[Federal Register Volume 71, Number 66 (Thursday, April 6, 2006)]
[Proposed Rules]
[Pages 17410-17433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3201]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 06-68; FCC 06-38]


Assessment and Collection of Regulatory Fees For Fiscal Year 2006

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission will revise its Schedule of Regulatory Fees in 
order to recover the amount of regulatory fees that Congress has 
required it to collect for fiscal year 2006. Section 9 of the 
Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees under sections 9(b)(2) and 
9(b)(3), respectively, for annual ``Mandatory Adjustments'' and 
``Permitted Amendments'' to the Schedule of Regulatory Fees.

DATES: Comments are due April 14, 2006, and reply comments are due 
April 21, 2006.

ADDRESSES: You may submit comments, identified by MD Docket No. 06-68, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs. Follow the instructions for submitting comments.
     E-mail: [email protected]. Include MD Docket No. 06-68 in the 
subject line of the message.
     Mail: Commercial overnight mail (other than U.S. Postal 
Service Express Mail, and Priority Mail, must be sent to 9300 East 
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th 
Street, SW., Washington DC 20554.

FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing 
Director at (202) 418-0444 or Rob Fream, Office of Managing Director at 
(202) 418-0408.

SUPPLEMENTARY INFORMATION:
    Adopted: March 22, 2006.
    Released: March 27, 2006.
    By the Commission.

Table of Contents

Heading
I. Introduction
II. Discussion
    A. FY 2006 Regulatory Fee Assessment Methodology
    1. Development of FY 2006 Regulatory Fees
    a. Calculation of Revenue and Fee Requirements
    b. Additional Adjustments to Payment Units
    2. Commercial Mobile Radio Service (CMRS) Messaging Service
    3. Regulatory Fees for Direct Broadcast Service (DBS) Providers 
and Cable Television Operators
    4. Broadband Radio Service (BRS)/Educational Broadband Service 
(EBS)
    B. Administrative and Operational Issues
    1. Mandatory Use of Fee Filer
    2. Proposals for Notification and Collection of Regulatory Fees
    a. Interstate Telecommunications Service Providers (ITSPs)--
Billed
    b. Satellite Space Station Licensees--Billed
    c. Additional Service Categories for Billing or Assessing
    d. Media Services Licensees--Assessed
    e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile 
Services--Assessed
    f. Cable Television Subscribers--Assessed
    3. Streamlined Regulatory Fee Payment Process for CMRS Providers
    4. Future Streamlining of the Regulatory Fee Assessment and 
Collection Process
III. Procedural Matters
    A. Payment of Regulatory Fees
    1. De Minimis Fee Payment Liability
    2. Standard Fee Calculations and Payment Dates
    B. Enforcement
    C. Initial Regulatory Flexibility Analysis
    D. Initial Paperwork Reduction Act of 1995 Analysis
    E. Ex Parte Rules
    F. Filing Requirements
IV. Ordering Clauses
Attachments
    Attachment A Initial Regulatory Flexibility Analysis
    Attachment B Sources of Payment Unit Estimates for FY 2006
    Attachment C Calculation of FY 2006 Revenue Requirements and 
Pro-Rata Fees
    Attachment D FY 2006 Schedule of Regulatory Fees
    Attachment E Factors, Measurements, and Calculations that 
Determine Station Contours and Population Coverages
    Attachment F FY 2005 Schedule of Regulatory Fees

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we propose to 
collect $288,771,000 in regulatory fees for Fiscal Year (FY) 2006, 
pursuant to section 9 of the Communications Act of 1934, as amended 
(the Act). These fees are mandated by Congress and are collected to 
recover the regulatory costs associated with the Commission's 
enforcement, policy and rulemaking, user information, and international 
activities.\1\
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    \1\ 47 U.S.C. 159(a).
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II. Discussion

    2. In this NPRM, we seek comment on the development of FY 2006 
regulatory fees collected pursuant to section 9 of the Act. For FY 
2006, we tentatively propose to retain the established method, 
policies, and priorities. In addition to the assessment methodology, 
the Commission typically seeks comment on various administrative and 
operational issues affecting the collection of regulatory fees. For the 
FY 2006 regulatory fee cycle, we propose to retain the same 
administrative measures used for notification and assessment of 
regulatory fees in previous years, such as generating pre-completed 
regulatory fee assessment forms for certain regulatees. Consistent with 
past practice, we invite comments and suggestions on ways to improve 
the Commission's administrative processes for notifying entities of 
their regulatory fee obligations and collecting their payments.
    3. The Commission is obligated to collect $288,771,000 in 
regulatory fees during FY 2006 to fund the Commission's operations. 
Consistent with our established practice, we plan to collect these 
regulatory fees in the August-September 2006 time frame in order to 
collect the required amount by the end of the fiscal year. In addition 
to the $288,771,000 amount above, pursuant to section 3013 of the 
Deficit Reduction Act (Public Law 109-171), the Commission is required 
to assess and collect an additional $10,000,000 in fiscal year 2006 as 
offsetting receipts.\2\

[[Page 17411]]

We seek comment on how the Commission should implement this provision. 
Specifically, we seek comment on whether the Commission should assess 
the additional $10,000,000 on application fees, on regulatory fees, or 
from some other form of assessment.
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    \2\ Section 3013 of Public Law 109-171 reads as follows, ``In 
addition to any fees assessed under the Communications Act of 1934 
(47 U.S.C. 151 et seq.), the Federal Communications Commission shall 
assess extraordinary fees for licenses in the aggregate amount of 
$10,000,000, which shall be deposited in the Treasury during fiscal 
year 2006 as offsetting receipts.''
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A. FY 2006 Regulatory Fee Assessment Methodology

1. Development of FY 2006 Regulatory Fees
a. Calculation of Revenue and Fee Requirements
    4. We propose to use, for the purpose of our FY 2006 regulatory fee 
assessment, the same section 9 regulatory fee assessment methodology 
adopted for FY 2005. Each fiscal year, the Commission proportionally 
allocates the total amount that must be collected via section 9 
regulatory fees. The results of our proposed FY 2006 regulatory fee 
assessment methodology (including a comparison to the prior year's 
results) are contained in Appendix C. For FY 2006, we propose to use 
the receipts collected through the FY 2005 regulatory fees as a base 
for calculating the amount the Commission must collect in FY 2006. To 
collect the $288,771,000 required by law, we propose to adjust the FY 
2005 amount upward by 3.1 percent.\3\ Consistent with past practice, we 
propose to divide the FY 2006 amount by the number of payment units in 
each fee category to determine the unit fee.\4\ As in prior years, for 
cases involving small fees (e.g., licenses that are renewed over a 
multiyear term), we propose to divide the resulting unit fee by the 
term of the license. We propose to round these unit fees consistent 
with the requirements of section 9(b)(2).
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    \3\ Note that the required increase in regulatory fee payments 
of approximately 3.1 percent in FY 2006 is reflected in the revenue 
that is expected to be collected from each service category. Because 
this expected revenue is adjusted each year by the number of 
estimated payment units in a service category, the actual fee itself 
is sometimes increased by a number other than 3.1 percent. For 
example, in industries where the number of units is declining and 
the expected revenue is increasing, the impact of the fee increase 
may be greater.
    \4\ In many instances, the regulatory fee amount is a flat fee 
per licensee or regulatee. However, in some instances the fee amount 
represents a unit subscriber fee (such as for Cable, Commercial 
Mobile Radio Service (CMRS) Cellular/Mobile and CMRS Messaging), a 
per unit fee (such as for International Bearer Circuits), or a fee 
factor per revenue dollar (Interstate Telecommunications Service 
Provider fee). The payment unit is the measure upon which the fee is 
based, such as a licensee, regulatee, subscriber fee, etc.
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b. Additional Adjustments to Payment Units
    5. In calculating the FY 2006 regulatory fees proposed in 
Attachment D, we further adjusted the FY 2005 list of payment units 
(Attachment B) based upon licensee databases and industry and trade 
group projections. Whenever possible, we verified these estimates from 
multiple sources to ensure the accuracy of these estimates. In some 
instances, Commission licensee databases were used, while in other 
instances, actual prior year payment records and/or industry and trade 
association projections were used in determining the payment unit 
counts.\5\ Where appropriate, we adjusted and/or rounded our final 
estimates to take into consideration variables that may impact the 
number of payment units, such as waivers and/or exemptions that may be 
filed in FY 2005, and fluctuations in the number of licensees or 
station operators due to economic, technical, or other reasons. 
Therefore, when we state that our estimated FY 2006 payment units are 
based on FY 2005 actual payment units, the number may have been rounded 
or adjusted slightly to account for these variables.
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    \5\ The databases we consulted include, but are not limited to, 
the Commission's Universal Licensing System (ULS), International 
Bureau Filing System (IBFS), and Consolidated Database System 
(CDBS). We also consulted industry sources including, but not 
limited to, Television & Cable Factbook by Warren Publishing, Inc. 
and the Broadcasting and Cable Yearbook by Reed Elsevier, Inc., as 
well as reports generated within the Commission such as the Wireline 
Competition Bureau's Trends in Telephone Service and the Wireless 
Telecommunications Bureau's Numbering Resource Utilization Forecast 
and Annual CMRS Competition Report. For additional information on 
source material, see Attachment B.
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    6. Additional factors are considered in determining regulatory fees 
for AM and FM radio stations. These factors are facility attributes and 
the population served by the radio station. The calculation of the 
population served is determined by coupling current U.S. Census Bureau 
data with technical and engineering data, as detailed in Attachment E. 
Consequently, the population served, as well as the class and type of 
service (AM or FM), determines the regulatory fee amount to be paid.\6\
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    \6\ In addition, beginning in FY 2005, we established a 
procedure by which we set regulatory fees for AM and FM radio and 
VHF and UHF television Construction Permits each year at an amount 
no higher than the lowest regulatory fee in that respective service 
category. For example, the regulatory fee for a Construction Permit 
for an AM radio station will never be more than the regulatory fee 
for an AM Class C radio station serving a population of less than 
25,000.
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2. Commercial Mobile Radio Service (CMRS) Messaging Service
    7. Since FY 2003, the Commission has maintained the CMRS Messaging 
regulatory fee at the rate that was established in FY 2002 (i.e., $0.08 
per subscriber). We have maintained, rather than increased, this rate 
to account for the messaging industry's declining subscriber base.\7\ 
We note that between FY 1997 and FY 2005, for example, the CMRS 
Messaging subscriber base declined 75.3 percent from 40.8 million to 
10.1 million, respectively.\8\ We seek comment on whether we should 
continue the same approach for regulatory fees applicable to the 
messaging industry. Specifically, should we maintain the industry's 
regulatory fee at $0.08 per subscriber in FY 2006?
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    \7\ See, e.g., Assessment and Collection of Regulatory Fees for 
Fiscal Year 2003; Report and Order, 18 FCC Rcd 15985, 15992, at 
paragraph (2003).
    \8\ The 40.8 million number represents a unit estimate from the 
FY 1997 regulatory fee order, and the 10.1 million figure represents 
the number of paid units as of fiscal year end 2005.
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3. Regulatory Fees for Direct Broadcast Service (DBS) Providers and 
Cable Television Operators
    8. We seek comment on the appropriate regulatory fee structure for 
both cable operators and DBS providers. Since the inception of the 
Commission regulatory fee program, we have assessed section 9 
regulatory fees on cable operators using a per-subscriber approach, 
which is consistent with the statute. By contrast, section 9 regulatory 
fee assessments for DBS providers are based on a per-license approach. 
In the FY 2005 regulatory fee proceeding, the cable industry generally 
argued that the Commission should modify the regulatory fee assessment 
for DBS providers to a per-subscriber approach.\9\ In the FY 2005 
proceeding, we concluded that no changes were warranted at that time 
and therefore retained the regulatory fee assessment methodology used 
for DBS providers since FY 1995. We seek comment on whether we should 
retain the existing regulatory fee assessment methodology for cable 
operators and DBS providers for the purposes of our FY 2006 regulatory 
fee assessment. Commenters proposing a fee change should identify the 
Commission rulemaking proceeding(s) or change(s) in law that they 
believe warrant a modification of our fee assessment methodology for 
DBS operators. To the extent parties argue

[[Page 17412]]

the regulatory fee assessment process should be changed, they should 
identify the legal basis that would justify a change and explain how 
the benefits of the proposed change outweigh the costs of the 
established assessment methodology.
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    \9\ Assessment and Collection of Regulatory Fees for Fiscal Year 
2005, Report and Order and Order on Reconsideration, 20 FCC Rcd 
12259, 12264, at paragraph 10 (2005) (FY 2005 R&O and Order on 
Recon).
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4. Broadband Radio Service (BRS)/Educational Broadband Service (EBS)
    9. We are exploring regulatory fee issues for BRS/EBS in a 
separately pending BRS/EBS proceeding.\10\ To the extent that any 
changes to our regulatory fee rules are adopted in this separate BRS/
EBS proceeding, we propose not to implement such regulatory fee changes 
in the FY 2006 schedule of section 9 Regulatory Fees.
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    \10\ See Amendment of Parts 1, 21, 73, 74 and 101 of the 
Commission's Rules to Facilitate the Provision of Fixed and Mobile 
Broadband Access, Educational and Other Advanced Services in the 
2150-2162 and 2500-2690 MHz Bands et al., Report & Order and Further 
Notice of Proposed Rulemaking, 19 FCC Rcd 14165, 14293-97, at 
paragraphs 351-359 (2004) (R&O and FNPRM).
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B. Administrative and Operational Issues

    10. We invite comment on the administrative and operational 
processes used to collect the annual section 9 regulatory fees. 
Although these issues do not affect the amount of regulatory fees 
parties are obligated to submit, the administrative and operational 
issues affect the process of submitting payment. We generally invite 
comment on ways to improve these processes.
1. Mandatory Use of Fee Filer
    11. We continue to encourage regulatees to use the Commission's 
online electronic Fee Filer application. Since this application was 
introduced in 2000, entities who will be submitting more than twenty-
five (25) Form 159-Cs have been strongly encouraged to use Fee Filer 
when sending their regulatory fee payment. We seek comment on the 
impact to the public if the Commission was to institute the mandatory 
use of Fee Filer for large-volume section 9 regulatory fee payers. 
Mandatory use of Fee Filer by large-volume payers could ease both the 
Commission's administrative burden and those of high-volume payers, as 
well. We seek comment on whether any such mandatory usage requirement 
should be based on a pre-determined dollar amount, or on the number of 
transactions necessary to make payment. If mandatory usage were to be 
based on a dollar amount, what amount should be pre-determined? If 
based on the number of transactions conducted by a single entity, at 
what threshold should mandatory usage be established? Commenters should 
be aware that, for FY 2006, the Commission seeks solely to establish a 
record on this topic. In the event that, after receiving comments, the 
Commission deems this proposal to be an improvement, the use of Fee 
Filer would only become mandatory in FY 2007 or later.
2. Proposals for Notification and Collection of Regulatory Fees
    12. In this section, we seek comment on the administrative 
processes that the Commission uses to notify regulatees and collect 
regulatory fees. Each year, we generate public notices and fact sheets 
that notify regulatees of the fee payment due date and provide 
additional information regarding regulatory fee payment procedures. 
Consistent with our established practice, we propose to provide public 
notices, fact sheets and all other relevant material on our Web site at 
http://www.fcc.gov/fees/regfees.html for the FY 2006 regulatory fee 
cycle. As a general practice, we will not send such material via 
surface mail. However, in the event that regulatees do not have access 
to the Internet, we will mail public notices and other relevant 
material upon request. Regulatees and the general public may request 
such information by contacting the FCC Financial Operations HelpDesk at 
(877) 480-3201, Option 4.
    13. Although we will not send public notices and fact sheets to 
regulatees en masse, we will send specific regulatory fee bills or 
assessments via surface mail or e-mail to the select fee categories 
discussed below.\11\ We are pursuing our billing initiatives as part of 
our effort to modernize our financial practices. These initiatives also 
serve the purpose of providing licensees with notification of upcoming 
regulatory fees. Eventually, we intend to expand our billing 
initiatives to include all regulatory fee service categories.
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    \11\ An assessment is a proposed statement of the amount of 
regulatory fees owed by an entity to the Commission (or proposed 
subscriber count to be ascribed for purposes of setting the entity's 
regulatory fee) but it is not entered into the Commission's accounts 
receivable system as a current debt. By contrast, a bill is 
automatically recognized as a debt owed to the Commission. Bills 
reflect the amount owed and have a Fee Due Date of the last day of 
the regulatory fee payment window. Consequently, if a bill is not 
paid by the Fee Due Date, it becomes delinquent and is subject to 
our debt collection procedures. See also 47 CFR 1.1161(c), 
1.1164(f)(5), and 1.1910.
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a. Interstate Telecommunications Service Providers (ITSPs)--Billed
    14. In FY 2001, we began sending pre-completed FCC Form 159-W 
assessments to carriers in an effort to assist them in paying the 
Interstate Telecommunications Service Provider (ITSP) regulatory fee. 
The fee amount on FCC Form 159-W was calculated from the FCC Form 499-A 
report, which carriers are required to submit by April 1st of each 
year. Throughout FY 2002 and FY 2003, we refined the FCC Form 159-W to 
simplify the regulatory fee payment process.\12\ Beginning in FY 2004, 
the pre-completed FCC Form 159-W was sent to carriers as a bill, rather 
than as an assessment of amount due. Other than the manner in which 
Form 159-W payments were entered into our financial system, carriers 
experienced no procedural changes regarding the use of the FCC Form 
159-W when submitting payment of their ITSP regulatory fees. For FY 
2006, we propose to continue our Form 159-W billing initiative for 
ITSPs. We seek comment on this proposal and on ways that we could 
improve our billing initiative for ITSPs.
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    \12\ Beginning in FY 2002, Form 159-W included a payment section 
at the bottom of the form that allowed carriers the opportunity to 
send in Form 159-W in lieu of completing Form 159 Remittance Advice 
Form.
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b. Satellite Space Station Licensees--Billed
    15. Beginning in FY 2004, we mailed regulatory fee bills via 
surface mail to licensees in our two satellite space station service 
categories. Specifically, geostationary orbit space station (GSO) 
licensees receive bills requesting regulatory fee payment for 
satellites that (1) were licensed by the Commission and operational on 
or before October 1 of the respective fiscal year; and (2) were not co-
located with and technically identical to another operational satellite 
on that date (i.e., were not functioning as a spare satellite). Non-
geostationary orbit space station (NGSO) licensees received bills 
requesting regulatory fee payment for systems that were licensed by the 
Commission and operational on or before October 1 of the respective 
fiscal year.
    16. For FY 2006, we propose to continue our billing initiative for 
our GSO and NGSO satellite space station categories. We emphasize that 
the bills that we propose to generate for our GSO and NGSO licensees 
will only be for the satellite or system aspects of their respective 
operations. GSO and NGSO licensees typically have regulatory fee 
obligations in other service categories (such as earth stations, 
broadcast facilities, etc.), and we expect satellite operators to meet 
their full fee payment obligations for their entire portfolio of

