, ‘‘Establishment and 85 13 CFR 121.201, NAICS code 517310 (changed Firm Size (Including Legal Form of Organization),’’ 79 3 CFR 121.201, NAICS code 517110 (changed from 513330 in October 2002). Table 4, NAICS code 513390 (issued October 2000). from 513310 in October 2002). 86 ‘‘Trends in Telephone Service’’ at Table 5.3. 94 13 CFR 121.201, NAICS code 513321 (changed 80 ‘‘Trends in Telephone Service’’ at Table 5.3. 87 We include all toll-free number subscribers in to 517211 in October 2002). 81 13 CFR 121.201, NAICS code 517110 (changed this category, including those for 888 numbers. 95 13 CFR 121.201, NAICS code 513322 (changed from 513310 in October 2002). 88 13 CFR 121.201, NAICS code 517310 (changed to 517212 in October 2002). 82 ‘‘Trends in Telephone Service’’ at Table 5.3. from 513330 in October 2002). 96 U.S. Census Bureau, 1997 Economic Census, 83 13 CFR 121.201, NAICS code 517110 (changed 89 FCC, Common Carrier Bureau, Industry Subject Series: ‘‘Information,’’ Table 5, Employment from 513310 in October 2002). Analysis Division, Study on Telephone Trends, Size of Firms Subject to Federal Income Tax: 1997, 84 ‘‘Trends in Telephone Service’’ at Table 5.3. Tables 21.2, 21.3, and 21.4 (Feb. 19, 1999). NAICS code 513321 (issued October 2000).

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more.97 Thus, under this category and broad economic census category more.111 Thus, under this category and associated small business size standard, ‘‘Cellular and Other Wireless associated small business size standard, the great majority of firms can be Telecommunications.’’ 104 Under this the great majority of firms can be considered small. For the census SBA category, a wireless business is considered small. category Cellular and Other Wireless small if it has 1,500 or fewer employees. 100. In the Paging Second Report and Telecommunications, Census Bureau For the census category Cellular and Order, the Commission adopted a size data for 1997 show that there were 977 Other Wireless Telecommunications standard for ‘‘small businesses’’ for firms in this category, total, that firms, Census Bureau data for 1997 purposes of determining their eligibility operated for the entire year.98 Of this show that there were 977 firms in this for special provisions such as bidding total, 965 firms had employment of 999 category, total, that operated for the credits and installment payments.112 A or fewer employees, and an additional entire year.105 Of this total, 965 firms small business is an entity that, together 12 firms had employment of 1,000 had employment of 999 or fewer with its affiliates and controlling employees or more.99 Thus, under this employees, and an additional 12 firms principals, has average gross revenues second category and size standard, the had employment of 1,000 employees or not exceeding $15 million for the great majority of firms can, again, be more.106 Thus, under this category and preceding three years.113 The SBA has considered small. size standard, the great majority of firms approved this definition.114 An auction 97. Internet Service Providers. The can be considered small. According to of Metropolitan Economic Area (MEA) SBA has developed a small business the most recent Trends in Telephone licenses commenced on February 24, size standard for Internet Service Service data, 719 carriers reported that 2000, and closed on March 2, 2000. Of Providers. This category comprises they were engaged in the provision of the 2,499 licenses auctioned, 985 were establishments ‘‘primarily engaged in cellular service, personal sold.115 Fifty-seven companies claiming providing direct access through communications service, or specialized small business status won 440 telecommunications networks to mobile radio telephony services, which licenses.116 An auction of MEA and computer-held information compiled or are placed together in the data.107 We Economic Area (EA) licenses published by others.’’ 100 Under the SBA have estimated that 294 of these are commenced on October 30, 2001, and size standard, such a business is small small, under the SBA small business closed on December 5, 2001. Of the if it has average annual receipts of $21 size standard.108 15,514 licenses auctioned, 5,323 were million or less.101 According to Census 99. Common Carrier Paging. The SBA sold.117 One hundred thirty-two Bureau data for 1997, there were 2,751 has developed a small business size companies claiming small business firms in this category that operated for standard for wireless firms within the status purchased 3,724 licenses. A third the entire year.102 Of these, 2,659 firms broad economic census categories of auction, consisting of 8,874 licenses in had annual receipts of under $10 ‘‘Cellular and Other Wireless each of 175 EAs and 1,328 licenses in million, and an additional 67 firms had Telecommunications.’’ 109 Under this all but three of the 51 MEAs receipts of between $10 million and SBA category, a wireless business is commenced on May 13, 2003, and $24,999,999.103 Thus, under this size small if it has 1,500 or fewer employees. closed on May 28, 2003. Seventy-seven standard, the great majority of firms can For the census category of Paging, bidders claiming small or very small be considered small entities. Census Bureau data for 1997 show that business status won 2,093 licenses.118 98. Cellular Licensees. The SBA has there were 1,320 firms in this category, developed a small business size total, that operated for the entire year.110 111 U.S. Census Bureau, 1997 Economic Census, standard for wireless firms within the Of this total, 1,303 firms had Subject Series: ‘‘Information,’’ Table 5, Employment employment of 999 or fewer employees, Size of Firms Subject to Federal Income Tax: 1997, 97 U.S. Census Bureau, 1997 Economic Census, NAICS code 513321 (issued October 2000). The and an additional 17 firms had census data do not provide a more precise estimate Subject Series: ‘‘Information,’’ Table 5, Employment employment of 1,000 employees or Size of Firms Subject to Federal Income Tax: 1997, of the number of firms that have employment of NAICS code 513321 (issued October 2000). The 1,500 or fewer employees; the largest category census data do not provide a more precise estimate 104 13 CFR 121.201, NAICS code 513322 (changed provided is ‘‘Firms with 1000 employees or more.’’ of the number of firms that have employment of to 517212 in October 2002). 112 Revision of Part 22 and Part 90 of the 1,500 or fewer employees; the largest category 105 U.S. Census Bureau, 1997 Economic Census, Commission’s Rules to Facilitate Future provided is ‘‘Firms with 1000 employees or more.’’ Subject Series: ‘‘Information,’’ Table 5, Employment Development of Paging Systems, Second Report and 98 U.S. Census Bureau, 1997 Economic Census, Size of Firms Subject to Federal Income Tax: 1997, Order, 12 FCC Rcd 2732, 2811–2812, paragraphs Subject Series: ‘‘Information,’’ Table 5, Employment NAICS code 513322 (issued October 2000). 178–181 (Paging Second Report and Order); see also Size of Firms Subject to Federal Income Tax: 1997, 106 U.S. Census Bureau, 1997 Economic Census, Revision of Part 22 and Part 90 of the Commission’s NAICS code 513322 (issued October 2000). Subject Series: ‘‘Information,’’ Table 5, Employment Rules to Facilitate Future Development of Paging 99 U.S. Census Bureau, 1997 Economic Census, Size of Firms Subject to Federal Income Tax: 1997, Systems, Memorandum Opinion and Order on Subject Series: ‘‘Information,’’ Table 5, Employment NAICS code 513322 (issued October 2000). The Reconsideration, 14 FCC Rcd 10030, 10085–10088, Size of Firms Subject to Federal Income Tax: 1997, census data do not provide a more precise estimate paragraphs 98–107 (1999). NAICS code 513322 (issued October 2000). The of the number of firms that have employment of 113 Paging Second Report and Order, 12 FCC Rcd census data do not provide a more precise estimate 1,500 or fewer employees; the largest category at 2811, paragraph 179. of the number of firms that have employment of provided is ‘‘Firms with 1000 employees or more.’’ 114 See Letter to Amy Zoslov, Chief, Auctions and 1,500 or fewer employees; the largest category 107 FCC, Wireline Competition Bureau, Industry Industry Analysis Division, Wireless provided is ‘‘Firms with 1000 employees or more.’’ Analysis and Technology Division, ‘‘Trends in Telecommunications Bureau, from Aida Alvarez, 100 Office of Management and Budget, North Telephone Service’’ at Table 5.3, page 5–5 (August Administrator, Small Business Administration, American Industry Classification System, page 515 2003). This source uses data that are current as of dated December 2, 1998. (1997). NAICS code 514191, ‘‘On-Line Information December 31, 2001. 115 See ‘‘929 and 931 MHz Paging Auction Services’’ (changed to current name and to code 108 FCC, Wireline Competition Bureau, Industry Closes,’’ Public Notice, 15 FCC Rcd 4858 (WTB 518111 in October 2002). Analysis and Technology Division, ‘‘Trends in 2000). 101 13 CFR 121.201, NAICS code 518111. Telephone Service’’ at Table 5.3, page 5–5 (August 116 See ‘‘929 and 931 MHz Paging Auction 102 U.S. Census Bureau, 1997 Economic Census, 2003). This source uses data that are current as of Closes,’’ Public Notice, 15 FCC Rcd 4858 (WTB Subject Series: ‘‘Information,’’ Table 4, Receipts December 31, 2001. 2000). Size of Firms Subject to Federal Income Tax: 1997, 109 13 CFR 121.201, NAICS code 513322 (changed 117 See ‘‘Lower and Upper Paging Band Auction NAICS code 514191 (issued October 2000). to 517212 in October 2002). Closes,’’ Public Notice, 16 FCC Rcd 21821 (WTB 103 U.S. Census Bureau, 1997 Economic Census, 110 U.S. Census Bureau, 1997 Economic Census, 2002). Subject Series: ‘‘Information,’’ Table 4, Receipts Subject Series: ‘‘Information,’’ Table 5, Employment 118 See ‘‘Lower and Upper Paging Bands Auction Size of Firms Subject to Federal Income Tax: 1997, Size of Firms Subject to Federal Income Tax: 1997, Closes,’’ Public Notice, 18 FCC Rcd 11154 (WTB NAICS code 514191 (issued October 2000). NAICS code 513321 (issued October 2000). 2003).

