[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Rules and Regulations]
[Pages 43019-43031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17288]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket Nos. 14-92; 15-121; 15-121; FCC 15-59]
Assessment and Collection of Regulatory Fees for Fiscal Year 2015
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) eliminates the regulatory fee components of two fee
categories, the amateur radio Vanity Call Sign and the General Mobile
Radio Service (GMRS); establishes a new Direct Broadcast Satellite
(DBS) regulatory fee category; provides specific instructions for
RespOrgs (Responsible Organizations), holders of toll free numbers that
are subject to regulatory fees, and amends rule provisions to specify
that debts owed to the Commission that have been delinquent for a
period of 120 days shall be transferred to the Secretary of the
Treasury.
DATES: Effective July 21, 2015.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order, FCC 15-59, MD Docket No. 15-121, adopted on May 20, 2015 and
released May 21, 2015.
I. Procedural Matters
Final Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980 (RFA),\1\
the Commission has prepared a Final Regulatory Flexibility Analysis
(FRFA) relating to this Report and Order.
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\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
The SBREFA was enacted as Title II of the Contract with America
Advancement Act of 1996 (CWAAA).
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Congressional Review Act
2. The Commission will send a copy of this Report and Order and
Order to Congress and the Government Accountability Office pursuant to
the Congressional Review Act. 5 U.S.C. 801(a)(1)(A).
Final Paperwork Reduction Act of 1995 Analysis
3. This Report and Order does not contain any new or modified
information collection burden for small business concerns with fewer
than 25 employees, pursuant to the Small Business Paperwork Relief Act
of 2002, Public Law 107-198, see 44 U.S.C. 3506 (c) (4).
4. Finally, in the Order section of this document, we amend three
sections of our rules \2\ to conform to the Digital Accountability and
Transparency Act (DATA Act) concerning when claims should be
transferred to the Secretary of the Treasury.\3\ In particular, we make
the ministerial change to our rules to specify that debts owed to the
Commission that have been delinquent for a period of 120 days shall be
transferred to the Secretary of the Treasury. The rules previously
specified transfer of delinquent debt to the Treasury after 180 days.
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\2\ 47 CFR 1.1911(d), 1.1912(b)(1), 1.1917(c).
\3\ 31 U.S.C. 3716(c)(6).
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II. Introduction
5. In the Report and Order, the Commission adopted a proposal from
[[Page 43020]]
our FY 2014 Further Notice of Proposed Rulemaking to add a new
subcategory in the existing cable television and Internet Protocol TV
(IPTV) regulatory fee category for direct broadcast satellite (DBS)
providers.\4\ In addition, we provide specific instructions regarding
our new regulatory fee requirement for toll free numbers.\5\ We also
remove amateur radio Vanity Call Signs and General Mobile Radio Service
(GMRS) from the regulatory fee schedule.\6\ The addition of DBS to the
cable television and IPTV category and removal of two wireless
categories from the schedule are permitted amendments to the regulatory
fee schedule and require Congressional notification.\7\
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\4\ Assessment and Collection of Regulatory Fees for Fiscal Year
2014, Report and Order and Further Notice of Proposed Rulemaking, MD
Docket No. 14-92, 79 FR 63883, 63885-63886, paras. 10-15 (October
27, 2014).
\5\ In 2014, the Commission adopted a regulatory fee requirement
for toll free numbers. See FY 2014 Report and Order, 79 FR 54190,
54195-54196, paras. 28-31 (September 11, 2014).
\6\ We sought comment on eliminating these categories in our FY
2014 NPRM. Assessment and Collection of Regulatory Fees for Fiscal
Year 2014, Notice of Proposed Rulemaking, Second Further Notice of
Proposed Rulemaking, and Order, MD Docket No. 14-92, 79 FR 37982,
37989, para. 38 (July 3, 2014).
\7\ 47 U.S.C. 159(b)(3)-(4)(requiring Congressional notification
of permitted amendments not later than 90 days before the effective
date of such amendment).
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III. Background
6. The Commission is required by Congress to assess regulatory fees
each year in an amount that can reasonably be expected to equal the
amount of its appropriation.\8\ Regulatory fees, assessed each fiscal
year, are to ``be derived by determining the full-time equivalent
number of employees performing'' these activities, ``adjusted to take
into account factors that are reasonably related to the benefits
provided to the payer of the fee by the Commission's activities. . .
.'' \9\ Regulatory fees recover direct costs, such as salary and
expenses; indirect costs, such as overhead functions; and support
costs, such as rent, utilities, or equipment.\10\ Regulatory fees also
cover the costs incurred in regulating entities that are statutorily
exempt from paying regulatory fees,\11\ entities whose regulatory fees
are waived,\12\ and entities that provide nonregulated services.
Congress sets the amount the Commission must collect each year in the
Commission's fiscal year appropriations, and section 9(a)(2) of the
Communications Act of 1934, as amended (Communications Act or Act)
requires the Commission to collect fees sufficient to offset the amount
appropriated.\13\ To calculate regulatory fees, the Commission
allocates the total collection target, as mandated by Congress each
year, across all regulatory fee categories. The allocation of fees to
fee categories is based on the Commission's calculation of full time
employees (FTEs) \14\ in each regulatory fee category. Historically,
the Commission has classified FTEs as ``direct'' if the employee is in
one of the four ``core'' bureaus; otherwise, that employee was
considered an ``indirect'' FTE.\15\ The total FTEs for each fee
category includes the direct FTEs associated with that category, plus a
proportional allocation of the indirect FTEs.
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\8\ 47 U.S.C. 159(b)(1)(B).
\9\ 47 U.S.C. 159(b)(1)(A).
\10\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2004, Report and Order, 69 FR 41028, 4103, para. 11 (July 7,
2004).
\11\ For example, governmental and nonprofit entities are exempt
from regulatory fees under section 9(h) of the Act. 47 U.S.C.
159(h); 47 CFR 1.1162.
\12\ 47 CFR 1.1166.
\13\ 47 U.S.C. 159(a)(2).
\14\ One FTE, a ``Full Time Equivalent'' or ``Full Time
Employee,'' is a unit of measure equal to the work performed
annually by a full time person (working a 40 hour workweek for a
full year) assigned to the particular job, and subject to agency
personnel staffing limitations established by the U.S. Office of
Management and Budget.
\15\ The core bureaus are the Wireline Competition Bureau (172
FTEs), Wireless Telecommunications Bureau (91 FTEs), Media Bureau
(155 FTEs), and part of the International Bureau (28 FTEs), totaling
446 ``direct'' FTEs. The ``indirect'' FTEs are the employees from
the following bureaus and offices: Enforcement Bureau, Consumer &
Governmental Affairs Bureau, Public Safety and Homeland Security
Bureau, Chairman and Commissioners' offices, Office of the Managing
Director, Office of General Counsel, Office of the Inspector
General, Office of Communications Business Opportunities, Office of
Engineering and Technology, Office of Legislative Affairs, Office of
Strategic Planning and Policy Analysis, Office of Workplace
Diversity, Office of Media Relations, and Office of Administrative
Law Judges, totaling 1,037 ``indirect'' FTEs. These totals are as of
Oct. 1, 2014 and exclude auctions FTEs.
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7. Section 9 of the Communications Act requires the Commission to
make certain changes (i.e., mandatory amendments) to the regulatory fee
schedule if it ``determines that the Schedule requires amendment to
comply with the requirements'' of section 9(b)(1)(A).\16\ In addition,
the Commission must add, delete, or reclassify services in the fee
schedule to reflect additions, deletions, or changes in the nature of
its services ``as a consequence of Commission rulemaking proceedings or
changes in law.'' \17\ These ``permitted amendments'' require
Congressional notification.\18\ The changes in fees resulting from both
mandatory and permitted amendments are not subject to judicial
review.\19\
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\16\ 47 U.S.C. 159(b)(3).
\17\ 47 U.S.C. 159(b)(3).
\18\ 47 U.S.C. 159(b)(4)(B).
\19\ 47 U.S.C. 159(b)(3). But see Comsat Corp. v. FCC, 114 F.3d
223, 227 (D.C. Cir. 1997) (``Where, as here, we find that the
Commission has acted outside the scope of its statutory mandate, we
also find that we have jurisdiction to review the Commission's
action.'')
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8. The Commission continues to improve the regulatory fee process
by ensuring a more equitable distribution of the regulatory fee burden
among categories of Commission licensees under the statutory framework
in section 9 of the Communications Act. For example, in 2013, the
Commission updated the FTE allocations to more accurately align
regulatory fees with the costs of Commission oversight and
regulation,\20\ as recommended in the GAO Report, a report issued by
the Government Accountability Office (GAO) in 2012.\21\ The Commission
also reallocated some FTEs from the International Bureau as
``indirect.'' \22\ Subsequently, in the FY 2014 Report and Order, the
Commission adopted the new toll free number regulatory fee category
\23\ and, in the accompanying FY 2014 Further Notice of Proposed
Rulemaking, the Commission sought additional comment on a new
regulatory fee category for DBS.\24\ In this Report and Order, we now
add a subcategory for DBS providers in the cable television and IPTV
regulatory fee category based on our finding that Media Bureau FTEs
work on issues and proceedings that include DBS as well as other
multichannel video programming distributors (MVPDs).
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\20\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2013, Report and Order, MD Docket No. 13-140, 78 FR 52433,
52436-52437, paras. 10-15 (August 23, 2013).
\21\ In 2012, the GAO concluded that the Commission should
conduct an overall analysis of the regulatory fee categories and
perform an updated FTE analysis by fee category. GAO ``Federal
Communications Commission Regulatory Fee Process Needs to be
Updated,'' GAO-12-686 (Aug. 2012) (GAO Report) at 36, (available at
http://www.gao.gov/products/GAO-12-686).
\22\ FY 2013 Report and Order, 78 FR 52433, 52436-52438, paras.
12-21 (August 23, 2013).
\23\ FY 2014 Report and Order, 79 FR 54190, 54195-54196, paras.
28-31 (September 11, 2014).
\24\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883,
63885-63886, paras. 10-15 (October 27, 2014).
