Assessment and Collection of Regulatory Fees for Fiscal Year 2011

Federal RegisterAug 10, 2011

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 11-76; FCC 11-114]

Assessment and Collection of Regulatory Fees for Fiscal Year 2011

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

The Commission revises its Schedule of Regulatory Fees to recover an amount of $335,794,000 that Congress has required the Commission to collect for fiscal year 2011. The Communications Act of 1934, as amended, provides for the annual assessment and collection of regulatory fees for annual “Mandatory Adjustments” and “Permitted Amendments” to the Schedule of Regulatory Fees.

DATES:

Effective September 9, 2011.

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 (R&O), FCC 11-114, MD Docket No. 11-76, adopted on July 21, 2011 and released on July 22, 2011.

I. Procedural Matters

A. Final Paperwork Reduction Act

1. 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).

B. Congressional Review Act Analysis

2. The Commission will send a copy of this

Report and Order

to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

See

5 U.S.C. 801(a)(1)(A). The Congressional Review Act is contained in Title II, 251, of the CWAAA;

see

Pub. L. No. 104-121, Title II, 251, 110 Stat. 868.

C. Final Regulatory Flexibility Analysis

3. As required by the Regulatory Flexibility Act of 1980 (“RFA”),

the Commission has prepared a Final Regulatory Flexibility Analysis (“FRFA”) relating to this Report and Order. The FRFA is set forth in the section entitled Final Regulatory Flexibility Analysis.

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”), Pub. L. No. 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”).

II. Report and Order

Introduction

4. In this

Report and Order,

we conclude the Assessment and Collection of Regulatory Fees for Fiscal Year (“FY”) 2011 proceeding to collect $335,794,000 in regulatory fees for Fiscal Year (“FY”) 2011, pursuant to section 9 of the Communications Act of 1934, as amended (the “Act”). Section 9 regulatory fees are mandated by Congress and are collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities.

The annual regulatory fee amount to be collected is established each year in the Commission's Annual Appropriations Act which is adopted by Congress and signed by the President and which funds the Commission.

In this annual regulatory fee proceeding, we retain many of the established methods, policies, and procedures for collecting section 9 regulatory fees adopted by the Commission in prior years. Consistent with our established practice, we intend to collect these regulatory fees during a September 2011 filing window in order to collect the required amount by the end of our fiscal year. Finally, we will initiate a further rulemaking that will update the record on regulatory fee rebalancing, as well as expand this inquiry to include new issues and services, by the end of this calendar year.

47 U.S.C. 159(a).

See

The Full-Year Continuing Appropriations Act, 2011, Public Law 112-10, for the appropriations act language specifying that the applicable level of funding for fiscal year 2011 continues to be the amount provided by the Consolidated Appropriations Act, 2010, Public Law 111-117, for agencies previously funded by that Act. The level set by Congress in the Consolidated Appropriations Act, 2010 for the Commission was $335,794,000 of offsetting collections to be assessed and collected by the Commission pursuant to Section 9 of the Communications Act.

III. Discussion

5. On May 3, 2011, we released a

Notice of Proposed Rulemaking

(“

FY 2011 NPRM

”) seeking comment on regulatory fee issues for FY 2011.

The section 9 regulatory fee proceeding is an annual rulemaking process for the Commission to collect the required fee amount each year. In the

FY 2011 NPRM

, we proposed to retain the section 9 regulatory fee methodology used in prior fiscal years, except as discussed below. We received six comments and one reply comment.

We address the issues raised in our

FY 2011 NPRM

and these comments below.

See

Assessment and Collection of Regulatory Fees for Fiscal Year 2011,

Notice of Proposed Rulemaking,

76 FR 30605 (May 26, 2011) (“

FY 2011 NPRM

”).

See

table of commenters and reply commenters.

Table—List of Commenters

Commenter

Abbreviated

name

American Association of Paging Carriers

“AAPC”

Raymond Awe

“Raymond Awe”

CTIA—The Wireless Association

“CTIA”

PCIA—The Wireless Infrastructure Association

“PCIA”

The United States Telecom Association

“USTelecom”

Verizon Wireless

“Verizon”

Table—List of Reply Commenters

Commenter

Abbreviated name

AT&T Inc

“AT&T”

A. FY 2011 Regulatory Fee Assessment Methodology

6. In our FY 2011 regulatory fee assessment, we will use the same section 9 regulatory fee assessment methodology adopted in FY 2010 and in prior years. Each fiscal year, the Commission proportionally allocates the total amount that must be collected via section 9 regulatory fees. The results of our FY 2011 regulatory fee assessment methodology (including a comparison to the prior year's results) are contained in the table below (Table—Calculation of FY 2011 Revenue Requirements and Pro-Rata Fees). To collect the $335,794,000 required by Congress, we allocated this amount across the various fee categories. Consistent with past practice, we then divided the various fee categories by their respective number of estimated payment units to

determine the unit fee.

As in prior years, for cases involving small fees,

e.g.

, licenses that are renewed over a multiyear term, we divided the resulting unit fee by the term of the license and then rounded these unit fees consistent with the requirements of section 9(b)(2) of the Act.

In many instances, the regulatory fee amount is a flat fee per licensee or regulatee. In some instances, the fee amount represents a per-unit fee (such as for International Bearer Circuits), a per-unit subscriber fee (such as for Cable, Commercial Mobile Radio Service (“CMRS”) Cellular/Mobile and CMRS Messaging), or a fee factor per revenue dollar (Interstate Telecommunications Service Provider (“ITSP”) fee). The payment unit is the measure upon which the fee is based, such as a licensee, regulatee, or subscriber fee.

Table—Calculation of FY 2011 Revenue Requirements and Pro-Rata Fees

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

Fee category

FY 2011

payment units

Years

FY 2010

revenue

estimate

Pro-rated

FY 2011

revenue

requirement

Computed

new

FY 2011

regulatory fee

Rounded

new

FY 2011

regulatory

fee

Expected

FY 2011

revenue

PLMRS (Exclusive Use)

1,200

480,000

495,845

480,000

LMRS (Shared use)

10,600

2,300,000

2,375,921

2,120,000

Microwave

10,200

2,375,000

2,324,270

2,550,000

218-219 MHz (Formerly IVDS)

1,950

2,015

1,950

Marine (Ship)

6,700

800,000

774,757

670,000

GMRS

9,300

242,500

284,078

232,500

Aviation (Aircraft)

4,600

230,000

361,553

460,000

Marine (Coast)

265

119,250

127,835

132,500

Aviation (Ground)

1,100

150,000

154,952

165,000

Amateur Vanity Call Signs

14,600

196,840

207,635

1.42

207,320

AM Class A

253,300

256,832

3,891

3,900

257,400

AM Class B

1,439

3,053,700

3,075,578

2,137

2,125

3,057,875

AM Class C

918

1,078,650

1,090,083

1,187

1,175

1,078,650

AM Class D

1,637

3,589,125

3,631,802

2,219

2,225

3,642,325

FM Classes A, B1 & C3

3,114

7,372,000

7,652,108

2,457

2,450

7,629,300

FM Classes B, C, C0, C1 & C2

3,111

9,308,775

9,400,580

3,022

3,025

9,410,775

AM Construction Permits

43,680

44,212

491

490

44,100

FM Construction Permits

151

105,300

101,925

675

101,925

Satellite TV

133

163,800

167,270

1,258

1,250

166,250

Satellite TV Construction Permit

2,025

2,015

672

670

2,010

VHF Markets 1-10

1,631,000

1,692,381

84,619

84,625

1,692,500

VHF Markets 11-25

1,708,425

1,772,526

68,174

68,175

1,772,550

VHF Markets 26-50

1,404,150

1,457,127

40,476

40,475

1,457,100

VHF Markets 51-100

1,140,000

1,182,936

22,749

22,750

1,183,000

VHF Remaining Markets

127

747,250

774,447

6,098

6,100

774,700

VHF Construction Permits

18,375

12,200

6,100

12,200

UHF Markets 1-10

113

3,776,175

3,915,430

34,650

3,915,450

UHF Markets 11-25

107

3,398,475

3,524,319

32,938

32,950

3,525,650

UHF Markets 26-50

144

2,910,600

3,016,311

20,947

20,950

3,016,800

UHF Markets 51-100

238

2,829,750

2,932,290

12,321

12,325

2,933,350

UHF Remaining Markets

264

835,700

866,787

3,283

3,275

864,600

UHF Construction Permits

36,600

32,750

3,275

32,750

Broadcast Auxiliaries

26,850

275,000

284,078

268,500

LPTV/Translators/Boosters/Class ATV

3,607

1,411,000

1,425,553

395

1,424,765

CARS Stations

470

173,250

174,578

371

370

173,900

Cable TV Systems

63,400,000

57,405,000

58,633,597

0.92482

0.93

58,962,000

Interstate Telecommunication Service Providers

$39,500,000,000

151,117,000

148,100,156

0.0037494

0.00375

148,125,000

CMRS Mobile Services (Cellular/Public Mobile)

298,000,000

50,940,000

51,562,378

0.1730

0.17

50,660,000

CMRS Messag. Services

4,200,000

480,000

376,000

0.0800

0.080

336,000

BRS

1,690

514,600

523,900

310

523,900

LMDS

520

158,100

161,200

310

161,200

Per 64 kbps Int'l Bearer Circuits Terrestrial (Common) & Satellite (Common & Non-Common)

3,247,195

1,130,233

1,143,849

.352

.35

1,136,518

Submarine Cable Providers (see chart in Appendix C)

39.375

7,983,860

8,080,736

205,225

8,080,734

Earth Stations

3,575

864,000

878,575

246

245

875,875

Space Stations (Geostationary)

11,129,475

11,429,445

131,373

131,375

11,429,625

Space Stations (Non-Geostationary)

828,300

850,528

141,755

141,750

850,500

Total Estimated Revenue to be Collected

336,712,213

337,295,342

336,599,048

Total Revenue Requirement

335,794,000

Difference

918,213

1,501,342

805,048

The FM Construction Permit revenues and the VHF and UHF Construction Permit revenues were adjusted to set the regulatory fee to an amount no higher than the lowest licensed fee for that class of service. The reductions in the FM Construction Permit revenues are offset by increases in the revenue totals for FM radio stations. Similarly, reductions in the VHF and UHF Construction Permit revenues are offset by increases in the revenue totals for VHF and UHF television stations, respectively.

MDS/MMDS category was renamed Broadband Radio Service (BRS).

See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands,

Report & Order and Further Notice of Proposed Rulemaking, 19 FCC Rcd 14165, 14169, para. 6 (2004).

The chart at the end of Table—FY 2011 Schedule of Regulatory Fees lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from the adoption of the following proceedings:

Assessment and Collection of Regulatory Fees for Fiscal Year 2008,

Second Report and Order (MD Docket No. 08-65, RM-11312), released March 24, 2009; and

Assessment and Collection of Regulatory Fees for Fiscal Year 2009 and Assessment and Collection of Regulatory Fees for Fiscal Year 2008,

Notice of Proposed Rulemaking and Order (MD Docket No. 09-65, MD Docket No. 08-65), released on May 14, 2009.

The fee amounts listed in the column entitled “Rounded New FY 2011 Regulatory Fee” constitute a weighted average media regulatory fee by class of service. The actual FY 2011 regulatory fees for AM/FM radio station are listed on a grid located in Table—FY 2011 Schedule of Regulatory Fees.

7. In calculating the FY 2011 regulatory fees listed in Table—FY 2011 Schedule of Regulatory Fees (see table below), we adjusted the FY 2011 list of payment units (see Table—Sources of Payment Unit Estimates for FY 2011 below) based upon licensee databases, industry and trade group projections, as well as prior year payment information. In some instances, Commission licensee databases are used; in other instances, actual prior year payment records and/or industry and trade association projections are used in determining the payment units.

Where appropriate, we adjusted and rounded our final estimates to take into consideration events that may impact the number of units for which regulatees submit payment, such as waivers and exemptions that may be filed in FY 2011, and fluctuations in the number of licenses or station operators due to economic, technical, or other reasons. Our estimated FY 2011 payment units, therefore, are based on several variable factors that are relevant to each fee category. The fee rate may also be rounded or adjusted slightly to account for these variables.

The databases we consulted are the following: The Commission's Universal Licensing System (“ULS”), International Bureau Filing System (“IBFS”), Consolidated Database System (“CDBS”) and Cable Operations and Licensing System (“COALS”). We also consulted reports generated within the Commission such as the Wireline Competition Bureau's

Trends in Telephone Service

and the Wireless Telecommunications Bureau's

Numbering Resource Utilization Forecast

and

Annual CMRS Competition Report

, as well as industry sources including, but not limited to,

Television & Cable Factbook

by Warren Publishing, Inc. and the

Broadcasting and Cable Yearbook

by Reed Elsevier, Inc.

Table—FY 2011 Schedule of Regulatory Fees

Fee category

Annual

regulatory fee

(U.S. $'s)

PLMRS (per license) (Exclusive Use) (47 CFR part 90)

Microwave (per license) (47 CFR part 101)

218-219 MHz (Formerly Interactive Video Data Service) (per license) (47 CFR part 95)

Marine (Ship) (per station) (47 CFR part 80)

Marine (Coast) (per license) (47 CFR part 80)

General Mobile Radio Service (per license) (47 CFR part 95)

Rural Radio (47 CFR part 22) (previously listed under the Land Mobile category)

PLMRS (Shared Use) (per license) (47 CFR part 90)

Aviation (Aircraft) (per station) (47 CFR part 87)

Aviation (Ground) (per license) (47 CFR part 87)

Amateur Vanity Call Signs (per call sign) (47 CFR part 97)

1.42

CMRS Mobile/Cellular Services (per unit) (47 CFR parts 20, 22, 24, 27, 80 and 90)

.17

CMRS Messaging Services (per unit) (47 CFR parts 20, 22, 24 and 90).