[[Page 17413]]

FCC licenses. We seek comment on our proposal to generate regulatory 
fee bills for our two satellite space station service categories.
c. Additional Service Categories for Billing or Assessing
    17. We are currently exploring the feasibility of expanding our 
section 9 regulatory fee billing or assessing initiatives to three 
additional service categories in FY 2006. The service categories are 
Earth Stations, Cable Television Relay Service Stations (CARS) and the 
Local Multipoint Distribution Service (LMDS). We believe that billing 
or assessing can be accomplished for these categories because they are 
comprised of relatively few payment units (in comparison to many other 
categories in our Schedule of Regulatory Fees), and because the 
Commission maintains licensing databases for each of the three 
categories. Depending on progress made throughout this year, we may be 
in a position to generate bills or assessments for Earth Station, CARS 
and LMDS licensees in FY 2006. Any assessment initiative may occur 
solely online, whereby licensees would be instructed to visit a 
Commission-authorized Web site to view their regulatory fee 
obligations. Licensees would then be able to update or correct any 
information concerning their license, or to certify their fee-exempt 
status, if appropriate. The web site would be available to licensees 
throughout this summer. We seek comment on our intent to expand our 
billing/assessment initiatives to these service categories.
d. Media Services Licensees--Assessed
    18. Beginning in FY 2003, we sent fee assessment postcards via 
surface mail to media services entities on a per-facility basis. The 
postcards notified licensees of the date when fee payments were due; 
provided the assessed fee amount for the facility, as well as other 
data attributes that we used to determine the fee amount; and, 
beginning in FY 2004, provided licensees with a telephone number to 
call (Financial Operations Help Desk) in the event that they needed 
customer assistance. We propose to continue our assessment initiative 
for media services licensees this year in a similar fashion.\13\
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    \13\ Fee assessments are proposed to be issued for AM and FM 
Radio Stations, AM and FM Construction Permits, FM Translators/
Boosters, VHF and UHF Television Stations, VHF and UHF Television 
Construction Permits, Satellite Television Stations, Low Power 
Television (LPTV) Stations and LPTV Translators/Boosters, to the 
extent that applicants, permittees and licensees of such facilities 
do not qualify as government entities or non-profit entities. Fee 
assessments have not been issued for broadcast auxiliary stations in 
prior years, nor will they be issued in FY 2006.
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    19. Consistent with procedures used last year, we propose to mail a 
single round of postcards to licensees and their other known points of 
contact listed in CDBS (Consolidated Database System) and in CORES 
(Commission Registration System), the Commission's two official 
databases for media services. By doing so, licensees and their other 
points of contact will all be furnished with the same information for 
each facility in question so that they can designate among themselves 
the payer of this year's fee. Mailing postcards to all interested 
parties at different addresses on file for each facility also 
encourages all parties to visit a Commission-authorized Web site to 
update or correct any information concerning the facility, or to 
certify their fee-exempt status, if appropriate. The Web site will be 
available to licensees throughout this summer.\14\ We seek comment on 
our proposal to generate fee assessment postcards for media services 
entities.
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    \14\ The Commission-authorized Web site for media services 
licensees is http://www.fccfees.com.
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    20. In the past, some media services licensees have mistakenly 
mailed their postcards back to the Commission stapled to payment 
checks. We emphasize that under our proposal, licensees must still 
submit a completed FCC Form 159 Remittance Advice with their fee 
payments, despite having received an assessment postcard. The postcards 
may not be used as a substitute for a completed Form 159. We cannot 
guarantee that a licensee's regulatory fee payment will be posted 
accurately against the licensee's account if the licensee does not 
submit a completed Form 159 along with its fee payment.
    21. We also emphasize that the most important data element that 
media services licensees need to include on their Form 159 is their 
facility ID number. The facility ID number is a unique identifier that 
remains constant over the course of a facility's existence. Despite the 
fact that we prominently display a facility ID number on the facility's 
postcard, and our Form 159 filing instructions require payers to 
provide their facility ID number (and associated call sign) for the 
facility in question, we continue to receive many incomplete Form 159s 
that do not provide the facility ID number for the facility for which 
the fee is being paid.
e. Commercial Mobile Radio Service (CMRS) Cellular and Mobile 
Services--Assessed
    22. As in FY 2005,\15\ we propose to send an assessment letter to 
Commercial Mobile Radio Service (CMRS) providers using data that is 
based on the Numbering Resource Utilization Forecast (NRUF) form, which 
includes a list of the carrier's Operating Company Numbers (OCNs) upon 
which the assessment is based. Consistent with existing practice, the 
letters will not include OCNs with their respective assigned number 
counts, but rather, an aggregate total of assigned numbers for each 
carrier. We also propose to continue our procedure of giving entities 
an opportunity to amend their subscriber counts by sending two rounds 
of assessment letters--an initial assessment and a final assessment 
letter.
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    \15\ See FY 2005 R&O and Order on Recon., 20 FCC Rcd 12259, 
12264, at paragraphs 38-44.
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    23. If the number of subscribers on the initial assessment letter 
differs from the subscriber count the service provider provided on its 
NRUF form, the carrier can correct its subscriber count by returning 
the assessment letter or by contacting (a telephone number will be 
provided) the Commission and stating a reason for the change, such as 
the purchase or the sale of a subsidiary, including the date of the 
transaction, and any other information that will help to justify a 
reason for the change.
    24. If we receive no response to our initial assessment letter, we 
will assume that the initial assessment is correct and will expect the 
fee payment to be based on the number of subscribers listed on the 
initial assessment. We will review all responses to initial assessment 
letters and determine whether a change in the number of subscribers is 
warranted. We will then generate a final assessment letter that informs 
carriers as to whether or not we accept the changed number of 
subscribers.
    25. As in previous years, operators will certify their subscriber 
counts in Block 30 of the FCC Form 159 Remittance Advice when making 
their regulatory fee payments. As an additional enhancement this year 
to this assessment process, we propose to include porting information 
(e.g., information on the number of ``ports in'' and ``ports out'') in 
our assessment letters so that licensees can account for any 
differences between the data submitted in their NRUF report and the 
Commission's assessment count.
    26. Although an initial and a final assessment letter will be 
mailed to carriers that have filed an NRUF form, it is conceivable that 
some carriers will

[[Page 17414]]

not be sent any letters of assessment because they did not file the 
NRUF form. We propose that these carriers compute their fee payment 
using the standard methodology \16\ that is currently in place for CMRS 
Wireless services (e.g., compute their subscriber counts as of December 
31, 2005), and submit their payment accordingly on FCC Form 159. 
However, regardless of whether a carrier receives an assessment letter 
or computes the subscriber count itself, the Commission reserves the 
right, under the Communications Act, to audit the number of subscribers 
for which regulatory fees are paid. In the event that the Commission 
determines that the number of subscribers is inaccurate or that an 
insufficient reason is given for making a correction on the initial 
assessment letter, we note that the Commission reserves the right to 
assess the carrier for the difference between what was paid and what 
should have been paid.
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    \16\ Federal Communications Commission, Regulatory Fees Fact 
Sheet: What You Owe--Commercial Wireless Services for FY 2005 at 1 
(rel. July 2005).
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    27. In summary, we propose to (1) Derive the subscriber count from 
NRUF data based on ``assigned'' number counts that have been adjusted 
for porting to net Type 0 ports (``in'' and ``out''), which should 
reflect a more accurate subscriber count; (2) provide carriers with the 
opportunity to revise their subscriber count in an initial assessment 
letter, and (3) require carriers to confirm their subscriber counts on 
an aggregate basis using data in the NRUF report.
f. Cable Television Subscribers--Assessed
    28. We propose to conduct a regulatory fee assessment initiative 
for the cable television industry consistent with the process the 
Commission used in FY 2005. Specifically, we propose to generate fee 
assessment letters for the cable operators who are on file as having 
paid regulatory fees the previous fiscal year for their basic cable 
subscribers. Also, as an additional means of notifying cable television 
regulatees of their section 9 regulatory fee payment obligations for FY 
2006, we propose to send an e-mail reminder to all of the operators' e-
mail addresses that are populated in the Media Bureau's Cable 
Operations and Licensing System (COALS). We seek comment on our 
proposed assessment initiative and on our intention to use company e-
mail addresses in COALS.
    29. Our assessment letter to each operator will (1) Announce the 
due date for payment of regulatory fees; (2) reflect the subscriber 
count for which the operator paid regulatory fees in FY 2005--and thus 
certified as having served as of December 31, 2004; and (3) request 
that the operator access a Commission-authorized Web site to provide 
its aggregate subscriber count as of December 31, 2005. If the number 
of subscribers as of December 31, 2005 differs from that as reported 
for last year, operators will be required to provide a brief 
explanation for the differing subscriber counts and indicate when the 
difference occurred. Cable operators who do not have access to the 
Internet will be able to contact the FCC Financial Operations Help Desk 
to provide their subscriber count as of December 31, 2005. We seek 
comment on this proposed assessment initiative.
    30. Some cable operators may not have made regulatory fee payments 
in FY 2005 and, as a result, will not receive an assessment letter for 
FY 2006 regulatory fees. For example, a new company may have become 
operational after the first day of the fiscal year and therefore did 
not have a regulatory fee obligation in FY 2005; or an existing company 
did not make a payment because it filed a petition for waiver of 
regulatory fees for FY 2005 based on financial hardship. Regardless of 
the circumstance, we emphasize that not receiving a regulatory fee 
assessment letter in FY 2006 does not excuse an operator from its 
obligation to pay FY 2006 regulatory fees. All non-exempt cable 
operators, not only those that made payments in FY 2005 and/or receive 
assessment letters for FY 2006 fees, are required to make payments.
    31. We also propose to retain the payment procedures for cable 
television operators that we have had in place for the past two fiscal 
years. That is, we will continue to permit cable television operators 
to base their payment on their company's aggregate subscriber count as 
of December 31, 2005, rather than requiring them to sub-report 
subscriber counts on a per community unit identifier (CUID) basis on 
the FCC Form 159 Remittance Advice. After providing their company's 
aggregate subscriber count in Block 25A of the FCC Form 159, operators 
will still be required to certify the accuracy of the subscriber count 
in Block 30.
    32. Finally, regarding the cable television industry's annual 
payment obligation for section 9 regulatory fees, we seek comment on 
ways in which we could reduce the gap between the number of estimated 
payment units that we establish for each fiscal year and the number of 
actual payment units that we receive for that fiscal year. The 
Commission does not have a universal reporting requirement by which all 
cable television operators would report the number of basic cable 
television subscribers that they serve throughout all of their cable 
television systems.\17\ Our estimates of the number of basic television 
subscribers are based on reviews of prior year regulatory fee payments 
made by cable operators and subscriber data published in publicly 
available data sources. As a result, the aggregate number of actual 
payment units made by the cable television industry may differ from the 
estimated number of units. We seek comments and/or proposals that 
address this situation.
---------------------------------------------------------------------------

    \17\ The number of basic cable television subscribers served is 
the basis from which cable television operators are required to 
calculate their annual section 9 regulatory fee payment obligations.
---------------------------------------------------------------------------

3. Streamlined Regulatory Fee Payment Process for CMRS Providers
    33. We propose to allow those CMRS Cellular, Mobile, and Messaging 
service providers that pay using an FCC Form 159 or the automated Fee 
Filer system to pay their subscriber totals at the aggregate level 
without having to identify and associate their subscriber counts with 
calls signs. We are requiring CMRS Cellular/Mobile providers to use the 
aggregate subscriber totals from their Numbering Resource Utilization 
Forecast report (NRUF),\18\ netted for porting; therefore, it is 
consistent for CMRS providers (Cellular, Mobile, and Messaging) to pay 
their subscriber totals at the aggregate level without having to 
associate these subscriber counts with their respective call signs. We 
believe that eliminating the requirement to identify subscribers at the 
call sign level will improve the Commission's efficiency in processing 
regulatory fee payments, as well as reduce the administrative burden on 
licensees during the payment process. We seek comment on whether 
eliminating the requirement for CMRS providers to identify their call 
signs when making their regulatory fee payment will in any manner 
disrupt the processes by which providers determine and calculate their 
subscriber totals.
---------------------------------------------------------------------------

    \18\ For more information on our proposed regulatory fee 
assessment initiative for CMRS providers this fiscal year, see also 
Section II.B.2.E. of this NPRM.
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4. Future Streamlining of the Regulatory Fee Assessment and Collection 
Process
    34. We continue to welcome comments concerning our commitment to 
reviewing, streamlining and modernizing our statutorily required fee 
assessment and collection procedures.

[[Page 17415]]

Our areas of particular interest include: (1) The process for notifying 
licensees about changes in the annual Schedule of Regulatory Fees and 
how it can be improved; (2) the most effective way to disseminate 
regulatory fee assessments and bills, e.g., through surface mail, e-
mail, online Web site, or some other mechanism; (3) the fee payment 
process, including how the agency's online regulatory fee filing system 
(Fee Filer) can be enhanced; (4) the timing of fee payments, including 
whether we should alter the existing section 9 regulatory fee payment 
``window'' in any way; and (5) the timing of fee assessments and bills.