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Currently, there are approximately data, 719 carriers reported that they ‘‘small’’ or ‘‘very small’’ businesses.131 74,000 Common Carrier Paging licenses. were engaged in wireless telephony.125 Subsequent events, concerning Auction According to the most recent Trends in We have estimated that 294 of these are 35, including judicial and agency Telephone Service, 608 private and small under the SBA small business size determinations, resulted in a total of 163 common carriers reported that they standard. C and F Block licenses being available were engaged in the provision of either 103. Broadband Personal for grant. paging or ‘‘other mobile’’ services.119 Of Communications Service. The 105. Narrowband Personal these, we estimate that 589 are small, broadband personal communications Communications Services. The under the SBA-approved small business services (PCS) spectrum is divided into Commission held an auction for size standard.120 We estimate that the six frequency blocks designated A Narrowband PCS licenses that majority of common carrier paging through F, and the Commission has held commenced on July 25, 1994, and providers would qualify as small auctions for each block. The closed on July 29, 1994. A second entities under the SBA definition. Commission has created a small auction commenced on October 26, 101. Wireless Communications business size standard for Blocks C and 1994 and closed on November 8, 1994. Services. This service can be used for F as an entity that has average gross For purposes of the first two fixed, mobile, radiolocation, and digital revenues of less than $40 million in the Narrowband PCS auctions, ‘‘small audio broadcasting satellite uses. The three previous calendar years.126 For businesses’’ were entities with average Commission defined ‘‘small business’’ Block F, an additional small business gross revenues for the prior three for the wireless communications size standard for ‘‘very small business’’ calendar years of $40 million or less.132 services (WCS) auction as an entity with was added and is defined as an entity Through these auctions, the average gross revenues of $40 million that, together with its affiliates, has Commission awarded a total of 41 for each of the three preceding years, average gross revenues of not more than licenses, 11 of which were obtained by and a ‘‘very small business’’ as an entity $15 million for the preceding three four small businesses.133 To ensure with average gross revenues of $15 calendar years.127 These small business meaningful participation by small million for each of the three preceding size standards, in the context of business entities in future auctions, the years.121 The SBA has approved these broadband PCS auctions, have been Commission adopted a two-tiered small definitions.122 The Commission approved by the SBA.128 No small business size standard in the auctioned geographic area licenses in businesses within the SBA-approved Narrowband PCS Second Report and the WCS service. In the auction, which small business size standards bid Order.134 A ‘‘small business’’ is an commenced on April 15, 1997 and successfully for licenses in Blocks A entity that, together with affiliates and closed on April 25, 1997, there were and B. There were 90 winning bidders controlling interests, has average gross seven bidders that won 31 licenses that that qualified as small entities in the revenues for the three preceding years of qualified as very small business entities, Block C auctions. A total of 93 ‘‘small’’ not more than $40 million.135 A ‘‘very and one bidder that won one license and ‘‘very small’’ business bidders won small business’’ is an entity that, that qualified as a small business entity. approximately 40 percent of the 1,479 together with affiliates and controlling An auction for one license in the 1670– licenses for Blocks D, E, and F.129 On interests, has average gross revenues for 1674 MHz band commenced on April March 23, 1999, the Commission the three preceding years of not more 30, 2003 and closed the same day. One reauctioned 155 C, D, E, and F Block than $15 million.136 The SBA has license was awarded. The winning licenses; there were 113 small business approved these small business size bidder was not a small entity. winning bidders.130 standards.137 A third auction 102. Wireless Telephony. Wireless 104. On January 26, 2001, the telephony includes cellular, personal Commission completed the auction of 131 See ‘‘C and F Block Broadband PCS Auction communications services, and 422 C and F Broadband PCS licenses in Closes; Winning Bidders Announced,’’ Public specialized mobile radio telephony Auction No. 35. Of the 35 winning Notice, 16 FCC Rcd 2339 (2001). 132 Implementation of Section 309(j) of the carriers. The SBA has developed a small bidders in this auction, 29 qualified as Communications Act—Competitive Bidding business size standard for ‘‘Cellular and Narrowband PCS, Third Memorandum Opinion and Other Wireless Telecommunications’’ 125 FCC, Wireline Competition Bureau, Industry Order and Further Notice of Proposed Rulemaking, services.123 Under the SBA small Analysis and Technology Division, ‘‘Trends in 10 FCC Rcd 175, 196, paragraph 46 (1994). 133 business size standard, a business is Telephone Service’’ at Table 5.3, page 5–5 (August See ‘‘Announcing the High Bidders in the 2003). This source uses data that are current as of Auction of ten Nationwide Narrowband PCS small if it has 1,500 or fewer December 31, 2001. Licenses, Winning Bids Total $617,006,674,’’ Public employees.124 According to the most 126 See Amendment of Parts 20 and 24 of the Notice, PNWL 94–004 (released Aug. 2, 1994); recent Trends in Telephone Service Commission’s Rules—Broadband PCS Competitive ‘‘Announcing the High Bidders in the Auction of 30 Bidding and the Commercial Mobile Radio Service Regional Narrowband PCS Licenses; Winning Bids Spectrum Cap, Report and Order, 11 FCC Rcd 7824, Total $490,901,787,’’ Public Notice, PNWL 94–27 119 See Trends in Telephone Service, Industry 7850–7852, paragraphs 57–60 (1996); see also 47 (released Nov. 9, 1994). Analysis Division, Wireline Competition Bureau, CFR 24.720(b). 134 Amendment of the Commission’s Rules to Table 5.3 (Number of Telecommunications Service 127 See Amendment of Parts 20 and 24 of the Establish New Personal Communications Services, Providers that are Small Businesses) (May 2002). Commission’s Rules—Broadband PCS Competitive Narrowband PCS, Second Report and Order and 120 13 CFR 121.201, NAICS code 517211. Bidding and the Commercial Mobile Radio Service Second Further Notice of Proposed Rule Making, 15 121 121 Amendment of the Commission’s Rules to Spectrum Cap, Report and Order, 11 FCC Rcd 7824, FCC Rcd 10456, 10476, paragraph 40 (2000). Establish Part 27, the Wireless Communications 7852, paragraph 60. 135 Amendment of the Commission’s Rules to Service (WCS), Report and Order, 12 FCC Rcd 128 See Letter to Amy Zoslov, Chief, Auctions and Establish New Personal Communications Services, 10785, 10879, paragraph 194 (1997). Industry Analysis Division, Wireless Narrowband PCS, Second Report and Order and 122 See Letter to Amy Zoslov, Chief, Auctions and Telecommunications Bureau, Federal Second Further Notice of Proposed Rule Making, 15 Industry Analysis Division, Wireless Communications Commission, from Aida Alvarez, FCC Rcd 10456, 10476, paragraph 40 (2000). Telecommunications Bureau, Federal Administrator, Small Business Administration, 136 Amendment of the Commission’s Rules to Communications Commission, from Aida Alvarez, dated December 2, 1998. Establish New Personal Communications Services, Administrator, Small Business Administration, 129 FCC News, ‘‘Broadband PCS, D, E and F Block Narrowband PCS, Second Report and Order and dated December 2, 1998. Auction Closes,’’ No. 71744 (released January 14, Second Further Notice of Proposed Rule Making, 15 123 13 CFR 121.201, NAICS code 513322 (changed 1997). FCC Rcd 10456, 10476, paragraph 40 (2000). to 517212 in October 2002). 130 See ‘‘C, D, E, and F Block Broadband PCS 137 See Letter to Amy Zoslov, Chief, Auctions and 124 13 CFR 121.201, NAICS code 513322 (changed Auction Closes,’’ Public Notice, 14 FCC Rcd 6688 Industry Analysis Division, Wireless to 517212 in October 2002). (WTB 1999). Continued