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IV. Discussion
A. Report and Order
1. Eliminating Regulatory Fee Categories
9. In the FY 2014 NPRM,\25\ we sought comment on eliminating
several of the smaller regulatory fee categories such as amateur radio
Vanity Call Signs \26\ and
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GMRS.\27\ In the FY 2014 Report and Order, we concluded that we did not
yet have adequate support to determine whether the cost of recovery and
burden on small entities outweighed the collected revenue or whether
eliminating the fee would adversely affect the licensing process.\28\
We stated, however, that we would reevaluate this issue in the future.
Since adoption of the FY 2014 Report and Order, Commission staff have
had an opportunity to obtain and analyze support concerning the
collection of fees from these regulatees.
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\25\ FY 2014 NPRM, 79 FR 37982, 37989, para. 38 (July 3, 2014).
\26\ Call signs assigned to newly licensed stations, i.e., a
sequential call sign, are assigned based on the licensee's mailing
address and class of operator license. 47 CFR 97.17(d). The licensee
can request a specific unassigned but assignable call sign, known as
a vanity call sign. 47 CFR 97.19. There is no fee for the sequential
call sign.
\27\ GMRS (formerly Class A of the Citizens Radio Service) is a
personal radio service available for the conduct of an individual's
personal and family communications. See 47 CFR 95.1. We initially
proposed eliminating regulatory fees for GMRS in the FY 2008 Report
and Order and Further Notice. See Assessment and Collection of
Regulatory Fees for Fiscal Year 2008, Report and Order and Further
Notice of Proposed Rulemaking, 73 FR 50285, 50290-50291, para 33
(August 26, 2008) (FY 2008 Report and Order and Further Notice). The
Commission has an open proceeding to review the Part 95, Personal
Radio Service rules, which include GMRS. See Review of the
Commission's Part 95 Personal Radio Services Rules, WT Docket No.
10-119, Notice of Proposed Rulemaking and Memorandum Opinion and
Order on Reconsideration, 75 FR 47142, 47143-47144, para. 4 (August
4, 2010).
\28\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 26
(September 11, 2014).
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10. The GMRS and amateur radio Vanity Call Sign regulatory fee
categories comprise on average over 20,000 licenses that are newly
obtained or renewed every five and 10 years, respectively. After five
years, the GMRS licensee is responsible for renewing the license (or
cancelling) and the Commission is responsible for maintaining accurate
records of licenses coming up for renewal--an administrative burden on
both GMRS users and on the Commission for renewing and maintaining
records of these licenses. After analyzing the costs of processing fee
payments for GMRS, we conclude that the Commission's cost of collecting
and processing this fee exceeds the payment amount of $25. Our costs
have increased over time and now that the costs exceed the amount of
the regulatory fee, the increased relative administrative cost supports
eliminating this regulatory fee category.
11. The Vanity Call Sign fee category has a small regulatory fee
($21.40 in FY 2014) for a 10-year license. The Commission often
receives multiple applications for the same vanity call sign, but only
one applicant can be issued that call sign. In such cases, the
Commission issues refunds for all the remaining applicants. In addition
to staff and computer time to process payments and issue refunds, there
is an additional expense to issue checks for the applicants who cannot
be refunded electronically. The Commission spends more resources on
processing the regulatory fees and issuing refunds than the amount of
the regulatory fee payment. As our costs now exceed the regulatory fee,
we are eliminating this regulatory fee category.
12. The Commission will therefore eliminate the GMRS and Vanity
Call Sign regulatory fee categories after the required congressional
notification is provided.\29\ Once eliminated, these licensees will no
longer be financially burdened with such payments and the Commission
will no longer incur these administrative costs that exceed the fee
payments. The revenue that the Commission would otherwise collect from
these regulatory fee categories will be proportionally assessed on
other wireless fee categories. This is a ``permitted amendment'' as
defined in section 9(b)(3) of the Act, which, pursuant to section
9(b)(4)(B, must be submitted to Congress at least 90 days before it
becomes effective.\30\
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\29\ After the 90-day notification period for a permitted
amendment, these two fee categories will be eliminated. We will not
be issuing refunds to licensees who have paid the regulatory fee
prior to the elimination of the fee.
\30\ 47 U.S.C. 159(b)(3).
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2. Toll Free Numbers
13. Toll free numbers, defined in section 52.101(f) of our
rules,\31\ allow callers to reach the called party without being
charged for the call. Instead, the charge for the call is paid by the
called party (the toll free subscriber).\32\ Prior to the FY 2014
Report and Order, the Commission did not assess regulatory fees on toll
free numbers based on the assumption that the entities controlling the
numbers--wireline and wireless common carriers--were paying regulatory
fees based on either revenues or subscribers.\33\ In the FY 2014 NPRM,
we observed this was no longer the case because many toll free numbers
are now controlled or managed by RespOrgs \34\ that are not common
carriers.\35\ In the FY 2014 Report and Order, we adopted a regulatory
fee obligation for toll free numbers beginning in FY 2015, finding that
the Commission has both the legal authority and responsibility to
assess regulatory fees on toll free numbers.\36\ This regulatory fee
assessed on RespOrgs for toll free numbers managed by a RespOrg,\37\ is
payable for all toll free numbers unless calls from only other
countries can be completed using those toll free numbers.\38\ This
regulatory fee is assessed on RespOrgs for each working, assigned,
reserved, in transit, or any other status of toll free number as
defined in section 52.103 of the Commission's rules. Interstate
Telecommunications Service Providers (ITSPs) that are RespOrgs and
RespOrgs that are not ITSPs will be responsible for this regulatory
fee.
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\31\ Toll free numbers are telephone numbers for which the toll
charges for completed calls are paid by the toll free subscriber.
See 47 CFR 52.101(f). These are 800, 888, 877, 866, 855, and 844
numbers. SMS/800 (or the 800 Service Management System) is a
centralized system that performs toll free number management. For a
list of RespOrgs on the SMS/800, Inc. Web site, see http://www.sms800.com/Controls/NAC/Serviceprovider.aspx.
\32\ 47 U.S.C. 52.101 (e), (f).
\33\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 28,
Footnote 76 (citing Universal Service Contribution Methodology,
Further Notice of Proposed Rulemaking, 77 FR 33896, 33923, para. 227
(June 7, 2012).
\34\ A RespOrg is a company that manages toll free telephone
numbers for subscribers. RespOrgs use the SMS/800 data base to
verify the availability of specific numbers and to reserve the
numbers for subscribers. See 47 CFR 52.101(b).
\35\ FY 2014 NPRM, 79 FR 37982, 37992, para. 57, Footnote 91
(citing, inter alia, Telseven, LLC, Calling 10, LLC, Patrick Hines
a/k/a P. Brian Hines, Notice of Apparent Liability for Forfeiture,
27 FCC Rcd 15558, 15560, para. 3 (2012) (various corporations,
including non-common carrier RespOrgs, owned and controlled by
Patrick Hines, controlled approximately one million toll free
numbers for Hines' ``directory assistance'' operation.))
\36\ FY 2014 Report and Order, 79 FR 54190, 54195, para. 28-29
(September 11, 2014) (summarizing the legal rationale for adoption
of a fee on toll free numbers and the FTEs involved in toll free
issues) (citing Toll Free Access Codes, Second Report and Order and
Further Notice of Proposed Rulemaking, CC Docket No. 95-155, 62 FR
20126, 20127 (April 25, 1997) (Toll Free Second Report and Order)
(Sections 201(b) and 251(e) of the Act ``empower the Commission to
ensure that toll free numbers . . . are allocated in an equitable
and orderly manner that serves the public interest.'')).
\37\ The proposed fee rate for toll free numbers for FY 2015 is
in Table C (FY 2015 Notice of Proposed Rulemaking).
\38\ See FY 2014 Report and Order, 79 FR 54190, 54195-54196,
para. 30 (September 11, 2014).
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14. The decision in 2014 to expand the pool of regulatory fee
obligations to all RespOrgs created a system in which there are now
numerous entities that play a role in toll free number administration
and are required to pay annual regulatory fees but are not common
carriers and therefore may lack familiarity with the Commission's
rules. In the FY 2014 Report and Order, we did not adopt a specific
enforcement mechanism to address circumstances where RespOrgs do not
make regulatory fee payments but instead, sought further comment on the
additional procedures
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for enforcement in such instances.\39\ Instead of adopting additional
enforcement procedures at this time, however, we direct SMS/800,
Inc.\40\ to provide the necessary outreach to the RespOrgs, through its
tariff, Web site, or otherwise, to advise them that: ``The Federal
Communications Commission (FCC) has adopted a regulatory fee category
for toll free numbers, assessed for each toll free number managed by a
Responsible Organization (RespOrg). This regulatory fee, assessed on
RespOrgs for toll free numbers managed by a RespOrg, is payable for all
toll free numbers unless calls from only other countries can be
completed using those toll free numbers. A RespOrg that fails to pay
the regulatory fee assessed by the FCC will be subject to penalties.''
\41\
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\39\ FY 2014 Report and Order, 79 FR 63883, 63885, paras. 8-9
(October 27, 2014).
\40\ SMS/800, Inc. provides administration and routing for all
toll free numbers in North America. The Commission has the ultimate
authority over numbering resources and oversees the SMS Tariff and
SMS/800 Board. See 47 U.S.C. 251 (e)(1); see generally Toll Free
Service Access Codes, CC Docket No. 95-155; Petition to Change the
Composition of SMS/800, Inc., WC Docket No. 12-260, 28 FCC Rcd 15328
(2013) (SMS Reauthorization Order). Previously the Commission
required SMS/800, Inc. to include language prohibiting toll free
number hoarding and warehousing in the SMS Tariff. See Toll Free
Service Access Codes, Second Report and Order and Further Notice of
Proposed Rulemaking, 62 FR 20126, 20127, para. 1 (April 25, 1997).
\41\ See Toll Free Second Report and Order, 62 FR 20126 (April
25, 1997) (``We also may limit any RespOrg's allocation of toll free
numbers or possibly decertify it as a RespOrg under section
251(e)(1) or section 4(i) [of the Communications Act].'')