III. Procedural Matters

A. Payment of Regulatory Fees

1. De Minimis Fee Payment Liability
    35. Consistent with past practice, regulatees whose total FY 2006 
regulatory fee liability, including all categories of fees for which 
payment is due, amounts to less than $10 will be exempted from payment 
of FY 2006 regulatory fees.
2. Standard Fee Calculations and Payment Dates
    36. The Commission will, for the convenience of payers, accept fee 
payments made in advance of the normal formal window for the payment of 
regulatory fees. Licensees are reminded that, under our current rules, 
the responsibility for payment of fees by service category is as 
follows:
    (a) Media Services: Regulatory fees must be paid for AM/FM radio 
station and VHF/UHF television station initial construction permits 
that were issued on or before October 1, 2005, and for all broadcast 
facility licenses granted on or before October 1, 2005. However, in 
instances where a permit or license is transferred or assigned after 
October 1, 2005, responsibility for payment rests with the holder of 
the permit or license as of the Fee Due Date.
    (b) Wireline (Common Carrier) Services: Fees must be paid for any 
authorization that was granted on or before October 1, 2005. However, 
in instances where a permit or license is transferred or assigned after 
October 1, 2005, responsibility for payment rests with the holder of 
the permit or license as of the Fee Due Date.
    (c) Wireless Services: Commercial Mobile Radio Service (CMRS) 
cellular, mobile, and messaging services (fees based upon a subscriber, 
unit or circuit count): Fees must be paid for any authorization that 
was issued on or before October 1, 2005. The number of subscribers, 
units or circuits on December 31, 2005 will be used as the basis from 
which to calculate the fee payment.
    The first eleven fee categories in our Attachment D, Schedule of 
Regulatory Fees, pay what the Commission refers to as ``small multi-
year wireless regulatory fees.'' Entities pay these regulatory fees in 
advance for the entire amount of the 5-year or 10-year term of initial 
license, and only pay fees again at the time of license renewal. As a 
result, the Commission does not collect regulatory fees for these 
eleven fee categories on an annual basis.
    (d) Multichannel Video Programming Distributor Services (cable 
television operators and CARS licensees): The number of basic cable 
television subscribers on December 31, 2005 will be used as the basis 
from which to calculate the fee payment.\19\ For CARS licensees, fees 
must be paid for any license that was granted on or before October 1, 
2005. In instances where a CARS license is transferred or assigned 
after October 1, 2005, responsibility for payment rests with the holder 
of the license as of the Fee Due Date.
---------------------------------------------------------------------------

    \19\ Cable television system operators should compute their 
basic subscribers as follows: Number of single family dwellings + 
number of individual households in multiple dwelling unit 
(apartments, condominiums, mobile home parks, etc.) paying at the 
basic subscriber rate + bulk rate customers + courtesy and free 
service. Note: Bulk-Rate Customers = Total annual bulk-rate charge 
divided by basic annual subscription rate for individual households. 
Operators may base their count on ``a typical day in the last full 
week'' of December 2005, rather than on a count as of December 31, 
2005.
---------------------------------------------------------------------------

    (e) International Services: For earth stations and geostationary 
orbit space stations, regulatory fees must be paid for stations that 
were licensed and operational on or before October 1, 2005. In 
instances where a license is transferred or assigned after October 1, 
2005, responsibility for payment rests with the holder of the license 
as of the Fee Due Date. For non-geostationary orbit satellite systems, 
fees must be paid for systems that were licensed and operational on or 
before October 1, 2005. In instances where a license is transferred or 
assigned after October 1, 2005, responsibility for payment rests with 
the holder of the license as of the Fee Due Date. For international 
bearer circuits, payment is calculated on a per-active circuit basis as 
of December 31, 2005.\20\
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    \20\ Regulatory fees for International Bearer Circuits are to be 
paid by facilities-based common carriers that have active 
international bearer circuits in any transmission facility for the 
provision of service to an end user or resale carrier, which 
includes active circuits to themselves or to their affiliates. In 
addition, non-common carrier satellite operators must pay a fee for 
each circuit sold or leased to any customer, including themselves or 
their affiliates, other than an international common carrier 
authorized by the Commission to provide U.S. international common 
carrier services. Non-common carrier submarine cable operators are 
also to pay fees for any and all international bearer circuits sold 
on an indefeasible right of use (IRU) basis or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. See Assessment and 
Collection of Regulatory Fees for Fiscal Year 2001, MD Docket No. 
01-76, Report and Order, 16 FCC Rcd 13525, 13593 (2001); Regulatory 
Fees Fact Sheet: What You Owe--International and Satellite Services 
Licensees for FY 2004 at 3 (rel. July 2004) (the fact sheet is 
available on the FCC Web site at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249904A4.pdf). On February 6, 2006, VSNL 
Telecommunications (US) Inc. filed a Petition for Rulemaking urging 
the Commission to reform the current International Bearer Circuit 
Fee rules and policies as applied to non-common carrier submarine 
cable operators. See Petition for Rulemaking of VSNL 
Telecommunications (US) Inc., RM-11312 (filed February 6, 2006). 
This Petition remains pending before the Commission, which has 
issued a Public Notice requesting comment on the petition. See 
Consumer and Governmental Affairs Bureau, Reference Information 
Center, Public Notice, Report No. 2759 (released February 15, 2006). 
The Commission intends to resolve the complex issues presented by 
this Petition separately, and any comments on these issues filed in 
the instant proceeding will be incorporated into, and addressed, 
with those filed on the Petition for Rulemaking.
---------------------------------------------------------------------------

B. Enforcement

    37. As a reminder to all licensees, section 159(c) of the 
Communications Act requires us to impose an additional charge as a 
penalty for late payment of any regulatory fee. As in years past, a 
late payment penalty of 25 percent of the amount of the required 
regulatory fee will be assessed on the first day following the deadline 
date for filing of these fees. Regulatory fee payment must be received 
and stamped at the lockbox bank by the last day of the regulatory fee 
filing window, and not merely postmarked by the last day of the window. 
Failure to pay regulatory fees and/or any late penalty will subject 
regulatees to sanctions, including the Commission's Red Light Rule (see 
47 CFR 1.1910) and the provisions set forth in the Debt Collection 
Improvement Act of 1996 (DCIA). We also assess administrative 
processing charges on delinquent debts to recover additional costs 
incurred in processing and handling the related debt pursuant to the 
DCIA and Sec.  1.1940(d) of the Commission's Rules. These 
administrative processing charges will be assessed on any delinquent 
regulatory fee, in addition to the 25 percent late charge penalty. 
Partial underpayments of regulatory fees are treated in the following 
manner. The licensee will be given credit for the amount paid, but if 
it is later determined that the fee paid is incorrect or not timely 
paid, the 25 percent late charge penalty will be assessed on the

[[Page 17416]]

portion that is not paid in a timely manner.
    38. Furthermore, our regulatory fee rules provide that we will 
withhold action on any applications or other requests for benefits 
filed by anyone who is delinquent in any non-tax debts owed to the 
Commission (including regulatory fees) and will ultimately dismiss 
those applications or other requests if payment of the delinquent debt 
or other satisfactory arrangement for payment is not made. See 47 CFR 
1.1161(c), 1.1164(f)(5), and 1.1910. Failure to pay regulatory fees can 
also result in the initiation of a proceeding to revoke any and all 
authorizations held by the entity responsible for paying the delinquent 
fee(s).

C. Initial Regulatory Flexibility Analysis

    39. With respect to this NPRM, an Initial Regulatory Flexibility 
Analysis (IRFA), is contained in Attachment A of the Appendix.\21\ 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM specified infra. The 
Commission will send a copy of the NPRM, including the IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration.
---------------------------------------------------------------------------

    \21\ See 5 U.S.C. 603. In addition, the NPRM and the IRFA (or 
summaries thereof) will be published in the Federal Register.
---------------------------------------------------------------------------

D. Initial Paperwork Reduction Act of 1995 Analysis

    40. This document does not contain proposed or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4). Completion of the 159 family of forms required by the 
Commission's regulatory fee payment process is already approved by the 
Office of Management and Budget under information collections 3060-0589 
and 3060-0949.

E. Ex Parte Rules

    41. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's 
rules.\22\ Ex parte presentations are permissible if disclosed in 
accordance with Commission rules, except during the Sunshine Agenda 
period when presentations, ex parte or otherwise, are generally 
prohibited. Persons making oral ex parte presentations are reminded 
that a memorandum summarizing a presentation must contain a summary of 
the substance of the presentation and not merely a listing of the 
subjects discussed. More than a one- or two-sentence description of the 
views and arguments presented is generally required.\23\ Additional 
rules pertaining to oral and written presentations are set forth in 
section 1.1206(b).
---------------------------------------------------------------------------

    \22\ See 47 CFR 1.1206(b); see also 47 CFR 1.1202 and 1.1203.
    \23\ See 47 CFR 1.1206(b)(2).
---------------------------------------------------------------------------

F. Filing Requirements

    42. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules,\24\ interested parties may file comments on or 
before the dates indicated on the first page of this document. Comments 
may be filed using: (1) The Commission's Electronic Comment Filing 
System (``ECFS''), (2) the Federal Government's eRulemaking Portal, or 
(3) by filing paper copies.\25\
---------------------------------------------------------------------------

    \24\ See id. Sec. Sec.  1.415, 1.419.
    \25\ See Electronic Filing of Documents in Rulemaking 
Proceedings, 13 FCC Rcd 11322 (1998).
---------------------------------------------------------------------------

    43. Electronic Filers: Comments may be filed electronically using 
the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs or the 
Federal eRulemaking Portal: http://www.regulations.gov. Filers should 
follow the instructions provided on the website for submitting 
comments. For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to [email protected], and include the following 
words in the body of the message, ``get form.'' A sample form and 
directions will be sent in response.
    44. Paper Filers: Parties who choose to file by paper must file an 
original and four copies of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although we continue to experience delays in 
receiving U.S. Postal Service mail). All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington DC 20554.
    45. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. These documents will also be available via ECFS. Documents 
will be available electronically in ASCII, Word 97, and/or Adobe 
Acrobat.
    46. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an e-mail to [email protected] or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: http://www.fcc.gov.

IV. Ordering Clauses

    47. Accordingly, it is ordered that, pursuant to sections 4(i) and 
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed 
Rulemaking is hereby adopted.
    It is further ordered that the Commission's Consumer Information 
Bureau, Reference Information Center, shall send a copy of this NPRM, 
including the Initial Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.


[[Page 17417]]


Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Attachment A: Initial Regulatory Flexibility Analysis

    48. As required by the Regulatory Flexibility Act (RFA),\26\ the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules in the present NPRM. Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed on or before the dates indicated on the first 
page of this document. The Commission will send a copy of the NPRM, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.\27\ In addition, the NPRM and IRFA (or 
summaries thereof) will be published in the Federal Register.\28\
---------------------------------------------------------------------------

    \26\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by 
the Contract With America Advancement Act of 1996, Public Law 104-
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
    \27\ 5 U.S.C. 603(a).
    \28\ Id.
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I. Need for, and Objectives of, the Proposed Rules

    49. This rulemaking proceeding is initiated to obtain comments 
concerning the Commission's proposed amendment of its Schedule of 
Regulatory Fees in the amount of $288,771,000, the amount that Congress 
has required the Commission to recover. The Commission seeks to collect 
the necessary amount through its proposed Schedule of Regulatory Fees 
in the most efficient manner possible and without undue public burden.

II. Legal Basis

    50. This action, including publication of proposed rules, is 
authorized under sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\29\
---------------------------------------------------------------------------

    \29\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
---------------------------------------------------------------------------

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

    51. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted.\30\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \31\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\32\ A ``small business concern'' is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\33\
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    \30\ 5 U.S.C. 603(b)(3).
    \31\ 5 U.S.C. 601(6).
    \32\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \33\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    52. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.\34\
---------------------------------------------------------------------------

    \34\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028, 
at page 40 (July 2002).
---------------------------------------------------------------------------

    53. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.\35\
---------------------------------------------------------------------------

    \35\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
---------------------------------------------------------------------------

    54. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' \36\ As of 1997, there were approximately 
87,453 governmental jurisdictions in the United States.\37\ This number 
includes 39,044 county governments, municipalities, and townships, of 
which 37,546 (approximately 96.2%) have populations of fewer than 
50,000, and of which 1,498 have populations of 50,000 or more. Thus, we 
estimate the number of small governmental jurisdictions overall to be 
84,098 or fewer.
---------------------------------------------------------------------------

    \36\ 5 U.S.C. 601(5).
    \37\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2000, Section 9, pages 299-300, Tables 490 and 492.
---------------------------------------------------------------------------

    55. We have included small incumbent local exchange carriers in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
\38\ The SBA's Office of Advocacy contends that, for RFA purposes, 
small incumbent local exchange carriers are not dominant in their field 
of operation because any such dominance is not ``national'' in 
scope.\39\ We have therefore included small incumbent local exchange 
carriers in this RFA analysis, although we emphasize that this RFA 
action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 632.
    \39\ Letter from Jere W. Glover, Chief Counsel for Advocacy, 
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small 
Business Act contains a definition of ``small-business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 
601(3) (RFA). SBA regulations interpret ``small business concern'' 
to include the concept of dominance on a national basis. See 13 CFR 
121.102(b).
---------------------------------------------------------------------------

    56. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees.\40\ According to 
Commission data,\41\ 1,303 carriers have reported that they are engaged 
in the provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by our proposed action.
---------------------------------------------------------------------------

    \40\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517110 (changed from 513310 in October 2002).
    \41\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
Page 5-5 (June 2005) (hereinafter ``Trends in Telephone Service''). 
This source uses data that are current as of October 1, 2004.
---------------------------------------------------------------------------

    57. Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees.\42\ 
According to Commission data,\43\ 820 carriers have reported that they 
are engaged in the provision of either competitive access provider 
services or competitive local exchange carrier services. Of these 820 
carriers, an estimated 726 have 1,500 or fewer

[[Page 17418]]

employees and 94 have more than 1,500 employees. In addition, 12 
carriers have reported that they are ``Shared-Tenant Service 
Providers,'' and all 12 are estimated to have 1.500 or fewer employees. 
In addition, 39 carriers have reported that they are ``Other Local 
Service Providers.'' Of the 39, an estimated 38 have 1,500 or fewer 
employees and one has more than 1,500 employees. Consequently, the 
Commission estimates that most providers of competitive local exchange 
service, competitive access providers, ``Shared-Tenant Service 
Providers,'' and ``Other Local Service Providers'' are small entities 
that may be affected by our proposed action.
---------------------------------------------------------------------------

    \42\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \43\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    58. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\44\ According to Commission data,\45\ 143 carriers have 
reported that they are engaged in the provision of local resale 
services. Of these, an estimated 141 have 1,500 or fewer employees and 
two have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of local resellers are small entities that 
may be affected by our proposed action.
---------------------------------------------------------------------------

    \44\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \45\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    59. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\46\ According to Commission data,\47\ 770 carriers have 
reported that they are engaged in the provision of toll resale 
services. Of these, an estimated 747 have 1,500 or fewer employees and 
23 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of toll resellers are small entities that 
may be affected by our proposed action.
---------------------------------------------------------------------------

    \46\ 13 CFR 121.201, NAICS code 517310 (changed to 513330 in 
October 2002).
    \47\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    60. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\48\ According to Commission data,\49\ 654 carriers have 
reported that they are engaged in the provision of payphone services. 
Of these, an estimated 652 have 1,500 or fewer employees and two have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of payphone service providers are small entities that may 
be affected by our proposed action.
---------------------------------------------------------------------------

    \48\ 3 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \49\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    61. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\50\ According to Commission data,\51\ 316 carriers 
have reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 292 have 1,500 or fewer employees and 
24 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by our proposed action.
---------------------------------------------------------------------------

    \50\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \51\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    62. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\52\ According to Commission data,\53\ 23 carriers have 
reported that they are engaged in the provision of operator services. 
Of these, an estimated 20 have 1,500 or fewer employees and three have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of OSPs are small entities that may be affected by our 
proposed action.
---------------------------------------------------------------------------

    \52\ 13 CFR 121.201, NAICS code 517110 (changed from 513310 in 
October 2002).
    \53\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    63. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\54\ According to Commission data,\55\ 89 carriers have 
reported that they are engaged in the provision of prepaid calling 
cards. Of these, an estimated 88 have 1,500 or fewer employees and one 
has more than 1,500 employees. Consequently, the Commission estimates 
that the majority of prepaid calling card providers are small entities 
that may be affected by our proposed action.
---------------------------------------------------------------------------

    \54\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \55\ ``Trends in Telephone Service'' at Table 5.3.
---------------------------------------------------------------------------

    64. 800 and 800-Like Service Subscribers.\56\ Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for 800 and 800-like service (``toll free'') subscribers. 
The appropriate size standard under SBA rules is for the category 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees.\57\ The most reliable 
source of information regarding the number of these service subscribers 
appears to be data the Commission receives from Database Service 
Management on the 800, 866, 877, and 888 numbers in use.\58\ According 
to our data, at the end of December 2004, the number of 800 numbers 
assigned was 7,540,453; the number of 888 numbers assigned was 
5,947,789; the number of 877 numbers assigned was 4,805,568; and the 
number of 866 numbers assigned was 5,011,291. We do not have data 
specifying the number of these subscribers that are not independently 
owned and operated or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
toll free subscribers that would qualify as small businesses under the 
SBA size standard. Consequently, we estimate that there are 7,540,453 
or fewer small entity 800 subscribers; 5,947,789 or fewer small entity 
888 subscribers; 4,805,568 or fewer small entity 877 subscribers, and 
5,011,291 or fewer entity 866 subscribers.
---------------------------------------------------------------------------

    \56\ We include all toll-free number subscribers in this 
category, including those for 888 numbers.
    \57\ 13 CFR 121.201, NAICS code 517310 (changed from 513330 in 
October 2002).
    \58\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service,'' Tables 18.4, 
18.5, 18.6, and 18.7, (June 2005).
---------------------------------------------------------------------------

    65. International Service Providers. The Commission has not 
developed a small business size standard specifically for providers of 
international service. The appropriate size standards under SBA rules 
are for the two broad categories of Satellite Telecommunications and 
Other Telecommunications. Under both categories, such a business is 
small if it has $12.5 million or less in average

[[Page 17419]]

annual receipts.\59\ For the first category of Satellite 
Telecommunications, Census Bureau data for 1997 show that there were a 
total of 324 firms that operated for the entire year.\60\ Of this 
total, 273 firms had annual receipts of under $10 million, and an 
additional 24 firms had receipts of $10 million to $24,999,999. Thus, 
the majority of Satellite Telecommunications firms can be considered 
small.
---------------------------------------------------------------------------

    \59\ 13 CFR 121.201, NAICS codes 517410 and 517910 (changed from 
513340 and 513390 in October 2002).
    \60\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 513340 (issued October 2000).
---------------------------------------------------------------------------