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commenced on October 3, 2001 and and won a total of 329 licenses.144 A closed on September 21, 2000.153 Of the closed on October 16, 2001. Here, five second auction commenced on May 28, 104 licenses auctioned, 96 licenses were bidders won 317 (Metropolitan Trading 2003, and closed on June 13, 2003, and sold to nine bidders. Five of these Areas and nationwide) licenses.138 included 256 licenses: 5 EAG licenses bidders were small businesses that won Three of these claimed status as a small and 476 Cellular Market Area a total of 26 licenses. A second auction or very small entity and won 311 licenses.145 Seventeen winning bidders of 700 MHz Guard Band licenses licenses. claimed small or very small business commenced on February 13, 2001, and 106. Lower 700 MHz Band Licenses. status and won 60 licenses, and nine closed on February 21, 2001. All eight We adopted criteria for defining three winning bidders claimed entrepreneur of the licenses auctioned were sold to groups of small businesses for purposes status and won 154 licenses.146 three bidders. One of these bidders was of determining their eligibility for 107. Upper 700 MHz Band Licenses. a small business that won a total of two 154 special provisions such as bidding The Commission released a Report and licenses. credits.139 We have defined a ‘‘small Order, authorizing service in the upper 109. Specialized Mobile Radio. The business’’ as an entity that, together 700 MHz band.147 This auction, Commission awards ‘‘small entity’’ with its affiliates and controlling previously scheduled for January 13, bidding credits in auctions for principals, has average gross revenues 2003, has been postponed.148 Specialized Mobile Radio (SMR) not exceeding $40 million for the geographic area licenses in the 800 MHz preceding three years.140 A ‘‘very small 108. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, we and 900 MHz bands to firms that had business’’ is defined as an entity that, revenues of no more than $15 million in together with its affiliates and adopted size standards for ‘‘small businesses’’ and ‘‘very small each of the three previous calendar controlling principals, has average gross years.155 The Commission awards ‘‘very revenues that are not more than $15 businesses’’ for purposes of determining 141 their eligibility for special provisions small entity’’ bidding credits to firms million for the preceding three years. that had revenues of no more than $3 Additionally, the lower 700 MHz such as bidding credits and installment 149 million in each of the three previous Service has a third category of small payments. A small business in this calendar years.156 The SBA has business status that may be claimed for service is an entity that, together with its affiliates and controlling principals, approved these small business size Metropolitan/Rural Service Area (MSA/ 157 RSA) licenses. The third category is has average gross revenues not standards for the 900 MHz Service. ‘‘entrepreneur,’’ which is defined as an exceeding $40 million for the preceding The Commission has held auctions for entity that, together with its affiliates three years.150 Additionally, a very geographic area licenses in the 800 MHz and controlling principals, has average small business is an entity that, together and 900 MHz bands. The 900 MHz SMR gross revenues that are not more than $3 with its affiliates and controlling auction began on December 5, 1995, and million for the preceding three years.142 principals, has average gross revenues closed on April 15, 1996. Sixty bidders The SBA has approved these small size that are not more than $15 million for claiming that they qualified as small standards.143 An auction of 740 licenses the preceding three years.151 SBA businesses under the $15 million size (one license in each of the 734 MSAs/ approval of these definitions is not standard won 263 geographic area RSAs and one license in each of the six required.152 An auction of 52 Major licenses in the 900 MHz SMR band. The Economic Area Groupings (EAGs)) Economic Area (MEA) licenses 800 MHz SMR auction for the upper 200 commenced on August 27, 2002, and commenced on September 6, 2000, and channels began on October 28, 1997, closed on September 18, 2002. Of the and was completed on December 8, 740 licenses available for auction, 484 144 See ‘‘Lower 700 MHz Band Auction Closes,’’ 1997. Ten bidders claiming that they licenses were sold to 102 winning Public Notice, 17 FCC Rcd 17272 (WTB 2002). qualified as small businesses under the bidders. Seventy-two of the winning 145 See ‘‘Lower 700 MHz Band Auction Closes,’’ $15 million size standard won 38 bidders claimed small business, very Public Notice, 18 FCC Rcd 11873 (WTB 2003). geographic area licenses for the upper small business or entrepreneur status 146 See ‘‘Lower 700 MHz Band Auction Closes,’’ 200 channels in the 800 MHz SMR Public Notice, 18 FCC Rcd 11873 (WTB 2003). 158 147 Service Rules for the 746–764 and 776–794 band. A second auction for the 800 Telecommunications Bureau, Federal MHz Bands, and Revisions to Part 27 of the MHz band was held on January 10, 2002 Communications Commission, from Aida Alvarez, Commission’s Rules, Second Memorandum and closed on January 17, 2002 and Administrator, Small Business Administration, Opinion and Order, 16 FCC Rcd 1239 (2001). included 23 BEA licenses. One bidder dated December 2, 1998. 148 See ‘‘Auction of Licenses for 747–762 and 138 See ‘‘Narrowband PCS Auction Closes,’’ 777–792 MHz Bands (Auction No. 31) Is Public Notice, 16 FCC Rcd 18663 (WTB 2001). Rescheduled,’’ Public Notice, 16 FCC Rcd 13079 153 See ‘‘700 MHz Guard Bands Auction Closes: 139 See Reallocation and Service Rules for the (WTB 2003). Winning Bidders Announced,’’ Public Notice, 15 698–746 MHz Spectrum Band (Television Channels 149 See Service Rules for the 746–764 MHz Bands, FCC Rcd 18026 (2000). 52–59), Report and Order, 17 FCC Rcd 1022 (2002). and Revisions to Part 27 of the Commission’s Rules, 154 See ‘‘700 MHz Guard Bands Auction Closes: 140 See Reallocation and Service Rules for the Second Report and Order, 15 FCC Rcd 5299 (2000). Winning Bidders Announced,’’ Public Notice, 16 698–746 MHz Spectrum Band (Television Channels 150 See Service Rules for the 746–764 MHz Bands, FCC Rcd 4590 (WTB 2001). 52–59), Report and Order, 17 FCC Rcd 1022, 1087– and Revisions to Part 27 of the Commission’s Rules, 155 47 CFR 90.814(b)(1). 88, paragraph 172 (2002). Second Report and Order, 15 FCC Rcd 5299, 5343, 156 47 CFR 90.814(b)(1). 141 See Reallocation and Service Rules for the paragraph 108 (2000). 157 See Letter to Thomas Sugrue, Chief, Wireless 698–746 MHz Spectrum Band (Television Channels 151 See Service Rules for the 746–764 MHz Bands, Telecommunications Bureau, Federal 52–59), Report and Order, 17 FCC Rcd 1022, 1087– and Revisions to Part 27 of the Commission’s Rules, Communications Commission, from Aida Alvarez, 88, paragraph 172 (2002). Second Report and Order, 15 FCC Rcd 5299, 5343, Administrator, Small Business Administration, 142 See Reallocation and Service Rules for the paragraph 108 (2000). dated August 10, 1999. We note that, although a 698–746 MHz Spectrum Band (Television Channels 152 See Service Rules for the 746–764 MHz Bands, request was also sent to the SBA requesting 52–59), Report and Order, 17 FCC Rcd 1022, 1088, and Revisions to Part 27 of the Commission’s Rules, approval for the small business size standard for paragraph 173 (2002). Second Report and Order, 15 FCC Rcd 5299, 5343, 800 MHz, approval is still pending. 143 See Letter to Thomas Sugrue, Chief, Wireless paragraph 108 n.246 (for the 746–764 MHz and 158 See ‘‘Correction to Public Notice DA 96–586 Telecommunications Bureau, Federal 776–794 MHz bands, the Commission is exempt ’FCC Announces Winning Bidders in the Auction Communications Commission, from Aida Alvarez, from 15 U.S.C. section 632, which requires Federal of 1020 Licenses to Provide 900 MHz SMR in Major Administrator, Small Business Administration, agencies to obtain SBA approval before adopting Trading Areas,’’’ Public Notice, 18 FCC Rcd 18367 dated August 10, 1999. small business size standards). (WTB 1996).

