# Assessment and Collection of Regulatory Fees for Fiscal Year 1995

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URL: https://www.frixlaw.com/law-library/documents/fr%3A95-15827

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** June 29, 1995
- **Citation:** 60 FR 34004

## Text

SUMMARY: The commission has revised its Schedule of Regulatory Fees in
order to recover the amount of regulatory fees that Congress has
required it to collect for fiscal year 1995. Section 9 of the
Communications Act of 1934, as amended, provides for the annual
assessment and collection of regulatory fees. For fiscal year 1995
sections 9(b) (2) and (3) provide for annual ``Mandatory Adjustments''
and ``Permitted Amendments'' to the Schedule of Regulatory Fees. These
revisions will further the National Performance Review goals of
reinventing Government by requiring beneficiaries of Commission
services to pay for such services.

EFFECTIVE DATE: September 18, 1995.

FOR FURTHER INFORMATION CONTACT:
Peter W. Herrick, Office of Managing Director at (202) 418-0443, or
Terry D. Johnson, Office of Managing Director at (202) 418-0445.

SUPPLEMENTARY INFORMATION:
In the Matter of: Assessment and Collection of Regulatory Fees
for Fiscal Year 1995.
Price Cap Treatment of Regulatory Fees Imposed by Section 9 of
the Act.

Report and Order

Adopted: June 14, 1995.

Released: June 19, 1995.

By the Commission.

Table of Contents

I. Introduction
II. Background
III. Discussion

A. FY 1995 Regulatory Fees

1. General Discussion
2. Private Radio Services
a. Exclusive Use Services
b. Shared Use Services
c. Amateur Radio Vanity Call Signs
3. Mass Media Services
a. Commercial AM and FM Radio Stations
b. Construction Permits--Commerical AM Radio
c. Construction Permits--Commerical FM Radio
d. Commercial Television Stations
e. Commercial Television Satellite Stations
f. Construction Permits--Commerical VHF Television Stations
g. Construction Permits--Commerical UHF Television Stations
h. Construction Permits--Commerical Television Satellite
Stations
i. Low Power Television, FM Translator and Booster Stations, TV
Translator and Booster Stations
j. Broadcast Auxiliary Stations
k. International HF Broadcast (Short Wave)
4. Cable Services
a. Cable Television Systems
b. Cable Antenna Relay Service
5. Common Carrier Services
a. Public Mobile/Cellular Radio Services
b. Domestic Public Fixed Radio Services
c. International Public Fixed Radio Service
d. Earth Stations
e. Space Stations (Geosynchronous)
f. International Bearer Circuits
g. Inter-exchange and Local Exchange, Competitive Access
Providers, Resellers, and Other Service Providers

B. Procedures for Payment of Regulatory Fees

1. Annual Payments of Standard Fees
2. Installment Payments for Large Fees
3. Advance Payments of Small Fees
4. Timing of Standard Fee Calculations and Payments

C. Authority and Further Information

Appendix A--Regulatory Flexibility Analysis
Appendix B--Schedule of Regulatory Fees
Appendix C--How Full Time Equivalents (FTEs) and Fee Category Cost
Allocations Were Calculated
Appendix D--Development of Private Radio Services Regulatory Fee
Appendix E--Development of Mass Media Services Regulatory Fees
Appendix F--Development of Cable Services Regulatory Fees
Appendix G--Development of Common Carrier Services Regulatory Fees
Appendix H--Guidelines for Regulatory Fee Categories
Appendix I--Description of FCC Activities
Appendix J--Parties filing Comments
I. Introduction

1. The Congress, pursuant to Section 9 of the Communications Act of
1934, as amended, has required that the Commission collect $116,400,000
in FY 1995 to recover certain of its regulatory costs. On January 12,
1995, the Commission released a Notice of Proposed Rule Making, In the
Matter of Assessment and Collection of Regulatory Fees for Fiscal year
1995, MD Docket No. 95-3, FCC 95-14 (Notice), 60 FR 3807 (1995). In the
Notice, the Commission asked for comments on proposals to revise its
Schedule of Regulatory Fees.\1\ The Commission now has under
consideration a proposed Report and Order to revise its Schedule of
Regulatory Fees. See 47 CFR 1.1152 through 1.1156.

\1\ The pleadings and reply pleadings are listed in Appendix J.
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2. In revising our regulatory fees, we adjusted our Regulatory Fee
Schedule to recover $116,400,000 in regulatory costs, consistent with
the amount that Congress has appropriated for our enforcement, policy
and rule making, international, and user information activities for FY
1995.\2\ 47 U.S.C. Sec. 159(a). In addition, we have amended the
Schedule to collect regulatory fees from regulatees of services not
included in the FY 1994 Schedule and we have modified our method of
assessing fees for certain services. 47 U.S.C. Secs. 159(b)(1)(A),
(b)(3). The revised Regulatory Fee Schedule is set forth in Appendix B.