    66. The second category--Other Telecommunications--includes 
``establishments primarily engaged in * * * providing satellite 
terminal stations and associated facilities operationally connected 
with one or more terrestrial communications systems and capable of 
transmitting telecommunications to or receiving telecommunications from 
satellite systems.''\61\ According to Census Bureau data for 1997, 
there were 439 firms in this category that operated for the entire 
year.\62\ Of this total, 424 firms had annual receipts of $5 million to 
$9,999,999 and an additional six firms had annual receipts of $10 
million to $24,999,990. Thus, under this second size standard, the 
majority of firms can be considered small.
---------------------------------------------------------------------------

    \61\ Office of Management and Budget, North American Industry 
Classification System, page 513 (1997) (NAICS code 513390, changed 
to 517910 in October 2002).
    \62\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 513390 (issued October 2000).
---------------------------------------------------------------------------

    67. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging''\63\ and ``Cellular and Other Wireless 
Telecommunications.''\64\ Under both SBA categories, a wireless 
business is small if it has 1,500 or fewer employees. For the census 
category of Paging, Census Bureau data for 1997 show that there were 
1,320 firms in this category, total, that operated for the entire 
year.\65\ Of this total, 1,303 firms had employment of 999 or fewer 
employees, and an additional 17 firms had employment of 1,000 employees 
or more.\66\ Thus, under this category and associated small business 
size standard, the great majority of firms can be considered small. For 
the census category Cellular and Other Wireless Telecommunications, 
U.S. Census Bureau data for 1997 show that there were 977 firms in this 
category, total, that operated for the entire year.\67\ Of this total, 
965 firms had employment of 999 or fewer employees, and an additional 
12 firms had employment of 1,000 employees or more.\68\ Thus, under 
this second category and size standard, the great majority of firms 
can, again, be considered small.
---------------------------------------------------------------------------

    \63\ 13 CFR 121.201, NAICS code 513321 (changed to 517211 in 
October 2002).
    \64\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \65\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
    \66\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
    \67\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).
    \68\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
---------------------------------------------------------------------------

    68. Internet Service Providers. The SBA has developed a small 
business size standard for Internet Service Providers. This category 
comprises establishments ``primarily engaged in providing direct access 
through telecommunications networks to computer-held information 
compiled or published by others.''\69\ Under the SBA size standard, 
such a business is small if it has average annual receipts of $21 
million or less.\70\ According to Census Bureau data for 1997, there 
were 2,751 firms in this category that operated for the entire 
year.\71\ Of these, 2,659 firms had annual receipts of under $10 
million, and an additional 67 firms had receipts of between $10 million 
and $24,999,999.\72\ Thus, under this size standard, the great majority 
of firms can be considered small entities.
---------------------------------------------------------------------------

    \69\ Office of Management and Budget, North American Industry 
Classification System, page 515 (1997). NAICS code 514191, ``On-Line 
Information Services'' (changed to current name and to code 518111 
in October 2002).
    \70\ 13 CFR 121.201, NAICS code 518111.
    \71\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 4, Receipts Size of Firms Subject to Federal 
Income Tax: 1997, NAICS code 514191 (issued October 2000).
    \72\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 4, Receipts Size of Firms Subject to Federal 
Income Tax: 1997, NAICS code 514191 (issued October 2000).
---------------------------------------------------------------------------

    69. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the broad economic census category 
``Cellular and Other Wireless Telecommunications.''\73\ Under this SBA 
category, a wireless business is small if it has 1,500 or fewer 
employees. For the census category Cellular and Other Wireless 
Telecommunications firms, U.S. Census Bureau data for 1997 show that 
there were 977 firms in this category, total, that operated for the 
entire year.\74\ Of this total, 965 firms had employment of 999 or 
fewer employees, and an additional 12 firms had employment of 1,000 
employees or more.\75\ Thus, under this category and size standard, the 
great majority of firms can be considered small. According to the most 
recent Trends in Telephone Service data, 604 carriers reported that 
they were engaged in the provision of cellular service, personal 
communications service, or specialized mobile radio telephony services, 
which are placed together in the data.\76\ We have estimated that 427 
of these are small, under the SBA small business size standard.\77\
---------------------------------------------------------------------------

    \73\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \74\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).
    \75\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513322 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
    \76\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (June 2005). This source uses data that are current as of 
October 1, 2004.
    \77\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (June 2005). This source uses data that are current as of 
October 1, 2004.
---------------------------------------------------------------------------

    70. Common Carrier Paging. The SBA has developed a small business 
size standard for wireless firms within the broad economic census 
categories of ``Cellular and Other Wireless Telecommunications.''\78\ 
Under this SBA category, a wireless business is small if it has 1,500 
or fewer employees. For the census category of Paging, U.S. Census 
Bureau data for 1997 show that there were 1,320 firms in this category, 
total, that operated for the entire year.\79\ Of this total, 1,303 
firms had employment of 999 or fewer employees, and an additional 17 
firms had employment of 1,000 employees or

[[Page 17420]]

more.\80\ Thus, under this category and associated small business size 
standard, the great majority of firms can be considered small.
---------------------------------------------------------------------------

    \78\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \79\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).
    \80\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
``Information,'' Table 5, Employment Size of Firms Subject to 
Federal Income Tax: 1997, NAICS code 513321 (issued October 2000). 
The census data do not provide a more precise estimate of the number 
of firms that have employment of 1,500 or fewer employees; the 
largest category provided is ``Firms with 1000 employees or more.''
---------------------------------------------------------------------------

    71. In the Paging Second Report and Order, the Commission adopted a 
size standard for ``small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments.\81\ A small business is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years.\82\ 
The SBA has approved this definition.\83\ An auction of Metropolitan 
Economic Area (MEA) licenses commenced on February 24, 2000, and closed 
on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold.\84\ 
Fifty-seven companies claiming small business status won 440 
licenses.\85\ An auction of MEA and Economic Area (EA) licenses 
commenced on October 30, 2001, and closed on December 5, 2001. Of the 
15,514 licenses auctioned, 5,323 were sold.\86\ One hundred thirty-two 
companies claiming small business status purchased 3,724 licenses. A 
third auction, consisting of 8,874 licenses in each of 175 EAs and 
1,328 licenses in all but three of the 51 MEAs commenced on May 13, 
2003, and closed on May 28, 2003. Seventy-seven bidders claiming small 
or very small business status won 2,093 licenses.\87\ Currently, there 
are approximately 74,000 Common Carrier Paging licenses. According to 
the most recent Trends in Telephone Service, 408 private and common 
carriers reported that they were engaged in the provision of either 
paging or ``other mobile'' services.\88\ Of these, we estimate that 589 
are small, under the SBA-approved small business size standard.\89\ We 
estimate that the majority of common carrier paging providers would 
qualify as small entities under the SBA definition.
---------------------------------------------------------------------------

    \81\ Revision of Part 22 and Part 90 of the Commission's Rules 
to Facilitate Future Development of Paging Systems, Second Report 
and Order, 12 FCC Rcd 2732, 2811-2812, at paragraphs 178-181 (Paging 
Second Report and Order); see also Revision of Part 22 and Part 90 
of the Commission's Rules to Facilitate Future Development of Paging 
Systems, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 
10030, 10085-10088, at paragraphs 98-107 (1999).
    \82\ Paging Second Report and Order, 12 FCC Rcd at 2811, at 
paragraph 179.
    \83\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, from Aida 
Alvarez, Administrator, Small Business Administration, dated 
December 2, 1998.
    \84\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \85\ See ``929 and 931 MHz Paging Auction Closes,'' Public 
Notice, 15 FCC Rcd 4858 (WTB 2000).
    \86\ See ``Lower and Upper Paging Band Auction Closes,'' Public 
Notice, 16 FCC Rcd 21821 (WTB 2002).
    \87\ See ``Lower and Upper Paging Bands Auction Closes,'' Public 
Notice, 18 FCC Rcd 11154 (WTB 2003).
    \88\ See Trends in Telephone Service, Industry Analysis 
Division, Wireline Competition Bureau, Table 5.3 (Number of 
Telecommunications Service Providers by Size of Business) (June 
2005).
    \89\ 13 CFR 121.201, NAICS code 517211.
---------------------------------------------------------------------------

    72. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years.\90\ The SBA has approved 
these definitions.\91\ The Commission auctioned geographic area 
licenses in the WCS service. In the auction, which commenced on April 
15, 1997 and closed on April 25, 1997, there were seven bidders that 
won 31 licenses that qualified as very small business entities, and one 
bidder that won one license that qualified as a small business entity. 
An auction for one license in the 1670-1674 MHz band commenced on April 
30, 2003 and closed the same day. One license was awarded. The winning 
bidder was not a small entity.
---------------------------------------------------------------------------

    \90\ Amendment of the Commission's Rules to Establish Part 27, 
the Wireless Communications Service (WCS), Report and Order, 12 FCC 
Rcd 10785, 10879, at paragraph 194 (1997).
    \91\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
---------------------------------------------------------------------------

    73. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The SBA has developed a small business size 
standard for ``Cellular and Other Wireless Telecommunications'' 
services.\92\ Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees.\93\ According to the most 
recent Trends in Telephone Service data, 719 carriers reported that 
they were engaged in wireless telephony.\94\ We have estimated that 427 
of these are small under the SBA small business size standard.
---------------------------------------------------------------------------

    \92\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \93\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \94\ FCC, Wireline Competition Bureau, Industry Analysis and 
Technology Division, ``Trends in Telephone Service'' at Table 5.3, 
page 5-5 (June 2005). This source uses data that are current as of 
October 1, 2004.
---------------------------------------------------------------------------

    74. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission has created a small business 
size standard for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar 
years.\95\ For Block F, an additional small business size standard for 
``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\96\ These 
small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA.\97\ No small businesses within 
the SBA-approved small business size standards bid successfully for 
licenses in Blocks A and B. There were 90 winning bidders that 
qualified as small entities in the Block C auctions. A total of 93 
``small'' and ``very small'' business bidders won approximately 40 
percent of the 1,479 licenses for Blocks D, E, and F.\98\ On March 23, 
1999, the Commission reauctioned 155 C, D, E, and F Block licenses; 
there were 113 small business winning bidders.\99\
---------------------------------------------------------------------------

    \95\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7850-
7852, at paragraphs 57-60 (1996); see also 47 CFR 24.720(b).
    \96\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7852, 
at paragraph 60.
    \97\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
    \98\ FCC News, ``Broadband PCS, D, E and F Block Auction 
Closes,'' No. 71744 (released January 14, 1997).
    \99\ See ``C, D, E, and F Block Broadband PCS Auction Closes,'' 
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------

    75. On January 26, 2001, the Commission completed the auction of 
422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning 
bidders in this auction, 29 qualified as

[[Page 17421]]

``small'' or ``very small'' businesses.\100\ Subsequent events, 
concerning Auction 35, including judicial and agency determinations, 
resulted in a total of 163 C and F Block licenses being available for 
grant.
---------------------------------------------------------------------------

    \100\ See ``C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
---------------------------------------------------------------------------

    76. Narrowband Personal Communications Services. The Commission 
held an auction for Narrowband PCS licenses that commenced on July 25, 
1994, and closed on July 29, 1994. A second auction commenced on 
October 26, 1994 and closed on November 8, 1994. For purposes of the 
first two Narrowband PCS auctions, ``small businesses'' were entities 
with average gross revenues for the prior three calendar years of $40 
million or less.\101\ Through these auctions, the Commission awarded a 
total of 41 licenses, 11 of which were obtained by four small 
businesses.\102\ To ensure meaningful participation by small business 
entities in future auctions, the Commission adopted a two-tiered small 
business size standard in the Narrowband PCS Second Report and 
Order.\103\ A ``small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $40 million.\104\ A ``very 
small business'' is an entity that, together with affiliates and 
controlling interests, has average gross revenues for the three 
preceding years of not more than $15 million.\105\ The SBA has approved 
these small business size standards.\106\ A third auction commenced on 
October 3, 2001 and closed on October 16, 2001. Here, five bidders won 
317 (Metropolitan Trading Areas and nationwide) licenses.\107\ Three of 
these claimed status as a small or very small entity and won 311 
licenses.
---------------------------------------------------------------------------

    \101\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding Narrowband PCS, Third Memorandum Opinion 
and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175, 
196, at paragraph 46 (1994).
    \102\ See ``Announcing the High Bidders in the Auction of ten 
Nationwide Narrowband PCS Licenses, Winning Bids Total 
$617,006,674,'' Public Notice, PNWL 94-004 (released Aug. 2, 1994); 
``Announcing the High Bidders in the Auction of 30 Regional 
Narrowband PCS Licenses; Winning Bids Total $490,901,787,'' Public 
Notice, PNWL 94-27 (released Nov. 9, 1994).
    \103\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, at paragraph 40 (2000).
    \104\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, at paragraph 40 (2000).
    \105\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476, at paragraph 40 (2000).
    \106\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
    \107\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16 
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------

    77. Lower 700 MHz Band Licenses. We adopted criteria for defining 
three groups of small businesses for purposes of determining their 
eligibility for special provisions such as bidding credits.\108\ We 
have defined a ``small business'' as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years.\109\ A ``very 
small business'' is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
are not more than $15 million for the preceding three years.\110\ 
Additionally, the lower 700 MHz Service has a third category of small 
business status that may be claimed for Metropolitan/Rural Service Area 
(MSA/RSA) licenses. The third category is ``entrepreneur,'' which is 
defined as an entity that, together with its affiliates and controlling 
principals, has average gross revenues that are not more than $3 
million for the preceding three years.\111\ The SBA has approved these 
small size standards.\112\ An auction of 740 licenses (one license in 
each of the 734 MSAs/RSAs and one license in each of the six Economic 
Area Groupings (EAGs)) commenced on August 27, 2002, and closed on 
September 18, 2002. Of the 740 licenses available for auction, 484 
licenses were sold to 102 winning bidders. Seventy-two of the winning 
bidders claimed small business, very small business or entrepreneur 
status and won a total of 329 licenses.\113\ A second auction commenced 
on May 28, 2003, and closed on June 13, 2003, and included 256 
licenses: 5 EAG licenses and 476 Cellular Market Area licenses.\114\ 
Seventeen winning bidders claimed small or very small business status 
and won 60 licenses, and nine winning bidders claimed entrepreneur 
status and won 154 licenses.\115\
---------------------------------------------------------------------------

    \108\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002).
    \109\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1087-88, at paragraph 172 (2002).
    \110\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1087-88, at paragraph 172 (2002).
    \111\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022, 1088, at paragraph 173 (2002).
    \112\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
August 10, 1999.
    \113\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
17 FCC Rcd 17272 (WTB 2002).
    \114\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
    \115\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
---------------------------------------------------------------------------

    78. Upper 700 MHz Band Licenses. The Commission released a Report 
and Order, authorizing service in the upper 700 MHz band.\116\ This 
auction, previously scheduled for January 13, 2003, has been 
postponed.\117\
---------------------------------------------------------------------------

    \116\ Service Rules for the 746-764 and 776-794 MHz Bands, and 
Revisions to Part 27 of the Commission's Rules, Second Memorandum 
Opnion and Order, 16 FCC Rcd 1239 (2001).
    \117\ See ``Auction of Licenses for 747-762 and 777-792 MHz 
Bands (Auction No. 31) Is Rescheduled,'' Public Notice, 16 FCC Rcd 
13079 (WTB 2003).
---------------------------------------------------------------------------

    79. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
we adopted size standards for ``small businesses'' and ``very small 
businesses'' for purposes of determining their eligibility for special 
provisions such as bidding credits and installment payments.\118\ A 
small business in this service is an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years.\119\ Additionally, 
a very small business is an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $15 million for the preceding three years.\120\ SBA approval 
of these definitions is not required.\121\ An auction of 52 Major 
Economic Area (MEA) licenses commenced on September 6, 2000, and

[[Page 17422]]

closed on September 21, 2000.\122\ Of the 104 licenses auctioned, 96 
licenses were sold to nine bidders. Five of these bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001, and closed on 
February 21, 2001. All eight of the licenses auctioned were sold to 
three bidders. One of these bidders was a small business that won a 
total of two licenses.\123\
---------------------------------------------------------------------------

    \118\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299 (2000).
    \119\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, at paragraph 108 (2000).
    \120\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, at paragraph 108 (2000).
    \121\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299, 5343, at paragraph 108, note 246 (for the 746-764 MHz 
and 776-794 MHz bands, the Commission is exempt from 15 U.S.C. 632, 
which requires Federal agencies to obtain SBA approval before 
adopting small business size standards).
    \122\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
    \123\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

    80. Specialized Mobile Radio. The Commission awards ``small 
entity'' bidding credits in auctions for Specialized Mobile Radio (SMR) 
geographic area licenses in the 800 MHz and 900 MHz bands to firms that 
had revenues of no more than $15 million in each of the three previous 
calendar years.\124\ The Commission awards ``very small entity'' 
bidding credits to firms that had revenues of no more than $3 million 
in each of the three previous calendar years.\125\ The SBA has approved 
these small business size standards for the 900 MHz Service.\126\ The 
Commission has held auctions for geographic area licenses in the 800 
MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 
1995, and closed on April 15, 1996. Sixty bidders claiming that they 
qualified as small businesses under the $15 million size standard won 
263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR 
auction for the upper 200 channels began on October 28, 1997, and was 
completed on December 8, 1997. Ten bidders claiming that they qualified 
as small businesses under the $15 million size standard won 38 
geographic area licenses for the upper 200 channels in the 800 MHz SMR 
band.\127\ A second auction for the 800 MHz band was held on January 
10, 2002 and closed on January 17, 2002 and included 23 BEA licenses. 
One bidder claiming small business status won five licenses.\128\
---------------------------------------------------------------------------