.08

Broadband Radio Service (formerly MMDS/MDS) (per license) (47 CFR part 21)

310

Local Multipoint Distribution Service (per call sign) (47 CFR, part 101)

310

AM Radio Construction Permits

490

FM Radio Construction Permits

675

TV (47 CFR part 73) VHF Commercial:

Markets 1-10

84,625

Markets 11-25

68,175

Markets 26-50

40,475

Markets 51-100

22,750

Remaining Markets

6,100

Construction Permits

6,100

TV (47 CFR part 73) UHF Commercial:

Markets 1-10

34,650

Markets 11-25

32,950

Markets 26-50

20,950

Markets 51-100

12,325

Remaining Markets

3,275

Construction Permits

3,275

Satellite Television Stations (All Markets)

1,250

Construction Permits—Satellite Television Stations

670

Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74)

395

Broadcast Auxiliaries (47 CFR part 74)

CARS (47 CFR part 78)

370

Cable Television Systems (per subscriber) (47 CFR part 76)

.93

Interstate Telecommunication Service Providers (per revenue dollar)

.00375

Earth Stations (47 CFR part 25)

245

Space Stations (per operational station in geostationary orbit) (47 CFR part 25) also includes DBS Service (per operational station) (47 CFR part 100)

131,375

Space Stations (per operational system in non-geostationary orbit) (47 CFR part 25)

141,750

International Bearer Circuits—Terrestrial/Satellites (per 64KB circuit)

.35

International Bearer Circuits—Submarine Cable

See Table Below.

FY 2011 Radio Station Regulatory Fees

Population served

Class A

Class B

Class C

Class D

FM Classes

A, B1, & C3

FM Classes

B, C, C0,

C1 & C2

<= 25,000

$700

$575

$525

$600

$675

$850

25,001-75,000

1,400

1,150

800

900

1,350

1,500

75,001-150,000

2,100

1,450

1,050

1,500

1,850

2,750

150,001-500,000

3,150

2,450

1,575

1,800

2,875

3,600

500,001-1,200,000

4,550

3,750

2,625

3,000

4,550

5,300

1,200,001-3,000,000

7,000

5,750

3,950

4,800

7,425

8,500

> 3,000,000

8,400

6,900

5,000

6,000

9,450

11,050

International Bearer Circuits—Submarine Cable

Submarine cable systems

(capacity as of December 31, 2010)

Fee amount

Address

< 2.5 Gbps

$12,825

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

2.5 Gbps or greater, but less than 5 Gbps

25,650

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

5 Gbps or greater, but less than 10 Gbps

51,300

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

10 Gbps or greater, but less than 20 Gbps

102,625

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

20 Gbps or greater

205,225

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

Table—Sources of Payment Unit Estimates for FY 2011

In order to calculate individual service fees for FY 2011, we adjusted FY 2010 payment units for each service to more accurately reflect expected FY 2011 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee data bases, actual prior year payment records and industry and trade association projections when available. The databases we consulted include our Universal Licensing System (“ULS”), International Bureau Filing System (“IBFS”), Consolidated Database System (“CDBS”) and Cable Operations and Licensing System (“COALS”), as well as reports generated within the Commission such as the Wireline Competition Bureau's Trends in Telephone Service and the Wireless Telecommunications Bureau's

Numbering Resource Utilization Forecast.

We sought verification for these estimates from multiple sources and, in all cases; we compared FY 2011 estimates with actual FY 2010 payment units to ensure that our revised

estimates were reasonable. Where appropriate, we adjusted and/or rounded our final estimates to take into consideration the fact that certain variables that impact on the number of payment units cannot yet be estimated with sufficient accuracy. These include an unknown number of waivers and/or exemptions that may occur in FY 2011 and the fact that, in many services, the number of actual licensees or station operators fluctuates from time to time due to economic, technical, or other reasons. When we note, for example, that our estimated FY 2011 payment units are based on FY 2010 actual payment units, it does not necessarily mean that our FY 2011 projection is exactly the same number as in FY 2010. We have either rounded the FY 2011 number or adjusted it slightly to account for these variables.

Fee category

Sources of payment unit estimates

Land and Mobile (All), Microwave, 218-219 MHz, Marine (Ship & Coast), Aviation (Aircraft & Ground), GMRS, Amateur Vanity Call Signs, Domestic Public Fixed

Based on Wireless Telecommunications Bureau (“WTB”) projections of new applications and renewals taking into consideration existing Commission licensee data bases. Aviation (Aircraft) and Marine (Ship) estimates have been adjusted to take into consideration the licensing of portions of these services on a voluntary basis.

CMRS Cellular/Mobile Services

Based on WTB projection reports, and FY 2010 payment data.

CMRS Messaging Services

Based on WTB reports, and FY 2010 payment data.

AM/FM Radio Stations

Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.

UHF/VHF Television Stations

Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.

AM/FM/TV Construction Permits

Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.

LPTV, Translators and Boosters, Class A Television

Based on CDBS data, adjusted for exemptions, and actual FY 2010 payment units.

Broadcast Auxiliaries

Based on actual FY 2010 payment units.

BRS (formerly MDS/MMDS)

LMDS

Based on WTB reports and actual FY 2010 payment units.

Cable Television Relay Service (“CARS”) Stations

Based on data from Media Bureau's COALS database and actual FY 2010 payment units.

Cable Television System Subscribers

Based on publicly available data sources for estimated subscriber counts and actual FY 2010 payment units.

Interstate Telecommunication Service Providers

Based on FCC Form 499-Q data for the four quarters of calendar year 2010, the Wireline Competition Bureau projected the amount of calendar year 2009 revenue that will be reported on 2011 FCC Form 499-A worksheets in April, 2011.

Earth Stations

Based on International Bureau (“IB”) licensing data and actual FY 2010 payment units.

Space Stations (GSOs & NGSOs)

Based on IB data reports and actual FY 2010 payment units.

International Bearer Circuits

Based on IB reports and submissions by licensees.

Submarine Cable Licenses

Based on IB license information.

8. When calculating the fee methodology for AM and FM radio stations, we consider many factors, such as facility attributes and the population served by each station. The calculation of the population served is determined by coupling current United States Census Bureau data with technical and engineering data, as detailed in the table below (Table—Factors, Measurements, and Calculations That Go into Determining Station Signal Contours and Associated Population Coverages). These population counts, along with the station's class and type of service, are the basis for determining regulatory fees. Although the 2010 Census data has been completed, the data is still subject to revisions. Also, because FY 2011 regulatory fees are determined on the basis of the station's attributes as of October 1, 2010, it would be inappropriate to apply incomplete 2010 Census data in determining FY 2011 regulatory fees for radio stations. Therefore, we will apply 2010 Census data in determining the population counts of radio stations as of October 1, 2011, as part of our calculations of FY 2012 regulatory fees.

Table—Factors, Measurements, and Calculations That Go Into Determining Station Signal Contours and Associated Population Coverages

AM Stations

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

FM Stations

The greater of the horizontal or vertical effective radiated power (“ERP”) (kW) and respective height above average terrain (“HAAT”) (m) combination was used. Where the antenna height above mean sea level (“HAMSL”) was available, it was used in lieu of the average HAAT figure to calculate specific HAAT figures for each of 360 radials under study. Any available directional pattern information was applied as well, to produce a radial-specific ERP figure. The HAAT and ERP figures were used in conjunction with the Field Strength (50-50) propagation curves specified in 47 CFR 73.313 of the

Commission's rules to predict the distance to the principal community (70 dBu (decibel above 1 microVolt per meter) or 3.17 mV/m) contour for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2000 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.

B. Regulatory Fee Obligations for Digital Low Power, Class A, and TV Translators/Boosters

9. The digital transition to full-service television stations was completed on June 12, 2009, but the digital transition for Low Power, Class A, and TV Translators/Boosters remains voluntary, and there is presently no set date for the completion of this transition. Historically, the discussion of digital transition conversion with respect to regulatory fees has applied only to full-service television stations. Hence, the “digital only” exemption does not impact this class of regulatees. Because the digital transition in the Low Power, Class A, and TV Translators/Booster facilities is still voluntary and the transition will occur over a period time, some facilities may still be in the process of converting from an analog to a digital service. During this transition period, licensees of Low Power, Class A, and TV Translator/Booster facilities may be operating in analog mode, in digital mode, or in an analog and digital simulcast mode. Therefore, for regulatory fee purposes, we conclude that a fee will be assessed for each facility operating either in an analog or digital mode. In instances in which a licensee is operating in both an analog and digital mode as a simulcast, a single regulatory fee will be assessed for this analog facility that has a digital companion channel. As greater numbers of facilities convert to digital mode, the Commission will provide revised instructions on how regulatory fees will be assessed.

C. Commercial Mobile Radio Service Messaging Service

10. Commercial Mobile Radio Service (“CMRS”) Messaging Service, which replaced the CMRS One-Way Paging fee category in 1997, includes all narrowband services.

Since 1997, the number of subscribers has declined from 40.8 million to 4.9 million, and there does not appear to be any sign of recovery to the subscriber levels of 1997-1999.

We sought comment on whether to continue to maintain the fee at the existing level of $.08 per subscriber. We received one comment from the American Association of Paging Carriers (“AAPC”). AAPC contends that retaining the $0.08 per unit for CMRS Messaging is the minimum appropriate action for the Commission to undertake.

Moreover, AAPC believes that after the Commission reviews its regulatory fee methodology, the Commission will find, as the paging industry believes it will, that the fee rate for the paging industry should be reduced.

We agree with AAPC that the prevailing circumstances in FY 2003 still exist today,

and conclude that the FY 2011 CMRS Messaging regulatory fee should remain at a rate of $0.08 per subscriber.

See Assessment and Collection of Regulatory Fees for Fiscal Year 1997,

MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161, 17184-85, para. 60 (1997) (

“FY 1997 Report and Order”

Between FY 1997 and FY 2010, the subscriber base in the paging industry declined 89 percent from 40.8 million to 4.9 million subscribers, according to FY 2010 collections data as of September 30, 2010.

See

American Association of Paging Carriers comments at page 2.

AAPC

comments at page 3.

Beginning in FY 2003, the Commission maintained the paging regulatory fee rate at $.08 per subscriber, the same level as in FY 2002, and it has maintained this level of $.08 per subscriber for all subsequent years. AAPC (at page 3) acknowledges that the circumstances that prompted the Commission to act in maintaining the fee rate at $.08 per subscriber still exist today.

D. Private Land Mobile Radio Service (“PLMRS”)

11. PLMRS systems are used by licensees, generally companies, local governments, and other organizations, for their own communications needs. The services included in PLMRS are Public Safety, Industrial/Business, Private Land Mobile Paging, and Radiolocation. In their comments, PCIA—The Wireless Infrastructure Association, contends that because the number of Private Land Mobile Radio Service licenses has declined over 30 percent between 2006 and 2010,

it is inequitable to raise the ten-year license fee from $20 per year to $25 per year. Furthermore, PCIA asserts that PLMRS is a declining industry, and the Commission should “exercise its discretion in assessing how to regulate fees on industries with declining unit bases,” particularly in those instances where it is hard to pass on these regulatory fee costs to its customers.

See

PCIA—The Wireless Infrastructure Association comments at page 2.

PCIA

comments at page 5.

12. We agree with PCIA that those industries that are declining and also lack the ability to effectively pass the regulatory fees onto its customers should be given special consideration for fee relief.

We note that the paging industry is in a similar situation with a declining subscriber base, and we have maintained their per unit regulatory fee at FY 2002 levels. Although PCIA projects the number of PLMRS licenses to increase slightly in 2011,

the number of PLMRS licenses issued in FY 2011 is significantly lower than in FY 2004 and FY 2005 where the estimated number of PLMRS licenses issued was over four times greater.

As a result, we believe the Commission should exercise its discretion to maintain the FY 2011 regulatory fee at $20 per year. Based on an anticipated increase of 14 percent in the number of licenses,

we will increase our unit estimate from 9,300 to 10,600, which will reduce the per year fee to $22. However, we note that if it were not for our rules regarding rounding to the nearest $5, the actual fee for PLMRS (Shared) would be $22 per year, and not $20 per year. But because of our rounding rules, we conclude that the FY 2011 regulatory fee rate for the PLMRS (Shared) fee category is $20 per year for a ten-year license.

PCIA

comments at page 5.

PCIA

comments at page 2.

See

Assessment and Collection of Regulatory Fees for Fiscal Year 2004,

Report and Order,

19 FCC Rcd 11,662 MD Docket No. 04-73 in Attachment C (2004) (

FY 2004 Report and Order

), and Assessment and Collection of Regulatory Fees for Fiscal Year 2005,

Report and Order and Order on Reconsideration,

20 FCC Rcd 12259, 12264 MD Docket No. 05-59, 04-73 in Attachment C (2005) (

FY 2005 R&O and Order on Reconsideration

PCIA

comments at page 2.

E. Interstate Telecommunications Service Provider (ITSP)

13. In our FY 2011 Regulatory Fee

Notice of Proposed Rulemaking,

we sought comment on our proposal to provide relief to the ITSP industry by assessing ITSP regulatory fees on all ITSP revenues that are reported on FCC Form 499-A, Lines 412(e), 420(d), and 420(e), the lines upon which the Commission has traditionally assessed ITSP regulatory fees. We received three comments and one reply comment.

its comments, the United States Telecom Association (“USTelecom”) urges the Commission to take a comprehensive approach to reforming the regulatory fee structure, including an updated full-time employee (FTE) analysis, reallocation of the costs of the support bureaus, reexamination of the underlying assumptions of the current regulatory fee structure, and incorporation of changes that have occurred in the communications industry over time.

While USTelecom supports limitations in the ITSP fee increase, it provides no support for action to effectuate such relief short of a complete overhaul of our regulatory fee methodology and the assumptions underlying it.

CTIA—The Wireless Association (“CTIA”) opposes the proposal to assess all ITSP revenues, arguing that the Commission lacks both legal authority and valid policy justification for its proposal.

CTIA also interprets the Commission's proposal as imposing a duplicative fee assessment on the CMRS industry, arguing that the move would result in an increase in regulatory fees of $108 million on CMRS providers in addition to over $52 million in fees that CMRS providers will pay on their subscriber fees.