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15. The imposition of a regulatory fee on RespOrgs is a new rule,
adopted in the FY 2014 Report and Order, and non-common carriers may be
unfamiliar with our regulatory fee process and unaware that
delinquencies can result in penalties imposed by SMS/800, Inc.,
penalties imposed by the Commission pursuant to the Debt Collection
Improvement Act of 1996 (DCIA), and/or enforcement action by the
Enforcement Bureau, pursuant to delegated authority, or by the
Commission.\42\ As a result, OMD will coordinate with SMS/800, Inc. to
ensure that all RespOrgs owing regulatory fees have sufficient
information about this process and opportunity to pay the regulatory
fee before the RespOrg is placed in red light status and enforcement
procedures are initiated.\43\
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\42\ The Commission has a number of generally applicable
mechanisms to ensure collection of delinquent debt which would also
apply to RespOrgs. See generally FY 2014 Report and Order, 79 FR
54190, 54199, paras. 47-48 (September 11, 2014) (summarizing the
late payment penalty on unpaid regulatory fees under 47 U.S.C.
159(c), the red-light rule set forth in section 1.1910 of the
Commission's rules, 47 CFR 1.1910, and additional provisions
contained in the Debt Collection Improvement Act of 1996 (DCIA), 31
U.S.C. 3701 et seq., See Amendment of Parts 0 and 1 of the
Commission's Rules, MD Docket No. 02-339, Report and Order, 69 FR
27843 (May 17, 2004); 47 CFR part 1, subpart O, Collection of Claims
Owed the United States).
\43\ Hypercube Telecom contends that the consumer end-users
would be affected by our enforcement action against a RespOrg.
Hypercube Telecom Reply Comments at 3-5. The notifications that are
part of our delinquent bill collection process will give RespOrgs
multiple opportunities to pay any delinquency before enforcement
action.
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16. The basis for identifying the toll free number count upon which
a regulatory fee will be assessed for each RespOrg will be derived from
data provided by SMS/800, Inc.\44\ The toll free number data will be
determined by the toll free number count as of or around December 31st
of each year. In addition to maintaining contact information with SMS/
800, Inc., RespOrgs are also responsible for: (i) Obtaining an FRN (FCC
Registration Number); \45\ (ii) maintaining current contact information
in the Commission Registration System (CORES); \46\ (iii) reviewing the
Commission's Regulatory Fees Home Page for updates on regulatory fees;
\47\ and (iv) making timely regulatory fee payments using the
Commission's Electronic Filing and Payment System (Fee Filer) located
at: www.fcc.gov/feefiler. SMS/800, Inc. will provide the Commission
with up-to-date contact information for the RespOrgs as needed to
facilitate the timely payment of regulatory fees for toll free numbers.
Under our bill collection procedures, delinquent RespOrgs will receive
notice from the Commission before the matter is referred to the
Enforcement Bureau for enforcement action and/or penalties imposed by
SMS/800, Inc.
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\44\ SMS/800, Inc. observes that some of its billing and contact
information may contain additional proprietary and confidential data
and that it would require the Commission to ensure the
confidentiality of any such information provided. See SMS/800, Inc.
Comments at 6. If SMS/800, Inc. is unable to provide the necessary
information without including any confidential information it should
submit, along with the responsive information and/or documents, a
statement in accordance with section 0.459 of the Commission's
rules. 47 CFR 0.459.
\45\ Commission FRN numbers can be obtained by registering in
the Commission's Registration System (CORES) located at: https://apps.fcc.gov/coresWeb/publicHome.do.
\46\ Commission's Registration System (CORES) located at:
https://apps.fcc.gov/coresWeb/publicHome.do.
\47\ The Commission's Regulatory Fees Home Page is located at:
http://www.fcc.gov/regfees.
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17. Any payments RespOrgs must pay SMS/800, Inc. for toll free
number management and administration are unrelated to regulatory fees
assessed by the Commission. Payment of regulatory fees to the
Commission does not relieve a RespOrg from any payment obligations to
SMS/800, Inc.
3. Direct Broadcast Satellite Providers
18. DBS service is a nationally distributed subscription service
that delivers video and audio programming via satellite to a small
parabolic ``dish'' antenna at the subscriber's location. DBS providers
are multichannel video programming distributors (MVPDs), as defined in
section 602(13) of the Act.\48\ These operators of U.S. licensed
geostationary space stations, which are used to provide one-way
subscription video service to consumers in the United States, currently
pay a fee per U.S.-licensed satellite under the category ``Space
Station (Geostationary Orbit)'' in the regulatory fee schedule based on
the International Bureau FTEs work associated with satellite
regulation. Cable television and IPTV, also MVPDs, similarly provide
subscription video services to consumers in the United States. These
regulated entities pay a regulatory fee per subscriber under the fee
category ``Cable TV System, Including IPTV.'' \49\ In the Further
Notice of Proposed Rulemaking accompanying the FY 2014 Report and
Order, the Commission proposed to adopt a fee to recover the costs
incurred by the Media Bureau for regulation of DBS.\50\ Under our
proposal, DBS providers would be subject to two regulatory fees. The
first fee would recover the burden of regulation and oversight by
International Bureau FTEs incurred as a result of its operation of
satellites, and the other fee would recover the burden of regulation
and oversight by Media Bureau FTEs as a result of DBS status as a MVPD.
We conclude that DBS providers are subject to regulation and oversight
of the Media Bureau and should share in the Media Bureau FTE burden
attributed to MVPDs. Accordingly, pursuant to section 9(b)(3), we amend
the regulatory fee schedule to replace the category ``Cable TV System,
Including IPTV'' with the ``Cable TV System, Including IPTV and DBS''
category. This category will now have two rates: One for DBS (a
subcategory) and another for cable television and IPTV.
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\48\ 47 U.S.C. 522(13).
\49\ In FY 2014, the regulatory fee for ``Cable TV System,
Including IPTV'' was $0.99 per subscriber. FY 2014 Report and Order,
79 FR 54190, 54208-54212 (September 11, 2014). Cumulatively, the
Cable TV System, Including IPTV fee category paid $64.35 million in
regulatory fees for FY 2014.
\50\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883,
63886-63887, paras. 10-15 (October 27, 2014).
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19. Background. The Commission has considered the appropriate
methodology for assessing regulatory fees on DBS providers on multiple
occasions. The
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original fee schedule adopted by Congress in 1993, when the DBS service
was a nascent industry,\51\ did not include a specific fee category for
DBS providers.\52\ The Commission recognized this and declined to adopt
a regulatory fee for DBS until fiscal year 1996.\53\ In the FY 1996
NPRM, the Commission determined that including the fledgling DBS
service in the regulatory fee imposed on geostationary orbit
geosynchronous satellite category best reflected the regulatory burden
born by the Commission at that time.\54\ In the 2005,\55\ 2006,\56\ and
2008 \57\ regulatory fee proceedings, the Commission also considered
whether DBS should pay a subscriber-based regulatory fee related to
Media Bureau oversight instead of being included in the geosynchronous
satellite category related to International Bureau oversight. In those
proceedings, the Commission either declined to adopt a change or made
no decision on the issue. In the FY 2005 Report and Order, in declining
to make a change, the Commission noted its FY 2005 NPRM had not
contained a proposal on the issue.\58\ In the FY 2006 Report and Order,
the Commission decided not to change the fee. In the FY 2009 Report and
Order, the Commission declined to address the issue raised in the FY
2008 Report and Order and Further Notice.\59\
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\51\ Implementation of Section 9 of the Communications Act,
Assessment and Collection of Regulatory Fees for the 1994 Fiscal
Year, Report and Order, 59 FR 30984, 30994, para. 85 (June 16, 1994)
(FY 1994 Report and Order) (declining to adopt a regulatory fee for
DBS under the Mass Media fees and noting that DBS service is not
expected to be offered prior to the time for calculating fee
payments for FY 1994).
\52\ In the Appendix to the FY 1994 Report and Order published
in the Federal Register, the Commission noted that DBS was not
included in the original fee schedule adopted by Congress and
observed ``that the omission of DBS and FM translators and boosters
was inadvertent and that Congress did not intend to exempt all DBS
permittees and licensees and licensees of FM translators and
boosters from regulatory fees as these services result in the
Commission incurring costs for necessary regulatory functions. . . .
we intend to add regulatory fee categories for DBS licenses and for
FM translators and boosters. . . .'' 59 FR 30984, 31006, note 2.
\53\ Assessment and Collection of Regulatory Fees for Fiscal
Year 1996, Report and Order, 61 FR 36629, 36652, para 35 in Appendix
F (July 12, 1996) (FY 1996 Report and Order) (imposing regulatory
fee for the first time on DBS relying on the analysis in the FY 1996
NPRM); Assessment and Collection of Regulatory Fees for Fiscal Year
1996, Notice of Proposed Rulemaking, 61 FR 16432, 16436, para.
41(April 15, 1996) (FY 1996 NPRM) (proposing to assess DBS licensees
the fee applicable to all geostationary orbit geosynchronous
satellite licensees and, therefore, to include DBS for regulatory
fee purposes in the Space Station fee category).
\54\ FY 1996 NPRM, 61 FR 16432, 16436, para.41 (April 15, 1996).
\55\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2005, Report and Order and Order on Reconsideration, 70 FR
41967, 41969, para 11 (July 21, 2005) (FY 2005 Report and Order). In
2005, the Commission declined to adopt changes in the regulatory fee
assessment methodology for DBS providers in response to the comments
of the National Cable and Telecommunications Association and
American Cable Association. Id. The FY 2005 NPRM did not contain a
proposal on this issue. See generally, Assessment and Collection of
Regulatory Fees for Fiscal Year 2005, Notice of Proposed Rulemaking,
70 FR 9575 (February 28, 2005).
\56\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2006, Report and Order, 71 FR 43842, 43844-43845, paras. 10-16
(August 2, 2006) (FY 2006 Report and Order) (declining to change the
DBS regulatory fee from a per operational space station fee to a
subscriber based fee); Assessment and Collection of Regulatory Fees
for Fiscal Year 2006, Notice of Proposed Rulemaking, 71 FR 17410,
17411-17412, para. 8 (June 6, 2006) (FY 2006 NPRM) (seeking comment
on the appropriate regulatory fee structure for both cable operators
and DBS providers).
\57\ FY 2008 Report and Order and Further Notice, 73 FR 50285,
50290, para. 26 (August 26, 2008) (seeking comment on whether the
Commission should impose the same per subscriber fee on DBS that
cable providers pay, or continue to assess a space station
regulatory fee for the DBS industry and a subscriber-based structure
for the cable industry).