    \124\ 47 CFR 90.814(b)(1).
    \125\ 47 CFR 90.814(b)(1).
    \126\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
August 10, 1999. We note that, although a request was also sent to 
the SBA requesting approval for the small business size standard for 
800 MHz, approval is still pending.
    \127\ See ``Correction to Public Notice DA 96-586 `FCC Announces 
Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz 
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB 
1996).
    \128\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    81. The auction of the 1,053 800 MHz SMR geographic area licenses 
for the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven bidders won 108 geographic area 
licenses for the General Category channels in the 800 MHz SMR band 
qualified as small businesses under the $15 million size standard.\129\ 
In an auction completed on December 5, 2000, a total of 2,800 Economic 
Area licenses in the lower 80 channels of the 800 MHz SMR service were 
sold.\130\ Of the 22 winning bidders, 19 claimed small business status 
and won 129 licenses. Thus, combining all three auctions, 40 winning 
bidders for geographic licenses in the 800 MHz SMR band claimed status 
as small business.
---------------------------------------------------------------------------

    \129\ See, ``800 MHz Specialized Mobile Radio (SMR) Service 
General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction 
Closes; Winning Bidders Announced,'' Public Notice, 15 FCC Rcd 17162 
(2000).
    \130\ See, ``800 MHz SMR Service Lower 80 Channels Auction 
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736 
(2000).
---------------------------------------------------------------------------

    82. In addition, there are numerous incumbent site-by-site SMR 
licensees and licensees with extended implementation authorizations in 
the 800 and 900 MHz bands. We do not know how many firms provide 800 
MHz or 900 MHz geographic area SMR pursuant to extended implementation 
authorizations, nor how many of these providers have annual revenues of 
no more than $15 million. One firm has over $15 million in revenues. We 
assume, for purposes of this analysis, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that small business size standard is approved by the SBA.
    83. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
definition of small entities specifically applicable to such incumbent 
220 MHz Phase I licensees. To estimate the number of such licensees 
that are small businesses, we apply the small business size standard 
under the SBA rules applicable to ``Cellular and Other Wireless 
Telecommunications'' companies. This category provides that a small 
business is a wireless company employing no more than 1,500 
persons.\131\ According to the Census Bureau data for 1997, only twelve 
firms out of a total of 1,238 such firms that operated for the entire 
year in 1997, had 1,000 or more employees.\132\ If this general ratio 
continues in the context of Phase I 220 MHz licensees, the Commission 
estimates that nearly all such licensees are small businesses under the 
SBA's small business standard.
---------------------------------------------------------------------------

    \131\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \132\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 513322 (October 2000).
---------------------------------------------------------------------------

    84. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service, and is subject to spectrum auctions. In the 220 MHz 
Third Report and Order, we adopted a small business size standard for 
defining ``small'' and ``very small'' businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits and installment payments.\133\ This small business standard 
indicates that a ``small business'' is an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
not exceeding $15 million for the preceding three years.\134\ A ``very 
small business'' is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
do not exceed $3 million for the preceding three years.\135\ The SBA 
has approved these small size standards.\136\ Auctions of Phase II 
licenses commenced on September 15, 1998, and closed on October 22, 
1998.\137\ In the first auction, 908 licenses were auctioned in three 
different-sized geographic areas: Three nationwide licenses, 30 
Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) 
Licenses. Of the 908 licenses auctioned, 693 were sold.\138\ Thirty-
nine small businesses

[[Page 17423]]

won 373 licenses in the first 220 MHz auction. A second auction 
included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen 
companies claiming small business status won 158 licenses.\139\ A third 
auction included four licenses: 2 BEA licenses and 2 EAG licenses in 
the 220 MHz Service. No small or very small business won any of these 
licenses.\140\
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    \133\ Amendment of Part 90 of the Commission's Rules to Provide 
For the Use of the 220-222 MHz Band by the Private Land Mobile Radio 
Service, Third Report and Order, 12 FCC Rcd 10943, 11068-70, at 
paragraphs 291-295 (1997).
    \134\ Id. at 11068, at paragraphs 291.
    \135\ Id.
    \136\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
January 6, 1998.
    \137\ See generally ``220 MHz Service Auction Closes,'' Public 
Notice, 14 FCC Rcd 605 (WTB 1998).
    \138\ See ``FCC Announces It is Prepared to Grant 654 Phase II 
220 MHz Licenses After Final Payment is Made,'' Public Notice, 14 
FCC Rcd 1085 (WTB 1999).
    \139\ See ``Phase II 220 MHz Service Spectrum Auction Closes,'' 
Public Notice, 14 FCC Rcd 11218 (WTB 1999).
    \140\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    85. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories, and are often used in 
support of the licensee's primary (non-telecommunications) business 
operations. For the purpose of determining whether a licensee of a PLMR 
system is a small business as defined by the SBA, we could use the 
definition for ``Cellular and Other Wireless Telecommunications.'' This 
definition provides that a small entity is any such entity employing no 
more than 1,500 persons.\141\ The Commission does not require PLMR 
licensees to disclose information about number of employees, so the 
Commission does not have information that could be used to determine 
how many PLMR licensees constitute small entities under this 
definition. Moreover, because PMLR licensees generally are not in the 
business of providing cellular or other wireless telecommunications 
services but instead use the licensed facilities in support of other 
business activities, we are not certain that the Cellular and Other 
Wireless Telecommunications category is appropriate for determining how 
many PLMR licensees are small entities for this analysis. Rather, it 
may be more appropriate to assess PLMR licensees under the standards 
applied to the particular industry subsector to which the licensee 
belongs.\142\
---------------------------------------------------------------------------

    \141\ See 13 CFR 121.201, NAICS code 517212.
    \142\ See generally 13 CFR 121.201.
---------------------------------------------------------------------------

    86. The Commission's 1994 Annual Report on PLMRs \143\ indicates 
that at the end of fiscal year 1994, there were 1,087,267 licensees 
operating 12,481,989 transmitters in the PLMR bands below 512 MHz. 
Because any entity engaged in a commercial activity is eligible to hold 
a PLMR license, the revised rules in this context could potentially 
impact every small business in the United States.
---------------------------------------------------------------------------

    \143\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994, at paragraph 116.
---------------------------------------------------------------------------

    87. Fixed Microwave Services. Fixed microwave services include 
common carrier,\144\ private operational-fixed,\145\ and broadcast 
auxiliary radio services.\146\ At present, there are approximately 
22,015 common carrier fixed licensees and 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the 
microwave services. The Commission has not created a size standard for 
a small business specifically with respect to fixed microwave services. 
For purposes of this analysis, the Commission uses the SBA small 
business size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees.\147\ The 
Commission does not have data specifying the number of these licensees 
that have more than 1,500 employees, and thus are unable at this time 
to estimate with greater precision the number of fixed microwave 
service licensees that would qualify as small business concerns under 
the SBA's small business size standard. Consequently, the Commission 
estimates that there are up to 22,015 common carrier fixed licensees 
and up to 61,670 private operational-fixed licensees and broadcast 
auxiliary radio licensees in the microwave services that may be small 
and may be affected by the rules and policies proposed herein. We 
noted, however, that the common carrier microwave fixed licensee 
category includes some large entities.
---------------------------------------------------------------------------

    \144\ See 47 CFR 101 et seq. (formerly, Part 21 of the 
Commission's Rules) for common carrier fixed microwave services 
(except Multipoint Distribution Service).
    \145\ Persons eligible under parts 80 and 90 of the Commission's 
Rules can use Private Operational-Fixed Microwave services. See 47 
CFR Parts 80 and 90. Stations in this service are called 
operational-fixed to distinguish them from common carrier and public 
fixed stations. Only the licensee may use the operational-fixed 
station, and only for communications related to the licensee's 
commercial, industrial, or safety operations.
    \146\ Auxiliary Microwave Service is governed by Part 74 of 
Title 47 of the Commission's Rules. See 47 CFR Part 74. This service 
is available to licensees of broadcast stations and to broadcast and 
cable network entities. Broadcast auxiliary microwave stations are 
used for relaying broadcast television signals from the studio to 
the transmitter, or between two points such as a main studio and an 
auxiliary studio. The service also includes mobile television 
pickups, which relay signals from a remote location back to the 
studio.
    \147\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
---------------------------------------------------------------------------

    88. 39 GHz Service. The Commission created a special small business 
size standard for 39 GHz licenses--an entity that has average gross 
revenues of $40 million or less in the three previous calendar 
years.\148\ An additional size standard for ``very small business'' is: 
An entity that, together with affiliates, has average gross revenues of 
not more than $15 million for the preceding three calendar years.\149\ 
The SBA has approved these small business size standards.\150\ The 
auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed 
on May 8, 2000. The 18 bidders who claimed small business status won 
849 licenses. Consequently, the Commission estimates that 18 or fewer 
39 GHz licensees are small entities that may be affected by the rules 
and polices proposed herein.
---------------------------------------------------------------------------

    \148\ See Amendment of the Commission's Rules Regarding the 
37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report 
and Order, 12 FCC Rcd 18600 (1997).
    \149\ Id.
    \150\ See Letter to Kathleen O'Brien Ham, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, FCC, 
from Aida Alvarez, Administrator, SBA (Feb. 4, 1998) (VoIP); See 
Letter to Margaret Wiener, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, from Hector Barreto, Administrator, Small Business 
Administration, dated January 18, 2002 (WTB).
---------------------------------------------------------------------------

    89. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video 
telecommunications.\151\ The auction of the 986 Local Multipoint 
Distribution Service (LMDS) licenses began on February 18, 1998 and 
closed on March 25, 1998. The Commission established a small business 
size standard for LMDS licenses as an entity that has average gross 
revenues of less than $40 million in the three previous calendar 
years.\152\ An additional small business size standard for ``very small 
business'' was added as an entity that, together with its affiliates, 
has average gross revenues of not more than $15 million for the 
preceding three calendar years.\153\ The

[[Page 17424]]

SBA has approved these small business size standards in the context of 
LMDS auctions.\154\ There were 93 winning bidders that qualified as 
small entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 32 small and very small business bidders winning that won 
119 licenses.
---------------------------------------------------------------------------

    \151\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, at paragraph 348 (1997).
    \152\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, at paragraph 348 (1997).
    \153\ See Rulemaking to Amend Parts 1, 2, 21, 25, of the 
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, 
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and 
Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC 
Rcd 12545, 12689-90, at paragraph 348 (1997).
    \154\ See Letter to Dan Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, 
SBA (Jan. 6, 1998).
---------------------------------------------------------------------------

    90. 218-219 MHz Service. The first auction of 218-219 MHz 
(previously referred to as the Interactive and Video Data Service or 
IVDS) spectrum resulted in 178 entities winning licenses for 594 
Metropolitan Statistical Areas (MSAs).\155\ Of the 594 licenses, 567 
were won by 167 entities qualifying as a small business. For that 
auction, we defined a small business as an entity that, together with 
its affiliates, has no more than a $6 million net worth and, after 
federal income taxes (excluding any carry over losses), has no more 
than $2 million in annual profits each year for the previous two 
years.\156\ In the 218-219 MHz Report and Order and Memorandum Opinion 
and Order, we defined a small business as an entity that, together with 
its affiliates and persons or entities that hold interests in such an 
entity and their affiliates, has average annual gross revenues not 
exceeding $15 million for the preceding three years.\157\ A very small 
business is defined as an entity that, together with its affiliates and 
persons or entities that hold interests in such an entity and its 
affiliates, has average annual gross revenues not exceeding $3 million 
for the preceding three years.\158\ The SBA has approved of these 
definitions.\159\ At this time, we cannot estimate the number of 
licenses that will be won by entities qualifying as small or very small 
businesses under our rules in future auctions of 218-219 MHz spectrum. 
Given the success of small businesses in the previous auction, and the 
prevalence of small businesses in the subscription television services 
and message communications industries, we assume for purposes of this 
analysis that in future auctions, many, and perhaps all, of the 
licenses may be awarded to small businesses.
---------------------------------------------------------------------------

    \155\ See ``Interactive Video and Data Service (IVDS) 
Applications Accepted for Filing,'' Public Notice, 9 FCC Rcd 6227 
(1994).
    \156\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, Fourth Report and Order, 9 FCC Rcd 2330 
(1994).
    \157\ Amendment of Part 95 of the Commission's Rules to Provide 
Regulatory Flexibility in the 218-219 MHz Service, Report and Order 
and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).
    \158\ Id.
    \159\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
January 6, 1998.
---------------------------------------------------------------------------

    91. Location and Monitoring Service (LMS). Multilateration LMS 
systems use non-voice radio techniques to determine the location and 
status of mobile radio units. For purposes of auctioning LMS licenses, 
the Commission has defined ``small business'' as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the preceding three years not exceeding $15 
million.\160\ A ``very small business'' is defined as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the preceding three years not exceeding $3 
million.\161\ These definitions have been approved by the SBA.\162\ An 
auction for LMS licenses commenced on February 23, 1999, and closed on 
March 5, 1999. Of the 528 licenses auctioned, 289 licenses were sold to 
four small businesses. We cannot accurately predict the number of 
remaining licenses that could be awarded to small entities in future 
LMS auctions.
---------------------------------------------------------------------------

    \160\ Amendment of Part 90 of the Commission's Rules to Adopt 
Regulations for Automatic Vehicle Monitoring Systems, Second Report 
and Order, 13 FCC Rcd 15182, 15192, at paragraph 20 (1998); see also 
47 CFR 90.1103.
    \161\ Amendment of Part 90 of the Commission's Rules to Adopt 
Regulations for Automatic Vehicle Monitoring Systems, Second Report 
and Order, 13 FCC Rcd at 15192, at paragraph 20; see also 47 CFR 
90.1103.
    \162\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
February 22, 1999.
---------------------------------------------------------------------------

    92. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\163\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (BETRS).\164\ The 
Commission uses the SBA's small business size standard applicable to 
``Cellular and Other Wireless Telecommunications,'' i.e., an entity 
employing no more than 1,500 persons.\165\ There are approximately 
1,000 licensees in the Rural Radiotelephone Service, and the Commission 
estimates that there are 1,000 or fewer small entity licensees in the 
Rural Radiotelephone Service that may be affected by the rules and 
policies proposed herein.
---------------------------------------------------------------------------

    \163\ The service is defined in Sec.  22.99 of the Commission's 
Rules, 47 CFR 22.99.
    \164\ BETRS is defined in Sec. Sec.  22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \165\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
---------------------------------------------------------------------------

    93. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service.\166\ We will use SBA's small business size 
standard applicable to ``Cellular and Other Wireless 
Telecommunications,'' i.e., an entity employing no more than 1,500 
persons.\167\ There are approximately 100 licensees in the Air-Ground 
Radiotelephone Service, and we estimate that almost all of them qualify 
as small under the SBA small business size standard.
---------------------------------------------------------------------------

    \166\ The service is defined in Sec.  22.99 of the Commission's 
Rules, 47 CFR 22.99.
    \167\ 13 CFR 121.201, NAICS codes 513322 (changed to 517212 in 
October 2002).
---------------------------------------------------------------------------

    94. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees.\168\ Most 
applicants for recreational licenses are individuals. Approximately 
581,000 ship station licensees and 131,000 aircraft station licensees 
operate domestically and are not subject to the radio carriage 
requirements of any statute or treaty. For purposes of our evaluations 
in this analysis, we estimate that there are up to approximately 
712,000 licensees that are small businesses (or individuals) under the 
SBA standard. In addition, between December 3, 1998 and December 14, 
1998, the Commission held an auction of 42 VHF Public Coast licenses in 
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz 
(coast transmit) bands. For purposes of the auction, the Commission 
defined a ``small'' business as an entity that, together with 
controlling interests and affiliates, has average gross revenues for 
the preceding three years not to exceed $15 million dollars. In 
addition, a ``very small'' business is one that, together with 
controlling interests and affiliates, has

[[Page 17425]]

average gross revenues for the preceding three years not to exceed $3 
million dollars.\169\ There are approximately 10,672 licensees in the 
Marine Coast Service, and the Commission estimates that almost all of 
them qualify as ``small'' businesses under the above special small 
business size standards.
---------------------------------------------------------------------------

    \168\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \169\ Amendment of the Commission's Rules Concerning Maritime 
Communications, PR Docket No. 92-257, Third Report and Order and 
Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

    95. Offshore Radiotelephone Service. This service operates on 
several ultra high frequencies (UHF) television broadcast channels that 
are not used for television broadcasting in the coastal areas of states 
bordering the Gulf of Mexico.\170\ There are presently approximately 55 
licensees in this service. We are unable to estimate at this time the 
number of licensees that would qualify as small under the SBA's small 
business size standard for ``Cellular and Other Wireless 
Telecommunications'' services.\171\ Under that SBA small business size 
standard, a business is small if it has 1,500 or fewer employees.\172\
---------------------------------------------------------------------------