CTIA urges use of the same methodology as the Commission used last year—spreading the regulatory fees across other fee categories—while the Commission engages in a comprehensive review of its FTEs by core bureau.

In separate comments, Verizon Wireless also opposes the Commission's proposal to apply the ITSP fee to the ITSP revenues of CMRS licensees.

Finally, in its reply comments, AT&T supports the comments of USTelecom and CTIA.

In the FY 2008

Report and Order

and

Further Notice of Proposed Rulemaking

(

“FY 2008 FNPRM”

) (73 FR 50285 (August 26, 2008) (2008)), we asked for comment on this same issue, noting that the marketplace for ITSP service has changed since the fees were set and asking interested parties to comment on how the market had changed and the methodology we should use to determine the revision to ITSP's proportionate share of regulatory fees. We also asked for current information about

the number of access lines, noting the success of the numbers-based approach on which CMRS regulatory fees are based. These issues remain outstanding, and we will include comments filed in response to the

FY 2008 FNPRM

in the further examination of these issues discussed in paragraph 27 of this document.

See

comments of USTelecom at page 1.

See

comments of USTelecom at page 3.

See

CTIA comments at page 1.

See

CTIA comments at page 8.

See

CTIA comments at pages 2-3.

See

Verizon Wireless comments at page 3.

See

AT&T reply comments at page 2.

14. First, it is necessary to address any misconception about the impact, in terms of increased regulatory fees, our proposal would have on CMRS licensees. Contrary to CTIA's assertions, the

Notice of Proposed Rulemaking

did not propose assessing $108 million from wireless providers in addition to $52 million in regulatory fees that CMRS licensees currently pay.

As the “Table—Calculations of FY 2011 Revenue Requirements and Pro-Rata Fees” illustrates, the Commission proposed to collect $52 million from CMRS providers and $148 million from ALL ITSP providers; from within the $148 million assessed to all ITSP revenues, the Commission estimated that only $7.2 million would be derived from the ITSP revenues of predominantly non-ITSP providers (

e.g.

wireless, satellite, etc.)—this $7.2 million is the resulting additional amount in regulatory fees that is proposed in our

NPRM

's proposed ITSP rate of $.00361, which is based on approximately $2 billion in ITSP revenues reported by these entities on Form 499-A Lines 412(e), 420(d), and 420(e)—ITSP revenue on which they currently do not pay regulatory fees. Assessing this estimated $2 billion in ITSP revenues would, in conjunction with the additional relief measure proposed in the

NPRM,

help reduce the impact of the fee burden on all ITSP payers by reducing the applicable ITSP fee rate from $0.00402 to $0.00361.

See

CTIA comments at page 8.

15. We are unpersuaded that assessing all ITSP revenues reported on Lines 412(e), 420(d), and 420(e) on FCC Form 499-A exceeds our statutory authority under section 159(b)(2)(A). However, we acknowledge that the comments filed by USTelecom, CTIA, Verizon Wireless, and AT&T raise important concerns about the need for a more comprehensive approach to regulatory fee reform.

As stated in the

NPRM

, we fully intend to engage in that process as expeditiously as possible.

To that end, it is important that today we take only those measured steps necessary to complete the FY 2011 regulatory fee assessment, so that we can complete the regulatory fee assessment and collection in a timely manner. Our proposal in the

NPRM

to provide some measure of regulatory fee relief for ITSP providers has two components: (1) A 5.6 percent assessment across all other fee categories, and (2) an assessment of an estimated $2 billion in ITSP revenues reported by non-ITSP providers. Of these two components, we will effectuate only one: A 5.6 percent assessment across all other fee categories. We will not, at this time, assess an estimated $2 billion in ITSP revenues reported by non-ITSP providers.

See

para. 27

supra

. This same argument was made by several commenters in response to the

FY2008 FNPRM

(73 FR 50285 (August 26, 2008) (2008)).

See

Assessment and Collection of Regulatory Fees for Fiscal Year 2011, MD Docket 11-76,

Notice of Proposed Rulemaking,

76 FR 30605 (May 26, 2011) at para. 22 (2011) (“

FY 2011 NPRM

”).

16. Since we have already assessed a 5.6 percent assessment across all other fee categories to provide some measure of relief to the applicable ITSP rate, we will reduce the proposed ITSP revenue base by $2.0 billion (from $41 billion to $39.0 billion), and re-calculate the ITSP fee rate on a revenue base of $39 billion, as it would be untenable to pass on any further increases across all other fee categories. This approach provides some level of relief for the ever-increasing ITSP rate, yet leaves the issue of whether all providers who report ITSP revenues should pay on those revenues to be addressed in a broader context of regulatory fee reform.

17. This limited, temporary adjustment for FY 2011 produces an equitable result. If we provided no relief to limit the FY 2011 ITSP fee rate, the fee rate applicable to ITSP revenues would have been $.00402 per revenue dollar, an increase of 15.2 percent from FY 2010 rates. Had we provided the full measure of relief proposed in the

NPRM,

the ITSP fee rate would have reduced to $.00361 per revenue dollar, an increase of 3.4 percent from FY 2010 rates. However, since, for the reasons stated above, we take only limited action to reduce the increase to the ITSP rate, the action we take today will result in an ITSP fee rate of $.00375 per revenue dollar, a 7.5 percent increase from FY 2010 rates.

This result is equitable not only for the ITSP industry, but also for the other fee categories that are bearing the fee burden associated with providing such relief. We conclude, therefore, that the FY 2011 ITSP regulatory fee rate is $.00375 per revenue dollar.

In addition to reducing the FY 2011 ITSP revenue base from $41.0 billion to $39.0 billion because of our retraction, we were able to increase the FY 2011 ITSP revenue base from $39.0 billion to $39.5 billion because our more recent data estimates showed a slight increase in revenues from our previous estimate (March 2011).

F. Amateur Radio Vanity Call Signs

18. We received a general comment from Raymond Awe regarding the regulatory fees paid on Amateur Radio Vanity Call Signs. Mr. Awe urges the Commission to keep the fee amount minimal, and to consider assessing a Vanity fee only on the first issue of the Vanity call sign or change in call sign.

See

comments of Raymond Awe at page 1.

19. The Commission tries to keep the regulatory fee for Vanity call signs as minimal as possible. Between FY 2007 and FY 2010, the regulatory fee for Vanity call signs increased from $1.17 (per year) to $1.33 (per year), an

increase of $0.16 per year or $1.60 over a ten-year license period.

We do not believe this increase is inequitable, and the Commission will continue its efforts to keep this fee as minimal as possible. Regarding Mr. Awe's recommendation to assess regulatory fees only at first issue or at the time of a change in call sign, the fees that are collected from Vanity call signs are used to offset the cost of monitoring and researching new call sign requests to prevent the issuance of duplicate call signs. More than likely, fees that are collected only on new issues and at the time of changes in call signs will not generate sufficient revenues to offset the cost of managing and monitoring this work at the Commission. Therefore, we conclude that the basis upon which the Commission collects fees on Amateur Radio Vanity call signs will not change.

See

Assessment and Collection of Regulatory Fees for Fiscal Year FY 2007, MD Docket 07-81,

Report and Order,

22 FCC Rcd 15712 in Attachment C (“

FY 2007 R&O

”) and Assessment and Collection of Regulatory Fees for Fiscal Year FY 2010, MD Docket 10-87,

Report and Order,

25 FCC Rcd 9278 in Appendix B (“

FY 2010 R&O

”).

G. Fee Waiver Policies

20. In our FY 2011 Notice of Proposed Rulemaking, we stated that as our rules expressly provide, petitions for waiver of a regulatory fee must be accompanied by the required fee “unless accompanied by a petition to defer payment due to financial hardship, supported by documentation of the financial hardship.”

Similarly, petitions for reduction of fees filed with less than the full fee due must be accompanied by a request for deferral “supported by documentation of financial hardship.”

However, citing § 1.1166 (b) of the rules, which states that “Deferrals of fees will be granted for a period of six months following the date that the fee is initially due,” it can be argued that, even where supporting documentation of financial hardship is not provided, a regulatee can delay its payment of the fees owed for up to six months simply by requesting the deferral.

That argument is inconsistent with §§ 1.1166 (c) and (d) of our rules, which provide that petitions for waivers or reductions will be dismissed if they are not accompanied by the full fee owed, unless the regulatee requests a deferral of payment supported by documentation of financial hardship.

A regulatee's mere allegation of financial hardship thus does not automatically entitle it to a deferral of its obligation to pay regulatory fees; only a properly supported claim of financial hardship will entitle the regulatee to a deferral. Accordingly, if a request for deferral is not supported by documentation of financial hardship, it will be denied, and an associated petition for waiver or reduction will be dismissed. A regulatee cannot delay payment on the theory that its deferral request triggered an automatic six-month extension of its obligation to pay. We sought comment on the proposal to amend § 1.1166 (b) of the rules

to read, “Deferrals of fees, if granted, will be for a designated period of time not to exceed six months.” We received no comments or reply comments. Therefore, § 1.1166(b) of the rules

is amended to read, “Deferrals of fees, if granted, will be for a designated period of time not to exceed six months.”

47 CFR 1.1166(c).

47 CFR 1.1166(d).

Hypothetically speaking, the current rule can be interpreted to provide a regulatee an opportunity to file a waiver and a deferral on the fee due date, and not make a regulatory fee payment for a period of up to six months.

47 CFR 1.1166(c) and (d) (requests for waivers and reductions of fees “that do not include the required fees or forms will be dismissed unless accompanied by a petition to defer payment due to financial hardship,

supported by documentation of the financial hardship.

”

47 CFR 1.1166(b).

H. Administrative and Operational Issues

21. In FY 2009, the Commission implemented several changes in procedures which simplified the payment and reconciliation processes of FY 2009 regulatory fees. These changes proved to be very helpful to both licensees and to the Commission. In FY 2011, the Commission will promote greater use of technology (and less use of paper) to improve the regulatory fee notification and collection process. We sought general comment on the specific initiatives discussed in the paragraphs below. We received no specific comments or reply comments on any steps to take to promote greater use of technology in collecting regulatory fees. The Commission will continue to promote greater efficiency in its regulatory fee notification and collection process.

1. Mandatory Use of Fee Filer

22. In FY 2009, we instituted a mandatory filing requirement using the Commission's electronic filing and payment system (also known as “Fee Filer”).

Licensees filing their annual regulatory fee payments were required to begin the process by entering the Commission's Fee Filer system with a valid FRN and password.

This change was beneficial to both licensees and to the Commission. For licensees, the mandatory use of Fee Filer eliminates the need to manually complete and submit a hardcopy Form 159, and for the Commission, the data in electronic format made it much easier to process payments more efficiently and effectively. We sought comment on how to improve the mandatory use of Fee Filer for filing annual regulatory fees. We received no specific comments or reply comments on this issue. The mandatory use of Fee Filer does not mean that licensees are expected to pay only through Fee Filer—it is only mandatory for licensees to begin the process of filing their annual regulatory fees using Fee Filer.

FY 2009 Report and Order

at paras. 20 and 21.

Therefore, it is very important for licensees to have a current and valid FRN address on file in the Commission's Registration System (CORES).

2. Notification and Collection of Regulatory Fees

a. Pre-bills

23. In prior years, the Commission mailed pre-bills via surface mail to licensees in select regulatory fee categories: Interstate telecommunications service providers (“ITSPs”), Geostationary (“GSO”) and Non-Geostationary (“NGSO”) satellite space station licensees,

holders of Cable Television Relay Service (“CARS”) licenses, and Earth Station licensees.

The remaining regulatees did not receive pre-bills. In our FY 2009 Report and Order, the Commission decided to make the information contained in these pre-bills viewable in Fee Filer, rather than mailing pre-bills out to licensees via surface mail.

In FY 2011, the Commission proposed to continue its practice of not mailing out hardcopy annual regulatory fee pre-bills, and instead place the pre-bill information on the Commission's Web site for licensees to access through the Commission's electronic filing and

payment system (“Fee Filer”). Regulatees can also look to the Commission's Web site for information on upcoming events and deadlines relating to regulatory fees. We sought comment on other changes to our system of electronic notification that would more efficiently and effectively inform regulatees of information and procedures pertaining to regulatory fees. We received no specific comments or reply comments on this issue. The Commission will continue its efforts to improve its information and procedures relating to regulatory fees.

Geostationary orbit space station (“GSO”) licensees received regulatory fee pre-bills for satellites that (1) were licensed by the Commission and operational on or before October 1 of the respective fiscal year; and (2) were not co-located with and technically identical to another operational satellite on that date (

i.e.

, were not functioning as a spare satellite). Non-geostationary orbit space station (“NGSO”) licensees received regulatory fee pre-bills for systems that were licensed by the Commission and operational on or before October 1 of the respective fiscal year.

A pre-bill is considered an account receivable in the Commission's accounting system. Pre-bills reflect the amount owed and have a payment due date of the last day of the regulatory fee payment window. Consequently, if a pre-bill is not paid by the due date, it becomes delinquent and is subject to our debt collection procedures. See also 47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.

See FY 2009 Report and Order

at 24, 26.

IV. Procedural Matters

24. Included below are procedural items as well as our current payment and collection methods which we have revised over the past several years to expedite the processing of regulatory fee payments. We do not propose changes to these procedures. Rather, we include them here as a useful way of reminding regulatory fee payers and the public about these aspects of the annual regulatory fee collection process.

A. Public Notices and Fact Sheets

25. Each year we post public notices and fact sheets pertaining to regulatory fees on our Web site. These documents contain information about the payment due date and relevant regulatory fee payment procedures. We will continue to post this information on

http://www.fcc.gov/fees/regfees.html,

but as in previous years, we will not send out public notices and fact sheets to regulatees

en masse.

B. Assessment Notifications

1. Media Services Licensees

26. Beginning in FY 2003, we sent fee assessment notifications via surface mail to media services entities on a per-facility basis.

These notifications provided the assessed fee amount for the facility in question, as well as the data attributes that determined the fee amount. We have since refined this initiative to be more electronic and paperless.