\58\ FY 2005 Report and Order, 70 FR 41967, 41969, para. 11
(July 21, 2005).
\59\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2009, Report and Order, 74 FR 40089, 40089, para 3 (August 11,
2009) (FY 2009 Report and Order) (the Commission noted that the
remaining outstanding issues from the FY 2008 Report and Order and
Further Notice would be decided at a later time).
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20. In August of 2012, the GAO Report concluded that regulatory fee
reform at the Commission was long overdue.\60\ The GAO Report observed,
among other things, that questions had been raised by commenters
regarding whether the Commission's regulatory fee analysis was based on
a ``valid FTE analysis'' of Media Bureau FTEs work related to the MVPDs
including DBS.\61\ Following the GAO Report, in the fiscal year 2013
regulatory fee proceeding, the Commission considered and adopted a
number of significant regulatory fee reforms such as updating the FTEs
allocated to each of the core bureaus and reclassifying most of the
International Bureau FTEs as indirect.\62\ The Commission also adopted
other reforms such as broadening the cable television category to
include IPTV providers as a ``permitted amendment.'' \63\ As part of
its overall analysis of the cable television systems category, the
Commission considered a change to the DBS fee schedule.\64\ While the
Commission declined to do so in 2013 to allow additional time to
examine the proposal as part of larger reform efforts, the Commission
noted its intent to revisit the issue in the future.\65\ In 2014, the
Commission again proposed to adopt a fee to recover the costs incurred
by the Media Bureau for regulation of DBS in the FY 2014 NPRM and the
FY 2014 Further Notice of Proposed Rulemaking.\66\ Alternatively, the
Commission sought comment on whether Media Bureau FTEs working on DBS
issues be assigned to the International Bureau as direct FTEs or
assigned as indirect FTEs for regulatory fee purposes.\67\
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\60\ See note 22, supra. We have adopted significant regulatory
fee reforms in our annual regulatory fee proceedings in response to
the GAO Report. See, e.g., FY 2013 Report and Order, 78 FR 52433,
52436, para. 12-14 (August 23, 2013) (using current FTE data to
calculate regulatory fees).
\61\ GAO Report at 18-20.
\62\ See FY 2013 Report and Order, 78 FR 52433, 52436-52438,
para. 12-22 (August 23, 2013).
\63\ FY 2013 Report and Order, 78 FR 52433, 52439, 52444, paras.
31, 36 (August 23, 2013).
\64\ FY 2013 Report and Order, 78 FR 52433, 52443-52444, paras.
35-36 (August 23, 2013); Assessment and Collection of Regulatory
Fees for Fiscal Year 2013, Notice of Proposed Rulemaking and Further
Notice of Proposed Rulemaking, 78 FR 34612, 34627-34628, paras. 56-
58 (June 10, 2013) (FY 2013 NPRM).
\65\ FY 2013 Report and Order, 78 FR 52433, 52439, para. 31
(August 23, 2013) (``We will continue to examine these suggestions
as we continue our regulatory fee reform, as well as our proposals
that we do not reach in this Report and Order: To combine the ITSP
and wireless categories, to use revenues in calculating all
regulatory fees, and to include DBS providers in a new MVPD
category. We find additional time is necessary and appropriate to
examine these proposals under Section 9 of the Communications Act
and analyze how these proposals account for changes in the
communications industry and the Commission's regulatory processes
and staffing.'') (footnotes omitted) and para. 33.
\66\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883,
63885-63886, paras. 10-15 (October 27, 2014); FY 2014 NPRM, 79 FR
37982, 37990-37991, paras. 47-52 (July 3, 2014).
\67\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR 63883,
63886, para. 13 (October 27, 2014).
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21. Discussion. Under section 9 of the Act, the Commission may make
a permitted amendment to the fee schedule if it ``determines that the
[[Page 43024]]
Schedule requires amendment to comply with the requirements of''
paragraph (1)(A) which mandates that the Commission allocate fees to
cover the costs of certain regulatory activities in accordance with the
benefits provided to the payor and other factors that the Commission
determines are in the public interest.\68\ The statute also provides,
however, that, ``[i]n making such amendments, the Commission shall add,
delete, or reclassify services in the Schedule to reflect additions,
deletions or changes in the nature of its services as a consequence of
Commission rulemaking proceedings or changes in law.'' \69\ We have
conducted a review of the Media Bureau work devoted to MVPD matters and
find that the recommendations in the GAO Report were correct.\70\
Analysis of the oversight and regulation of MVPDs (including the DBS
industry) by the Media Bureau in various rulemaking proceedings reveal
a cumulative effect of changes in law that have taken effect since the
Commission adopted the current DBS regulatory fee structure in 1996.
Due to these changes, we find that the DBS providers should be included
in the same fee category as the other MVPDs, such as cable television
and IPTV. There are certain rules that both DBS providers and cable
operators including IPTV are subject to, and Media Bureau FTEs provide
the oversight and regulation of the DBS industry as required by these
rules.\71\ For example, DBS providers (and cable television operators)
are permitted to file program access complaints \72\ and complaints
seeking relief under the retransmission consent good faith rules.\73\
In addition, DBS providers are subject to MVPD requirements such as
those pertaining to program carriage \74\ and the requirement to
negotiate retransmission consent in good faith.\75\ More recently, the
Commission adopted a host of requirements that apply to all MVPDs and
thus equally apply to DBS providers as part of its implementation of
the Commercial Advertisement Loudness Mitigation Act (CALM Act),\76\
the Twenty-First Century Communications and Video Accessibility Act of
2010 (CVAA),\77\ as well as the Satellite Television Extension and
Localism Act (STELA) Reauthorization Act of 2014 (STELAR).\78\ These
regulatory developments increased the amount of regulatory activity by
the Media Bureau FTEs involving regulation and oversight of MVPDs,
including the DBS providers. The Media Bureau has been responsible for
adopting many of these regulations and overseeing the MVPD industry. As
MVPDs, DBS providers actively participate in Media Bureau proceedings
involving MVPD oversight and regulation.\79\
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\68\ 47 U.S.C. 159(b)(3).
\69\ 47 U.S.C. 159(b)(3).
\70\ The GAO Report did not have a specific recommendation with
respect to the DBS regulatory fee, but observed that the National
Cable and Telecommunications Association had argued that our
regulatory fee process was competitively disadvantaging the cable
television industry. GAO Report at 18-19. Competition per se is not
part of the permitted amendment analysis; however, in this case the
Media Bureau FTEs work on MVPD issues that include DBS.
\71\ See, e.g., 47 CFR 76.65(b); 76.1000-1004; 47 U.S.C. 618(b).
\72\ 47 U.S.C. 548; 47 CFR 76.1000-1004.
\73\ 47 U.S.C. 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).
\74\ 47 U.S.C. 536; 47 CFR 76.1300-1302.
\75\ 47 U.S.C. 325(b)(3)(C)(iii); 47 CFR 76.65(a)-(b).
\76\ See Implementation of the Commercial Advertisement,
Loudness Mitigation (CALM) Act, Report and Order, 77 FR 40276 (July
9, 2012) (CALM Act Report and Order).
\77\ Public Law 111-260, 124 Stat. 2751 (2010). See also
Amendment of Twenty-First Century Communications and Video
Accessibility Act of 2010, Public Law 111-265, 124 Stat. 2795 (2010)
(making corrections to the CVAA); 47 CFR part 79.
\78\ The STELA Reauthorization Act of 2014 (STELAR), 102, Public
Law 113-200, 128 Stat. 2059, 2060-62 (2014) (codified at 47 U.S.C.
338(1)). The STELAR was enacted on Dec. 4, 2014 (H.R. 5728, 113th
Cong.). Implementation of Section 102 of the STELA Reauthorization
Act of 2014, Notice of Proposed Rulemaking, MB Docket No. 15-71, FCC
15-34 (rel. Mar. 26, 2015) proposes satellite television ``market
modification'' rules to implement section 102 of STELAR.
\79\ NCTA and ACA Comments at 7, 10-11; ITTA Comments at 3.
DIRECTV and DISH filed comments and ex parte statements in numerous
Commission proceedings, in the Media Bureau dockets as well as other
dockets. As of Mar. 17, 2015, in the past 12 months, DIRECTV filed
109 comments and ex parte statements in Media Bureau (and other)
dockets. There are other proceedings, such as mergers, in which
DIRECTV and DISH have participated. Regardless of whether the
proceeding is merger-related or pertains strictly to MVPD
regulation, DBS participation, and Media Bureau staff involvement,
support our conclusion that DBS providers should be added to the
cable television and IPTV category.
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22. DIRECTV and DISH disagree that a permitted amendment is
justified, contending that there has been no ``meaningful increase in
the regulation of DBS.'' \80\ To the contrary, as discussed above,
implementation of the CALM Act, CVAA, and STELAR should alone provide
adequate justification for a permitted amendment in this case. A
permitted amendment under section 9(b)(3), however, does not require a
sudden increase in regulation or oversight over a defined period of
time. Circumstances have changed in the almost 20 years since the
Commission first addressed the issue of DBS regulatory fees.\81\ At the
time we adopted a DBS regulatory fee, it was a fledging service where
the business model was uncertain and there were questions concerning
whether it would operate as a subscription based service or a free to
air broadcaster.\82\ The first DBS satellite was not launched until
1993 and did not become operational until 1994.\83\ In 2015, however,
DBS had developed into a large MVPD \84\ and as such significant Media
Bureau FTE resources are used in regulation and oversight of DBS. The
GAO Report correctly noted that an evaluation of Media Bureau FTEs was
long overdue \85\ and the result of such evaluation leads us to the
conclusion that the Media Bureau FTEs regulate the DBS industry
together with the other MVPDs. Thus, there is no reasonable basis to
exclude DBS providers from sharing in the cost of MVPD oversight and
regulation. With this Report and Order, we recognize the changes in
fact and law since the adoption of the DBS fee in 1996 cumulatively
require us to adopt a permitted amendment to ensure that DBS providers
contribute equitably to the FTE burden of MVPD oversight.\86\
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\80\ DIRECTV and DISH Comments at 8-9.