    \170\ This service is governed by Subpart I of Part 22 of the 
Commission's Rules. See 47 CFR 22.1001-22.1037.
    \171\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \172\ Id.
---------------------------------------------------------------------------

    96. Multiple Address Systems (MAS). Entities using MAS spectrum, in 
general, fall into two categories: (1) Those using the spectrum for 
profit-based uses, and (2) those using the spectrum for private 
internal uses. With respect to the first category, the Commission 
defines ``small entity'' for MAS licenses as an entity that has average 
gross revenues of less than $15 million in the three previous calendar 
years.\173\ ``Very small business'' is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $3 million for the preceding three calendar years.\174\ The SBA 
has approved of these definitions.\175\ The majority of these entities 
will most likely be licensed in bands where the Commission has 
implemented a geographic area licensing approach that would require the 
use of competitive bidding procedures to resolve mutually exclusive 
applications. The Commission's licensing database indicates that, as of 
January 20, 1999, there were a total of 8,670 MAS station 
authorizations. Of these, 260 authorizations were associated with 
common carrier service. In addition, an auction for 5,104 MAS licenses 
in 176 EAs began November 14, 2001, and closed on November 27, 
2001.\176\ Seven winning bidders claimed status as small or very small 
businesses and won 611 licenses.
---------------------------------------------------------------------------

    \173\ See Amendment of the Commission's Rules Regarding Multiple 
Address Systems, Report and Order, 15 FCC Rcd 11956, 12008, at 
paragraph 123 (2000).
    \174\ Id.
    \175\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
June 4, 1999.
    \176\ See ``Multiple Address Systems Spectrum Auction Closes,'' 
Public Notice, 16 FCC Rcd 21011 (2001).
---------------------------------------------------------------------------

    97. With respect to the second category, which consists of entities 
that use, or seek to use, MAS spectrum to accommodate internal 
communications needs, we note that MAS serves an essential role in a 
range of industrial, safety, business, and land transportation 
activities. MAS radios are used by companies of all sizes, operating in 
virtually all U.S. business categories, and by all types of public 
safety entities. For the majority of private internal users, the 
definitions developed by the SBA would be more appropriate. The 
applicable definition of small entity in this instance appears to be 
the ``Cellular and Other Wireless Telecommunications'' definition under 
the SBA rules. This definition provides that a small entity is any 
entity employing no more than 1,500 persons.\177\ The Commission's 
licensing database indicates that, as of January 20, 1999, of the 8,670 
total MAS station authorizations, 8,410 authorizations were for private 
radio service, and of these, 1,433 were for private land mobile radio 
service.
---------------------------------------------------------------------------

    \177\ See 13 CFR 121.201, NAICS code 517212.
---------------------------------------------------------------------------

    98. Incumbent 24 GHz Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band, 
and applicants who wish to provide services in the 24 GHz band. The 
applicable SBA small business size standard is that of ``Cellular and 
Other Wireless Telecommunications'' companies. This category provides 
that such a company is small if it employs no more than 1,500 
persons.\178\ According to U.S. Census Bureau data for 1997, there were 
977 firms in this category, total, that operated for the entire 
year.\179\ Of this total, 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more.\180\ Thus, under this size standard, the great majority of 
firms can be considered small. These broader census data 
notwithstanding, we believe that there are only two licensees in the 24 
GHz band that were relocated from the 18 GHz band, Teligent \181\ and 
TRW, Inc. It is our understanding that Teligent and its related 
companies have less than 1,500 employees, though this may change in the 
future. TRW is not a small entity. Thus, only one incumbent licensee in 
the 24 GHz band is a small business entity.
---------------------------------------------------------------------------

    \178\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \179\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Employment Size of Firms Subject to Federal Income 
Tax: 1997,'' Table 5, NAICS code 513322 (issued October 2000).
    \180\ Id. The census data do not provide a more precise estimate 
of the number of firms that have employment of 1,500 or fewer 
employees; the largest category provided is ``Firms with 1,000 
employees or more.''
    \181\ Teligent acquired the DEMS licenses of FirstMark, the only 
licensee other than TRW in the 24 GHz band whose license has been 
modified to require relocation to the 24 GHz band.
---------------------------------------------------------------------------

    99. Future 24 GHz Licensees. With respect to new applicants in the 
24 GHz band, we have defined ``small business'' as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the three preceding years not exceeding $15 
million.\182\ ``Very small business'' in the 24 GHz band is defined as 
an entity that, together with controlling interests and affiliates, has 
average gross revenues not exceeding $3 million for the preceding three 
years.\183\ The SBA has approved these definitions.\184\ The Commission 
will not know how many licensees will be small or very small businesses 
until the auction, if required, is held.
---------------------------------------------------------------------------

    \182\ Amendments to Parts 1, 2, 87 and 101 of the Commission's 
Rules To License Fixed Services at 24 GHz, Report and Order, 15 FCC 
Rcd 16934, 16967, at paragraph 77 (2000) (24 GHz Report and Order); 
see also 47 CFR 101.538(a)(2).
    \183\ 24 GHz Report and Order, 15 FCC Rcd at 16967, at paragraph 
77; see also 47 CFR 101.538(a)(1).
    \184\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, from Gary M. Jackson, Assistant 
Administrator, Small Business Administration, dated July 28, 2000.
---------------------------------------------------------------------------

    100. Multipoint Distribution Service, Multichannel Multipoint 
Distribution Service, and Instructional Television Fixed Service. 
Multichannel Multipoint Distribution Service (MMDS) systems, often 
referred to as ``wireless cable,'' transmit video programming to 
subscribers using the microwave frequencies of the Multipoint 
Distribution Service (MDS) and Instructional Television Fixed Service 
(ITFS).\185\ In connection with the 1996

[[Page 17426]]

MDS auction, the Commission defined ``small business'' as an entity 
that, together with its affiliates, has average gross annual revenues 
that are not more than $40 million for the preceding three calendar 
years.\186\ The SBA has approved of this standard.\187\ The MDS auction 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 Basic Trading Areas (BTAs).\188\ Of the 67 auction winners, 61 
claimed status as a small business. At this time, we estimate that of 
the 61 small business MDS auction winners, 48 remain small business 
licensees. In addition to the 48 small businesses that hold BTA 
authorizations, there are approximately 392 incumbent MDS licensees 
that have gross revenues that are not more than $40 million and are 
thus considered small entities.\189\
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    \185\ Amendment of Parts 21 and 74 of the Commission's Rules 
with Regard to Filing Procedures in the Multipoint Distribution 
Service and in the Instructional Television Fixed Service and 
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, Report and Order, 10 FCC Rcd 9589, 9593, at 
paragraph 7 (1995) (MDS Auction R&O).
    \186\ 47 CFR 21.961(b)(1).
    \187\ See Letter to Margaret Wiener, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Bureau, from Gary Jackson, Assistant 
Administrator for Size Standards, Small Business Administration, 
dated March 20, 2003 (noting approval of $40 million size standard 
for MDS auction).
    \188\ Basic Trading Areas (BTAs) were designed by Rand McNally 
and are the geographic areas by which MDS was auctioned and 
authorized. See MDS Auction R&O, 10 FCC Rcd 9608, at paragraph 34.
    \189\ 47 U.S.C. 309(j). Hundreds of stations were licensed to 
incumbent MDS licensees prior to implementation of Section 309(j) of 
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-
auction licenses, the applicable standard is SBA's small business 
size standard for ``other telecommunications'' (annual receipts of 
$12.5 million or less). See 13 CFR 121.201, NAICS code 517910.
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    101. In addition, the SBA has developed a small business size 
standard for Cable and Other Program Distribution,\190\ which includes 
all such companies generating $12.5 million or less in annual 
receipts.\191\ According to Census Bureau data for 1997, there were a 
total of 1,311 firms in this category, total, that had operated for the 
entire year.\192\ Of this total, 1,180 firms had annual receipts of 
under $10 million, and an additional 52 firms had receipts of $10 
million or more but less than $25 million.\193\ Consequently, we 
estimate that the majority of providers in this service category are 
small businesses that may be affected by the proposed rules and 
policies.
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    \190\ 13 CFR 121.201, NAICS code 517510.
    \191\ Id.
    \192\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4 (issued October 2000).
    \193\ Id.
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    102. Finally, while SBA approval for a Commission-defined small 
business size standard applicable to ITFS is pending, educational 
institutions are included in this analysis as small entities.\194\ 
There are currently 2,032 ITFS licensees, and all but 100 of these 
licenses are held by educational institutions. Thus, we tentatively 
conclude that at least 1,932 ITFS licensees are small businesses.
---------------------------------------------------------------------------

    \194\ In addition, the term ``small entity'' under SBREFA 
applies to small organizations (nonprofits) and to small 
governmental jurisdictions (cities, counties, towns, townships, 
villages, school districts, and special districts with populations 
of less than 50,000). 5 U.S.C. 601(4)-(6). We do not collect annual 
revenue data on ITFS licensees.
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    103. Television Broadcasting. The Small Business Administration 
defines a television broadcasting station that has no more than $12 
million in annual receipts as a small business.\195\ Business concerns 
included in this industry are those ``primarily engaged in broadcasting 
images together with sound.'' \196\ According to Commission staff 
review of the BIA Publications, Inc. Master Access Television Analyzer 
Database as of May 16, 2003, about 814 of the 1,220 commercial 
television stations in the United States have revenues of $12 million 
or less. We note, however, that, in assessing whether a business 
concern qualifies as small under the above definition, business 
(control) affiliations \197\ must be included. Our estimate, therefore, 
likely overstates the number of small entities that might be affected 
by our action, because the revenue figure on which it is based does not 
include or aggregate revenues from affiliated companies. There are also 
2,117 low power television stations (LPTV).\198\ Given the nature of 
this service, we will presume that all LPTV licensees qualify as small 
entities under the SBA definition.
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    \195\ See OMB, North American Industry Classification System: 
United States, 1997 at 509 (1997) (NAICS code 513120, which was 
changed to code 515120 in October 2002).
    \196\ OMB, North American Industry Classification System: United 
States, 1997, at 509 (1997) (NAICS code 513120, which was changed to 
code 51520 in October 2002). This category description continues, 
``These establishments operate television broadcasting studios and 
facilities for the programming and transmission of programs to the 
public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in 
turn broadcast the programs to the public on a predetermined 
schedule. Programming may originate in their own studios, from an 
affiliated network, or from external sources.'' Separate census 
categories pertain to businesses primarily engaged in producing 
programming. See id., at 502-05, NAICS code 51210. Motion Picture 
and Video Production: code 512120, Motion Picture and Video 
Distribution, code 512191, Teleproduction and Other Post-Production 
Services, and code 512199, Other Motion Picture and Video 
Industries.
    \197\ ``Concerns are affiliates of each other when one concern 
controls or has the power to control the other or a third party or 
parties controls or has to power to control both.'' 13 CFR 
121.103(a)(1).
    \198\ FCC News Release, ``Broadcast Station Totals as of 
September 30, 2005.''
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    104. In addition, an element of the definition of ``small 
business'' is that the entity not be dominant in its field of 
operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific television station is 
dominant in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply do not exclude any television 
station from the definition of a small business on this basis and are 
therefore over-inclusive to that extent. Also as noted, an additional 
element of the definition of ``small business'' is that the entity must 
be independently owned and operated. We note that it is difficult at 
times to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
    105. Radio Broadcasting. The SBA defines a radio broadcast entity 
that has $6 million or less in annual receipts as a small 
business.\199\ Business concerns included in this industry are those 
``primarily engaged in broadcasting aural programs by radio to the 
public.\200\ According to Commission staff review of the BIA 
Publications, Inc., Master Access Radio Analyzer Database, as of May 
16, 2003, about 10,427 of the 10,945 commercial radio stations in the 
United States have revenue of $6 million or less. We note, however, 
that many radio stations are affiliated with much larger corporations 
with much higher revenue, and that in assessing whether a business 
concern qualifies as small under the above definition, such business 
(control) affiliations \201\ are included.\202\ Our estimate, therefore 
likely overstates the number of small businesses that might be affected 
by our action.
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    \199\ See OMB, North American Industry Classification System: 
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code 
513111, which was changed to code 515112 in October 2002).
    \200\ Id.
    \201\ ``Concerns are affiliates of each other when one concern 
controls or has the power to control the other, or a third party or 
parties controls or has the power to control both.'' 13 CFR 
121.103(a)(1).
    \202\ ``SBA counts the receipts or employees of the concern 
whose size is at issue and those of all its domestic and foreign 
affiliates, regardless of whether the affiliates are organized for 
profit, in determining the concern's size.'' 13 CFR 121(a)(4).
---------------------------------------------------------------------------

    106. Auxiliary, Special Broadcast and Other Program Distribution 
Services. This service involves a variety of

[[Page 17427]]

transmitters, generally used to relay broadcast programming to the 
public (through translator and booster stations) or within the program 
distribution chain (from a remote news gathering unit back to the 
station). The Commission has not developed a definition of small 
entities applicable to broadcast auxiliary licensees. The applicable 
definitions of small entities are those, noted previously, under the 
SBA rules applicable to radio broadcasting stations and television 
broadcasting stations.\203\
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    \203\ 13 CFR 121.201, NAICS codes 513111 and 513112.
---------------------------------------------------------------------------

    107. The Commission estimates that there are approximately 3,868 FM 
translators and boosters.\204\ The Commission does not collect 
financial information on any broadcast facility, and the Department of 
Commerce does not collect financial information on these auxiliary 
broadcast facilities. We believe that most, if not all, of these 
auxiliary facilities could be classified as small businesses by 
themselves. We also recognize that most commercial translators and 
boosters are owned by a parent station which, in some cases, would be 
covered by the revenue definition of small business entity discussed 
above. These stations would likely have annual revenues that exceed the 
SBA maximum to be designated as a small business ($5 million for a 
radio station or $10.5 million for a TV station). Furthermore, they do 
not meet the Small Business Act's definition of a ``small business 
concern'' because they are not independently owned and operated.\205\
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    \204\ FCC News Release, ``Broadcast Station Totals as of 
September 30, 2004.''
    \205\ 15 U.S.C. 632.
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    108. Cable and Other Program Distribution. This category includes 
cable systems operators, closed circuit television services, direct 
broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems, and subscription television services. 
The SBA has developed small business size standard for this census 
category, which includes all such companies generating $12.5 million or 
less in revenue annually.\206\ According to Census Bureau data for 
1997, there were a total of 1,311 firms in this category, total, that 
had operated for the entire year.\207\ Of this total, 1,180 firms had 
annual receipts of under $10 million and an additional 52 firms had 
receipts of $10 million or more but less than $25 million. 
Consequently, the Commission estimates that the majority of providers 
in this service category are small businesses that may be affected by 
the rules and policies proposed herein.
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    \206\ 13 CFR 121.201, NAICS code 513220 (changed to 517510 in 
October 2002).
    \207\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization)'', Table 4, NAICS code 513220 (issued October 2000).
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    109. Cable System Operators (Rate Regulation Standard). The 
Commission has developed its own small business size standard for cable 
system operators, for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.\208\ The most recent estimates indicate 
that there were 1,439 cable operators who qualified as small cable 
system operators at the end of 1995.\209\ Since then, some of those 
companies may have grown to serve over 400,000 subscribers, and others 
may have been involved in transactions that caused them to be combined 
with other cable operators. Consequently, the Commission estimates that 
there are now fewer than 1,439 small entity cable system operators that 
may be affected by the rules and policies proposed herein.
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    \208\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determination that a small cable system operator is one 
with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995).
    \209\ Paul Kagan Associates, Inc., Cable TV Investor, February 
29, 1996 (based on figures for December 30, 1995).
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    110. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent of all subscribers in the United States and is not affiliated 
with any entity or entities whose gross annual revenues in the 
aggregate exceed $250,000,000.'' \210\ The Commission has determined 
that there are 63,000,000 subscribers in the United States.\211\ 
Therefore, an operator serving fewer than 630,000 subscribers shall be 
deemed a small operator, if its annual revenues, when combined with the 
total annual revenues of all its affiliates, do not exceed $250 million 
in the aggregate.\212\ Based on available data, the Commission 
estimates that the number of cable operators serving 630,000 
subscribers or fewer, totals 1,450.\213\ The Commission neither 
requests nor collects information on whether cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million,\214\ and therefore are unable, at this time, to estimate more 
accurately the number of cable system operators that would qualify as 
small cable operators under the size standard contained in the 
Communications Act of 1934.
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    \210\ 47 U.S.C. 543(m)(2).
    \211\ See FCC Announces New Subscriber Count for the Definition 
of Small Cable Operator, Public Notice, DA 01-158 (January 24, 
2001).
    \212\ 47 CFR 76.901(f).
    \213\ See FCC Announces New Subscriber Count for the Definition 
of Small Cable Operators, Public Notice, DA-01-0158 (released 
January 24, 2001).
    \214\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's 
finding that the operator does not qualify as a small cable operator 
pursuant to Sec.  76.901(f) of the Commission's rules. See 47 CFR 
76.909(b).
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    111. Open Video Services. Open Video Service (OVS) systems provide 
subscription services.\215\ The SBA has created a small business size 
standard for Cable and Other Program Distribution.\216\ This standard 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The Commission has certified approximately 25 OVS 
operators to serve 75 areas, and some of these are currently providing 
service.\217\ Affiliates of Residential Communications Network, Inc. 
(RCN) received approval to operate OVS systems in New York City, 
Boston, Washington, DC, and other areas. RCN has sufficient revenues to 
assure that they do not qualify as a small business entity. Little 
financial information is available for the other entities that are 
authorized to provide OVS and are not yet operational. Given that some 
entities authorized to provide OVS service have not yet begun to 
generate revenues, the Commission concludes that up to 24 OVS operators 
(those remaining) might qualify as small businesses that may be 
affected by the rules and policies proposed herein.
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    \215\ See 47 U.S.C. 573.
    \216\ 13 CFR 121.201, NAICS code 513220 (changed to 517510 in 
October 2002).
    \217\ See http://www.fcc.gov/csb/ovs/csovscer.html (current as 
of March 2002).
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    112. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. The SBA has defined a small 
business size standard for Cable and other Program Distribution, 
consisting of all such companies having annual receipts of no more than 
$12.5 million.\218\ According to Census Bureau data for 1997, there 
were 1,311 firms in the industry category Cable and Other Program 
Distribution, total, that operated for the entire year.\219\ Of this 
total, 1,180 firms