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claiming small business status won five is a wireless company employing no won 373 licenses in the first 220 MHz licenses.159 more than 1,500 persons.162 According auction. A second auction included 225 110. The auction of the 1,053 800 to the Census Bureau data for 1997, only licenses: 216 EA licenses and 9 EAG MHz SMR geographic area licenses for twelve firms out of a total of 1,238 such licenses. Fourteen companies claiming the General Category channels began on firms that operated for the entire year in small business status won 158 August 16, 2000, and was completed on 1997, had 1,000 or more employees.163 licenses.170 A third auction included September 1, 2000. Eleven bidders won If this general ratio continues in the four licenses: 2 BEA licenses and 2 EAG 108 geographic area licenses for the context of Phase I 220 MHz licensees, licenses in the 220 MHz Service. No General Category channels in the 800 the Commission estimates that nearly all small or very small business won any of MHz SMR band qualified as small such licensees are small businesses these licenses.171 businesses under the $15 million size under the SBA’s small business 114. Private Land Mobile Radio standard.160 In an auction completed on standard. (PLMR). PLMR systems serve an December 5, 2000, a total of 2,800 113. 220 MHz Radio Service—Phase II essential role in a range of industrial, Economic Area licenses in the lower 80 Licensees. The 220 MHz service has business, land transportation, and channels of the 800 MHz SMR service both Phase I and Phase II licenses. The public safety activities. These radios are were sold.161 Of the 22 winning bidders, Phase II 220 MHz service is a new used by companies of all sizes operating 19 claimed small business status and service, and is subject to spectrum in all U.S. business categories, and are won 129 licenses. Thus, combining all auctions. often used in support of the licensee’s three auctions, 40 winning bidders for In the 220 MHz Third Report and primary (non-telecommunications) geographic licenses in the 800 MHz Order, we adopted a small business size business operations. For the purpose of SMR band claimed status as small standard for defining ‘‘small’’ and ‘‘very determining whether a licensee of a business. small’’ businesses for purposes of PLMR system is a small business as 111. In addition, there are numerous determining their eligibility for special defined by the SBA, we could use the incumbent site-by-site SMR licensees provisions such as bidding credits and definition for ‘‘Cellular and Other and licensees with extended installment payments.164 This small Wireless Telecommunications.’’ This implementation authorizations in the business standard indicates that a definition provides that a small entity is 800 and 900 MHz bands. We do not ‘‘small business’’ is an entity that, any such entity employing no more than know how many firms provide 800 MHz together with its affiliates and 1,500 persons.172 The Commission does or 900 MHz geographic area SMR controlling principals, has average gross not require PLMR licensees to disclose pursuant to extended implementation revenues not exceeding $15 million for information about number of authorizations, nor how many of these the preceding three years.165 A ‘‘very employees, so the Commission does not providers have annual revenues of no small business’’ is defined as an entity have information that could be used to more than $15 million. One firm has that, together with its affiliates and determine how many PLMR licensees over $15 million in revenues. We controlling principals, has average gross constitute small entities under this assume, for purposes of this analysis, revenues that do not exceed $3 million definition. Moreover, because PMLR that all of the remaining existing for the preceding three years.166 The licensees generally are not in the extended implementation SBA has approved these small size business of providing cellular or other authorizations are held by small standards.167 Auctions of Phase II wireless telecommunications services entities, as that small business size licenses commenced on September 15, but instead use the licensed facilities in standard is approved by the SBA. support of other business activities, we 112. 220 MHz Radio Service—Phase I 1998, and closed on October 22, 1998.168 In the first auction, 908 are not certain that the Cellular and Licensees. The 220 MHz service has Other Wireless Telecommunications both Phase I and Phase II licenses. Phase licenses were auctioned in three category is appropriate for determining I licensing was conducted by lotteries in different-sized geographic areas: three how many PLMR licensees are small 1992 and 1993. There are approximately nationwide licenses, 30 Regional entities for this analysis. Rather, it may 1,515 such non-nationwide licensees Economic Area Group (EAG) Licenses, be more appropriate to assess PLMR and four nationwide licensees currently and 875 Economic Area (EA) Licenses. licensees under the standards applied to authorized to operate in the 220 MHz Of the 908 licenses auctioned, 693 were 169 the particular industry subsector to band. The Commission has not sold. Thirty-nine small businesses which the licensee belongs.173 developed a definition of small entities 162 115. The Commission’s 1994 Annual specifically applicable to such 13 CFR 121.201, NAICS code 513322 (changed to 517212 in October 2002). Report on PLMRs 174 indicates that at incumbent 220 MHz Phase I licensees. 163 U.S. Census Bureau, 1997 Economic Census, the end of fiscal year 1994, there were To estimate the number of such Subject Series: Information, ‘‘Establishment and 1,087,267 licensees operating licensees that are small businesses, we Firm Size (Including Legal Form of Organization),’’ 12,481,989 transmitters in the PLMR apply the small business size standard Table 5, NAICS code 513322 (October 2000). 164 bands below 512 MHz. Because any under the SBA rules applicable to Amendment of Part 90 of the Commission’s Rules to Provide For the Use of the 220–222 MHz entity engaged in a commercial activity ‘‘Cellular and Other Wireless Band by the Private Land Mobile Radio Service, is eligible to hold a PLMR license, the Telecommunications’’ companies. This Third Report and Order, 12 FCC Rcd 10943, 11068– revised rules in this context could category provides that a small business 70, paragraphs 291–295 (1997). 165 Id. at 11068, paragraph 291. 166 159 Id. is Made,’’ Public Notice, 14 FCC Rcd 1085 (WTB See ‘‘Multi-Radio Service Auction Closes,’’ 1999). Public Notice, 17 FCC Rcd 1446 (WTB 2002). 167 See Letter to Daniel Phythyon, Chief, Wireless 170 See ‘‘Phase II 220 MHz Service Spectrum 160 See, ‘‘800 MHz Specialized Mobile Radio Telecommunications Bureau, Federal Auction Closes,’’ Public Notice, 14 FCC Rcd 11218 (SMR) Service General Category (851–854 MHz) and Communications Commission, from Aida Alvarez, (WTB 1999). Upper Band (861-865 MHz) Auction Closes; Administrator, Small Business Administration, 171 Winning Bidders Announced,’’ Public Notice, 15 dated January 6, 1998. See ‘‘Multi-Radio Service Auction Closes,’’ FCC Rcd 17162 (2000). 168 See generally ‘‘220 MHz Service Auction Public Notice, 17 FCC Rcd 1446 (WTB 2002). 172 161 See, ‘‘800 MHz SMR Service Lower 80 Closes,’’ Public Notice, 14 FCC Rcd 605 (WTB See 13 CFR 121.201, NAICS code 517212. Channels Auction Closes; Winning Bidders 1998). 173 See generally 13 CFR 121.201. Announced,’’ Public Notice, 16 FCC Rcd 1736 169 See ‘‘FCC Announces It is Prepared to Grant 174 Federal Communications Commission, 60th (2000). 654 Phase II 220 MHz Licenses After Final Payment Annual Report, Fiscal Year 1994, at paragraph 116.

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potentially impact every small business calendar years.179 An additional size SBA has approved these small business in the United States. standard for ‘‘very small business’’ is: size standards in the context of LMDS 116. Fixed Microwave Services. Fixed An entity that, together with affiliates, auctions.185 There were 93 winning microwave services include common has average gross revenues of not more bidders that qualified as small entities carrier,175 private operational-fixed,176 than $15 million for the preceding three in the LMDS auctions. A total of 93 and broadcast auxiliary radio calendar years.180 The SBA has small and very small business bidders services.177 At present, there are approved these small business size won approximately 277 A Block approximately 22,015 common carrier standards.181 The auction of the 2,173 licenses and 387 B Block licenses. On fixed licensees and 61,670 private 39 GHz licenses began on April 12, 2000 March 27, 1999, the Commission re- operational-fixed licensees and and closed on May 8, 2000. The 18 auctioned 161 licenses; there were 32 broadcast auxiliary radio licensees in bidders who claimed small business small and very small business winning the microwave services. The status won 849 licenses. Consequently, that won 119 licenses. Commission has not created a size the Commission estimates that 18 or 119. 218–219 MHz Service. The first standard for a small business fewer 39 GHz licensees are small auction of 218–219 MHz (previously specifically with respect to fixed entities that may be affected by the rules referred to as the Interactive and Video microwave services. For purposes of and polices proposed herein. Data Service or IVDS) spectrum resulted this analysis, the Commission uses the 118. Local Multipoint Distribution in 178 entities winning licenses for 594 SBA small business size standard for the Service. Local Multipoint Distribution Metropolitan Statistical Areas category ‘‘Cellular and Other Service (LMDS) is a fixed broadband (MSAs).186 Of the 594 licenses, 567 Telecommunications,’’ which is 1,500 point-to-multipoint microwave service were won by 167 entities qualifying as or fewer employees.178 The Commission that provides for two-way video a small business. For that auction, we does not have data specifying the telecommunications.182 The auction of defined a small business as an entity number of these licensees that have the 986 Local Multipoint Distribution that, together with its affiliates, has no more than 1,500 employees, and thus Service (LMDS) licenses began on more than a $6 million net worth and, are unable at this time to estimate with February 18, 1998 and closed on March after federal income taxes (excluding greater precision the number of fixed 25, 1998. The Commission established a any carry over losses), has no more than microwave service licensees that would small business size standard for LMDS $2 million in annual profits each year 187 qualify as small business concerns licenses as an entity that has average for the previous two years. In the under the SBA’s small business size gross revenues of less than $40 million 218–219 MHz Report and Order and 183 standard. Consequently, the in the three previous calendar years. Memorandum Opinion and Order, we Commission estimates that there are up An additional small business size defined a small business as an entity to 22,015 common carrier fixed standard for ‘‘very small business’’ was that, together with its affiliates and licensees and up to 61,670 private added as an entity that, together with its persons or entities that hold interests in operational-fixed licensees and affiliates, has average gross revenues of such an entity and their affiliates, has broadcast auxiliary radio licensees in not more than $15 million for the average annual gross revenues not preceding three calendar years.184 The exceeding $15 million for the preceding the microwave services that may be 188 small and may be affected by the rules three years. A very small business is 179 See Amendment of the Commission’s Rules defined as an entity that, together with and policies proposed herein. We noted, Regarding the 37.0–38.6 GHz and 38.6–40.0 GHz however, that the common carrier its affiliates and persons or entities that Bands, ET Docket No. 95–183, Report and Order, hold interests in such an entity and its microwave fixed licensee category 12 FCC Rcd 18600 (1997), 63 Fed.Reg. 6079 (Feb. affiliates, has average annual gross includes some large entities. 6, 1998). 180 Id. revenues not exceeding $3 million for 117. 39 GHz Service. The Commission 181 See Letter to Kathleen O’Brien Ham, Chief, the preceding three years.189 The SBA created a special small business size Auctions and Industry Analysis Division, Wireless has approved of these definitions.190 At standard for 39 GHz licenses—an entity Telecommunications Bureau, FCC, from Aida this time, we cannot estimate the that has average gross revenues of $40 Alvarez, Administrator, SBA (Feb. 4, 1998) (VoIP); number of licenses that will be won by million or less in the three previous See Letter to Margaret Wiener, Chief, Auctions and Industry Analysis Division, Wireless entities qualifying as small or very small Telecommunications Bureau, Federal businesses under our rules in future 175 See 47 CFR 101 et seq. (formerly, Part 21 of Communications Commission, from Hector Barreto, the Commission’s Rules) for common carrier fixed Administrator, Small Business Administration, microwave services (except Multipoint Distribution dated January 18, 2002 (WTB). Satellite Services, Second Report and Order, Order Service). 182 See Rulemaking to Amend Parts 1, 2, 21, 25, on Reconsideration, and Fifth Notice of Proposed 176 Persons eligible under parts 80 and 90 of the of the Commission’s Rules to Redesignate the 27.5– Rule Making, 12 FCC Rcd 12545, 12689–90, Commission’s Rules can use Private Operational- 29.5 GHz Frequency Band, Reallocate the 29.5–30.5 paragraph 348 (1997). Fixed Microwave services. See 47 CFR Parts 80 and Frequency Band, to Establish Rules and Policies for 185 See Letter to Dan Phythyon, Chief, Wireless 90. Stations in this service are called operational- Local Multipoint Distribution Service and for Fixed Telecommunications Bureau, FCC, from Aida fixed to distinguish them from common carrier and Satellite Services, Second Report and Order, Order Alvarez, Administrator, SBA (Jan. 6, 1998). public fixed stations. Only the licensee may use the on Reconsideration, and Fifth Notice of Proposed 186 See ‘‘Interactive Video and Data Service operational-fixed station, and only for Rule Making, 12 FCC Rcd 12545, 12689–90, (IVDS) Applications Accepted for Filing,’’ Public communications related to the licensee’s paragraph 348 (1997). Notice, 9 FCC Rcd 6227 (1994). commercial, industrial, or safety operations. 183 See Rulemaking to Amend Parts 1, 2, 21, 25, 187 Implementation of Section 309(j) of the 177 Auxiliary Microwave Service is governed by of the Commission’s Rules to Redesignate the 27.5– Communications Act—Competitive Bidding, Fourth Part 74 of Title 47 of the Commission’s Rules. See 29.5 GHz Frequency Band, Reallocate the 29.5–30.5 Report and Order, 9 FCC Rcd 2330 (1994). 47 CFR Part 74. This service is available to licensees Frequency Band, to Establish Rules and Policies for 188 Amendment of Part 95 of the Commission’s of broadcast stations and to broadcast and cable Local Multipoint Distribution Service and for Fixed Rules to Provide Regulatory Flexibility in the 218– network entities. Broadcast auxiliary microwave Satellite Services, Second Report and Order, Order 219 MHz Service, Report and Order and stations are used for relaying broadcast television on Reconsideration, and Fifth Notice of Proposed Memorandum Opinion and Order, 15 FCC Rcd 1497 signals from the studio to the transmitter, or Rule Making, 12 FCC Rcd 12545, 12689–90, (1999). between two points such as a main studio and an paragraph 348 (1997). 189 Id. auxiliary studio. The service also includes mobile 184 See Rulemaking to Amend Parts 1, 2, 21, 25, 190 See Letter to Daniel Phythyon, Chief, Wireless television pickups, which relay signals from a of the Commission’s Rules to Redesignate the 27.5– Telecommunications Bureau, Federal remote location back to the studio. 29.5 GHz Frequency Band, Reallocate the 29.5–30.5 Communications Commission, from Aida Alvarez, 178 13 CFR 121.201, NAICS code 513322 (changed Frequency Band, to Establish Rules and Policies for Administrator, Small Business Administration, to 517212 in October 2002). Local Multipoint Distribution Service and for Fixed dated January 6, 1998.