\81\ The Commission's annual MVPD Competition Report provides a
history of MVPD services. Annual Assessment of the Status of
Competition in the Market for the Delivery of Video Programming,
Report, 9 FCC Rcd 7442 (1994) (First Report); 11 FCC Rcd 2060 (1996)
(Second Report); 12 FCC Rcd 4358 (1997) (Third Report); 13 FCC Rcd
1034 (1998) (Fourth Report); 13 FCC Rcd 24284 (1998) (Fifth Report);
15 FCC Rcd 978 (2000) (Sixth Report); 16 FCC Rcd 6005 (2001)
(Seventh Report); 17 FCC Rcd 1244 (2002) (Eighth Report); 17 FCC Rcd
26901 (2002) (Ninth Report); 19 FCC Rcd 1606 (2004) (Tenth Report);
20 FCC Rcd 2755 (2005) (Eleventh Report); 21 FCC Rcd 2503 (2006)
(Twelfth Report); 24 FCC Rcd 542 (2007) (Thirteenth Report); 27 FCC
Rcd 8610 (2012) (Fourteenth Report); 28 FCC Rcd 10496 (2013)
(Fifteenth Report).
\82\ FY 1996 Report and Order, 61 FR 36629, 36652, Appendix F,
para. 35 (July 12, 1996). DBS space stations applicants must
indicate in their license application whether they seek to operate
on a broadcast or non-broadcast basis, which affects the length of
their license terms. Inquiry into the Development of Regulatory
Policy in regard to Direct Broadcast Satellites for the Period
Following the 1982 Regional Administrative Radio Conference, Report
and Order, 90 FCC 2d 676 (1982), aff'd sub nom National Association
of Broadcasters v. F.C.C., 740 F.2d 1190 (1984). To date, neither
DIRECTV nor DISH has elected to operate as a broadcaster.
\83\ First Report, 59 FR 64657, 64659, paras. 21-22 (December
15, 1994).
\84\ Fifteenth Report, 28 FCC Rcd at 10546-49, paras. 110-117
(describing DBS MVPD business models and competitive strategies).
\85\ GAO Report at 17-20.
\86\ 47 U.S.C. 159(b)(3). See, e.g., 47 CFR 76.65(b); 76.1000-
1004; Part 79; 47 U.S.C. 618(b).
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\23.\ We also reject the argument raised by DIRECTV and DISH that
section 9 of the Act requires us to ``show that DBS and cable occupy a
comparable number of FTEs.'' \87\ The commenters' argument that DBS is
not involved in certain matters such as petitions for effective
[[Page 43025]]
competition,\88\ or other requirements that do not pertain to DBS,\89\
demonstrates that DBS is not identical to cable television. It does
not, however, refute our conclusion that a significant number of Media
Bureau FTEs work on MVPD issues that include DBS.\90\ The Commission
has determined in other proceedings that services that are not
technologically identical nevertheless warrant placement in the same
regulatory fee category. Other fee categories, such as Interstate
Telecommunications Service Providers (ITSP), also include a range of
carriers that may not be regulated identically.\91\ For example, when
interconnected Voice over Internet Protocol (VoIP) providers were added
to the ITSP category in a permitted amendment the Commission observed
that ``the costs and benefits associated with our regulation of
interconnected VoIP providers are not identical as those associated
with regulating interstate telecommunications service and CMRS.'' \92\
The Commission stated that ``Section 9 is clear, however, that
regulatory fee assessments are based on the burden imposed on the
Commission, not benefits realized by regulatees.'' \93\ Concerning many
aspects of MVPD regulation, Media Bureau FTEs bear the same burden
regardless of the specific technology used by the service provider.
Thus, although DBS is not identical to cable television and IPTV, the
services all receive oversight and regulation as a result of the work
of Media Bureau FTEs on MVPD issues. The burden imposed on the
Commission is therefore similar.
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\87\ DIRECTV and DISH Comments at 11 & Reply Comments at 4-9.
\88\ DIRECTV and DISH Comments at 12.
\89\ DIRECTV and DISH Comments at 12 (these are (1) a
requirement to encrypt the basic service tier, (2) the viewability
requirements in sections 614 and 615 of the Act, and (3) the
requirement to include certain digital interfaces on high definition
set-top boxes).
\90\ See, e.g., Closed Captioning Report and Order, 79 FR 17911
(March 31, 2014), 79 FR 17093 (March 31, 2014); CALM Act Report and
Order, 77 FR 40276 (July 9, 2012); 76.1000-1004; part 79; 47 U.S.C.
618(b).
\91\ ITSP, regulated by the Wireline Competition Bureau,
includes interexchange carriers (IXCs), incumbent local exchange
carriers (LECs), toll resellers, Voice over Internet Providers
(VoIP), and other service providers, all of which involve different
degrees of regulatory oversight. See NCTA and ACA Comments at 9 &
Reply Comments at 8-9.
\92\ See Assessment and Collection of Regulatory Fees for Fiscal
Year 2007, Report and Order and Further Notice of Proposed
Rulemaking, 72 FR 45908, 45912, para. 19 (August 16, 2007) (FY 2007
Report and Order).
\93\ FY 2007 Report and Order, 72 FR 45908, 45912, para. 19
(August 16, 2007).
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24. DIRECTV and DISH also observe that there are more cable
operators and cable systems than DBS operators, and that the cable
industry has a larger filing and recordkeeping requirement than
DBS.\94\ While we agree that the two DBS providers and their trade
association had fewer filings than the top 25 cable operators and their
two trade associations (combined), we are not persuaded that this
demonstrates a lack of Media Bureau oversight and regulation of the DBS
industry.\95\ We are therefore including DBS providers into the same
regulatory fee category as cable television and IPTV because many Media
Bureau issues involve the entire MVPD industry. We find that it is
appropriate under section 9 of the Act to recover the costs associated
with Media Bureau FTE work.\96\ As we explain below, however, DBS will
have an opportunity to raise questions concerning the rate calculation
between it and other members of the same fee category for fiscal year
2015 and in the future.\97\ The video programming and distribution
industry continues to change \98\ and the appropriate allocation
between and among regulatees with respect to Media Bureau FTEs working
on MVPD issues may change over time as different regulatory and legal
issues are presented to the Commission.
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\94\ DIRECTV and DISH Comments at 13. DIRECTV and DISH compare
the number of filings in our electronic comment filing system (ECFS)
and observe that over a two year period DIRECTV and DISH and their
trade association filed 4,870 pages in 401 proceedings and the top
25 cable companies and their two trade associations filed 93,673
pages in 2,217 proceedings. DIRECTV and DISH Comments at 13, note
53.
\95\ In the 12 months prior to Mar. 17, 2015, Comcast
Corporation (the largest cable company in the country) had 297 total
ECFS filings, DIRECTV had 109, and DISH Network had 134 (some
filings were by DIRECTV and DISH together), a not unexpected
relative volume of ECFS filings for the top three MVPDs in the
country.
\96\ 47 U.S.C. 159(a)(1).
\97\ Even when an industry has oversight generally by one
organizational unit within the Commission, we are sensitive to the
fact that balance between members of the same industry may require
adjustments to FTE allocations. See, e.g., recent changes in FTE
allocations between space station and earth stations even though
such systems are may operate in the same spectrum and be part of the
same telecommunication system. FY 2014 Report and Order, 79 FR
54190, 54192-54193, paras. 11-15 (September 11, 2014).
\98\ See, e.g., Promoting Innovation and Competition in the
Provision of Multichannel Video Programming Distribution Services,
Notice of Proposed Rulemaking, 29 FCC Rcd 15995 (2014) (seeking
comment on, inter alia, expanding the definition of MVPD to include
providers of multiple linear streams of video programming,
regardless of the technology used to distribute it.)
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25. To the extent that DIRECTV and DISH are suggesting by these
arguments that the number of FTEs dedicated to a service is wholly
determinative of their regulatory fees, we disagree. Although the
statute requires us to calculate FTEs initially, we are also required
to ``adjust[]'' that number ``to take into account factors that are
reasonably related to the benefits provided to the payor of the fee by
the Commission's activities.'' \99\ Since DBS providers generally
benefit from the regulatory activities of the Media Bureau, much like
cable operators and IPTV providers, the Commission can attribute Media
Bureau FTEs to DBS providers and require them to pay Media Bureau
regulatory fees.
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\99\ 47 U.S.C. 159(b)(1)(A).
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26. DIRECTV and DISH also argue that because we declined to include
DBS in the cable television and IPTV regulatory fee category
previously, we must provide a reasoned explanation for changing our fee
determination.\100\ We agree that it serves the public interest to
explain our rationale. A prior decision, however, does not preclude us
from making a different determination in light of the facts and
circumstances presented to the Commission in 2015. When the Commission
first determined to include DBS in the geosynchronous satellite
regulatory fee, DBS was a new service with an uncertain business model.
Imposing a subscription based fee derived from Media Bureau FTEs risked
failing to compensate the Commission for the substantive work
regulating DBS as a satellite industry.\101\ When we examined the issue
again in 2005, 2006, and 2008, contemporaneously there was a
significant amount of regulatory work being done by the International
Bureau related to making new spectrum available for satellite based
video services.\102\ Thus, it is not surprising that the Commission
concluded in 2006 that the existing methodology
[[Page 43026]]
adequately ensured recovery of International Bureau FTE burden of
oversight and regulation. Further, removing DBS from the geosynchronous
satellite regulatory fee category at a time when that fee category bore
the burden of substantial rulemakings relating to new satellite
spectrum would have been a complex issue. While the burden of new
satellite rulemakings was not mentioned by the Commission in the FY
2006 Report and Order, review of the context in which decisions are
made is appropriate here. Further, in the past, changes to the DBS
regulatory fee was frequently described as either a fee assessed based
on International Bureau FTEs or a fee based on Media Bureau FTEs. In
contrast, our proposal presents a more nuanced approach of recognizing
that the work of both the International Bureau FTEs and the Media
Bureau FTEs provide oversight and regulation of DBS. As a result, while
the decisions made in the past are understandable in their context, we
are not bound to disregard the FTE burden born by the Media Bureau in
regulating DBS as a MVPD simply because we previously declined to
change the methodology of assessing fees on DBS providers.
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\100\ DIRECTV and DISH Comments at 15-17 & Reply Comments at 10-
11.