[[Page 17428]]

had annual receipts of $10 million or less, and an additional 52 firms 
had receipts of $10 million or more but less than $25 million.\220\ 
Thus, under this standard, we estimate that the majority of providers 
in this service category are small businesses that may be affected by 
the proposed rules and policies.
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    \218\ 13 CFR 121.201, NAICS code 517510.
    \219\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4 (issued October 2000).
    \220\ Id.
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    113. Multichannel Video Distribution and Data Service. MVDDS is a 
terrestrial fixed microwave service operating in the 12.2-12.7 GHz 
band. No auction has yet been held in this service, although an action 
has been scheduled for January 14, 2004.\221\ Accordingly, there are no 
licensees in this service.
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    \221\ ``Auctions of Licenses in the Multichannel Video 
Distribution and Data Service Rescheduled for January 14, 2004,'' 
Public Notice, DA 03-2354 (August 28, 2003).
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    114. Amateur Radio Service. These licensees are believed to be 
individuals, and therefore are not small entities.
    115. Aviation and Marine Services. Small businesses in the aviation 
and marine radio services use a very high frequency (VHF) marine or 
aircraft radio and, as appropriate, an emergency position-indicating 
radio beacon (and/or radar) or an emergency locator transmitter. The 
Commission has not developed a small business size standard 
specifically applicable to these small businesses. For purposes of this 
analysis, the Commission uses the SBA small business size standard for 
the category ``Cellular and Other Telecommunications,'' which is 1,500 
or fewer employees.\222\ Most applicants for recreational licenses are 
individuals. Approximately 581,000 ship station licensees and 131,000 
aircraft station licensees operate domestically and are not subject to 
the radio carriage requirements of any statute or treaty. For purposes 
of our evaluations in this analysis, we estimate that there are up to 
approximately 712,000 licensees that are small businesses (or 
individuals) under the SBA standard. In addition, between December 3, 
1998 and December 14, 1998, the Commission held an auction of 42 VHF 
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 
161.775-162.0125 MHz (coast transmit) bands. For purposes of the 
auction, the Commission defined a ``small'' business as an entity that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $15 million 
dollars. In addition, a ``very small'' business is one that, together 
with controlling interests and affiliates, has average gross revenues 
for the preceding three years not to exceed $3 million dollars.\223\ 
There are approximately 10,672 licensees in the Marine Coast Service, 
and the Commission estimates that almost all of them qualify as 
``small'' businesses under the above special small business size 
standards.
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    \222\ 13 CFR 121.201, NAICS code 513322 (changed to 517212 in 
October 2002).
    \223\ Amendment of the Commission's Rules Concerning Maritime 
Communications, Third Report and Order and Memorandum Opinion and 
Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

    116. Personal Radio Services. Personal radio services provide 
short-range, low power radio for personal communications, radio 
signaling, and business communications not provided for in other 
services. The Personal Radio Services include spectrum licensed under 
Part 95 of our rules.\224\ These services include Citizen Band Radio 
Service (CB), General Mobile Radio Service (GMRS), Radio Control Radio 
Service (R/C), Family Radio Service (FRS), Wireless Medical Telemetry 
Service (WMTS), Medical Implant Communications Service (MICS), Low 
Power Radio Service (LPRS), and Multi-Use Radio Service (MURS).\225\ 
There are a variety of methods used to license the spectrum in these 
rule parts, from licensing by rule, to conditioning operation on 
successful completion of a required test, to site-based licensing, to 
geographic area licensing. Under the RFA, the Commission is required to 
make a determination of which small entities are directly affected by 
the rules being proposed. Since all such entities are wireless, we 
apply the definition of cellular and other wireless telecommunications, 
pursuant to which a small entity is defined as employing 1,500 or fewer 
persons.\226\ Many of the licensees in these services are individuals, 
and thus are not small entities. In addition, due to the mostly 
unlicensed and shared nature of the spectrum utilized in many of these 
services, the Commission lacks direct information upon which to base an 
estimation of the number of small entities under an SBA definition that 
might be directly affected by the proposed rules.
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    \224\ 47 CFR Part 90.
    \225\ The Citizens Band Radio Service, General Mobile Radio 
Service, Radio Control Radio Service, Family Radio Service, Wireless 
Medical Telemetry Service, Medical Implant Communications Service, 
Low Power Radio Service, and Multi-Use Radio Service are governed by 
Subpart D, Subpart A, Subpart C, Subpart B, Subpart H, Subpart I, 
Subpart G, and Subpart J, respectively, of Part 95 of the 
Commission's rules. See generally 47 CFR Part 95.
    \226\ 13 CFR 121.201, NAICS Code 517212.
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    117. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.\227\ There are a total of 
approximately 127,540 licensees in these services. Governmental 
entities \228\ as well as private businesses comprise the licensees for 
these services. All governmental entities with populations of less than 
50,000 fall within the definition of a small entity.\229\
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    \227\ With the exception of the special emergency service, these 
services are governed by Subpart B of part 90 of the Commission's 
Rules, 47 CFR 90.15-90.27. The police service includes approximately 
27,000 licensees that serve state, county, and municipal enforcement 
through telephony (voice), telegraphy (code) and teletype and 
facsimile (printed material). The fire radio service includes 
approximately 23,000 licensees comprised of private volunteer or 
professional fire companies as well as units under governmental 
control. The local government service that is presently comprised of 
approximately 41,000 licensees that are state, county, or municipal 
entities that use the radio for official purposes not covered by 
other public safety services. There are approximately 7,000 
licensees within the forestry service which is comprised of 
licensees from state departments of conservation and private forest 
organizations who set up communications networks among fire lookout 
towers and ground crews. The approximately 9,000 state and local 
governments are licensed to highway maintenance service provide 
emergency and routine communications to aid other public safety 
services to keep main roads safe for vehicular traffic. The 
approximately 1,000 licensees in the Emergency Medical Radio Service 
(EMRS) use the 39 channels allocated to this service for emergency 
medical service communications related to the delivery of emergency 
medical treatment. 47 CFR 90.15-90.27. The approximately 20,000 
licensees in the special emergency service include medical services, 
rescue organizations, veterinarians, handicapped persons, disaster 
relief organizations, school buses, beach patrols, establishments in 
isolated areas, communications standby facilities, and emergency 
repair of public communications facilities. 47 CFR 90.33-90.55.
    \228\ 47 CFR 1.1162.
    \229\ 5 U.S.C. 601(5).
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IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    118. With certain exceptions, the Commission's Schedule of 
Regulatory Fees applies to all Commission licensees and regulatees. 
Most licensees will be required to count the number of licenses or call 
signs authorized, complete and submit an FCC Form 159 (``FCC Remittance 
Advice''), and pay a regulatory fee based on the number of licenses or 
call signs.\230\ Interstate

[[Page 17429]]

telephone service providers must compute their annual regulatory fee 
based on their interstate and international end-user revenue using 
information they already supply to the Commission in compliance with 
the Form 499-A, Telecommunications Reporting Worksheet, and they must 
complete and submit the FCC Form 159. Compliance with the fee schedule 
will require some licensees to tabulate the number of units (e.g., 
cellular telephones, pagers, cable TV subscribers) they have in 
service, and complete and submit an FCC Form 159. Licensees ordinarily 
will keep a list of the number of units they have in service as part of 
their normal business practices. No additional outside professional 
skills are required to complete the FCC Form 159, and it can be 
completed by the employees responsible for an entity's business 
records.
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    \230\ The following categories are exempt from the Commission's 
Schedule of Regulatory Fees: Amateur radio licensees (except 
applicants for vanity call signs) and operators in other non-
licensed services (e.g., Personal Radio, part 15, ship and 
aircraft). Governments and non-profit (exempt under section 501(c) 
of the Internal Revenue Code) entities are exempt from payment of 
regulatory fees and need not submit payment. Non-commercial 
educational broadcast licensees are exempt from regulatory fees as 
are licensees of auxiliary broadcast services such as low power 
auxiliary stations, television auxiliary service stations, remote 
pickup stations and aural broadcast auxiliary stations where such 
licenses are used in conjunction with commonly owned non-commercial 
educational stations. Emergency Alert System licenses for auxiliary 
service facilities are also exempt as are instructional television 
fixed service licensees. Regulatory fees are automatically waived 
for the licensee of any translator station that: (1) Is not licensed 
to, in whole or in part, and does not have common ownership with, 
the licensee of a commercial broadcast station; (2) does not derive 
income from advertising; and (3) is dependent on subscriptions or 
contributions from members of the community served for support. 
Receive only earth station permittees are exempt from payment of 
regulatory fees. A regulatee will be relieved of its fee payment 
requirement if its total fee due, including all categories of fees 
for which payment is due by the entity, amounts to less than $10.
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    119. Each licensee must submit the FCC Form 159 to the Commission's 
lockbox bank after computing the number of units subject to the fee. 
Licensees may also file electronically to minimize the burden of 
submitting multiple copies of the FCC Form 159. Applicants who pay 
small fees in advance and provide fee information as part of their 
application must use FCC Form 159.
    120. Licensees and regulatees are advised that failure to submit 
the required regulatory fee in a timely manner will subject the 
licensee or regulatee to a late payment penalty of 25 percent in 
addition to the required fee.\231\ If payment is not received, new or 
pending applications may be dismissed, and existing authorizations may 
be subject to rescission.\232\ Further, in accordance with the Debt 
Collection Improvement Act of 1996, federal agencies may bar a person 
or entity from obtaining a federal loan or loan insurance guarantee if 
that person or entity fails to pay a delinquent debt owed to any 
federal agency.\233\ Nonpayment of regulatory fees is a debt owed the 
United States pursuant to 31 U.S.C. 3711 et seq., and the Debt 
Collection Improvement Act of 1996, Public Law 194-134. Appropriate 
enforcement measures as well as administrative and judicial remedies, 
may be exercised by the Commission. Debts owed to the Commission may 
result in a person or entity being denied a federal loan or loan 
guarantee pending before another federal agency until such obligations 
are paid.\234\
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    \231\ 47 CFR 1.1164.
    \232\ 47 CFR 1.1164(c).
    \233\ Public Law 104-134, 110 Stat. 1321 (1996).
    \234\ 31 U.S.C. 7701(c)(2)(B).
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    121. The Commission's rules currently provide for relief in 
exceptional circumstances. Persons or entities may request a waiver, 
reduction or deferment of payment of the regulatory fee.\235\ However, 
timely submission of the required regulatory fee must accompany 
requests for waivers or reductions. This will avoid any late payment 
penalty if the request is denied. The fee will be refunded if the 
request is granted. In exceptional and compelling instances (where 
payment of the regulatory fee along with the waiver or reduction 
request could result in reduction of service to a community or other 
financial hardship to the licensee), the Commission will defer payment 
in response to a request filed with the appropriate supporting 
documentation.
---------------------------------------------------------------------------

    \235\ 47 CFR 1.1166.
---------------------------------------------------------------------------

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

    122. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives: (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. As described in Section III of this IRFA, supra, we have 
created procedures in which all fee-filing licensees and regulatees use 
a single form, FCC Form 159, and have described in plain language the 
general filing requirements. We have sought comment on other 
alternatives that might simplify our fee procedures or otherwise 
benefit small entities, while remaining consistent with our statutory 
responsibilities in this proceeding.
    123. The Omnibus Appropriations Act for FY 2006, Public Law 109-
108, requires the Commission to revise its Schedule of Regulatory Fees 
in order to recover the amount of regulatory fees that Congress, 
pursuant to Section 9(a) of the Communications Act, as amended, has 
required the Commission to collect for Fiscal Year (FY) 2006.\236\ As 
noted, we seek comment on the proposed methodology for implementing 
these statutory requirements and any other potential impact of these 
proposals on small entities.
---------------------------------------------------------------------------

    \236\ 47 U.S.C. 159(a).
---------------------------------------------------------------------------

    124. We have previously used cost accounting data for computation 
of regulatory fees, but found that some fees which were very small in 
previous years would have increased dramatically and would have a 
disproportionate impact on smaller entities. The methodology we are 
proposing in this Notice of Proposed Rulemaking minimizes this impact 
by limiting the amount of increase and shifting costs to other services 
which, for the most part, are larger entities.
    125. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. See, e.g., footnote 230, supra.

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

    126. None.

Attachment B: Sources of Payment Unit Estimates for FY 2006

    In order to calculate individual service fees for FY 2006, we 
adjusted FY 2005 payment units for each service to more accurately 
reflect expected FY 2006 payment liabilities. We obtained our updated 
estimates through a variety of means. For example, we used Commission 
licensee data bases, actual prior year payment records and industry and 
trade association projections when available. The databases we 
consulted include the Commission's Universal Licensing System (ULS), 
International Bureau Filing System (IBFS) and Consolidated Database 
System (CDBS), as well as reports generated within the Commission such 
as the Wireline Competition Bureau's Trends in Telephone Service and 
the Wireless Telecommunications Bureau's Numbering Resource Utilization 
Forecast.
    We tried to obtain verification for these estimates from multiple 
sources and, in all cases; we compared FY 2006

[[Page 17430]]

estimates with actual FY 2005 payment units to ensure that our revised 
estimates were reasonable. Where appropriate, we adjusted and/or 
rounded our final estimates to take into consideration the fact that 
certain variables that impact on the number of payment units cannot yet 
be estimated exactly. These include an unknown number of waivers and/or 
exemptions that may occur in FY 2006 and the fact that, in many 
services, the number of actual licensees or station operators 
fluctuates from time to time due to economic, technical or other 
reasons. Therefore, when we note, for example, that our estimated FY 
2006 payment units are based on FY 2005 actual payment units, it does 
not necessarily mean that our FY 2006 projection is exactly the same 
number as FY 2005. It means that we have either rounded the FY 2006 
number or adjusted it slightly to account for these variables.