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auctions of 218–219 MHz spectrum. Radiotelephone Service, and the business is one that, together with Given the success of small businesses in Commission estimates that there are controlling interests and affiliates, has the previous auction, and the 1,000 or fewer small entity licensees in average gross revenues for the preceding prevalence of small businesses in the the Rural Radiotelephone Service that three years not to exceed $3 million subscription television services and may be affected by the rules and dollars. There are approximately 10,672 message communications industries, we policies proposed herein. licensees in the Marine Coast Service, assume for purposes of this analysis that 122. Air-Ground Radiotelephone and the Commission estimates that in future auctions, many, and perhaps Service. The Commission has not almost all of them qualify as ‘‘small’’ all, of the licenses may be awarded to adopted a small business size standard businesses under the above special small businesses. specific to the Air-Ground small business size standards. 120. Location and Monitoring Service Radiotelephone Service.197 We will use 124. Offshore Radiotelephone Service. (LMS). Multilateration LMS systems use SBA’s small business size standard This service operates on several ultra non-voice radio techniques to determine applicable to ‘‘Cellular and Other high frequencies (UHF) television the location and status of mobile radio Wireless Telecommunications,’’ i.e., an broadcast channels that are not used for units. For purposes of auctioning LMS entity employing no more than 1,500 television broadcasting in the coastal licenses, the Commission has defined persons.198 There are approximately 100 areas of states bordering the Gulf of ‘‘small business’’ as an entity that, licensees in the Air-Ground Mexico.201 There are presently together with controlling interests and Radiotelephone Service, and we approximately 55 licensees in this affiliates, has average annual gross estimate that almost all of them qualify service. We are unable to estimate at revenues for the preceding three years as small under the SBA small business this time the number of licensees that not exceeding $15 million.191 A ‘‘very size standard. would qualify as small under the SBA’s small business’’ is defined as an entity 123. Aviation and Marine Radio small business size standard for that, together with controlling interests Services. Small businesses in the ‘‘Cellular and Other Wireless and affiliates, has average annual gross aviation and marine radio services use Telecommunications’’ services.202 revenues for the preceding three years a very high frequency (VHF) marine or Under that SBA small business size not exceeding $3 million.192 These aircraft radio and, as appropriate, an standard, a business is small if it has definitions have been approved by the emergency position-indicating radio 1,500 or fewer employees.203 SBA.193 An auction for LMS licenses beacon (and/or radar) or an emergency 125. Multiple Address Systems (MAS). commenced on February 23, 1999, and locator transmitter. The Commission has Entities using MAS spectrum, in closed on March 5, 1999. Of the 528 not developed a small business size general, fall into two categories: (1) licenses auctioned, 289 licenses were standard specifically applicable to these Those using the spectrum for profit- sold to four small businesses. We cannot small businesses. For purposes of this based uses, and (2) those using the accurately predict the number of analysis, the Commission uses the SBA spectrum for private internal uses. With remaining licenses that could be small business size standard for the respect to the first category, the awarded to small entities in future LMS category ‘‘Cellular and Other Commission defines ‘‘small entity’’ for auctions. Telecommunications,’’ which is 1,500 MAS licenses as an entity that has 121. Rural Radiotelephone Service. or fewer employees.199 Most applicants average gross revenues of less than $15 The Commission has not adopted a size for recreational licenses are individuals. million in the three previous calendar standard for small businesses specific to Approximately 581,000 ship station years.204 ‘‘Very small business’’ is the Rural Radiotelephone Service.194 A licensees and 131,000 aircraft station defined as an entity that, together with significant subset of the Rural licensees operate domestically and are its affiliates, has average gross revenues Radiotelephone Service is the Basic not subject to the radio carriage of not more than $3 million for the 205 Exchange Telephone Radio System requirements of any statute or treaty. preceding three calendar years. The (BETRS).195 The Commission uses the For purposes of our evaluations in this SBA has approved of these 206 SBA’s small business size standard analysis, we estimate that there are up definitions. The majority of these applicable to ‘‘Cellular and Other to approximately 712,000 licensees that entities will most likely be licensed in Wireless Telecommunications,’’ i.e., an are small businesses (or individuals) bands where the Commission has entity employing no more than 1,500 under the SBA standard. In addition, implemented a geographic area persons.196 There are approximately between December 3, 1998 and licensing approach that would require 1,000 licensees in the Rural December 14, 1998, the Commission the use of competitive bidding held an auction of 42 VHF Public Coast procedures to resolve mutually 191 Amendment of Part 90 of the Commission’s licenses in the 157.1875–157.4500 MHz exclusive applications. The Rules to Adopt Regulations for Automatic Vehicle (ship transmit) and 161.775–162.0125 Monitoring Systems, Second Report and Order, 13 MHz (coast transmit) bands. For No. 92–257, Third Report and Order and FCC Rcd 15182, 15192, paragraph 20 (1998); See purposes of the auction, the Memorandum Opinion and Order, 13 FCC Rcd also 47 CFR 90.1103. 19853 (1998). 192 Amendment of Part 90 of the Commission’s Commission defined a ‘‘small’’ business 201 This service is governed by Subpart I of Part Rules to Adopt Regulations for Automatic Vehicle as an entity that, together with 22 of the Commission’s rules. See 47 CFR 22.1001– Monitoring Systems, Second Report and Order, 13 controlling interests and affiliates, has 22.1037. FCC Rcd at 15192, paragraph 20; See also 47 CFR average gross revenues for the preceding 202 13 CFR 121.201, NAICS code 513322 (changed 90.1103. three years not to exceed $15 million to 517212 in October 2002). 193 See Letter to Thomas Sugrue, Chief, Wireless 203 dollars.200 In addition, a ‘‘very small’’ Id. Telecommunications Bureau, Federal 204 See Amendment of the Commission’s Rules Communications Commission, from Aida Alvarez, Regarding Multiple Address Systems, Report and Administrator, Small Business Administration, 197 The service is defined in § 22.99 of the Order, 15 FCC Rcd 11956, 12008, paragraph 123 dated February 22, 1999. Commission’s rules, 47 CFR 22.99. (2000). 194 The service is defined in section 22.99 of the 198 13 CFR 121.201, NAICS codes 513322 205 Id. Commission’s rules, 47 CFR 22.99. (changed to 517212 in October 2002). 206 See Letter to Thomas Sugrue, Chief, Wireless 195 BETRS is defined in § 22.757 and 22.759 of the 199 13 CFR 121.201, NAICS code 513322 (changed Telecommunications Bureau, Federal Commission’s rules, 47 CFR 22.757 and 22.759. to 517212 in October 2002). Communications Commission, from Aida Alvarez, 196 13 CFR 121.201, NAICS code 513322 (changed 200 Amendment of the Commission’s Rules Administrator, Small Business Administration, to 517212 in October 2002). Concerning Maritime Communications, PR Docket dated June 4, 1999.