\101\ FY 1996 NPRM, 61 FR 16432, 16436, para. 41 (April 15,
1996) (``Moreover, because DBS licensees are not restricted to the
provision of video programming, but rather may provide various non-
video services, we concluded that a facility-based fee would ensure
that each DBS licensee contributed equitably to the cost of DBS
regulation without the need to impose possibly burdensome and overly
intrusive reporting requirements necessary to gather information
identifying the services offered by individual DBS operators.'')
\102\ Establishment of Policies and Service Rules for the
Broadcasting Satellite Service at the 17.3-17.7 GHz Frequency Band
and at the 17.7-17.8 GHz Frequency Band Internationally, and at the
24.75-25.25 GHz Frequency Band for Fixed Satellite Services
Providing Feeder Links to the Broadcasting-Satellite Service and for
the Broadcasting Satellite Service Operating Bidirectionally in the
17.3-17.7 GHz Frequency Band, Notice of Proposed Rulemaking, 72 FR
46939 (August 22, 2007), Report and Order and Further Notice of
Proposed Rulemaking, 72 FR 50000 (August 29, 2007); Amendment of the
Commission's Policies and Rules for Processing Applications in the
Direct Broadcast Satellite Service, Notice of Proposed Rulemaking,
21 FCC Rcd 9443 (2006). See Thirteenth Report, 74 FR 11102, at para.
(March 16, 2009).
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27. Regulatory fee reform is a logistical challenge due to the time
constraints in regulatory fee proceedings which typically must be
completed in a year in order to satisfy our statutory mandate.
Unfortunately, at times we must decline to adopt a proposal or take an
incremental approach, not because a proposal lacks merit, but simply
because there is insufficient time to address the substantive comments
raised in the record in the time allotted.\103\ In this instance,
however, we have the benefit of comments regarding this issue from the
FY 2013 NPRM, the FY 2014 NPRM, and the FY 2014 Further Notice of
Proposed Rulemaking. As a result, unlike prior review of this issue, we
have had more time within which to review the significant issue of
adopting an additional fee category for DBS providers. The GAO Report
also brought new focus to conducting the necessary analysis of Media
Bureau FTEs as part of our overall regulatory fee reform.\104\ Had the
Commission performed this analysis of Media Bureau FTEs and regulation
and oversight of DBS earlier, we may have reached this result at that
time. The Commission may update its regulatory fee methodology when,
among other things, it is supported by updated data, analysis, and
changes in the regulation and oversight of the industry. As the GAO
Report observed, it is important to ``regularly update analyses to
ensure that fees are set based on relevant information.'' \105\
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\103\ See, e.g., FY 2006 Report and Order, 71 FR 43842, 43845,
para 16 (August 6, 2006) (``Finally, as a practical matter, we do
not have sufficient time available to modify the section 9
regulatory fee classification and methodology as proposed by NCTA
and still comply with the 90-day congressional notification
requirement before we start our regulatory fee collections in the
August/September time frame.'')
\104\ See, e.g., FY 2013 Report and Order, 78 FR 52433, 52436,
paras. 12-14 (August 23, 2013).
\105\ GAO Report at 12.
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28. Finally, DISH and DIRECTV contend that a ``fee increase will
cause rate shock'' \106\ and argue that we must explain the basis of
any regulatory fee increase exceeding 7.5 percent relying upon a cap we
adopted for FY 2013.\107\ We note first that it is somewhat premature
to address this concern since the rate for DBS providers is merely
proposed in the accompanying NPRM, and DISH and DIRECTV, the two DBS
providers, may provide comments on the rate for this year and in
subsequent years. As to the substance of the complaint, we note that
this cap was adopted due to the significant regulatory fee changes
adopted that year and our concern on the impact on small entities;
neither DISH nor DIRECTV claim that they are small entities. We are not
required to adopt a cap every year and we are not seeking comment on
such a cap for FY 2015 in our NPRM above. Due to their concern that the
regulatory fee would have such an impact on their customers, we have
decided to phase in the DBS fee and introduce it initially as a
subcategory of the cable television and IPTV category.\108\ This phased
approach is consistent with the interim approach the Commission took in
the FY 2013 Report and Order to ``avoid sudden and large changes in the
amount of fees'' \109\ and addresses DIRECTV and DISH's concerns.\110\
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\106\ DIRECTV and DISH Comments at 11.
\107\ DIRECTV and DISH Comments at 15-17 & Reply Comments at 10-
11.
\108\ Commenters propose a three-year phase-in period. See NCTA
and ACA Comments at 14-15.
\109\ FY 2013 Report and Order, 78 FR 52433, 52439, para. 28
(August 23, 2013).
\110\ In FY 2014, DIRECTV and DISH paid approximately $2.49
million in international regulatory fees for 20 satellites and 141
earth stations. Assuming these DBS providers pay for the same number
of satellite and earth station units, the Commission estimates that
in FY 2015 their total fees paid would be $2.72 million (satellites
and earth stations) plus $2.72 million (media services) for a total
of $5.44 million.
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29. We also note that we sought comment on whether the operator of
the satellite or the provider of DBS service should be the entity that
pays the regulatory fee.\111\ As the fee is based on subscriber
numbers, the DBS service provider would be the entity with this
information and it would be more efficient for those DBS providers to
be responsible for the regulatory fee. For purposes of calculating
regulatory fees, the subscriber count includes single family dwellings
as well as individuals in multiple dwelling units (e.g., apartments,
condominiums, mobile home parks) based on the formula in the footnote
below.\112\
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\111\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR
63883, 63886, para. 13 (October 27, 2014).
\112\ DBS providers, cable television system operators, and IPTV
providers should compute their number of basic subscribers as
follows: Number of single family dwellings + number of individual
households in multiple dwelling unit (apartments, condominiums,
mobile home parks, etc.) paying at the basic subscriber rate + bulk
rate customers + courtesy and free service. Note: Bulk-Rate
Customers = Total annual bulk-rate charge divided by basic annual
subscription rate for individual households. Providers and operators
may base their count on ``a typical day in the last full week'' of
December 2014, rather than on a count as of December 31, 2014.
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30. In the FY 2014 Further Notice of Proposed Rulemaking, we
further sought comment on whether, in lieu of a permitted amendment,
Media Bureau FTEs working on DBS issues should be assigned to the
International Bureau as direct FTEs or assigned as indirect FTEs.\113\
These alternatives would, in some ways, allocate the Media Bureau FTEs
for regulatory fee purposes in a way that is fairer than the current
allocation. DBS providers would be paying regulatory fees for some of
the Media Bureau FTEs, if reallocated as direct FTEs to the
International Bureau. If we reallocated some Media Bureau FTEs as
indirect, the regulatory fee burden would be spread among all
regulatory fee payors, which would relieve the burden on the cable
television and IPTV industry. Although these two alternatives would
serve to reallocate a portion of the Media Bureau FTEs, such
reallocation would either shift the burden to all International Bureau
regulatees or to all regulatory fee payors, instead of to the DBS
providers. Thus, although those two alternative proposals might be an
improvement over the status quo, including DBS in the same category as
cable television and IPTV, and basing the regulatory fee on Media
Bureau FTEs, is the more straightforward and equitable approach because
the DBS regulation and oversight is done by the Media Bureau FTEs.
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\113\ FY 2014 Further Notice of Proposed Rulemaking, 79 FR
63883, 63886, para. 13 (October 27, 2014).
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31. Under section 9 of the Act, the Commission must add, delete, or
reclassify services in the fee schedule to reflect additions,
deletions, or changes in the nature of its services ``as a
[[Page 43027]]
consequence of Commission rulemaking proceedings or changes in law.''
\114\ As explained above, after analyzing the oversight and regulation
of MVPDs (including DBS) by the Media Bureau in various rulemaking
proceedings, MVPDs (including DBS providers) are subject to increased
regulation and oversight due to changes in law, and therefore DBS
should be included in the same fee category as cable television and
IPTV, as a permitted amendment. Since two different sets of FTE
resources are involved, the Commission is assessing two separate fees
on DBS providers, a satellite fee based on International Bureau FTEs
and a fee based on Media Bureau FTEs, assessed per DBS subscriber. This
adoption of a fee subcategory for DBS within the cable television and
IPTV category is a permitted amendment as defined in section 9(b)(3) of
the Act, which, pursuant to section 9(b)(4)(B), must be submitted to
Congress at least 90 days before it becomes effective.\115\
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\114\ 47 U.S.C. 159(b)(3).
\115\ 47 U.S.C. 159(b)(4)(B).
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32. In the Order portion of the rulemaking, the Commission makes
ministerial changes to sections 1.911(d), 1.1912(b)(1), and 1.1917(c)
of the Commission's rules \116\ to conform to the Digital
Accountability and Transparency Act (DATA Act).\117\ In particular, the
Commission amends the rule provisions to specify that debts owed to the
Commission that have been delinquent for a period of 120 days shall be
transferred to the Secretary of the Treasury.\118\ These amendments are
to conform the Commission's rules to the DATA Act and the notice and
comment and effective date provisions of the Administrative Procedure
Act are inapplicable.\119\
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\116\ 47 CFR 1.1911(d), 1.1912(b)(1), 1.1917(c).
\117\ 31 U.S.C. 3716(c)(6).
\118\ The full text of the new rules is contained in the Rule
Change section of this document.
\119\ 5 U.S.C. 553(b)(3)(A).
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Final Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA),\120\ an Initial Regulatory Flexibility Analysis (IRFA)
was included in the Report and Order and Further Notice of Proposed
Rulemaking.\121\ The Commission sought written public comment on these
proposals including comment on the IRFA. This Final Regulatory
Flexibility Analysis (FRFA) conforms to the IRFA.\122\
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\120\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended
by the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
\121\ Assessment and Collection of Regulatory Fees for Fiscal
Year 2014, Report and Order and Further Notice of Proposed
Rulemaking, MD Docket No. 14-92, 79 FR 63883 (October 27, 2014)
(Further Notice).
\122\ 5 U.S.C. 604.
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A. Need for, and Objectives of, the Report and Order
2. In this Report and Order, we eliminate two categories from the
regulatory fee schedule: Amateur radio Vanity Call Signs and General
Mobile Radio Service (GMRS). We also include direct broadcast satellite
(DBS) providers in the cable television and IPTV regulatory fee
category, as a subcategory. To aid in the implementation of new
regulatory fees for Responsible Organizations (RespOrgs) adopted in the
fiscal year 2014 proceeding, we direct the Managing Director to
coordinate with SMS/800, Inc. to ensure that all RespOrgs owing
regulatory fees have sufficient information about this process and
opportunity to pay the regulatory fee before the RespOrg is placed in
red light status and enforcement procedures are initiated.