------------------------------------------------------------------------
           Fee category               Sources of payment unit estimates
------------------------------------------------------------------------
Land Mobile (All), Microwave, 218-  Based on Wireless Telecommunications
 219 MHz, Marine (Ship & Coast),     Bureau (WTB) projections of new
 Aviation (Aircraft & Ground),       applications and renewals taking
 GMRS, Amateur Vanity Call Signs,    into consideration existing
 Domestic Public Fixed.              Commission licensee data bases.
                                     Aviation (Aircraft) and Marine
                                     (Ship) estimates have been adjusted
                                     to take into consideration the
                                     licensing of portions of these
                                     services on a voluntary basis.
CMRS Mobile Services..............  Based on Wireless Telecommunications
                                     Bureau estimates.
CMRS Messaging Services...........  Based on Wireless Telecommunications
                                     Bureau Competition Report
                                     estimates.
AM/FM Radio Stations..............  Based on estimates from Media Bureau
                                     estimates, adjusted for exemptions,
                                     and actual FY 2005 payment units.
UHF/VHF Television Stations.......  Based on Media Bureau estimates as
                                     well as actual FY 2005 payment
                                     units.
AM/FM/TV Construction Permits.....  Based on Media Bureau estimates as
                                     well as actual FY 2005 payment
                                     units.
LPTV, Translators and Boosters....  Based on actual FY 2005 payment
                                     units.
Broadcast Auxiliaries.............  Based on actual FY 2005 payment
                                     units.
BRS (formerly MDS/MMDS)...........  Based on Wireless Telecommunications
                                     Bureau estimates and actual FY 2005
                                     payment units.
Cable Television Relay Service      Based on actual FY 2005 payment
 (CARS) Stations.                    units.
Cable Television System             Based on Media Bureau industry
 Subscribers.                        estimates of subscriber counts, and
                                     actual FY 2005 payment units.
Interstate Telecommunication        Based on actual FY 2005 interstate
 Service Providers.                  revenues reported on
                                     Telecommunications Reporting
                                     Worksheet, adjusted for FY 2006
                                     revenue growth/decline for
                                     industry, and projections by the
                                     Wireline Competition Bureau.
Earth Stations....................  Based on actual FY 2005 payment
                                     estimates and projected FY 2006
                                     units.
Space Stations (GSOs & NGSOs).....  Based on International Bureau
                                     licensee data base estimates.
International Bearer Circuits.....  Based on FY 2005 actual units.
International HF Broadcast          Based on International Bureau
 Stations, International Public      estimates.
 Fixed Radio Service.
------------------------------------------------------------------------

Attachment C: Calculation of FY 2006 Revenue Requirements and Pro-Rata 
Fees

    Regulatory fees for the first ten categories are collected by the 
Commission in advance to cover the term of the license and are 
submitted along with the application at the time the application is 
filed.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Pro-rated FY 2006   Computed new FY     Rounded new FY
         Fee category           FY 2006 payment    Years    FY 2005 revenue        revenue        2006 regulatory    2006 regulatory    Expected FY 2006
                                     units                      estimate         requirement*           fee                fee              revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLMRS (Exclusive Use)........              2,200       10            370,000            380,547                 17                 15            330,000
PLMRS (Shared use)...........             25,000       10          2,300,000          2,365,564                  9                 10          2,500,000
Microwave....................              2,000       10          1,560,000          1,604,469                 80                 80          1,600,000
218-219 MHz (Formerly IVDS)..                  3       10              1,500              1,543                 51                 50              1,500
Marine (Ship)................              8,000       10            700,000            719,954                  9                 10            800,000
GMRS.........................             17,000        5            525,000            539,966                  6                  5            425,000
Aviation (Aircraft)..........              6,000       10            370,000            380,547                  6                  5            300,000
Marine (Coast)...............                600       10            100,000            102,851                 17                 15             90,000
Aviation (Ground)............              1,500       10            120,000            123,421                  8                 10            150,000
Amateur Vanity Call Signs....              8,500       10            166,443            171,188               2.01               2.01            171,188
AM Class A...................                 69        1            202,950            213,431              3,093              3,100            213,900
AM Class B...................              1,612        1          2,467,600          2,556,655              1,586              1,575          2,538,900
AM Class C...................                950        1            860,400            893,691                941                940            893,000
AM Class D...................              1,769        1          2,874,625          2,977,802              1,683              1,675          2,963,075
FM Classes A, B1 & C3........              3,068        1          6,013,875          6,234,202              2,032              2,025          6,212,700
FM Classes B, C, C0, C1 & C2.              2,908        1          7,333,425          7,599,534              2,613              2,625          7,633,500
AM Construction Permits......                 60        1             35,030             36,245                604                375             22,500
FM Construction Permits \1\..                 59        1             53,900             55,770                945                550             32,450
Satellite TV.................                123        1            132,225            136,813              1,112              1,100            135,300
Satellite TV Construction                      3        1              1,605              1,661                554                555              1,665
 Permit......................
VHF Markets 1-10.............                 44        1          2,664,925          2,757,388             62,668             62,675          2,757,700
VHF Markets 11-25............                 61        1          2,725,175          2,819,728             46,225             46,225          2,819,725
VHF Markets 26-50............                 72        1          2,305,800          2,385,803             33,136             33,125          2,385,000
VHF Markets 51-100...........                118        1          2,218,400          2,295,370             19,452             19,450          2,295,100
VHF Remaining Markets........                211        1            975,875          1,009,734              4,785              4,775          1,007,525
VHF Construction Permits.....                  9        1             28,575             29,566              3,285              3,275             29,475

[[Page 17431]]

 
UHF Markets 1-10.............                 84        1          1,682,100          1,742,992             20,750             20,750          1,743,000
UHF Markets 11-25............                 79        1          1,384,475          1,435,040             18,165             18,175          1,435,825
UHF Markets 26-50............                115        1          1,155,750          1,198,378             10,421             10,425          1,198,875
UHF Markets 51-100...........                162        1            992,250          1,028,286              6,347              6,350          1,028,700
UHF Remaining Markets........                181        1            312,225            323,058              1,785              1,775            321,275
UHF Construction Permits \1\.                 26        1             53,475             55,330              2,128              1,775             46,150
Broadcast Auxiliaries........             24,000        1            250,000            258,674                 11                 10            240,000
LPTV/Translators/Boosters....              2,900        1          1,145,500          1,185,245                409                410          1,189,000
CARS Stations................                850        1            139,500            144,340                170                170            144,500
Cable TV Systems.............         63,000,000        1         46,800,000         48,423,784              0.769               0.77         48,510,000
Interstate Telecommunication      53,100,000,000        1        131,220,000        135,772,841         0.00255693            0.00256        135,936,000
 Service Providers...........
CMRS Mobile Services                 203,000,000        1         39,380,000         41,153,670              0.203               0.20         40,600,000
 (Cellular/Public Mobile)....
CMRS Messaging Services......          6,500,000        1            896,000            519,756               0.08               0.08            520,000
BRS \2\......................              1,767        1            459,000            473,579                268                270            477,090
LMDS.........................                330        1             84,150             88,417                268                270             89,100
International Bearer Circuits          5,300,000        1          7,261,000          7,512,929               1.42               1.42          7,526,000
International Public Fixed...                  1        1              1,800              1,862              1,862              1,850              1,850
Earth Stations...............              3,500        1            697,000            721,183                206                205            717,500
International HF Broadcast...                  5        1              3,825              3,958                792                790              3,950
Space Stations                                87        1          9,065,925          9,380,479            107,822            107,825          9,380,775
 (Geostationary).............
Space Stations (Non-                           6        1            674,550            697,954            116,326            116,325            697,950
 Geostationary...............
                              --------------------------------------------------------------------------------------------------------------------------
    ****** Total Estimated     .................  .......        280,765,853        290,515,198  .................  .................        290,116,743
     Revenue to be Collected.
                              --------------------------------------------------------------------------------------------------------------------------
    ****** Total Revenue       .................  .......        280,098,000        288,771,000  .................  .................        288,771,000
     Requirement.............
                              --------------------------------------------------------------------------------------------------------------------------
    Difference...............  .................  .......            667,853          1,744,198  .................  .................         1,345,743
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 1.030964163 factor applied based on the amount Congress designated for recovery through regulatory fees (Public Law 109-108 and 47 U.S.C. 159(a)(2)).
\1\ The AM and FM Construction Permits and the UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher than the
  lowest licensed fee for that class of service.
\2\ MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate
  the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands et al, Report &
  Order and Further Notice of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, at paragraph 6 (2004) (R&O and FNPRM).

Attachment D: FY 2006 Schedule of Regulatory Fees

    Regulatory fees for the first eleven categories are collected by 
the Commission in advance to cover the term of the license and are 
submitted along with the application at the time the application is 
filed.

------------------------------------------------------------------------
                                                       Annual regulatory
                     Fee category                       fee  (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).                 15
Microwave (per license) (47 CFR part 101)............                 80
218-219 MHz (Formerly Interactive Video Data Service)                 50
 (per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80).........                 10
Marine (Coast) (per license) (47 CFR part 80)........                 15
General Mobile Radio Service (per license) (47 CFR                     5
 part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under                 10
 the Land Mobile category)...........................
PLMRS (Shared Use) (per license) (47 CFR part 90)....                 10
Aviation (Aircraft) (per station) (47 CFR part 87)...                  5
Aviation (Ground) (per license) (47 CFR part 87).....                 10
Amateur Vanity Call Signs (per call sign) (47 CFR                   2.01
 part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR                     .20
 parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20,                 .08
 22, 24 and 90)......................................
Broadband Radio Service (formerly MMDS/MDS) (per                     270
 license) (47 CFR part 21)...........................
Local Multipoint Distribution Service (per call sign)                270
 (47 CFR, part 101)..................................
AM Radio Construction Permits........................                375
FM Radio Construction Permits........................                550
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10.....................................             62,675
    Markets 11-25....................................             46,225
    Markets 26-50....................................             33,125
    Markets 51-100...................................             19,450
    Remaining Markets................................              4,775
    Construction Permits.............................              3,275
TV (47 CFR part 73) UHF Commercial:

[[Page 17432]]

 
    Markets 1-10.....................................             20,750
    Markets 11-25....................................             18,175
    Markets 26-50....................................             10,425
    Markets 51-100...................................              6,350
    Remaining Markets................................              1,775
    Construction Permits.............................              1,775
Satellite Television Stations (All Markets)..........              1,100
Construction Permits--Satellite Television Stations..                555
Low Power TV, TV/FM Translators & Boosters (47 CFR                   410
 part 74)............................................
Broadcast Auxiliaries (47 CFR part 74)...............                 10
CARS (47 CFR part 78)................................                170
Cable Television Systems (per subscriber) (47 CFR                    .77
 part 76)............................................
Interstate Telecommunication Service Providers (per               .00256
 revenue dollar).....................................
Earth Stations (47 CFR part 25)......................                205
Space Stations (per operational station in                       107,825
 geostationary orbit) (47 CFR part 25) also includes
 DBS Service (per operational station) (47 CFR part
 100)................................................
Space Stations (per operational system in non-                   116,325
 geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits (per active 64KB                      1.42
 circuit)............................................
International Public Fixed (per call sign) (47 CFR                 1,850
 part 23)............................................
International (HF) Broadcast (47 CFR part 73)........                790
------------------------------------------------------------------------


                                                          FY 2006 Radio Station Regulatory Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          FM  Classes A,  FM  Classes B,
                    Population served                       AM  Class A     AM  Class B     AM  Class C     AM  Class D       B1 & C3     C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................             625             475             375             450             550             725
25,001-75,000...........................................           1,225             925             575             700           1,125           1,250
75,001-150,000..........................................           1,825           1,150             775           1,150           1,550           2,300
150,001-500,000.........................................           2,750           1,950           1,150           1,375           2,375           3,000
500,001-1,200,000.......................................           3,950           2,975           1,925           2,300           3,775           4,400
1,200,001-3,000,00......................................           6,075           4,575           2,875           3,675           6,150           7,025
>3,000,000..............................................           7,275           5,475           3,650           4,600           7,850           9,125
--------------------------------------------------------------------------------------------------------------------------------------------------------

Attachment E: Factors, Measurements and Calculations That Determine 
Station Contours and Population Coverages

AM Stations

    For stations with nondirectional daytime antennas, the theoretical 
radiation was used at all azimuths. For stations with directional 
daytime antennas, specific information on each day tower, including 
field ratio, phasing, spacing and orientation was retrieved, as well as 
the theoretical pattern root-mean-square of the radiation in all 
directions in the horizontal plane (RMS) figure milliVolt per meter 
(mV/m) @ 1 km) for the antenna system. The standard, or modified 
standard if pertinent, horizontal plane radiation pattern was 
calculated using techniques and methods specified in Sec. Sec.  73.150 
and 73.152 of the Commission's rules.\237\ Radiation values were 
calculated for each of 360 radials around the transmitter site. Next, 
estimated soil conductivity data was retrieved from a database 
representing the information in FCC Figure R3 \238\. Using the 
calculated horizontal radiation values, and the retrieved soil 
conductivity data, the distance to the principal community (5 mV/m) 
contour was predicted for each of the 360 radials. The resulting 
distance to principal community contours was used to form a 
geographical polygon. Population counting was accomplished by 
determining which 2000 block centroids were contained in the polygon. 
(A block centroid is the center point of a small area containing 
population as computed by the U.S. Census Bureau.) The sum of the 
population figures for all enclosed blocks represents the total 
population for the predicted principal community coverage area.
---------------------------------------------------------------------------

    \237\ 47 CFR 73.150 and 73.152.
    \238\ See Map of Estimated Effective Ground Conductivity in the 
United States, 47 CFR 73.190 Figure R3.
---------------------------------------------------------------------------

FM Stations

    The greater of the horizontal or vertical effective radiated power 
(ERP) (kW) and respective height above average terrain (HAAT) (m) 
combination was used. Where the antenna height above mean sea level 
(HAMSL) was available, it was used in lieu of the average HAAT figure 
to calculate specific HAAT figures for each of 360 radials under study. 
Any available directional pattern information was applied as well, to 
produce a radial-specific ERP figure. The HAAT and ERP figures were 
used in conjunction with the Field Strength (50-50) propagation curves 
specified in 47 CFR 73.313 of the Commission's rules to predict the 
distance to the principal community (70 dBu (decibel above 1 microVolt 
per meter) or 3.17 mV/m) contour for each of the 360 radials.\239\ The 
resulting distance to principal community contours were used to form a 
geographical polygon. Population counting was accomplished by 
determining which 2000 block centroids were contained in the polygon. 
The sum of the population figures for all enclosed blocks represents 
the total population for the predicted principal community coverage 
area.
---------------------------------------------------------------------------

    \239\ 47 CFR 73.313.
---------------------------------------------------------------------------

Attachment F: FY 2005 Schedule of Regulatory Fees

[[Page 17433]]



------------------------------------------------------------------------
                                                       Annual regulatory
                     Fee category                       fee  (U.S. $'s)
------------------------------------------------------------------------
PLMRS (per license) (Exclusive Use) (47 CFR part 90).                 10
Microwave (per license) (47 CFR part 101)............                 60
218-219 MHz (Formerly Interactive Video Data Service)                 50
 (per license) (47 CFR part 95)......................
Marine (Ship) (per station) (47 CFR part 80).........                 10
Marine (Coast) (per license) (47 CFR part 80)........                 10
General Mobile Radio Service (per license) (47 CFR                     5
 part 95)............................................
Rural Radio (47 CFR part 22) (previously listed under                  5
 the Land Mobile category)...........................
PLMRS (Shared Use) (per license) (47 CFR part 90)....                  5
Aviation (Aircraft) (per station) (47 CFR part 87)...                  5
Aviation (Ground) (per license) (47 CFR part 87).....                 15
Amateur Vanity Call Signs (per call sign) (47 CFR                   2.19
 part 97)............................................
CMRS Mobile/Cellular Services (per unit) (47 CFR                     .22
 parts 20, 22, 24, 27, 80 and 90)....................
CMRS Messaging Services (per unit) (47 CFR parts 20,                 .08
 22, 24 and 90)......................................
Multipoint Distribution Services (MMDS/MDS) (per                     255
 license sign) (47 CFR part 21)......................
Local Multipoint Distribution Service (per call sign)                255
 (47 CFR, part 101)..................................
AM Radio Construction Permits........................                310
FM Radio Construction Permits........................                550
TV (47 CFR part 73) VHF Commercial:
    Markets 1-10.....................................             61,975
    Markets 11-25....................................             44,675
    Markets 26-50....................................             32,025
    Markets 51-100...................................             18,800
    Remaining Markets................................              4,625
    Construction Permits.............................              3,175
TV (47 CFR part 73) UHF Commercial:
    Markets 1-10.....................................             20,025
    Markets 11-25....................................             17,525
    Markets 26-50....................................             10,050
    Markets 51-100...................................              6,125
    Remaining Markets................................              1,725
    Construction Permits.............................              1,725
Satellite Television Stations (All Markets)..........              1,075
Construction Permits--Satellite Television Stations..                535
Low Power TV, TV/FM Translators & Boosters (47 CFR                   395
 part 74)............................................
Broadcast Auxiliary (47 CFR part 74).................                 10
CARS (47 CFR part 78)................................                155
Cable Television Systems (per subscriber) (47 CFR                    .72
 part 76)............................................
Interstate Telecommunication Service Providers (per               .00243
 revenue dollar).....................................
Earth Stations (47 CFR part 25)......................                205
Space Stations (per operational station in                       111,925
 geostationary orbit) (47 CFR part 25) also includes
 Direct Broadcast Satellite Service (per operational
 station) (47 CFR part 100)..........................
Space Stations (per operational system in non-                   112,425
 geostationary orbit) (47 CFR part 25)...............
International Bearer Circuits (per active 64KB                      1.37
 circuit)............................................
International Public Fixed (per call sign) (47 CFR                 1,800
 part 23)............................................
International (HF) Broadcast (47 CFR part 73)........                765
------------------------------------------------------------------------


                                                          FY 2005 Radio Station Regulatory Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          FM  Classes A,  FM  Classes B,
                    Population served                       AM  Class A     AM  Class B     AM  Class C     AM  Class D       B1 & C3     C, C0, C1 & C2
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25,000................................................             625             475             375             450             550             725
25,001-75,000...........................................           1,225             925             550             675           1,125           1,250
75,001-150,000..........................................           1,825           1,150             750           1,125           1,550           2,300
150,001-500,000.........................................           2,750           1,950           1,125           1,350           2,375           3,000
500,001-1,200,000.......................................           3,950           2,975           1,875           2,250           3,750           4,400
1,200,001-3,000,00......................................           6,075           4,575           2,825           3,600           6,100           7,025
>3,000,000..............................................           7,275           5,475           3,575           4,500           7,750           9,125
--------------------------------------------------------------------------------------------------------------------------------------------------------

[FR Doc. 06-3201 Filed 4-5-06; 8:45 am]
BILLING CODE 6712-01-P