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Commission’s licensing database employees or more.211 Thus, under this MDS auction, the Commission defined indicates that, as of January 20, 1999, size standard, the great majority of firms ‘‘small business’’ as an entity that, there were a total of 8,670 MAS station can be considered small. These broader together with its affiliates, has average authorizations. Of these, 260 census data notwithstanding, we believe gross annual revenues that are not more authorizations were associated with that there are only two licensees in the than $40 million for the preceding three common carrier service. In addition, an 24 GHz band that were relocated from calendar years.217 The SBA has auction for 5,104 MAS licenses in 176 the 18 GHz band, Teligent 212 and TRW, approved of this standard.218 The MDS EAs began November 14, 2001, and Inc. It is our understanding that Teligent auction resulted in 67 successful closed on November 27, 2001.207 Seven and its related companies have less than bidders obtaining licensing winning bidders claimed status as small 1,500 employees, though this may opportunities for 493 Basic Trading or very small businesses and won 611 change in the future. TRW is not a small Areas (BTAs).219 Of the 67 auction licenses. entity. Thus, only one incumbent winners, 61 claimed status as a small 126. With respect to the second licensee in the 24 GHz band is a small business. At this time, we estimate that category, which consists of entities that business entity. of the 61 small business MDS auction 128. Future 24 GHz Licensees. With use, or seek to use, MAS spectrum to winners, 48 remain small business respect to new applicants in the 24 GHz accommodate internal communications licensees. In addition to the 48 small band, we have defined ‘‘small business’’ businesses that hold BTA needs, we note that MAS serves an as an entity that, together with authorizations, there are approximately essential role in a range of industrial, controlling interests and affiliates, has 392 incumbent MDS licensees that have safety, business, and land transportation average annual gross revenues for the gross revenues that are not more than activities. MAS radios are used by three preceding years not exceeding $15 $40 million and are thus considered companies of all sizes, operating in million.213 ‘‘Very small business’’ in the small entities.220 virtually all U.S. business categories, 24 GHz band is defined as an entity that, 130. In addition, the SBA has and by all types of public safety entities. together with controlling interests and developed a small business size For the majority of private internal affiliates, has average gross revenues not standard for Cable and Other Program users, the definitions developed by the exceeding $3 million for the preceding Distribution,221 which includes all such SBA would be more appropriate. The three years.214 The SBA has approved companies generating $12.5 million or applicable definition of small entity in these definitions.215 The Commission less in annual receipts.222 According to this instance appears to be the ‘‘Cellular will not know how many licensees will Census Bureau data for 1997, there were and Other Wireless be small or very small businesses until a total of 1,311 firms in this category, Telecommunications’’ definition under the auction, if required, is held. total, that had operated for the entire the SBA rules. This definition provides 129. Multipoint Distribution Service, year.223 Of this total, 1,180 firms had that a small entity is any entity Multichannel Multipoint Distribution annual receipts of under $10 million, employing no more than 1,500 Service, and Instructional Television and an additional 52 firms had receipts persons.208 The Commission’s licensing Fixed Service. Multichannel Multipoint of $10 million or more but less than $25 database indicates that, as of January 20, Distribution Service (MMDS) systems, million.224 Consequently, we estimate 1999, of the 8,670 total MAS station often referred to as ‘‘wireless cable,’’ that the majority of providers in this authorizations, 8,410 authorizations transmit video programming to service category are small businesses were for private radio service, and of subscribers using the microwave that may be affected by the proposed these, 1,433 were for private land frequencies of the Multipoint rules and policies. mobile radio service. Distribution Service (MDS) and 131. Finally, while SBA approval for 127. Incumbent 24 GHz Licensees. Instructional Television Fixed Service a Commission-defined small business This analysis may affect incumbent (ITFS).216 In connection with the 1996 size standard applicable to ITFS is licensees who were relocated to the 24 GHz band from the 18 GHz band, and 211 Id. The census data do not provide a more 217 47 CFR 21.961(b)(1). applicants who wish to provide services precise estimate of the number of firms that have 218 See Letter to Margaret Wiener, Chief, Auctions employment of 1,500 or fewer employees; the and Industry Analysis Division, Wireless in the 24 GHz band. The applicable SBA largest category provided is ‘‘Firms with 1,000 Telecommunications Bureau, Federal small business size standard is that of employees or more.’’ Communications Bureau, from Gary Jackson, ‘‘Cellular and Other Wireless 212 Teligent acquired the DEMS licenses of Assistant Administrator for Size Standards, Small Telecommunications’’ companies. This FirstMark, the only licensee other than TRW in the Business Administration, dated March 20, 2003 24 GHz band whose license has been modified to (noting approval of $40 million size standard for category provides that such a company require relocation to the 24 GHz band. MDS auction). is small if it employs no more than 213 Amendments to Parts 1, 2, 87 and 101 of the 219 Basic Trading Areas (BTAs) were designed by 1,500 persons.209 According to Census Commission’s Rules To License Fixed Services at Rand McNally and are the geographic areas by Bureau data for 1997, there were 977 24 GHz, Report and Order, 15 FCC Rcd 16934, which MDS was auctioned and authorized. See 16967, paragraph 77 (2000) (24 GHz Report and MDS Auction R&O, 10 FCC Rcd at 9608, paragraph firms in this category, total, that 34. 210 Order); See also 47 CFR 101.538(a)(2). operated for the entire year. Of this 214 24 GHz Report and Order, 15 FCC Rcd at 220 47 U.S.C. 309(j). Hundreds of stations were total, 965 firms had employment of 999 16967, paragraph 77; See also 47 CFR 101.538(a)(1). licensed to incumbent MDS licensees prior to or fewer employees, and an additional 215 See Letter to Margaret W. Wiener, Deputy implementation of Section 309(j) of the 12 firms had employment of 1,000 Chief, Auctions and Industry Analysis Division, Communications Act of 1934, 47 U.S.C. 309(j). For Wireless Telecommunications Bureau, Federal these pre-auction licenses, the applicable standard Communications Commission, from Gary M. is SBA’s small business size standard for ‘‘other 207 See ‘‘Multiple Address Systems Spectrum Jackson, Assistant Administrator, Small Business telecommunications’’ (annual receipts of $12.5 Auction Closes,’’ Public Notice, 16 FCC Rcd 21011 Administration, dated July 28, 2000. million or less). See 13 CFR 121.201, NAICS code 517910. (2001). 216 Amendment of Parts 21 and 74 of the 221 208 See 13 CFR 121.201, NAICS code 517212. Commission’s Rules with Regard to Filing 13 CFR 121.201, NAICS code 517510. 209 13 CFR 121.201, NAICS code 513322 (changed Procedures in the Multipoint Distribution Service 222 Id. to 517212 in October 2002). and in the Instructional Television Fixed Service 223 U.S. Census Bureau, 1997 Economic Census, 210 U.S. Census Bureau, 1997 Economic Census, and Implementation of Section 309(j) of the Subject Series: Information, ‘‘Establishment and Subject Series: Information, ‘‘Employment Size of Communications Act & Competitive Bidding, Firm Size (Including Legal Form of Organization),’’ Firms Subject to Federal Income Tax: 1997,’’ Table Report and Order, 10 FCC Rcd 9589, 9593, Table 4 (issued October 2000). 5, NAICS code 513322 (issued October 2000). paragraph 7 (1995) (MDS Auction R&O). 224 Id.