3. Our regulatory fee for DBS providers, adopted herein, will
include DBS providers in the category of cable television operators and
IPTV providers, but at a lower regulatory fee rate. This rule was
adopted because the Media Bureau staff spend approximately as much time
working on issues that include DBS as cable television and IPTV. For
the most part, the rules and policies addressed by the Media Bureau
include DBS and cable television, as well as IPTV. Under section 9 of
the Commission's rules, the DBS industry should contribute to these
regulatory fees, otherwise the cable television and IPTV industries are
paying for costs that should be shared with DBS.
B. Summary of the Significant Issues Raised by the Public Comments in
Response to the IRFA
4. None.
C. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
5. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and policies, if adopted.\123\ The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \124\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\125\ A ``small business concern'' is one
which: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the SBA.\126\ Nationwide, there are a total of
approximately 27.9 million small businesses, according to the SBA.\127\
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\123\ 5 U.S.C. 603(b)(3).
\124\ 5 U.S.C. 601(6).
\125\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\126\ 15 U.S.C. 632.
\127\ See SBA, Office of Advocacy, ``Frequently Asked
Questions,'' http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf.
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6. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as ``establishments primarily engaged in
operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired communications
networks. Transmission facilities may be based on a single technology
or a combination of technologies. Establishments in this industry use
the wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including VoIP services, wired (cable) audio and video programming
distribution, and wired broadband internet services. By exception,
establishments providing satellite television distribution services
using facilities and infrastructure that they operate are included in
this industry.'' \128\ The SBA has developed a small business size
standard for Wired Telecommunications Carriers, which consists of all
such companies having 1,500 or fewer employees.\129\ Census data for
2007 shows that there were 3,188 firms that operated that year. Of this
total, 3,144 operated with less than 1,000 employees.\130\ Thus, under
this size standard, the majority of firms in this industry can be
considered small.
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\128\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
\129\ See 13 CFR 120.201, NAICS Code 517110.
\130\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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7. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small
[[Page 43028]]
businesses specifically applicable to local exchange services. The
closest applicable NAICS Code category is Wired Telecommunications
Carriers as defined in paragraph 6 of this FRFA. Under the applicable
SBA size standard, such a business is small if it has 1,500 or fewer
employees.\131\ According to Commission data, census data for 2007
shows that there were 3,188 firms that operated that year. Of this
total, 3,144 operated with fewer than 1,000 employees.\132\ The
Commission therefore estimates that most providers of local exchange
carrier service are small entities that may be affected by the rules
adopted.
---------------------------------------------------------------------------
\131\ 13 CFR 121.201, NAICS code 517110.
\132\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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8. Incumbent LECs. Neither the Commission nor the SBA has developed
a small business size standard specifically for incumbent local
exchange services. The closest applicable NAICS Code category is Wired
Telecommunications Carriers as defined in paragraph 6 of this FRFA.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\133\ According to Commission data, 3,188 firms
operated in that year. Of this total, 3,144 operated with fewer than
1,000 employees.\134\ Consequently, the Commission estimates that most
providers of incumbent local exchange service are small businesses that
may be affected by the rules and policies adopted. Three hundred and
seven (307) Incumbent Local Exchange Carriers reported that they were
incumbent local exchange service providers.\135\ Of this total, an
estimated 1,006 have 1,500 or fewer employees.\136\
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\133\ 13 CFR 121.201, NAICS code 517110.
\134\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\135\ See Trends in Telephone Service, Federal Communications
Commission, Wireline Competition Bureau, Industry Analysis and
Technology Division at Table 5.3 (Sept. 2010) (Trends in Telephone
Service).
\136\ Id.
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9. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate NAICS Code category is Wired
Telecommunications Carriers, as defined in paragraph 6 of this FRFA.
Under that size standard, such a business is small if it has 1,500 or
fewer employees.\137\ U.S. Census data for 2007 indicate that 3,188
firms operated during that year. Of that number, 3,144 operated with
fewer than 1,000 employees.\138\ Based on this data, the Commission
concludes that the majority of Competitive LECS, CAPs, Shared-Tenant
Service Providers, and Other Local Service Providers, are small
entities. According to Commission data, 1,442 carriers reported that
they were engaged in the provision of either competitive local exchange
services or competitive access provider services.\139\ Of these 1,442
carriers, an estimated 1,256 have 1,500 or fewer employees.\140\ In
addition, 17 carriers have reported that they are Shared-Tenant Service
Providers, and all 17 are estimated to have 1,500 or fewer
employees.\141\ Also, 72 carriers have reported that they are Other
Local Service Providers.\142\ Of this total, 70 have 1,500 or fewer
employees.\143\ Consequently, based on internally researched FCC data,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and Other Local Service Providers are small entities that
may be affected by the rules adopted.
---------------------------------------------------------------------------
\137\ 13 CFR 121.201, NAICS code 517110.
\138\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\139\ See Trends in Telephone Service, at tbl. 5.3.
\140\ Id.
\141\ Id.
\142\ Id.
\143\ Id.
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10. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a definition for Interexchange Carriers. The closest
NAICS Code category is Wired Telecommunications Carriers as defined in
paragraph 6 of this FRFA. The applicable size standard under SBA rules
is that such a business is small if it has 1,500 or fewer
employees.\144\ U.S. Census data for 2007 indicates that 3,188 firms
operated during that year. Of that number, 3,144 operated with fewer
than 1,000 employees.\145\ According to internally developed Commission
data, 359 companies reported that their primary telecommunications
service activity was the provision of interexchange services.\146\ Of
this total, an estimated 317 have 1,500 or fewer employees.\147\
Consequently, the Commission estimates that the majority of
interexchange service providers are small entities that may be affected
by the rules adopted.
---------------------------------------------------------------------------
\144\ 13 CFR 121.201, NAICS code 517110.
\145\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\146\ See Trends in Telephone Service, at Table 5.3.
\147\ Id.
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11. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate NAICS Code category for
prepaid calling card providers is Telecommunications Resellers. This
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Mobile virtual
networks operators (MVNOs) are included in this industry.\148\ Under
the applicable SBA size standard, such a business is small if it has
1,500 or fewer employees.\149\ U.S. Census data for 2007 show that
1,523 firms provided resale services during that year. Of that number,
1,522 operated with fewer than 1,000 employees.\150\ Thus, under this
category and the associated small business size standard, the majority
of these prepaid calling card providers can be considered small
entities. According to Commission data, 193 carriers have reported that
they are engaged in the provision of prepaid calling cards.\151\ All
193 carriers have 1,500 or fewer employees.\152\ Consequently, the
Commission estimates that the majority of prepaid calling card
providers are small entities that may be affected by the rules adopted.
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\148\ http://www.census.gov/cgi-bin/ssd/naics/naicsrch.
\149\ 13 CFR 121.201, NAICS code 517911.
\150\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\151\ See Trends in Telephone Service, at Table 5.3.
\152\ Id.
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12. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees.\153\ Census data for 2007 show that 1,523 firms provided
resale services during that year. Of that number, 1,522 operated with
fewer than 1,000 employees.\154\ Under this category
[[Page 43029]]
and the associated small business size standard, the majority of these
local resellers can be considered small entities. According to
Commission data, 213 carriers have reported that they are engaged in
the provision of local resale services.\155\ Of this total, an
estimated 211 have 1,500 or fewer employees.\156\ Consequently, the
Commission estimates that the majority of local resellers are small
entities that may be affected by the rules adopted.
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\153\ 13 CFR 121.201, NAICS code 517911.
\154\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\155\ See Trends in Telephone Service, at tbl. 5.3.
\156\ Id.
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13. Toll Resellers. The Commission has not developed a definition
for Toll Resellers. The closest NAICS Code Category is
Telecommunications Resellers, and the SBA has developed a small
business size standard for the category of Telecommunications
Resellers. Under that size standard, such a business is small if it has
1,500 or fewer employees.\157\ Census data for 2007 show that 1,523
firms provided resale services during that year. Of that number, 1,522
operated with fewer than 1,000 employees.\158\ Thus, under this
category and the associated small business size standard, the majority
of these resellers can be considered small entities. According to
Commission data, 881 carriers have reported that they are engaged in
the provision of toll resale services.\159\ Of this total, an estimated
857 have 1,500 or fewer employees.\160\ Consequently, the Commission
estimates that the majority of toll resellers are small entities that
may be affected by the rules adopted.
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\157\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\158\ Id.
\159\ Trends in Telephone Service, at Table 5.3.
\160\ Id.
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14. Other Toll Carriers. Neither the Commission nor the SBA has
developed a definition for small businesses specifically applicable to
Other Toll Carriers. This category includes toll carriers that do not
fall within the categories of interexchange carriers, operator service
providers, prepaid calling card providers, satellite service carriers,
or toll resellers. The closest applicable NAICS Code category is for
Wired Telecommunications Carriers as defined in paragraph 6 of this
FRFA. Under the applicable SBA size standard, such a business is small
if it has 1,500 or fewer employees.\161\ Census data for 2007 shows
that there were 3,188 firms that operated that year. Of this total,
3,144 operated with fewer than 1,000 employees.\162\ Thus, under this
category and the associated small business size standard, the majority
of Other Toll Carriers can be considered small. According to internally
developed Commission data, 284 companies reported that their primary
telecommunications service activity was the provision of other toll
carriage.\163\ Of these, an estimated 279 have 1,500 or fewer
employees.\164\ Consequently, the Commission estimates that most Other
Toll Carriers are small entities that may be affected by the rules and
policies adopted.
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\161\ 13 CFR 121.201, NAICS code 517110.
\162\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
\163\ Trends in Telephone Service, at Table 5.3.
\164\ Id.