In our

FY 2010 Notice of Proposed Rulemaking

, we proposed to discontinue mailing the media notifications beginning in FY 2011, relying instead on information on the Commission's Web site and the use of the Commission-authorized Web site at

http://www.fccfees.com

We kept the comment and reply comment period open until September 30, 2010 to be receptive to the needs of media licensees. We received no comments or reply comments on this particular issue. Therefore, we conclude that beginning in FY 2011 the Commission will discontinue mailing hardcopy notification assessment letters to media licensees.

An assessment is a proposed statement of the amount of regulatory fees owed by an entity to the Commission (or proposed subscriber count to be ascribed for purposes of setting the entity's regulatory fee), but it is not entered into the Commission's accounting system as a current debt.

Some of those refinements have been to provide licensees with a Commission-authorized Web site to update or correct any information concerning their facilities, and to amend their fee-exempt status, if need be. The notifications also provide licensees with a telephone number to call in the event that they need customer assistance.

See Assessment and Collection of Regulatory Fees for Fiscal Year 2010

, Report and Order, 25 FCC Rcd 9278 at para. 42 (2010) (“

FY 2010 Report and Order

”).

2. CMRS Cellular and Mobile Services Assessments

27. As we have done in prior years, our procedures for conveying CMRS subscriber counts to providers are as follows. We will mail an initial assessment letter to Commercial Mobile Radio Service (CMRS) providers using data from the Numbering Resource Utilization Forecast (“NRUF”) report that is based on “assigned” number counts that have been adjusted for porting to net Type 0 ports (“in” and “out”).

The letter will include a listing of the carrier's Operating Company Numbers (“OCNs”) upon which the assessment is based.

The letters will not include OCNs with their respective assigned number counts, but rather, an aggregate total of assigned numbers for each carrier.

See Assessment and Collection of Regulatory Fees for Fiscal Year 2005 and Assessment and Collection of Regulatory Fees for Fiscal Year 2004

, MD Docket Nos. 05-59 and 04-73, Report and Order and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paras. 38-44 (2005).

Id.

28. A carrier wishing to revise their subscriber count can access Fee Filer after they receive their initial CMRS assessment letter and revise their count. Providers should follow the prompts in Fee Filer to record their subscriber revisions, along with any supporting documentation.

The Commission will then review the revised count and supporting documentation and either approve or disapprove the submission in Fee Filer. If the submission is disapproved, the Commission will attempt to contact the provider so that the provider will have an opportunity to discuss its revised subscriber count and/or provide additional supporting documentation. If we receive no response or correction to the initial assessment letter, or we do not reverse the disapproval of the provider's revised count submission, we will expect the fee payment to be based on the number of subscribers listed on the initial assessment letter. Once the timeframe for revision has passed, the subscriber counts will be finalized. These subscriber counts will then be the basis upon which CMRS regulatory fees will be expected. Providers will be able to view their final subscriber counts online in Fee Filer. A final CMRS assessment letter will not be mailed out.

In the supporting documentation, the provider will need to state a reason for the change, such as a purchase or sale of a subsidiary, the date of the transaction, and any other pertinent information that will help to justify a reason for the change.

29. Because some carriers do not file the NRUF report, they may not receive an initial letter of assessment. In these instances, the carriers should compute their fee payment using the standard methodology

that is currently in place for CMRS Wireless services (

e.g.

, compute their subscriber counts as of December 31, 2010), and submit their fee payment accordingly. Whether a carrier receives an assessment letter or not, the Commission reserves the right to audit the number of subscribers for which regulatory fees are paid. In the event that the Commission determines that the number of subscribers paid is inaccurate, the Commission will bill the carrier for the difference between what was paid and what should have been paid.

See, e.g.

, Federal Communications Commission,

Regulatory Fees Fact Sheet: What You Owe—Commercial Wireless Services for FY 2010

at 1 (rel. September 2010).

3. Submarine Cable Allocation

30. The Commission collects a revenue amount each year based on a Congressional mandate. Because the dollar amount differs each year, a revenue apportionment is necessary each year to determine the projected regulatory fee revenue that is to be collected from submarine cable providers and from terrestrial/satellite facilities.

Since FY 2009, the Commission has used the 87.4/12.6 percent allocation proposed in the Consensus Proposal as the percentage upon which to determine the regulatory fee revenue amounts for submarine cable providers and terrestrial/satellite facilities, respectively.

Each year, the Commission reserves the right to revise this 87.4/12.6 allocation. Although we will continue to review this allocation as part of our annual regulatory fee proceeding, we do not at this time find

any basis to alter the 87.4/12.6 percent revenue allocation for 2011 regulatory fees.

See Assessment and Collection of Regulatory Fees for Fiscal Year 2008

, Second Report and Order, 24 FCC Rcd 4208 at n. 35 (2009) (“

Submarine Cable Order

”).

See Assessment and Collection of Regulatory Fees for Fiscal Year 2009

, Report and Order, 24 FCC Rcd 10301 at para. 8 (2009) (“

FY 2009 Report and Order

”).

C. Re-Assessment of Regulatory Fee Issues in a Further Notice of Proposed Rulemaking

31. Since 1994 when the first regulatory fees were collected, the communications industry has undergone a rapid transformation. The current basis of how regulatory fees are assessed, however, has changed only slightly since its inception in 1994.

In FY 2008, the Commission released a

Further Notice of Proposed Rulemaking

which identified some of the issues raised by commenters with regard to the need for fundamental reform of our regulatory fee assessment methodology.

From this rulemaking, the Commission has already acted on three of the issues: (1) A change in the bearer circuit methodology for calculating regulatory fees, (2) the elimination of two regulatory fee categories, the

International Public Fixed Radio

and

International High Frequency Broadcast Stations

, and (3) the conversion of UHF and VHF Television stations from analog to digital television.

In our FY 2010 Regulatory Fees

Report & Order

, we stated that in a future proceeding, we will “further examine the nature and extent of all changes that need to be made to our regulatory fee schedule and calculations. In a separate and forthcoming action, we will call for comment on issues including, but not limited to, how changes in the telecommunications marketplace may warrant rebalancing of regulatory fees among existing service providers * * *”

In response to our

FY 2011 Notice of Proposed Rulemaking

, we have heard the call again from commenters and reply commenters to re-examine our regulatory fee structure. As our commitment to this “forthcoming action”, the Commission will by the end of calendar year 2011, initiate a further rulemaking that will update the record on regulatory fee rebalancing, as well as expand this inquiry to include new issues and services not covered by the 2008

Further Notice of Proposed Rulemaking

, such as whether and how to re-assess the regulatory fee burden of all fee categories, whether to incorporate 499-A wireless revenue in the calculation of ITSP regulatory fees, and whether to eliminate the regulatory fee portion (but not the application fee portion) of General Mobile Radio Service (GMRS).

47 U.S.C. 159(a) and 159(b).

Assessment and Collection of Regulatory Fees for Fiscal Year 2008

, MD Docket No. 08-65, RM-11312, Report and Order and Further Notice of Proposed Rulemaking, 73 FR 50201 (August 26, 2008) at paras. 38-41.

See Assessment and Collection of Regulatory Fees for Fiscal Year 2009

, Report and Order, 24 FCC Rcd 10301 (2009) at paras. 7-13 (“

FY 2009 Report and Order

”).

See Assessment and Collection of Regulatory Fees for Fiscal Year 2010

, MD Docket No. 10-87, Report and Order, 25 FCC Rcd 9278 para. 31 (2010).

D. Streamlined Regulatory Fee Payment Process

1. Cable Television Subscribers

32. We will continue to permit cable television operators to base their regulatory fee payment on their company's aggregate year-end subscriber count, rather than requiring them to report cable subscriber counts on a per community unit identifier (“CUID”) basis.

2. CMRS Cellular and Mobile Providers

33. In FY 2006, we streamlined the CMRS payment process by eliminating the requirement for CMRS providers to identify their individual call signs when making their regulatory fee payment, instead allowing CMRS providers to pay their regulatory fees only at the aggregate subscriber level without having to identify their various call signs.

We will continue this practice in FY 2011. In FY 2007, we consolidated the CMRS cellular and CMRS mobile fee categories into one fee category with a single fee code, thereby eliminating the requirement for CMRS providers to separate their subscriber counts into CMRS cellular and CMRS mobile fee categories during the regulatory fee payment process. This consolidation of fee categories enabled the Commission to process payments more quickly and accurately. For FY 2011, we will continue this practice of combining the CMRS cellular and CMRS mobile fee categories into one regulatory fee category.

See Assessment and Collection of Regulatory Fees for Fiscal Year 2006

, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092, 8105, para. 48 (2006).

3. Interstate Telecommunications Service Providers (“ITSP”)

34. In FY 2007, we adopted a proposal to round lines 14 (total subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W to the nearest dollar. This revision enabled the Commission to process the ITSP regulatory fee payments more quickly because rounding was performed in a consistent manner and eliminated processing issues that occurred in prior years. In FY 2011, we will continue rounding lines 14 and 16 when calculating the FY 2011 ITSP fee obligation. In addition, we will continue the practice of not mailing out Form 159-W via surface mail.

E. Payment of Regulatory Fees

1. Lock Box Bank

35. All lock box payments to the Commission for FY 2011 will be processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC. During the regulatory fee season, for those licensees paying by check, money order, or by credit card using Form 159-E remittance advice, the fee payment and Form 159-E remittance advice should be mailed to the following address: Federal Communications Commission, Regulatory Fees, P.O. Box 979084, St. Louis, MO 63197-9000. Additional payment options and instructions are posted at

http://www.fcc.gov/fees/regfees.html

2. Receiving Bank for Wire Payments

36. The receiving bank for all wire payments is the Federal Reserve Bank, New York, New York (TREAS NYC). When making a wire transfer, regulatees must fax a copy of their Fee Filer generated Form 159-E to U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour before initiating the wire transfer (but on the same business day), so as not to delay crediting their account. Regulatees should discuss arrangements (including bank closing schedules) with their bankers several days before they plan to make the wire transfer to allow sufficient time for the transfer to be initiated and completed before the deadline. Complete instructions for making wire payments are posted at

http://www.fcc.gov/fees/wiretran.html

3. De Minimis Regulatory Fees

37. Regulatees whose total FY 2011 regulatory fee liability, including all categories of fees for which payment is due, is less than $10 are exempted from payment of FY 2011 regulatory fees.

4. Standard Fee Calculations and Payment Dates

38. The Commission will accept fee payments made in advance of the window for the payment of regulatory fees. The responsibility for payment of fees by service category is as follows:

•

Media Services:

Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2010 for AM/FM radio stations, VHF/UHF full service television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2010. In

instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

•

Wireline (Common Carrier) Services:

Regulatory fees must be paid for authorizations that were granted on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date. We note that audio bridging service providers are included in this category.

Audio bridging services are toll teleconferencing services, and audio bridging service providers are required to contribute directly to the universal service fund based on revenues from these services. On June 30, 2008, the Commission released the

InterCall Order

, in which the Commission stated that InterCall, Inc. and all similarly situated audio bridging service providers are required to contribute directly to the universal service fund.

See Request for Review by InterCall, Inc. of Decision of Universal Service Administrator

, CC Docket No. 96-45, Order, 23 FCC Rcd 10731 (2008) (“

InterCall Order

”).

•

Wireless Services:

CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2010. The number of subscribers, units, or telephone numbers on December 31, 2010 will be used as the basis from which to calculate the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• The first eleven regulatory fee categories in our Schedule of Regulatory Fees (

see

Table—FY 2011 Schedule of Regulatory Fees) pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire amount of their five-year or ten-year term of initial license, and only pay regulatory fees again when the license is renewed or a new license is obtained. We include these fee categories in our Schedule of Regulatory Fees to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2011.

•

Multichannel Video Programming Distributor Services (cable television operators and CARS licensees):

Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2010.

Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

Cable television system operators should compute their basic subscribers as follows: Number of single family dwellings + number of individual households in multiple dwelling unit (apartments, condominiums, mobile home parks,

etc.

) paying at the basic subscriber rate + bulk rate customers + courtesy and free service. Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by basic annual subscription rate for individual households. Operators may base their count on “a typical day in the last full week” of December 2010, rather than on a count as of December 31, 2010.

•

International Services:

Regulatory fees must be paid for earth stations, geostationary orbit space stations and non-geostationary orbit satellite systems that were licensed and operational on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

•

International Services: Submarine Cable Systems:

Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis based on circuit capacity as of December 31, 2010. In instances where a license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the license as of the fee due date. For regulatory fee purposes, the allocation in FY 2011 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

•

International Services: Terrestrial and Satellite Services:

Finally, regulatory fees for International Bearer Circuits are to be paid by facilities-based common carriers that have active (used or leased) international bearer circuits as of December 31, 2010 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier, which includes active circuits to themselves or to their affiliates. In addition, non-common carrier satellite operators must pay a fee for each circuit sold or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services. “Active circuits” for these purposes include backup and redundant circuits as of December 31, 2010. Whether circuits are used specifically for voice or data is not relevant for these purposes in determining that they are active circuits. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date. For regulatory fee purposes, the allocation in FY 2011 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

F. Enforcement

39. To be considered timely, regulatory fee payments must be received and stamped at the lockbox bank by the last day of the regulatory fee filing window. Section 9(c) of the Act requires us to impose a late payment penalty of 25 percent of the unpaid amount to be assessed on the first day following the deadline date for filing of these fees.

Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including those set forth in § 1.1910 of the Commission's rules

and in the Debt Collection Improvement Act of 1996 (“DCIA”).

We also assess administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and § 1.1940(d) of the Commission's rules.

These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. In case of partial payments (underpayments) of regulatory fees, the licensee will be given credit for the amount paid, but if it is later determined that the fee paid is incorrect or not timely paid, then the 25 percent late charge penalty (and other charges and/or sanctions, as appropriate) will be assessed on the portion that is not paid in a timely manner.

47 U.S.C. 159(c).

See

47 CFR 1.1910.

Delinquent debt owed to the Commission triggers application of the “red light rule” which requires offsets or holds on pending disbursements. 47 CFR 1.1910. In 2004, the Commission adopted rules implementing the requirements of the DCIA.