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pending, educational institutions are them to be combined with other cable service.237 Affiliates of Residential included in this analysis as small operators. Consequently, the Communications Network, Inc. (RCN) entities.225 There are currently 2,032 Commission estimates that there are received approval to operate OVS ITFS licensees, and all but 100 of these now fewer than 1,439 small entity cable systems in New York City, Boston, licenses are held by educational system operators that may be affected by Washington, DC, and other areas. RCN institutions. Thus, we tentatively the rules and policies proposed herein. has sufficient revenues to assure that conclude that at least 1,932 ITFS 134. Cable System Operators they do not qualify as a small business licensees are small businesses. (Telecom Act Standard). The entity. Little financial information is 132. Cable and Other Program Communications Act of 1934, as available for the other entities that are Distribution. This category includes amended, also contains a size standard authorized to provide OVS and are not cable systems operators, closed circuit for small cable system operators, which yet operational. Given that some entities television services, direct broadcast is ‘‘a cable operator that, directly or authorized to provide OVS service have satellite services, multipoint through an affiliate, serves in the not yet begun to generate revenues, the distribution systems, satellite master aggregate fewer than 1 percent of all Commission concludes that up to 24 antenna systems, and subscription subscribers in the United States and is OVS operators (those remaining) might television services. The SBA has not affiliated with any entity or entities qualify as small businesses that may be developed small business size standard whose gross annual revenues in the affected by the rules and policies for this census category, which includes aggregate exceed $250,000,000.’’ 230 The proposed herein. all such companies generating $12.5 Commission has determined that there 136. Cable Television Relay Service. million or less in revenue annually.226 are 67,700,000 subscribers in the United This service includes transmitters According to Census Bureau data for States.231 Therefore, an operator serving generally used to relay cable 1997, there were a total of 1,311 firms fewer than 677,000 subscribers shall be programming within cable television in this category, total, that had operated deemed a small operator, if its annual system distribution systems. The SBA for the entire year.227 Of this total, 1,180 revenues, when combined with the total has defined a small business size firms had annual receipts of under $10 annual revenues of all its affiliates, do standard for Cable and other Program million and an additional 52 firms had not exceed $250 million in the Distribution, consisting of all such receipts of $10 million or more but less aggregate.232 Based on available data, companies having annual receipts of no than $25 million. Consequently, the the Commission estimates that the more than $12.5 million.238 According Commission estimates that the majority number of cable operators serving to Census Bureau data for 1997, there of providers in this service category are 677,000 subscribers or fewer, totals were 1,311 firms in the industry small businesses that may be affected by 1,450.233 The Commission neither category Cable and Other Program the rules and policies proposed herein. requests nor collects information on Distribution, total, that operated for the 239 133. Cable System Operators (Rate whether cable system operators are entire year. Of this total, 1,180 firms Regulation Standard). The Commission affiliated with entities whose gross had annual receipts of $10 million or has developed its own small business annual revenues exceed $250 less, and an additional 52 firms had size standard for cable system operators, million,234 and therefore are unable, at receipts of $10 million or more but less 240 for purposes of rate regulation. Under this time, to estimate more accurately than $25 million. Thus, under this the Commission’s rules, a ‘‘small cable the number of cable system operators standard, we estimate that the majority company’’ is one serving fewer than of providers in this service category are 228 that would qualify as small cable 400,000 subscribers nationwide. The operators under the size standard small businesses that may be affected by most recent estimates indicate that there contained in the Communications Act of the proposed rules and policies. were 1,439 cable operators who 137. Multichannel Video Distribution 1934. qualified as small cable system and Data Service. MVDDS is a terrestrial 229 135. Open Video Services. Open operators at the end of 1995. Since Video Service (OVS) systems provide fixed microwave service operating in then, some of those companies may subscription services.235 The SBA has the 12.2–12.7 GHz band. No auction has have grown to serve over 400,000 created a small business size standard yet been held in this service, although subscribers, and others may have been for Cable and Other Program an action has been scheduled for January 14, 2004.241 Accordingly, there involved in transactions that caused Distribution.236 This standard provides are no licensees in this service. that a small entity is one with $12.5 225 138. Amateur Radio Service. These In addition, the term ‘‘small entity’’ under million or less in annual receipts. The SBREFA applies to small organizations (nonprofits) licensees are believed to be individuals, and to small governmental jurisdictions (cities, Commission has certified approximately and therefore are not small entities. counties, towns, townships, villages, school 25 OVS operators to serve 75 areas, and 139. Aviation and Marine Services. districts, and special districts with populations of some of these are currently providing less than 50,000). 5 U.S.C. 601(4)–(6). We do not Small businesses in the aviation and collect annual revenue data on ITFS licensees. marine radio services use a very high 230 226 13 CFR 121.201, NAICS code 513220 (changed 47 U.S.C. 543(m)(2). frequency (VHF) marine or aircraft radio to 517510 in October 2002). 231 See FCC Announces New Subscriber Count for the Definition of Small Cable Operator, Public and, as appropriate, an emergency 227 U.S. Census Bureau, 1997 Economic Census, position-indicating radio beacon (and/or Subject Series: Information, ‘‘Establishment and Notice, DA–01–158 (January 24, 2001). Firm Size (Including Legal Form of Organization)’’, 232 47 CFR 76.901(f). Table 4, NAICS code 513220 (issued October 2000). 233 See FCC Announces New Subscriber Count for 237 See http://www.fcc.gov/csb/ovs/csovscer.html 228 47 CFR 76.901(e). The Commission developed the Definition of Small Cable Operators, Public (current as of March 2002). this definition based on its determination that a Notice, DA–01–0158 (released January 24, 2001). 238 13 CFR 121.201, NAICS code 517510. small cable system operator is one with annual 234 The Commission does receive such 239 U.S. Census Bureau, 1997 Economic Census, revenues of $100 million or less. Implementation of information on a case-by-case basis if a cable Subject Series: Information, ‘‘Establishment and Sections of the 1992 Cable Act: Rate Regulation, operator appeals a local franchise authority’s Firm Size (Including Legal Form of Organization),’’ Sixth Report and Order and Eleventh Order on finding that the operator does not qualify as a small Table 4 (issued October 2000). Reconsideration, 10 FCC Rcd 7393 (1995), 60 FR cable operator pursuant to section 76.901(f) of the 240 Id. 10534 (February 27, 1995). Commission’s rules. See 47 CFR 76.909(b). 241 ‘‘Auctions of Licenses in the Multichannel 229 Paul Kagan Associates, Inc., Cable TV 235 See 47 U.S.C. 573. Video Distribution and Data Service Rescheduled Investor, February 29, 1996 (based on figures for 236 13 CFR 121.201, NAICS code 513220 (changed for January 14, 2004,’’ Public Notice, DA 03–2354 December 30, 1995). to 517510 in October 2002). (August 28, 2003).

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radar) or an emergency locator Use Radio Service (MURS).245 There are There are a total of approximately transmitter. The Commission has not a variety of methods used to license the 127,540 licensees in these services. developed a small business size spectrum in these rule parts, from Governmental entities 248 as well as standard specifically applicable to these licensing by rule, to conditioning private businesses comprise the small businesses. For purposes of this operation on successful completion of a licensees for these services. All analysis, the Commission uses the SBA required test, to site-based licensing, to governmental entities with populations small business size standard for the geographic area licensing. Under the of less than 50,000 fall within the category ‘‘Cellular and Other RFA, the Commission is required to definition of a small entity.249 make a determination of which small Telecommunications,’’ which is 1,500 IV. Description of Projected Reporting, 242 entities are directly affected by the rules or fewer employees. Most applicants Recordkeeping and Other Compliance being proposed. Since all such entities for recreational licenses are individuals. Requirements Approximately 581,000 ship station are wireless, we apply the definition of 142. With certain exceptions, the licensees and 131,000 aircraft station cellular and other wireless telecommunications, pursuant to which Commission’s Schedule of Regulatory licensees operate domestically and are Fees applies to all Commission not subject to the radio carriage a small entity is defined as employing 246 licensees and regulatees. Most licensees requirements of any statute or treaty. 1,500 or fewer persons. Many of the licensees in these services are will be required to count the number of For purposes of our evaluations in this individuals, and thus are not small licenses or call signs authorized, analysis, we estimate that there are up entities. In addition, due to the mostly complete and submit an FCC Form 159 to approximately 712,000 licensees that unlicensed and shared nature of the (‘‘FCC Remittance Advice’’), and pay a are small businesses (or individuals) spectrum utilized in many of these regulatory fee based on the number of under the SBA standard. In addition, services, the Commission lacks direct licenses or call signs.250 Interstate between December 3, 1998 and information upon which to base an telephone service providers must December 14, 1998, the Commission estimation of the number of small compute their annual regulatory fee held an auction of 42 VHF Public Coast entities under an SBA definition that based on their interstate and licenses in the 157.1875–157.4500 MHz might be directly affected by the international end-user revenue using (ship transmit) and 161.775–162.0125 proposed rules. information they already supply to the MHz (coast transmit) bands. For 141. Public Safety Radio Services. Commission in compliance with the purposes of the auction, the Public Safety radio services include Form 499–A, Telecommunications Commission defined a ‘‘small’’ business police, fire, local government, forestry Reporting Worksheet, and they must as an entity that, together with conservation, highway maintenance, complete and submit the FCC Form 159. controlling interests and affiliates, has and emergency medical services.247 Compliance with the fee schedule will average gross revenues for the preceding require some licensees to tabulate the three years not to exceed $15 million 245 The Citizens Band Radio Service, General number of units (e.g., cellular dollars. In addition, a ‘‘very small’’ Mobile Radio Service, Radio Control Radio Service, telephones, pagers, cable TV business is one that, together with Family Radio Service, Wireless Medical Telemetry subscribers) they have in service, and Service, Medical Implant Communications Service, controlling interests and affiliates, has Low Power Radio Service, and Multi-Use Radio average gross revenues for the preceding Service are governed by Subpart D, Subpart A, organizations, school buses, beach patrols, three years not to exceed $3 million Subpart C, Subpart B, Subpart H, Subpart I, Subpart establishments in isolated areas, communications dollars.243 There are approximately G, and Subpart J, respectively, of Part 95 of the standby facilities, and emergency repair of public Commission’s rules. See generally 47 CFR Part 95. communications facilities. 47 CFR 90.33–90.55. 10,672 licensees in the Marine Coast 246 13 CFR 121.201, NAICS Code 517212. 248 47 CFR 1.1162. Service, and the Commission estimates 247 With the exception of the special emergency 249 5 U.S.C. 601(5). that almost all of them qualify as service, these services are governed by Subpart B 250 The following categories are exempt from the ‘‘small’’ businesses under the above of part 90 of the Commission’s Rules, 47 CFR Commission’s Schedule of Regulatory Fees: 90.15–90.27. The police service includes Amateur radio licensees (except applicants for special small business size standards. approximately 27,000 licensees that serve state, vanity call signs) and operators in other non- 140. Personal Radio Services. county, and municipal enforcement through licensed services (e.g., Personal Radio, part 15, ship Personal radio services provide short- telephony (voice), telegraphy (code) and teletype and aircraft). Governments and non-profit (exempt and facsimile (printed material). The fire radio under section 501(c) of the Internal Revenue Code) range, low power radio for personal service includes approximately 23,000 licensees entities are exempt from payment of regulatory fees communications, radio signaling, and comprised of private volunteer or professional fire and need not submit payment. Non-commercial business communications not provided companies as well as units under governmental educational broadcast licensees are exempt from control. The local government service that is regulatory fees as are licensees of auxiliary for in other services. The Personal Radio presently comprised of approximately 41,000 broadcast services such as low power auxiliary Services include spectrum licensed licensees that are state, county, or municipal stations, television auxiliary service stations, under Part 95 of our rules.244 These entities that use the radio for official purposes not remote pickup stations and aural broadcast services include Citizen Band Radio covered by other public safety services. There are auxiliary stations where such licenses are used in approximately 7,000 licensees within the forestry conjunction with commonly owned non- Service (CB), General Mobile Radio service which is comprised of licensees from state commercial educational stations. Emergency Alert Service (GMRS), Radio Control Radio departments of conservation and private forest System licenses for auxiliary service facilities are Service (R/C), Family Radio Service organizations who set up communications networks also exempt as are instructional television fixed (FRS), Wireless Medical Telemetry among fire lookout towers and ground crews. The service licensees. Regulatory fees are automatically approximately 9,000 state and local governments waived for the licensee of any translator station Service (WMTS), Medical Implant are licensed to highway maintenance service that: (1) Is not licensed to, in whole or in part, and Communications Service (MICS), Low provide emergency and routine communications to does not have common ownership with, the Power Radio Service (LPRS), and Multi- aid other public safety services to keep main roads licensee of a commercial broadcast station; (2) does safe for vehicular traffic. The approximately 1,000 not derive income from advertising; and (3) is licensees in the Emergency Medical Radio Service dependent on subscriptions or contributions from 242 13 CFR 121.201, NAICS code 513322 (changed (EMRS) use the 39 channels allocated to this service members of the community served for support. to 517212 in October 2002). for emergency medical service communications Receive only earth station permittees are exempt 243 Amendment of the Commission’s Rules related to the delivery of emergency medical from payment of regulatory fees. A regulatee will Concerning Maritime Communications, Third treatment. 47 CFR 90.15–90.27. The approximately be relieved of its fee payment requirement if its Report and Order and Memorandum Opinion and 20,000 licensees in the special emergency service total fee due, including all categories of fees for Order, 13 FCC Rcd 19853 (1998). include medical services, rescue organizations, which payment is due by the entity, amounts to less 244 47 CFR Part 90. veterinarians, handicapped persons, disaster relief than $10.