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15. Wireless Telecommunications Carriers (except Satellite). This
industry comprises establishments engaged in operating and maintaining
switching and transmission facilities to provide communications via the
airwaves, such as cellular services, paging services, wireless internet
access, and wireless video services.\165\ The appropriate size standard
under SBA rules is that such a business is small if it has 1,500 or
fewer employees. For this industry, Census data for 2007 show that
there were 1,383 firms that operated for the entire year. Of this
total, 1,368 firms had fewer than 1,000 employees. Thus under this
category and the associated size standard, the Commission estimates
that the majority of wireless telecommunications carriers (except
satellite) are small entities. Similarly, according to internally
developed Commission data, 413 carriers reported that they were engaged
in the provision of wireless telephony, including cellular service,
Personal Communications Service (PCS), and Specialized Mobile Radio
(SMR) services.\166\ Of this total, an estimated 261 have 1,500 or
fewer employees.\167\ Consequently, the Commission estimates that
approximately half of these firms can be considered small. Thus, using
available data, we estimate that the majority of wireless firms can be
considered small.
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\165\ NAICS Code 517210. See http://www.census.gov/cgi-bin/ssd/naics/naiscsrch.
\166\ Trends in Telephone Service, at Table 5.3.
\167\ Id.
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16. Cable Television and Other Subscription Programming.\168\ Since
2007, these services have been defined within the broad economic census
category of Wired Telecommunications Carriers. That category is defined
as follows: ``This industry comprises establishments primarily engaged
in operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired telecommunications
networks. Transmission facilities may be based on a single technology
or a combination of technologies.'' \169\ The SBA has developed a small
business size standard for this category, which is: all such firms
having 1,500 or fewer employees.\170\ Census data for 2007 shows that
there were 3,188 firms that operated that year. Of this total, 3,144
had fewer than 1,000 employees.\171\ Thus under this size standard, the
majority of firms offering cable and other program distribution
services can be considered small and may be affected by rules adopted.
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\168\ In 2014, ``Cable and Other Subscription Programming,''
NAICS Code 515210, replaced a prior category, now obsolete, which
was called ``Cable and Other Program Distribution.'' Cable and Other
Program Distribution, prior to 2014, was placed under NAICS Code
517110, Wired Telecommunications Carriers. Wired Telecommunications
Carriers is still a current and valid NAICS Code Category. Because
of the similarity between ``Cable and Other Subscription
Programming'' and ``Cable and other Program Distribution,'' we will,
in this proceeding, continue to use Wired Telecommunications Carrier
data based on the U.S. Census. The alternative of using data
gathered under Cable and Other Subscription Programming (NAICS Code
515210) is unavailable to us for two reasons. First, the size
standard established by the SBA for Cable and Other Subscription
Programming is annual receipts of $38.5 million or less. Thus to use
the annual receipts size standard would require the Commission
either to switch from existing employee based size standard of 1,500
employees or less for Wired Telecommunications Carriers, or else
would require the use of two size standards. No official approval of
either option has been granted by the Commission as of the time of
the release of this Regulatory Fees NPRM and its associated Report
and Order and Order. Second, the data available under the size
standard of $38.5 million dollars or less is not applicable at this
time, because the only currently available U.S. Census data for
annual receipts of all businesses operating in the NAICS Code
category of 515210 (Cable and other Subscription Programming)
consists only of total receipts for all businesses operating in this
category in 2007 and of total annual receipts for all businesses
operating in this category in 2012. The data do not provide any
basis for determining, for either year, how many businesses were
small because they had annual receipts of $38.5 million or less. See
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51I2&prodType=table.
\169\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition), (Full definition
stated in paragraph 6 of this IRFA) available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
\170\ 13 CFR 121.201, NAICS code 517110.
\171\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US-51SSSZ5&prodType=Table.
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17. Cable Companies and Systems. The Commission has developed its
own small business size standards, for the
[[Page 43030]]
purpose of cable rate regulation. Under the Commission's rules, a
``small cable company'' is one serving 400,000 or fewer subscribers,
nationwide.\172\ Industry data indicate that at the end of June 2012,
1,141 cable companies were in operation.\173\ Of this total, all but
ten cable operators were small under this size standard. In addition,
under the Commission's rules, a ``small system'' is a cable system
serving 15,000 or fewer subscribers.\174\ Industry data indicate that
of 4,945 systems nationwide, 4,380 systems have fewer than 20,000.\175\
Thus, under this second size standard, most cable systems are small and
may be affected by the rules adopted.
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\172\ See 47 CFR 76.901(e). The Commission determined that this
size standard equates approximately to a size standard of $100
million or less in annual revenues. See Implementation of Sections
of the 1992 Cable Television Consumer Protection and Competition
Act: Rate Regulation, MM Docket Nos. 92-266, 93-215, Sixth Report
and Order and Eleventh Order on Reconsideration, 60 FR 35854, 35855,
para. 7 (July 12, 1995).
\173\ NCTA, Industry Data, Number of Cable Operating Companies.
See http://www.ncta.com/Statistics.aspx.
\174\ See 47 CFR 76.901(c).
\175\ The number of active, registered cable systems comes from
the Commission's Cable Operations Licensing System (COALS) database
on August 28, 2013.
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18. All Other Telecommunications. ``All Other Telecommunications''
is defined as follows: This U.S. industry is comprised of
establishments that are primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing Internet services or voice over Internet
protocol (VoIP) services via client-supplied telecommunications
connections are also included in this industry.\176\ The SBA has
developed a small business size standard for ``All Other
Telecommunications,'' which consists of all such firms with gross
annual receipts of $32.5 million or less.\177\ For this category,
census data for 2007 show that there were 2,383 firms that operated for
the entire year. Of these firms, a total of 2,346 had gross annual
receipts of less than $25 million.\178\ Thus, a majority of ``All Other
Telecommunications'' firms potentially affected by the rules adopted
can be considered small.
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\176\ http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.
\177\ 13 CFR 121.201; NAICS Code 517919.
\178\ http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ5&prodType=table.
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D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
19. This Report and Order does not adopt any new reporting,
recordkeeping, or other compliance requirements, other than the
requirement that DBS providers pay regulatory fees based on Media
Bureau FTEs, as a subcategory of the cable television operators and
IPTV category. These two companies are already subject to our
regulatory fee requirements.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
20. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the following four alternatives, among others: (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.\179\
---------------------------------------------------------------------------
\179\ 5 U.S.C. 603(c)(1)-(c)(4).
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21. This Report and Order does not adopt any new reporting
requirements. Therefore no adverse economic impact on small entities
will be sustained based on reporting requirements. There will be a
regulatory fee increase on DBS providers, but these companies are not
small entities. We are also advising SMS/800, Inc. to provide
information to Responsible Organizations, or RespOrgs, to ensure that
they comply with their new previously adopted regulatory fee
requirements. These entities may be small entities; however, the
regulatory fee per toll free number is very small and could easily be
paid and then passed on to the subscriber if the number is in use, in
which case compliance would not be an issue. (We also note that there
is a previously adopted de minimis threshold of $500, per year.) If the
toll free number is not used by a subscriber, the RespOrg can either
choose to pay the regulatory fee or return the toll free number to the
800/SMS, Inc. database. The Commission expends resources to address
toll free issues, and so parties should either be responsible for the
payment of the resources used or the toll free numbers should be
returned for others to use.
22. In keeping with the requirements of the Regulatory Flexibility
Act, we have considered certain alternative means of mitigating the
effects of fee increases to a particular industry segment. In addition,
the Commission's rules provide a process by which regulatory fee payors
may seek waivers or other relief on the basis of financial hardship.
See 47 CFR 1.1166.
F. Federal Rules That May Duplicate, Overlap, or Conflict
23. None.
V. Ordering Clauses
24. Accordingly, it is ordered that, pursuant to Sections 4(i) and
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 154(j), 159, and 303(r), this Report and Order and Order
is hereby adopted.
25. It is further ordered that Part 1 of the Commission's rules are
amended as set forth in paragraph 32 and in the rule change section of
this document, effective upon publication in the Federal Register.
26. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the U.S.
Small Business Administration.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 1 as follows:
PART 1--PRACTICE AND PROCEDURE
0
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq., 47 U.S.C. 151, 154(i), 154(j),
155, 157, 225, 303, and 309.
Subpart O--Collection of Claims Owed the United States
0
2. Revise Sec. 1.1911(d) to read as follows:
[[Page 43031]]
Sec. 1.1911 Demand for payment.
* * * * *
(d) The Commission may, as circumstances and the nature of the debt
permit, include in demand letters such items as the Commission's
willingness to discuss alternative methods of payment; its policies
with respect to the use of credit bureaus, debt collection centers, and
collection agencies; the Commission's remedies to enforce payment of
the debt (including assessment of interest, administrative costs and
penalties, administrative garnishment, the use of collection agencies,
Federal salary offset, tax refund offset, administrative offset, and
litigation); the requirement that any debt delinquent for more than 120
days be transferred to the Department of the Treasury for collection;
and, depending on applicable statutory authority, the debtor's
entitlement to consideration of a waiver. Where applicable, the debtor
will be provided with a period of time (normally not more than 15
calendar days) from the date of the demand in which to exercise the
opportunity to request a review.
* * * * *
0
3. Revise Sec. 1.1912(b)(1) to read as follows:
Sec. 1.1912 Collection by administrative offset.
* * * * *
(b) Mandatory centralized administrative offset. (1) The Commission
is required to refer past due, legally enforceable nontax debts which
are over 120 days delinquent to the Treasury for collection by
centralized administrative offset. Debts which are less than 120 days
delinquent also may be referred to the Treasury for this purpose. See
FCCS for debt certification requirements.
* * * * *
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4. Revise Sec. 1.1917(c) to read as follows:
Sec. 1.1917 Referrals to the Department of Justice and transfer of
delinquent debt to the Secretary of Treasury.
* * * * *
(c) All non-tax debts of claims owed to the Commission that have
been delinquent for a period of 120 days shall be transferred to the
Secretary of the Treasury. Debts which are less than 120 days
delinquent may also be referred to the Treasury. Upon such transfer the
Secretary of the Treasury shall take appropriate action to collect or
terminate collection actions on the debt or claim. A debt is past-due
if it has not been paid by the date specified in the Commission's
initial written demand for payment or applicable agreement or
instrument (including a post-delinquency payment agreement) unless
other satisfactory payment arrangements have been made.
[FR Doc. 2015-17288 Filed 7-20-15; 8:45 am]
BILLING CODE 6712-01-P