See Amendment of Parts 0 and 1 of the Commission's Rules,

MD Docket No. 02-339, Report and Order, 19 FCC Rcd 6540 (2004); 47 CFR Part 1, Subpart O, Collection of Claims Owed the United States.

47 CFR 1.1940(d).

40. We will withhold action on any applications or other requests for benefits filed by anyone who is delinquent in any non-tax debts owed to the Commission (including regulatory fees) and will ultimately dismiss those applications or other requests if payment of the delinquent debt or other satisfactory arrangement for payment is not made.

Failure to pay regulatory fees can also result in the initiation of a proceeding to revoke any and all authorizations held by the entity

responsible for paying the delinquent fee(s).

See

47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.

Table—Reference to FY 2010 Schedule of Regulatory Fees

Fee category

Annual

regulatory fee

(U.S. $'s)

PLMRS (per license) (Exclusive Use) (47 CFR part 90)

Microwave (per license) (47 CFR part 101)

218-219 MHz (Formerly Interactive Video Data Service) (per license) (47 CFR part 95)

Marine (Ship) (per station) (47 CFR part 80)

Marine (Coast) (per license) (47 CFR part 80)

General Mobile Radio Service (per license) (47 CFR part 95)

Rural Radio (47 CFR part 22) (previously listed under the Land Mobile category)

PLMRS (Shared Use) (per license) (47 CFR part 90)

Aviation (Aircraft) (per station) (47 CFR part 87)

Aviation (Ground) (per license) (47 CFR part 87)

Amateur Vanity Call Signs (per call sign) (47 CFR part 97)

1.33

CMRS Mobile/Cellular Services (per unit) (47 CFR parts 20, 22, 24, 27, 80 and 90)

.18

CMRS Messaging Services (per unit) (47 CFR parts 20, 22, 24 and 90)

.08

Broadband Radio Service (formerly MMDS/ MDS) (per license) (47 CFR part 21)

310

Local Multipoint Distribution Service (per call sign) (47 CFR, part 101)

310

AM Radio Construction Permits

390

FM Radio Construction Permits

675

TV (47 CFR part 73) VHF Commercial:

Markets 1-10

81,550

Markets 11-25

63,275

Markets 26-50

42,550

Markets 51-100

23,750

Remaining Markets

6,125

Construction Permits

6,125

TV (47 CFR part 73) UHF Commercial:

Markets 1-10

32,275

Markets 11-25

30,075

Markets 26-50

18,900

Markets 51-100

11,550

Remaining Markets

3,050

Construction Permits

3,050

Satellite Television Stations (All Markets)

1,300

Construction Permits—Satellite Television Stations

675

Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74)

415

Broadcast Auxiliaries (47 CFR part 74)

CARS (47 CFR part 78)

315

Cable Television Systems (per subscriber) (47 CFR part 76)

.89

Interstate Telecommunication Service Providers (per revenue dollar)

.00349

Earth Stations (47 CFR part 25)

240

Space Stations (per operational station in geostationary orbit) (47 CFR part 25) also includes DBS Service (per operational station) (47 CFR part 100)

127,925

Space Stations (per operational system in non-geostationary orbit) (47 CFR part 25)

138,050

International Bearer Circuits—Terrestrial/Satellites (per 64KB circuit)

.39

International Bearer Circuits—Submarine Cable

(

)

See Table Below.

FY 2010 Radio Station Regulatory Fees

Population served

AM Class A

AM Class B

AM Class

FM Classes

A, B1 & C3

FM Classes

B, C, C0,

C1 & C2

<= 25,000

$675

$550

$500

$575

$650

$825

25,001-75,000

1,350

1,075

750

875

1,325

1,450

75,001-150,000

2,025

1,350

1,000

1,450

1,825

2,725

150,001-500,000

3,050

2,300

1,500

1,725

2,800

3,550

500,001-1,200,000

4,400

3,500

2,500

2,875

4,450

5,225

1,200,001-3,000,000

6,750

5,400

3,750

4,600

7,250

8,350

> 3,000,000

8,100

6,475

4,750

5,750

9,250

10,850

International Bearer Circuits—Submarine Cable

Submarine cable systems (capacity as of December 31, 2009)

Fee amount

Address

< 2.5 Gbps

$14,625

FCC, International P.O. Box 979084, St. Louis, MO 63197-9000.

2.5 Gbps or greater, but less than 5 Gbps

29,250

FCC, International P.O. Box 979084, St. Louis, MO 63197-9000.

5 Gbps or greater, but less than 10 Gbps

58,500

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

10 Gbps or greater, but less than 20 Gbps

116,975

FCC, International P.O. Box 979084, St. Louis, MO 63197-9000.

20 Gbps or greater

233,950

FCC, International, P.O. Box 979084, St. Louis, MO 63197-9000.

FINAL REGULATORY FLEXIBILITY ANALYSIS

41. As required by the Regulatory Flexibility Act (“RFA”),

the Commission prepared an Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities by the policies and rules proposed in its

Notice of Proposed Rulemaking.

Written public comments were sought on the FY 2011 fees proposal, including comments on the IRFA. This Final Regulatory Flexibility Analysis (“FRFA”) conforms to the RFA.

5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by the Contract With America Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996) (“CWAAA”). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”).

5 U.S.C. 604.

I. Need for, and Objectives of, the Notice

42. This rulemaking proceeding was initiated for the Commission to amend its Schedule of Regulatory Fees in the amount of $335,794,000, which is the amount that Congress has required the Commission to recover. The Commission seeks to collect the necessary amount through its revised Schedule of Regulatory Fees in the most efficient manner possible and without undue public burden.

II. Summary of Significant Issues Raised by Public Comments in Response to the IRFA

43. No parties have raised issues in response to the IRFA.

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

44. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted.

The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.”

In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.

A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

5 U.S.C. 603(b)(3).

5 U.S.C. 601(6).

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

.”

15 U.S.C. 632.

45. Small Businesses. Nationwide, there are a total of approximately 29.6 million small businesses, according to the SBA.

See

SBA, Office of Advocacy, “Frequently Asked Questions, “

http://web.sba.gov/faqs

” (accessed Jan. 2009).

46. Small Organizations. Nationwide, as of 2002, there are approximately 1.6 million small organizations.

A “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.”

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

5 U.S.C. 601(4).

47. Small Governmental Jurisdictions. The term “small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.”

Census Bureau data for 2002 indicate that there were 87,525 local governmental jurisdictions in the United States.

We estimate that, of this total, 84,377 entities were “small governmental jurisdictions.”

Thus, we estimate that most governmental jurisdictions are small.

5 U.S.C. 601(5).

U.S. Census Bureau, Statistical Abstract of the United States: 2006, Section 8, p. 272, Table 415.

We assume that the villages, school districts, and special districts are small, and total 48,558.

See

U.S. Census Bureau, Statistical Abstract of the United States: 2006, section 8, p. 273, Table 417. For 2002, Census Bureau data indicate that the total number of county, municipal, and township governments nationwide was 38,967, of which 35,819 were small.

Id.

48. We have included small incumbent local exchange carriers in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (

e.g.

, a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.”

The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not “national” in scope.

We have therefore included small incumbent local exchange carriers in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

15 U.S.C. 632.

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

49. Incumbent Local Exchange Carriers (“ILECs”). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or

fewer employees.

According to Commission data,

1,311 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,311 carriers, an estimated 1,024 have 1,500 or fewer employees and 287 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our action.

13 CFR 121.201, North American Industry Classification System (NAICS) code 517110.

FCC, Wireline Competition Bureau, Industry Analysis and Technology Division, “

Trends in Telephone Service

” at Table 5.3, Page 5-5 (Aug. 2008) (“

Trends in Telephone Service

”). This source uses data that are current as of November 1, 2006.

50. Competitive Local Exchange Carriers (“CLECs”), Competitive Access Providers (“CAPs”), “Shared-Tenant Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

1,005 carriers have reported that they are engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Of these 1,005 carriers, an estimated 918 have 1,500 or fewer employees and 87 have more than 1,500 employees. In addition, 16 carriers have reported that they are “Shared-Tenant Service Providers,” and all 16 are estimated to have 1,500 or fewer employees. In addition, 89 carriers have reported that they are “Other Local Service Providers.” Of the 89, all have 1,500 or fewer employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, “Shared-Tenant Service Providers,” and “Other Local Service Providers” are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

51. 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.

According to Commission data,

151 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 149 have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517310.

“Trends in Telephone Service” at Table 5.3.

52. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

815 carriers have reported that they are engaged in the provision of toll resale services. Of these, an estimated 787 have 1,500 or fewer employees and 28 have more than 1,500 employees. Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517310.

“Trends in Telephone Service” at Table 5.3.

53. Payphone Service Providers (“PSPs”). Neither the Commission nor the SBA has developed a small business size standard specifically for payphone services providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

526 carriers have reported that they are engaged in the provision of payphone services. Of these, an estimated 524 have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of payphone service providers are small entities that may be affected by our action.

3 CFR 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

54. Interexchange Carriers (“IXCs”). Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

300 carriers have reported that they are engaged in the provision of interexchange service. Of these, an estimated 268 have 1,500 or fewer employees and 32 have more than 1,500 employees. Consequently, the Commission estimates that the majority of IXCs are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

55. Operator Service Providers (“OSPs”). Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

28 carriers have reported that they are engaged in the provision of operator services. Of these, an estimated 27 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the majority of OSPs are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

56. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

According to Commission data,

88 carriers have reported that they are engaged in the provision of prepaid calling cards. Of these, an estimated 85 have 1,500 or fewer employees and three have more than 1,500 employees. Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by our action.

13 CFR 121.201, NAICS code 517310.

“Trends in Telephone Service” at Table 5.3.

57. 800 and 800-Like Service Subscribers.

Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.

The most reliable source of information regarding the number of these service subscribers appears to be data the Commission receives from Database Service Management on the 800, 866, 877, and 888 numbers in use.

According to our data, at the end of December 2007, the number of 800 numbers assigned was 7,860,000; the

number of 888 numbers assigned was 5,210,184; the number of 877 numbers assigned was 4,388,682; and the number of 866 numbers assigned was 7,029,116. We do not have data specifying the number of these subscribers that are independently owned and operated or have 1,500 or fewer employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, we estimate that there are 7,860,000 or fewer small entity 800 subscribers; 5,210,184 or fewer small entity 888 subscribers; 4,388,682 or fewer small entity 877 subscribers, and 7,029,116 or fewer entity 866 subscribers.

We include all toll-free number subscribers in this category.

13 CFR 121.201, NAICS code 517310.

“Trends in Telephone Service” at Tables 18.4, 18.5, 18.6, and 18.7.

58. Satellite Telecommunications and All Other Telecommunications. These two economic census categories address the satellite industry. The first category has a small business size standard of $15 million or less in average annual receipts, under SBA rules.

The second has a size standard of $25 million or less in annual receipts.

100

The most current Census Bureau data in this context, however, are from the (last) economic census of 2002, and we will use those figures to gauge the prevalence of small businesses in these categories.

101

13 CFR

121.201, NAICS code 517410.

100

13 CFR

121.201, NAICS code 517919.

101

13 CFR

121.201, NAICS codes 517410 and 517910 (2002).

59. The category of Satellite Telecommunications “comprises establishments primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.”

102

For this category, Census Bureau data for 2002 show that there were a total of 371 firms that operated for the entire year.

103

Of this total, 307 firms had annual receipts of under $10 million, and 26 firms had receipts of $10 million to $24,999,999.

104

Consequently, we estimate that the majority of Satellite Telecommunications firms are small entities that might be affected by our action.

102

U.S. Census Bureau, 2007 NAICS Definitions, “517410 Satellite Telecommunications”;

http://www.census.gov/naics/2007/def/ND517410.HTM.

103

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization),” Table 4, NAICS code 517410 (issued Nov. 2005).

104

Id.

An additional 38 firms had annual receipts of $25 million or more.

60. The second category of All Other Telecommunications comprises,

inter alia,

“establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems.”

105

For this category, Census Bureau data for 2002 show that there were a total of 332 firms that operated for the entire year.

106

Of this total, 303 firms had annual receipts of under $10 million and 15 firms had annual receipts of $10 million to $24,999,999.

107

Consequently, we estimate that the majority of All Other Telecommunications firms are small entities that might be affected by our action.

105

U.S. Census Bureau, 2007 NAICS Definitions, “517919 All Other Telecommunications”;

http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.

106

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization),” Table 4, NAICS code 517910 (issued Nov. 2005).

107

Id.

An additional 14 firms had annual receipts of $25 million or more.

61. Wireless Telecommunications Carriers (except Satellite). Since 2007, the Census Bureau has placed wireless firms within this new, broad, economic census category.

108

Prior to that time, such firms were within the now-superseded categories of “Paging” and “Cellular and Other Wireless Telecommunications.”

109

Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees.

110

For the category of Wireless Telecommunications Carriers (except Satellite), preliminary data for 2007 show that there was 11,927 firms operating that year.

111

While the Census Bureau has not released data on the establishments broken down by number of employees, we note that the Census Bureau lists total employment for all firms in that sector at 281,262.

112

Since all firms with fewer than 1,500 employees are considered small, given the total employment in the sector, we estimate that the vast majority of wireless firms are small.

108

U.S. Census Bureau, 2007 NAICS Definitions, “517210 Wireless Telecommunications Categories (Except Satellite)”;

http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.

109

U.S. Census Bureau, 2002 NAICS Definitions, “517211 Paging”;

http://www.census.gov/epcd/naics02/def/NDEF517.HTM

.; U.S. Census Bureau, 2002 NAICS Definitions, “517212 Cellular and Other Wireless Telecommunications”;

http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

110

13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 517211 and 517212 (referring to the 2002 NAICS).

111

U.S. Census Bureau, 2007 Economic Census, Sector 51, EC0751I1 Information: Industry Series: Preliminary Summary Statistics for the United States: 2007, NAICS code 517210 (issued Oct. 20, 2009),

http://factfinder.census.gov/servlet/IBQTable?-fds_name=EC0700A1&-_clearIBQ=Y&-ds_name=EC0751I1&-NAICS2007=51721

(visited Mar. 2, 2011).