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complete and submit an FCC Form 159. and compelling instances (where services which, for the most part, are Licensees ordinarily will keep a list of payment of the regulatory fee along with larger entities. the number of units they have in service the waiver or reduction request could 149. Several categories of licensees as part of their normal business result in reduction of service to a and regulatees are exempt from payment practices. No additional outside community or other financial hardship of regulatory fees. See, e.g., footnote professional skills are required to to the licensee), the Commission will 250, supra. complete the FCC Form 159, and it can defer payment in response to a request VI. Federal Rules that May Duplicate, be completed by the employees filed with the appropriate supporting Overlap, or Conflict with the Proposed responsible for an entity’s business documentation. Rules records. 143. Each licensee must submit the V. Steps Taken to Minimize Significant 150. None. FCC Form 159 to the Commission’s Economic Impact on Small Entities, and Significant Alternatives Considered Attachment B—Sources of Payment lockbox bank after computing the Unit Estimates For FY 2005 number of units subject to the fee. 146. The RFA requires an agency to Licensees may also file electronically to describe any significant alternatives that In order to calculate individual minimize the burden of submitting it has considered in reaching its service fees for FY 2005, we adjusted FY multiple copies of the FCC Form 159. proposed approach, which may include 2004 payment units for each service to Applicants who pay small fees in the following four alternatives: (1) The more accurately reflect expected FY advance and provide fee information as establishment of differing compliance or 2005 payment liabilities. We obtained part of their application must use FCC reporting requirements or timetables our updated estimates through a variety Form 159. that take into account the resources of means. For example, we used 144. Licensees and regulatees are available to small entities; (2) the Commission licensee data bases, actual advised that failure to submit the clarification, consolidation, or prior year payment records and industry required regulatory fee in a timely simplification of compliance or and trade association projections when manner will subject the licensee or reporting requirements under the rule available. The databases we consulted regulatee to a late payment penalty of 25 for small entities; (3) the use of include the Commission’s Universal percent in addition to the required performance, rather than design, Licensing System (ULS), International fee.251 If payment is not received, new standards; and (4) an exemption from Bureau Filing System (IBFS), and or pending applications may be coverage of the rule, or any part thereof, Consolidated Database System (CDBS). dismissed, and existing authorizations for small entities. As described in The industry sources we consulted may be subject to rescission.252 Further, Section III of this IRFA, supra, we have include, but are not limited to, Television & Cable Factbook by Warren in accordance with the Debt Collection created procedures in which all fee- Publishing, Inc. and the Broadcasting Improvement Act of 1996, federal filing licensees and regulatees use a and Cable Yearbook by Reed Elsevier, agencies may bar a person or entity from single form, FCC Form 159, and have Inc, as well as reports generated within obtaining a federal loan or loan described in plain language the general the Commission such as the Wireline insurance guarantee if that person or filing requirements. We have sought Competition Bureau’s Trends in entity fails to pay a delinquent debt comment on other alternatives that Telephone Service and the Wireless owed to any federal agency.253 might simplify our fee procedures or Telecommunications Bureau’s Nonpayment of regulatory fees is a debt otherwise benefit small entities, while Numbering Resource Utilization owed the United States pursuant to 31 remaining consistent with our statutory Forecast. U.S.C. 3711 et seq., and the Debt responsibilities in this proceeding. 147. The Omnibus Appropriations Act We tried to obtain verification for Collection Improvement Act of 1996, these estimates from multiple sources Public Law 194–134. Appropriate for FY 2005, Public Law 108–447, requires the Commission to revise its and, in all cases; we compared FY 2005 enforcement measures as well as estimates with actual FY 2004 payment administrative and judicial remedies, Schedule of Regulatory Fees in order to recover the amount of regulatory fees units to ensure that our revised may be exercised by the Commission. estimates were reasonable. Where Debts owed to the Commission may that Congress, pursuant to Section 9(a) of the Communications Act, as appropriate, we adjusted and/or result in a person or entity being denied rounded our final estimates to take into a federal loan or loan guarantee pending amended, has required the Commission to collect for Fiscal Year (FY) 2005.256 consideration the fact that certain before another federal agency until such variables that impact on the number of obligations are paid.254 As noted, we seek comment on the proposed methodology for payment units cannot yet be estimated 145. The Commission’s rules exactly. These include an unknown currently provide for relief in implementing these statutory requirements and any other potential number of waivers and/or exemptions exceptional circumstances. Persons or that may occur in FY 2005 and the fact entities may request a waiver, reduction impact of these proposals on small entities. that, in many services, the number of or deferment of payment of the actual licensees or station operators regulatory fee.255 However, timely 148. We have previously used cost accounting data for computation of fluctuates from time to time due to submission of the required regulatory economic, technical or other reasons. fee must accompany requests for regulatory fees, but found that some fees which were very small in previous years Therefore, when we note, for example, waivers or reductions. This will avoid that our estimated FY 2005 payment any late payment penalty if the request would have increased dramatically and would have a disproportionate impact units are based on FY 2004 actual is denied. The fee will be refunded if payment units, it does not necessarily the request is granted. In exceptional on smaller entities. The methodology we are proposing in this Notice of mean that our FY 2005 projection is Proposed Rulemaking minimizes this exactly the same number as FY 2004. It 251 47 CFR 1.1164. means that we have either rounded the 252 impact by limiting the amount of 47 CFR 1.1164(c). FY 2005 number or adjusted it slightly 253 Public Law 104–134, 110 Stat. 1321 (1996). increase and shifting costs to other 254 31 U.S.C. 7701(c)(2)(B). to account for these variables. 255 47 CFR 1.1166. 256 47 U.S.C. 159(a). BILLING CODE 6712–05–P

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Attachment C—Calculation of FY 2005 Commisison in advance to cover the Revenue Requirements and Pro–Rata term of the license and are submitted Fees along with the application at the time Regulatory fees for the first ten fee the application is filed. categories below are collected by the

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Attachment D—FY 2005 Schedule of Commission in advance to cover the Regulatory Fees term of the license and are submitted Regulatory fees for the first eleven fee along with the application at the time categories below are collected by the the application is filed.

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Attachment E—Factors, Measurements database representing the information in available, it was used in lieu of the and Calculations That Go Into FCC Figure R3.258 Using the calculated average HAAT figure to calculate Determining Station Signal Contours horizontal radiation values, and the specific HAAT figures for each of 360 and Associated Population Coverages retrieved soil conductivity data, the radials under study. Any available distance to the city grade (5 mV/m) AM Stations directional pattern information was contour was predicted for each of the applied as well, to produce a radial- For stations with nondirectional 360 radials. The resulting distance to specific ERP figure. The HAAT and ERP daytime antennas, the theoretical city grade contours were used to form a figures were used in conjunction with radiation was used at all azimuths. For geographical polygon. Population the Field Strength (50–50) propagation stations with directional daytime counting was accomplished by curves specified in 47 CFR 73.313 of the antennas, specific information on each determining which 2000 block centroids Commission’s rules to predict the day tower, including field ratio, were contained in the polygon. (A block distance to the city grade (70 dBu phasing, spacing and orientation was centroid is the center point of a small (decibel above 1 microVolt per meter) or retrieved, as well as the theoretical area containing population as computed 3.17 mV/m) contour for each of the 360 pattern root-mean-square of the by the U.S. Census Bureau.) The sum of radials.259 The resulting distance to city radiation in all directions in the the population figures for all enclosed grade contours were used to form a horizontal plane (RMS) figure milliVolt blocks represents the total population geographical polygon. Population per meter (mV/m) @ 1 km) for the for the predicted city grade coverage counting was accomplished by antenna system. The standard, or area. determining which 2000 block centroids modified standard if pertinent, FM Stations were contained in the polygon. The sum horizontal plane radiation pattern was of the population figures for all enclosed calculated using techniques and The greater of the horizontal or vertical effective radiated power (ERP) blocks represents the total population methods specified in §§ 73.150 and for the predicted city grade coverage 257 (kW) and respective height above 73.152 of the Commission’s rules. area. Radiation values were calculated for average terrain (HAAT) (m) combination BILLING CODE 6712–05–P each of 360 radials around the was used. Where the antenna height transmitter site. Next, estimated soil above mean sea level (HAMSL) was Attachment F—FY 2004 Schedule of conductivity data was retrieved from a Regulatory Fees 258 See Map of Estimated Effective Ground Conductivity in the United States, 47 CFR 73.190 257 47 CFR 73.150 and 73.152. Figure R3. 259 47 CFR 73.313.

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[FR Doc. 05–3822 Filed 2–25–05; 8:45 am] BILLING CODE 6712–05–C

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