112

Id.

62. Auctions. Initially, we note that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

63. Common Carrier Paging. As noted, the SBA has developed a small business size standard for Wireless Telecommunications Carriers (except Satellite) firms within the broad economic census categories of “Cellular and Other Wireless Telecommunications.”

113

Since 2007, the Census Bureau has placed wireless firms within this new, broad, economic census category.

114

Prior to that time, such firms were within the now-superseded categories of “Paging” and “Cellular and Other Wireless Telecommunications.”

115

Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees.

116

Because Census Bureau data are not yet available for the new category, we will estimate small business prevalence using the prior categories and associated data. For the category of Paging, data for 2002 show that there were 807 firms that operated for the entire year.

117

Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or

more.

118

For the category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year.

119

Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more.

120

Thus, we estimate that the majority of wireless firms are small.

113

13 CFR 121.201, NAICS code 517212.

114

U.S. Census Bureau, 2007 NAICS Definitions, “517210 Wireless Telecommunications Categories (Except Satellite)”;

http://www.census.gov/naics/2007/def/ND517210.HTM#N517210

115

U.S. Census Bureau, 2002 NAICS Definitions, “517211 Paging”;

http://www.census.gov/epcd/naics02/def/NDEF517.HTM,

; U.S. Census Bureau, 2002 NAICS Definitions, “517212 Cellular and Other Wireless Telecommunications”;

http://www.census.gov/epcd/naics02/def/NDEF517.HTM

116

13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 517211 and 517212 (referring to the 2002 NAICS).

117

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization,” Table 5, NAICS code 517211 (issued Nov. 2005).

118

Id.

The census data do not provide a more precise estimate of the number of firms that have employment of 1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.”

119

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization,” Table 5, NAICS code 517212 (issued Nov. 2005).

120

Id.

64. In addition, in the

Paging Second Report and Order,

the Commission adopted a size standard for “small businesses” for purposes of determining their eligibility for special provisions such as bidding credits.

121

A small business is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years.

122

The SBA has approved this definition.

123

An initial auction of Metropolitan Economic Area (“MEA”) licenses was conducted in the year 2000. Of the 2,499 licenses auctioned, 985 were sold.

124

Fifty-seven companies claiming small business status won 440 licenses.

125

A subsequent auction of MEA and Economic Area (“EA”) licenses was held in the year 2001. Of the 15,514 licenses auctioned, 5,323 were sold.

126

One hundred thirty-two companies claiming small business status purchased 3,724 licenses. A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs, was held in 2003. Seventy-seven bidders claiming small or very small business status won 2,093 licenses.

127

121

evision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging Systems,

Second Report and Order, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (“

Paging Second Report and Order

”);

see also Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging Systems,

Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 10030, 10085-10088, paras. 98-107 (1999).

122

Paging Second Report and Order,

12 FCC Rcd at 2811, para. 179.

123

See

Letter from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau (“WTB”), FCC (Dec. 2, 1998) (“

Alvarez Letter 1998

”).

124

See

“9

29 and 931 MHz Paging Auction Closes,

” Public Notice, 15 FCC Rcd 4858 (WTB 2000).

125

See id.

126

See

“

Lower and Upper Paging Band Auction Closes

,” Public Notice, 16 FCC Rcd 21821 (WTB 2002).

127

See

“

Lower and Upper Paging Bands Auction Closes

,” Public Notice, 18 FCC Rcd 11154 (WTB 2003). The current number of small or very small business entities that hold wireless licenses may differ significantly from the number of such entities that won in spectrum auctions due to assignments and transfers of licenses in the secondary market over time. In addition, some of the same small business entities may have won licenses in more than one auction.

65. Currently, there are approximately 74,000 Common Carrier Paging licenses. According to the most recent

Trends in Telephone Service,

281 carriers reported that they were engaged in the provision of “paging and messaging” services.

128

Of these, an estimated 279 have 1,500 or fewer employees and two have more than 1,500 employees.

129

We estimate that the majority of common carrier paging providers would qualify as small entities under the SBA definition.

128

“Trends in Telephone Service” at Table 5.3.

129

Id.

66. 2.3 GHz Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (“WCS”) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years.

130

The SBA approved these definitions.

131

The Commission conducted an auction of geographic area licenses in the WCS service in 1997. In the auction, seven bidders that qualified as very small business entities won licenses, and one bidder that qualified as a small business entity won a license.

130

Amendment of the Commission's Rules to Establish Part 27, the Wireless Communications Service (WCS),

Report and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).

131

See Alvarez Letter

1998.

67. 1670-1675 MHz Services. This service can be used for fixed and mobile uses, except aeronautical mobile.

132

An auction for one license in the 1670-1675 MHz band was conducted in 2003. The winning bidder was not a small entity.

132

47 CFR 2.106;

see generally

47 CFR 27.1-.70.

68. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. As noted, the SBA has developed a small business size standard for Wireless Telecommunications Carriers (except Satellite).

133

Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees.

134

According to

Trends in Telephone Service

data, 413 carriers reported that they were engaged in wireless telephony.

135

Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees.

136

Therefore, more than half of these entities can be considered small.

133

13 CFR 121.201, NAICS code 517210.

134

Id.

135

“Trends in Telephone Service” at Table 5.3.

136

Id.

69. Broadband Personal Communications Service. The broadband personal communications services (“PCS”) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission initially defined a “small business” for C- and F-Block licenses as an entity that has average gross revenues of $40 million or less in the three previous years.

137

For Block F licenses, an additional small business size standard for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three years.

138

These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA.

139

No small businesses within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that claimed small business status in the first two C Block auctions.

140

A total of 93 bidders that claimed “small” and “very small” business status won licenses in the first auction of the D, E, and F Blocks.

141

In 1999, the Commission completed a subsequent auction of C, D, E, and F Block licenses.

142

Of the 57 winning bidders

in that auction, 48 claimed small business status and won 277 licenses.

143

137

See

Amendment of Parts 20 and 24 of the Commission's Rules—Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap

et al.

Report and Order,

11 FCC Rcd 7824, 7850-52, paras. 57-60 (1996) (“

PCS Report and Order

”);

see also

47 CFR 24.720(b).

138

See PCS Report and Order,

11 FCC Rcd at 7852, para. 60.

139

See Alvarez Letter

1998.

140

See

Entrepreneurs C Block Auction Closes,

Public Notice,

DA 96-716 (1996); Entrepreneurs C Block Reauction Closes,

Public Notice,

DA 96-1153 (1996).

141

See

Broadband PCS, D, E and F Block Auction Closes,

Public Notice,

Doc. No. 89838 (released January 14, 1997).

142

See

C, D, E, and F Block Broadband PCS Auction Closes,

Public Notice,

14 FCC Rcd 6688 (1999). Before Auction No. 22, the Commission established a very small standard for the C Block to match the standard used for F Block. Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal Communications Services (PCS) Licensees, WT Docket No. 97-82,

Fourth Report and Order,

13 FCC Rcd 15,743, 15,768 para. 46 (1998).

143

See

C, D, E, and F Block Broadband PCS Auction Closes,

Public Notice,

14 FCC Rcd 6688 (1999).

70. In 2001, the Commission completed the auction of 422 C and F Block Broadband PCS licenses (Auction 35). Of the 35 winning bidders in that auction, 29 claimed small or very small businesses status.

144

Subsequent events concerning that Auction, including judicial and agency determinations, resulted in only a portion of those C and F Block licenses being available for grant. The Commission completed an auction of 188 C Block licenses and 21 F Block licenses in 2005. Of the 24 winning bidders in that auction, 16 claimed small business status and won 156 licenses.

145

In 2007, the Commission completed an auction of licenses in the A, C, and F Blocks.

146

Of the 12 winning bidders in that auction, five claimed small business status and won 18 licenses.

147

Most recently, in 2008, the Commission completed the auction of C, D, E, and F Block Broadband PCS licenses.

148

Of the eight winning bidders for Broadband PCS licenses in that auction, six claimed small business status and won 14 licenses.

149

144

See

“C and F Block Broadband PCS Auction Closes; Winning Bidders Announced,”

Public Notice,

16 FCC Rcd 2339 (2001).

145

See

“Broadband PCS Spectrum Auction Closes; Winning Bidders Announced for Auction No. 58,”

Public Notice,

20 FCC Rcd 3703 (2005).

146

See

“Auction of Broadband PCS Spectrum Licenses Closes; Winning Bidders Announced for Auction No. 71,”

Public Notice,

22 FCC Rcd 9247 (2007).

147

Id.

148

See

Auction of AWS-1 and Broadband PCS Licenses Closes; Winning Bidders Announced for Auction 78,

Public Notice,

23 FCC Rcd 12,749 (2008).

149

Id.

71. Advanced Wireless Services. In 2006, the Commission conducted its first auction of Advanced Wireless Services licenses in the 1710-1755 MHz and 2110-2155 MHz bands (“AWS-1”), designated as Auction 66.

150

For the AWS-1 bands, the Commission has defined a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million.

151

In Auction 66, 31 winning bidders identified themselves as very small businesses and won 142 licenses.

152

Twenty-six of the winning bidders identified themselves as small businesses and won 73 licenses.

153

In a subsequent 2008 auction, the Commission offered 35 AWS-1 licenses.

154

Four winning bidders identifying themselves as very small businesses won 17 licenses, and three winning bidders identifying themselves as a small business won five AWS-1 licenses.

155

150

See

Auction of Advanced Wireless Services Licenses Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction No. 66, AU Docket No. 06-30,

Public Notice,

21 FCC Rcd 4562 (2006) (“

Auction 66 Procedures Public Notice

”).

151

See

Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1 GHz Bands,

Report and Order,

18 FCC Rcd 25,162, App. B (2003),

modified by

Service Rules for Advanced Wireless Services In the 1.7 GHz and 2.1 GHz Bands,

Order on Reconsideration,

20 FCC Rcd 14,058, App. C (2005).

152

See

Auction of Advanced Wireless Services Licenses Closes; Winning Bidders Announced for Auction No. 66,

Public Notice,

21 FCC Rcd 10,521 (2006) (“

Auction 66 Closing Public Notice

”).

153

See id.

154

See AWS-1 and Broadband PCS Procedures Public Notice,

23 FCC Rcd at 7499. Auction 78 also included an auction of broadband PCS licenses.

155

See

“Auction of AWS-1 and Broadband PCS Licenses Closes, Winning Bidders Announced for Auction 78, Down Payments Due September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008, Final Payments Due September 23, 2008, Ten-Day Petition to Deny Period”,

Public Notice,

23 FCC Rcd 12749-65 (2008).

72. Narrowband Personal Communications Services. In 1994, the Commission conducted two auctions of Narrowband PCS licenses. For these auctions, the Commission defined a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million.

156

Through these auctions, the Commission awarded a total of 41 licenses, 11 of which were obtained by four small businesses.

157

To ensure meaningful participation by small business entities in future auctions, the Commission adopted a two-tiered small business size standard in the

Narrowband PCS Second Report and Order.

158

A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million.

159

A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million.

160

The SBA has approved these small business size standards.

161

A third auction of Narrowband PCS licenses was conducted in 2001. In that auction, five bidders won 317 (Metropolitan Trading Areas and nationwide) licenses.

162

Three of the winning bidders claimed status as a small or very small entity and won 311 licenses.

156

Implementation of Section 309(j) of the Communications Act - Competitive Bidding Narrowband PCS,

Third Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175, 196, para. 46 (1994).

157

See

“Announcing the High Bidders in the Auction of ten Nationwide Narrowband PCS Licenses, Winning Bids Total $617,006,674,”

Public Notice,

PNWL 94-004 (rel. Aug. 2, 1994); “Announcing the High Bidders in the Auction of 30 Regional Narrowband PCS Licenses; Winning Bids Total $490,901,787,”

Public Notice,

PNWL 94-27 (released November 9, 1994).

158

Amendment of the Commission's Rules to Establish New Personal Communications Services,

Narrowband PCS, Second Report and Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 10456, 10476, para. 40 (2000) (“

Narrowband PCS Second Report and Order

”).

159

Narrowband PCS Second Report and Order,

15 FCC Rcd at 10476, para. 40.

160

Id.

161

See Alvarez Letter 1998.

162

See

“Narrowband PCS Auction Closes,”

Public Notice,

16 FCC Rcd 18663 (WTB 2001).

73. Lower 700 MHz Band Licenses. The Commission previously adopted criteria for defining three groups of small businesses for purposes of determining their eligibility for special provisions such as bidding credits.

163

The Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years.

164

A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years.

165

Additionally, the Lower 700 MHz Service had a third category of small business status for Metropolitan/Rural Service Area (“MSA/RSA”) licenses—“entrepreneur”—which is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years.

166

The SBA approved these small size standards.

167

An auction of 740 licenses was conducted in 2002 (one license in each of the 734 MSAs/RSAs and one license in each of the six Economic Area Groupings (EAGs)). Of the 740 licenses available for auction, 484 licenses were won by 102 winning bidders. Seventy-two of the winning bidders claimed small business, very small business, or entrepreneur status and won a total of

329 licenses.

168

A second auction commenced on May 28, 2003, closed on June 13, 2003, and included 256 licenses.

169

Seventeen winning bidders claimed small or very small business status and won 60 licenses, and nine winning bidders claimed entrepreneur status and won 154 licenses.

170

In 2005, the Commission completed an auction of 5 licenses in the lower 700 MHz band (Auction 60). All three winning bidders claimed small business status.

163

See Reallocation and Service Rules for the 698-746 MHz Spectrum Band (Television Channels 52-59),

Report and Order, 17 FCC Rcd 1022 (2002) (“

Channels 52-59 Report and Order

”).

164

See Channels 52-59 Report and Order,

17 FCC Rcd at 1087-88, para. 172.

165

See id.

166

See id,

17 FCC Rcd at 1088, para. 173.

167

See

Letter from Aida Alvarez, Administrator, SBA, to Thomas Sugrue, Chief, WTB, FCC (Aug. 10, 1999) (“

Alvarez Letter 1999

”).

168

See

“Lower 700 MHz Band Auction Closes,”

Public Notice,

17 FCC Rcd 17272 (WTB 2002).

169

See

Lower 700 MHz Band Auction Closes,

Public Notice,

18 FCC Rcd 11,873 (WTB 2003).

170

See id.

74. In 2007, the Commission reexamined its rules governing the 700 MHz band in the

700 MHz Second Report and Order.

171

An auction of A, B and E block licenses in the Lower 700 MHz band was held in 2008.

172

Twenty winning bidders claimed small business status (those with attributable average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years). Thirty three winning bidders claimed very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years).

171

Service Rules for the 698-746, 747-762 and 777-792 MHz Band, WT Docket No. 06-150,

Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems,

CC Docket No. 94-102,

Section 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephone,

WT Docket No. 01-309,

Biennial Regulatory Review—Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services,

WT Docket No. 03-264,

Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules,

WT Docket No. 06-169,

Implementing a Nationwide, Broadband Interoperable Public Safety Network in the 700 MHz Band,

PS Docket No. 06-229,

Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State, and Local Public Safety Communications Requirements Through the Year 2010,

WT Docket No. 96-86, Second Report and Order, 22 FCC Rcd 15289 (2007) (“

700 MHz Second Report and Order

”).

172

See

Auction of 700 MHz Band Licenses Closes,

Public Notice,

23 FCC Rcd 4572 (WTB 2008).

75. Upper 700 MHz Band Licenses. In the

700 MHz Second Report and Order,

the Commission revised its rules regarding Upper 700 MHz band licenses.

173

In 2008, the Commission conducted Auction 73 in which C and D block licenses in the Upper 700 MHz band were available.

174

Three winning bidders claimed very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years).

173

700 MHz Second Report and Order, 22 FCC Rcd 15,289.

174

See

Auction of 700 MHz Band Licenses Closes,

Public Notice,

23 FCC Rcd 4572 (2008).

76. 700 MHz Guard Band Licenses. In 2000, the Commission adopted the

700 MHz Guard Band Report and Order,

in which it established rules for the A and B block licenses in the Upper 700 MHz band, including size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits.

175

A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years.

176

Additionally, a very small business is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years.

177

SBA approval of these definitions is not required.

178

An auction of these licenses was conducted in 2000.

179

Of the 104 licenses auctioned, 96 licenses were won by nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses was held in 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business.

180

175

See Service Rules for the 746-764 MHz Bands, and Revisions to Part 27 of the Commission's Rules,

Second Report and Order, 15 FCC Rcd 5299 (2000) (“700 MHz Guard Band Report and Order”).

176

See 700 MHz Guard Band Report and Order,

15 FCC Rcd at 5343, para. 108.

177

See id.

178

See id.,

15 FCC Rcd 5299, 5343, para. 108 n.246 (for the 746-764 MHz and 776-794 MHz bands, the Commission is exempt from 15 U.S.C. 632, which requires Federal agencies to obtain SBA approval before adopting small business size standards).

179

See

“700 MHz Guard Bands Auction Closes: Winning Bidders Announced,”

Public Notice,

15 FCC Rcd 18026 (2000).

180

See

“700 MHz Guard Bands Auction Closes: Winning Bidders Announced,”

Public Notice,

16 FCC Rcd 4590 (WTB 2001).

77. Specialized Mobile Radio. The Commission adopted small business size standards for the purpose of determining eligibility for bidding credits in auctions of Specialized Mobile Radio (SMR) geographic area licenses in the 800 MHz and 900 MHz bands. The Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years.

181

The Commission defined a “very small business” as an entity that together with its affiliates and controlling principals, has average gross revenues not exceeding $3 million for the preceding three years.

182

The SBA has approved these small business size standards for both the 800 MHz and 900 MHz SMR Service.

183

The first 900 MHz SMR auction was completed in 1996. Sixty bidders claiming that they qualified as small businesses under the $15 million size standard won 263 licenses in the 900 MHz SMR band. In 2004, the Commission held a second auction of 900 MHz SMR licenses and three winning bidders identifying themselves as very small businesses won 7 licenses.

184

The auction of 800 MHz SMR licenses for the upper 200 channels was conducted in 1997. Ten bidders claiming that they qualified as small or very small businesses under the $15 million size standard won 38 licenses for the upper 200 channels.

185

A second auction of 800 MHz SMR licenses was conducted in 2002 and included 23 BEA licenses. One bidder claiming small business status won five licenses.

186

181

47 CFR 90.810, 90.814(b), 90.912.

182

47 CFR 90.810, 90.814(b), 90.912.

183

See Alvarez Letter 1999.

184

See

900 MHz Specialized Mobile Radio Service Spectrum Auction Closes: Winning Bidders Announced,”

Public Notice,

19 FCC Rcd. 3921 (WTB 2004).

185

See

“Correction to Public Notice DA 96-586 `FCC Announces Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz SMR in Major Trading Areas,'”

Public Notice,

18 FCC Rcd 18367 (WTB 1996).

186

See

“Multi-Radio Service Auction Closes,”

Public Notice,

17 FCC Rcd 1446 (WTB 2002).

78. The auction of the 1,053 800 MHz SMR licenses for the General Category channels was conducted in 2000. Eleven bidders who won 108 licenses for the General Category channels in the 800 MHz SMR band qualified as small or very small businesses .

187

In an auction completed in 2000, a total of 2,800 Economic Area licenses in the lower 80 channels of the 800 MHz SMR service were awarded.

188

Of the 22 winning bidders, 19 claimed small or very small business status and won 129 licenses. Thus, combining all three auctions, 41 winning bidders for geographic licenses in the 800 MHz SMR band claimed to be small businesses.

187

See

“800 MHz Specialized Mobile Radio (SMR) Service General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction Closes; Winning Bidders Announced,”

Public Notice,

15 FCC Rcd 17162 (2000).

188

See,

“800 MHz SMR Service Lower 80 Channels Auction Closes; Winning Bidders Announced,”

Public Notice,

16 FCC Rcd 1736 (2000).

79. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations in the 800 and 900 MHz bands. We do not know how many firms provide 800 MHz

or 900 MHz geographic area SMR pursuant to extended implementation authorizations, nor how many of these providers have annual revenues not exceeding $15 million. One firm has over $15 million in revenues. In addition, we do not know how many of these firms have 1500 or fewer employees.

189

We assume, for purposes of this analysis, that all of the remaining existing extended implementation authorizations are held by small entities, as that small business size standard is approved by the SBA.

189

See generally

13 CFR 121.201, NAICS code 517210.

80. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the small business size standard under the SBA rules applicable to Wireless Telecommunications Carriers (except Satellite).

190

This category provides that a small business is a wireless company employing no more than 1,500 persons.

191

The Commission estimates that most such licensees are small businesses under the SBA's small business standard.

190

Id.

191

Id.

81. 220 MHz Radio Service—Phase II Licensees. The 220 MHz service has both Phase I and Phase II licenses. The Phase II 220 MHz service licenses are assigned by auction, where mutually exclusive applications are accepted. In the

220 MHz Third Report and Order,

the Commission adopted small business size standards for defining “small” and “very small” businesses for the purpose of determining their eligibility for special provisions such as bidding credits, which are discounts on winning bids

192

that the Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years.

193

The Commission defined a “very small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years.

194

The SBA has approved these small size standards.

195

The first auction of Phase II licenses was conducted in 1998.

196

In that auction, 908 licenses were offered in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (“EAG”) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold.

197

Thirty-nine small or very small businesses won 373 licenses in the first 220 MHz auction. A second auction in 1999 offered 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming very small business status won 158 licenses.

198

A third auction included four licenses: 2 BEA licenses and 2 EAG licenses in the 220 MHz Service. No small or very small business won any of these licenses.

199

In 2007, the Commission conducted a fourth auction of the 220 MHz licenses, designated as Auction 72.

200

Auction 72 offered 94 Phase II 220 MHz Service licenses.

201

In this auction, five winning bidders won a total of 76 licenses.

202

Two winning bidders that identified themselves as very small businesses won 56 of the 76 licenses. One winning bidder that identified itself as a small business won 5 licenses.

192

Amendment of Part 90 of the Commission's Rules to Provide For the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service,

Third Report and Order, 12 FCC Rcd 10943, 11068-70, paras. 291-295 (1997).

193

Id.

at 11068, para. 291.

194

Id.

195

See

Letter from Aida Alvarez, Administrator, SBA, to Daniel Phythyon, Chief, WTB, FCC (Jan. 6, 1998) (“

Alvarez to Phythyon Letter 1998”

196

See generally

“220 MHz Service Auction Closes,”

Public Notice,

14 FCC Rcd 605 (1998).

197

See

“FCC Announces It is Prepared to Grant 654 Phase II 220 MHz Licenses After Final Payment is Made,”

Public Notice,

14 FCC Rcd 1085 (1999).

198

See

“Phase II 220 MHz Service Spectrum Auction Closes,”

Public Notice,

14 FCC Rcd 11218 (1999).

199

See

“Multi-Radio Service Auction Closes,”

Public Notice,

17 FCC Rcd 1446 (2002).

200

See

“Auction of Phase II 220 MHz Service Spectrum Scheduled for June 20, 2007, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction 72,

Public Notice,

22 FCC Rcd 3404 (2007).

201

Id.

202

See

“Auction of Phase II 220 MHz Service Spectrum Licenses Closes, Winning Bidders Announced for Auction 72, Down Payments due July 18, 2007, FCC Forms 601 and 602 due July 18, 2007, Final Payments due August 1, 2007, Ten-Day Petition to Deny Period,

Public Notice,

22 FCC Rcd 11573 (2007).

82. Private Land Mobile Radio (“PLMR”). PLMR systems serve an essential role in a range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories, and are often used in support of the licensee's primary (non-telecommunications) business operations. For the purpose of determining whether a licensee of a PLMR system is a small business as defined by the SBA, we use the broad census category, Wireless Telecommunications Carriers (except Satellite). This definition provides that a small entity is any such entity employing no more than 1,500 persons.

203

The Commission does not require PLMR licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many PLMR licensees constitute small entities under this definition. We note that PLMR licensees generally use the licensed facilities in support of other business activities, and therefore, it would also be helpful to assess PLMR licensees under the standards applied to the particular industry subsector to which the licensee belongs.

204

203

See

13 CFR 121.201, NAICS code 517210.

204

See generally

13 CFR 121.201.

83. As of March 2010, there were 424,162 PLMR licensees operating 921,909 transmitters in the PLMR bands below 512 MHz. We note that any entity engaged in a commercial activity is eligible to hold a PLMR license, and that any revised rules in this context could therefore potentially impact small entities covering a great variety of industries.

84. Fixed Microwave Services. Fixed microwave services include common carrier,

205

private operational-fixed,

206

and broadcast auxiliary radio services.

207

At present, there are approximately 22,015 common carrier fixed licensees and 61,670 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services. The Commission has not created a size standard for a small business specifically with respect to fixed

microwave services. For purposes of this analysis, the Commission uses the SBA small business size standard for the category Wireless Telecommunications Carriers (except Satellite), which is 1,500 or fewer employees.

208

The Commission does not have data specifying the number of these licensees that have no more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of fixed microwave service licensees that would qualify as small business concerns under the SBA's small business size standard. Consequently, the Commission estimates that there are 22,015 or fewer common carrier fixed licensees and 61,670 or fewer private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services that may be small and may be affected by the rules and policies proposed herein. We note, however, that the common carrier microwave fixed licensee category includes some large entities.

205

See

47 CFR 101

et seq.

for common carrier fixed microwave services (except Multipoint Distribution Service).

206

Persons eligible under parts 80 and 90 of the Commission's rules can use Private Operational-Fixed Microwave services.

See

47 CFR Parts 80 and 90. Stations in this service are called operational-fixed to distinguish them from common carrier and public fixed stations. Only the licensee may use the operational-fixed station, and only for communications related to the licensee's commercial, industrial, or safety operations.

207

Auxiliary Microwave Service is governed by Part 74 of Title 47 of the Commission's rules.

See

47 CFR Part 74. This service is available to licensees of broadcast stations and to broadcast and cable network entities. Broadcast auxiliary microwave stations are used for relaying broadcast television signals from the studio to the transmitter, or between two points such as a main studio and an auxiliary studio. The service also includes mobile television pickups, which relay signals from a remote location back to the studio.

208

13 CFR 121.201, NAICS code 517210.

85. 39 GHz Service. The Commission adopted small business size standards for 39 GHz licenses. A “small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million in the preceding three years.

209

A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues of not more than $15 million for the preceding three years.

210

The SBA has approved these small business size standards.

211

In 2000, the Commission conducted an auction of 2,173, 39 GHz licenses. A total of 18 bidders who claimed small or very small business status won 849 licenses.

209

See Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands,

ET Docket No. 95-183, Report and Order, 12 FCC Rcd 18600 (1997).

210

Id.

211

See

Letter from Aida Alvarez, Administrator, SBA, to Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis Division, WTB, FCC (Feb. 4, 1998);

see

Letter from Hector Barreto, Administrator, SBA, to Margaret Wiener, Chief, Auctions and Industry Analysis Division, WTB, FCC (January 18, 2002).

86. Local Multipoint Distribution Service. Local Multipoint Distribution Service (“LMDS”) is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications.

212

The Commission established small business size standards for LMDS licenses. It defined a “small business” as an entity that has average gross revenues of not more than $40 million in the three preceding years and defined a “very small business” as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the three preceding years.

213

The SBA approved these small business size standards for auctions of LMDS licenses.

214

In 1998, an auction of 986 LMDS licenses was conducted. A total of 93 winning bidders that qualified as small or very small businesses won approximately 664 licenses. In 1999, the Commission conducted an auction of 161 LMDS licenses. and in this auction, 32 small and very small businesses won 119 licenses.

212

See Rulemaking to Amend Parts 1, 2, 21, 25, of the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services,

Second Report and Order, Order on Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC Rcd 12545, 12689-90, para. 348 (1997) (“

LMDS Second Report and Order”

213

See LMDS Second Report and Order,

12 FCC Rcd at 12689-90, para. 348.

214

See Alvarez to Phythyon Letter 1998.

87. 218-219 MHz Service. The first auction of 218-219 MHz Service (previously referred to as the Interactive and Video Data Service or IVDS) licenses resulted in 178 entities winning licenses for 594 Metropolitan Statistical Areas (“MSAs”).

215

Of the 594 licenses, 567 were won by 167 entities qualifying as a small business. For that auction, the Commission defined a small business as an entity that, together with its affiliates, has no more than a $6 million net worth and, after Federal income taxes (excluding any carry over losses), has no more than $2 million in annual profits each year for the previous two years.

216

In the

218-219 MHz Report and Order and Memorandum Opinion and Order,

the Commission revised its small business size standards for the 218-219 MHz Service and defined a small business as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and their affiliates, has average annual gross revenues not exceeding $15 million for the preceding three years.

217

The Commission defined a very small business as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and its affiliates, has average annual gross revenues not exceeding $3 million for the preceding three years.

218

The SBA has approved these definitions.

219

215

See

“

Interactive Video and Data Service (IVDS) Applications Accepted for Filing,”

Public Notice, 9 FCC Rcd 6227 (1994).

216

Implementation of Section 309(j) of the Communications Act—Competitive Bidding,

Fourth Report and Order, 9 FCC Rcd 2330 (1994).

217

Amendment of Part 95 of the Commission's Rules to Provide Regulatory Flexibility in the 218-219 MHz Service,

Report and Order and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).

218

Id.

219

See Alvarez to Phythyon Letter 1998.

88. Location and Monitoring Service (“LMS”). Multilateration LMS systems use non-voice radio techniques to determine the location and status of mobile radio units. For auctions of LMS licenses, the Commission has defined a “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $15 million.

220

A “very small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $3 million.

221

These definitions have been approved by the SBA.

222

An auction of LMS licenses was conducted in 1999. Of the 528 licenses auctioned, 289 licenses were sold to four small businesses.

220

Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle Monitoring Systems,

Second Report and Order, 13 FCC Rcd 15182, 15192, para. 20 (1998) (“

Automatic Vehicle Monitoring Systems Second Report and Order”

);

see also

47 CFR 90.1103.

221

Automatic Vehicle Monitoring Systems Second Report and Order,

13 FCC Rcd at 15192, para. 20;

see also

47 CFR 90.1103.

222

See Alvarez Letter 1998.

89. Rural Radiotelephone Service. The Commission has not adopted a size standard for small businesses specific to the Rural Radiotelephone Service.

223

A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio System (“BETRS”).

224

In the present context, we will use the SBA's small business size standard applicable to Wireless Telecommunications Carriers (except Satellite),

i.e.,

an entity employing no more than 1,500 persons.

225

There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelephone Service that may be affected by our action.

223

The service is defined in section 22.99 of the Commission's rules, 47 CFR 22.99.

224

BETRS is defined in sections 22.757 and 22.759 of the Commission's rules, 47 CFR 22.757 and 22.759.

225

13 CFR 121.201, NAICS code 517210.

90. Air-Ground Radiotelephone Service.

226

The Commission has previously used the SBA's small business definition applicable to Wireless Telecommunications Carriers (except Satellite),

i.e.,

an entity employing no more than 1,500

persons.

227

There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and under that definition, we estimate that almost all of them qualify as small entities under the SBA definition. For purposes of assigning Air-Ground Radiotelephone Service licenses through competitive bidding, the Commission has defined “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $40 million.

228

A “very small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $15 million.

229

These definitions were approved by the SBA.

230

In 2006, the Commission completed an auction of nationwide commercial Air-Ground Radiotelephone Service licenses in the 800 MHz band (Auction 65). The auction closed with two winning bidders winning two Air-Ground Radiotelephone Services licenses. Neither of the winning bidders claimed small business status.

226

The service is defined in section 22.99 of the Commission's rules, 47 CFR 22.99.

227

13 CFR 121.201, NAICS codes 517210.

228

Amendment of Part 22 of the Commission's Rules to Benefit the Consumers of Air-Ground Telecommunications Services, Biennial Regulatory Review—Amendment of Parts 1, 22, and 90 of the Commission's Rules, Amendment of Parts 1 and 22 of the Commission's Rules to Adopt Competitive Bidding Rules for Commercial and General Aviation Air-Ground Radiotelephone Service,

WT Docket Nos. 03-103 and 05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd 19663, paras. 28-42 (2005).

229

Id.

230

See

Letter from Hector V. Barreto, Administrator, SBA, to Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access Division, WTB, FCC (Sept. 19, 2005).

91. Aviation and Marine Radio Services. There are approximately 26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast) licensees.

231

The Commission has not developed a small business size standard specifically applicable to all licensees. For purposes of this analysis, we will use the SBA small business size standard for the category Wireless Telecommunications Carriers (except Satellite), which is 1,500 or fewer employees.

232

We are unable to determine how many of those licensed fall under this standard. For purposes of our evaluations in this analysis, we estimate that there are up to approximately 62,969 licensees that are small businesses under the SBA standard.

233

In 1998, the Commission held an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For VHF Public Coast licenses, the Commission defined a “small” business as an entity that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not exceeding $15 million dollars. In addition, it defined a “very small” business as one that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not exceeding $3 million dollars.

234

The Commission also made available Automated Maritime Telecommunications System (“AMTS”) licenses in Auctions 57 and 61.

235

Winning bidders could claim status as a very small business or a very small business. For AMTS, the Commission defined a very small business as an entity with attributed average annual gross revenues that do not exceed $3 million for the preceding three years, and defined a small business as an entity with attributed average annual gross revenues not exceeding $15 million for the preceding three years.

236

Three of the winning bidders in Auction 57 qualified as small or very small businesses, and three winning bidders in Auction 61 qualified as very small businesses.

231

Vessels that are not required by law to carry a radio and do not make international voyages or communications are not required to obtain an individual license.

See

Amendment of Parts 80 and 87 of the Commission's rules to Permit Operation of Certain Domestic Ship and Aircraft Radio Stations Without Individual Licenses,

Report and Order,

WT Docket No. 96-82, 11 FCC Rcd 14849 (1996).

232

13 CFR 121.201, NAICS code 517210.

233

A licensee may have a license in more than one category.

234

Amendment of the Commission's Rules Concerning Maritime Communications,

PR Docket No. 92-257, Third Report and Order and Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).

235

See

“

Automated Maritime Telecommunications System Spectrum Auction Scheduled for September 15, 2004, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Auction Procedures,”

Public Notice, 19 FCC Rcd 9518 (WTB 2004); “

Auction of Automated Maritime Telecommunications System Licenses Scheduled for August 3, 2005, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Auction Procedures for Auction No. 61,”

Public Notice, 20 FCC Rcd 7811 (WTB 2005).

236

47 CFR 80.1252.

92. Offshore Radiotelephone Service. This service operates on several ultra high frequencies (“UHF”) television broadcast channels that are not used for television broadcasting in the coastal areas of states bordering the Gulf of Mexico.

237

There is presently 1 licensee in this service. We do not have information whether that licensee would qualify as small under the SBA's small business size standard for Wireless Telecommunications Carriers (except Satellite) services.

238

Under that SBA small business size standard, a business is small if it has 1,500 or fewer employees.

239

237

This service is governed by Subpart I of Part 22 of the Commission's rules.

See

47 CFR 22.1001-22.1037.

238

13 CFR 121.201, NAICS code 517210.

239

Id.

93. Multiple Address Systems (“MAS”). Entities using MAS spectrum, in general, fall into two categories: (1) Those using the spectrum for profit-based uses, and (2) those using the spectrum for private internal uses. The Commission defines a small business for MAS licenses as an entity that has average gross revenues of less than $15 million in the preceding three calendar years.

240

A very small business is defined as an entity that, together with its affiliates, has average gross revenues of not more than $3 million for the preceding three calendar years.

241

The SBA has approved these definitions.

242

The majority of these entities will most likely be licensed in bands where the Commission has implemented a geographic area licensing approach that would require the use of competitive bidding procedures to resolve mutually exclusive applications. The Commission's licensing database indicates that, as of March 5, 2010, there were over 11,500 MAS station authorizations. In 2001, an auction of 5,104 MAS licenses in 176 EAs was conducted in 2001.

243

Seven winning bidders claimed status as small or very small businesses and won 611 licenses. In 2005, the Commission completed an auction (Auction 59) of 4,226 MAS licenses in the Fixed Microwave Services from the 928/959 and 932/941 MHz bands. Twenty-six winning bidders won a total of 2,323 licenses. Of the 26 winning bidders in this auction, five claimed small business status and won 1,891 licenses.

240

See Amendment of the Commission's Rules Regarding Multiple Address Systems,

Report and Order, 15 FCC Rcd 11956, 12008, para. 123 (2000).

241

Id.

242

See Alvarez Letter 1999.

243

See

“

Multiple Address Systems Spectrum Auction Closes,”

Public Notice, 16 FCC Rcd 21011 (2001).

94. With respect to entities that use, or seek to use, MAS spectrum to accommodate internal communications needs, we note that MAS serves an essential role in a range of industrial, safety, business, and land transportation activities. MAS radios are used by companies of all sizes, operating in virtually all U.S. business categories, and by all types of public safety entities. For the majority of private internal users, the small business size standard developed by the SBA would be more appropriate. The applicable size

standard in this instance appears to be that of Wireless Telecommunications Carriers (except Satellite). This definition provides that a small entity is any such entity employing no more than 1,500 persons.

244

The Commission's licensing database indicates that, as of January 20, 1999, of the 8,670 total MAS station authorizations, 8,410 authorizations were for private radio service, and of these, 1,433 were for private land mobile radio service.

244

See

13 CFR 121.201, NAICS code 517210.

95. 1.4 GHz Band Licensees. The Commission conducted an auction of 64 1.4 GHz band licenses in the paired 1392-1395 MHz and 1432-1435 MHz bands, and in the unpaired 1390-1392 MHz band in 2007.

245

For these licenses, the Commission defined “small business” as an entity that, together with its affiliates and controlling interests, had average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years.

246

Neither of the two winning bidders claimed small business status.

247

245

See

“

Auction of 1.4 GHz Bands Licenses Scheduled for February 7, 2007,”

Public Notice, 21 FCC Rcd 12393 (WTB 2006); “

Auction of 1.4 GHz Band Licenses Closes; Winning Bidders Announced for Auction No. 69,”

Public Notice, 22 FCC Rcd 4714 (2007) (“

Auction No. 69 Closing PN”

246

Auction No. 69 Closing PN,

Attachment C.

247

See Auction No. 69 Closing PN.

96. Incumbent 24 GHz Licensees. This analysis may affect incumbent licensees who were relocated to the 24 GHz band from the 18 GHz band, and applicants who wish to provide services in the 24 GHz band. The applicable SBA small business size standard is that of Wireless Telecommunications Carriers (except Satellite). This category provides that such a company is small if it employs no more than 1,500 persons.

248

The broader census data notwithstanding, we believe that there are only two licensees in the 24 GHz band that were relocated from the 18 GHz band, Teligent

249

and TRW, Inc. It is our understanding that Teligent and its related companies have fewer than 1,500 employees, though this may change in the future. TRW is not a small entity.

248

13 CFR 121.201, NAICS code 517210.

249

Teligent acquired the DEMS licenses of FirstMark, the only licensee other than TRW in the 24 GHz band whose license has been modified to require relocation to the 24 GHz band.

97. Future 24 GHz Licensees. With respect to new applicants for licenses in the 24 GHz band, for the purpose of determining eligibility for bidding credits, the Commission established three small business definitions. An “entrrpreneur” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not exceeding $40 million.

250

A “small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not exceeding $15 million.

251

A “very small business” in the 24 GHz band is defined as an entity that, together with controlling interests and affiliates, has average gross revenues not exceeding $3 million for the preceding three years.

252

The SBA has approved these definitions.

253

In a 2004 auction of 24 GHz licenses, three winning bidders won seven licenses. Two of the winning bidders were very small businesses that won five licenses.

250

Amendments to Parts 1, 2, 87 and 101 of the Commission's Rules To License Fixed Services at 24 GHz,

Report and Order, 15 FCC Rcd 16934, 16967 para. 77 (2000) (“

24 GHz Report and Order”

);

see also

47 CFR 101.538(a)(3).

251

24 GHz Report and Order,

15 FCC Rcd at 16967 para. 77;

see also

47 CFR 101.538(a)(2).

252

24 GHz Report and Order,

15 FCC Rcd at 16967 para. 77;

see also

47 CFR 101.538(a)(1).

253

See

Letter from Gary M. Jackson, Assistant Administrator, SBA, to Margaret W. Wiener, Deputy Chief, Auctions and Industry Analysis Division, WTB, FCC (July 28, 2000).

98. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service systems, previously referred to as Multipoint Distribution Service (“MDS”) and Multichannel Multipoint Distribution Service (“MMDS”) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high speed data operations using the microwave frequencies of the Broadband Radio Service (“BRS”) and Educational Broadband Service (“EBS”) (previously referred to as the Instructional Television Fixed Service (“ITFS”)).

254

In connection with the 1996 BRS auction, the Commission established a size standard that defined a “small business” as an entity that had annual average gross revenues of no more than $40 million in the preceding three years.

255

The BRS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (“BTAs”). Of the 67 winning bidders, 61 met the definition of a small business. At this time, we estimate that of the 61 small businesses that won BRS licenses in the 1996 auction, 48 remain small business licensees. BRS also includes licensees of stations authorized prior to the 1996 auction. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent BRS licensees that are considered small entities.

256

In 2008, the Commission adopted three small business definitions for BRS, for the purpose of determining eligibility for bidding credits. A “small business” is defined as an entity with attributed average annual gross revenues that do not exceed $40 million for the preceding three years. A “very small business” is defined as an entity with attributed average annual gross revenues that do not exceed $15 million for the preceding three years. An “entrepreneur” is defined as an entity with attributed average annual gross revenues that do not exceed $3 million for the preceding three years.

257

In 2009, the Commission conducted Auction 86

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