\2\ See Public Law 103-317, 108 Stat. 1724 at 1737-38 (August
26, 1994).
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3. For several categories of service, the regulatory fees for FY
1995 are significantly higher than corresponding fees for FY 1994. See
47 U.S.C. Sec. 159(g); see also Implementation of Section 9 of the
Communications Act (FY 1994 Order), 9 FCC Rcd 5333 (1994) Petitions for
Reconsideration Pending, 59 FR 30984 (1994). Our revised assessments
result, for the most part, from increases in the amount that Congress
has appropriated for Commission activities whose costs must be
recovered through regulatory fees. As noted, the amount appropriated
and to be recovered through regulatory fees is $116,400,000. That
amount is 93 percent greater than the $60,400,000 that Congress
required us to recover through regulatory fees in FY 1994. The impact
of this increase is, however, lessened for some categories of services
by anticipated revenues from categories of regulatees that we added to
the Regulatory Fee Schedule and by increases in the number of payment
units, e.g., subscribers.\3\ Similarly, for some services increases in
the fees exceed 93% because of the reallocation of FTEs, decreases in
the number of payment units, and modification of the methodology for
computing fees to better reflect the benefits derived from the
Commission's regulation.

\3\ Payment units represent the number of individual payments
available in a particular service to generate the required revenue
in that service. Payment units also represent, in a different
context, the number by which a payor must multiply the fee amount
for a particular service in order to calculate its total fee due for
the service. For example, ``subscribers'' is the payment unit
applicable to Cable Television fees. The number of subscribers is
divided into the overall Cable Television revenue requirement to
determine the fee amount for that service, and it is also used by
payors to determine the system's total fee liability (i.e., by
multiplying the payment units by the fee amount to determine the
system's total fee requirement).
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4. In determining the individual fee amounts for FY 1995, Section 9
of the Act requires that we first determine the number of full-time
equivalent employees (FTEs)\4\ associated with our regulatory
activities, and then determine the amount to be recovered from each fee
category by estimating the number of FTEs assigned to each category.
``Mandatory adjustments'' are then made to the Section 9 Regulatory Fee
Schedule. An initial attempt to develop individual fees by allocating
FTEs down to the individual fee level rather than at the grouped
category level proved ineffective. Since we do not have a cost
accounting system to gather appropriate data on how Commission
employees allocate their time, estimated FTE data yielded anomalous
results which would have required substantial ``permitted amendments''
to resolve obvious inequities.

[[Page 34005]]

\4\ Full Time Equivalent (FTE) employment is the total number of
regular straight-time hours (i.e., not including overtime or holiday
hours) worked or to be worked by current and future employees
divided by the number of compensable hours applicable to each fiscal
year. See Office of Management and Budget Circular A-11, Section
13.1, Definitions relating to employment.
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5. Additionally, it became apparent in the fee development effort
that the Commission's options were limited in terms of what it could do
to make the fees more equitable and at the same time assure that the
Commission collects the $116.4 million that Congress has required. This
meant that we could not recommend adoption of proposals that would have
resulted in the regulatees being unsure about the amount of their fee
payment and the staff having no way to verify that proper payments were
made. In addition, we had difficulty developing fees in several areas
because the Commission does not always have accurate or complete
information concerning the number of regulatees and/or measurement
units essential to fee collection verification requirements. Thus, it
became necessary in a number of instances to utilize industry estimates
of payment volumes instead of relying on information available within
the Commission.
6. Finally, much of our policy and rule making efforts are expended
in the development of new and emerging technologies and services (e.g.,
PCS, DBS, and LEOs). We found that, as a practical matter, we had to
allocate the costs associated with these activities to existing
licensees in other services because there was no operational systems or
customer base on which to assess a fee for these new services. To
alleviate the regulatory burden on existing licensees, we urge the
Congress to allow the Commission to recoup, from amounts received from
competitive bidding under Section 309 of the Communications Act, at
least such amount as would otherwise be allocable as regulatory fees
for such services.
II. Background

7. Section 9(a) of the Act requires us to assess and collect annual
regulatory fees to recover the costs, as determined annually by
Congress, of our enforcement, policy and rule making, international,
and user information activities.\5\ 47 U.S.C. 159(a). Congress
established our Regulatory Fee Schedule for FY 1995. 47 U.S.C.
Sec. 9(g). In our FY 1994 Report and Order, 59 FR 30984 (1994), we set
forth the Regulatory Fee Schedule for FY 1994 and prescribed rules to
govern payment of the fees, as required by Congress.\6\ 47 U.S.C.
Sec. 159(f)(1); 47 CFR 1.1151-1.1166.

\5\ Our various activities, including those whose costs are
subject to recovery through regulatory fees, are described in
Appendix I.
\6\ In the FY 1994 Order, we adopted rules to implement the
collection of regulatory fees, including payment procedures,
specific exemptions from the payment of regulatory fees, procedures
for requesting waivers, reductions and deferments of fee payments,
and penalties for late payment or non-payment of the fees. We shall
in the near future address petitions for reconsideration of the FY
1994 Order and consider whether to make amendments to our
implementing rules.
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8. For fiscal years after FY 1994, Section 9 requires that we
adjust the fees so that we can reasonably expect to collect the amount
specified by Congress. 47 U.S.C. Sec. 159(b)(1)(B). Sections 9(b) (2)
and (3) provide for annual ``Mandatory Adjustments'' and ``Permitted
Amendments'' to the Schedule of Regulatory Fees.
9. In making Section 9(b)(2)'s mandatory adjustments, we first
consider the amount that we are to collect as set forth in our
Appropriations Act. 47 U.S.C. Secs. 159(b)(2), (b)(1)(B). Second, we
identify the number of FTEs allocated to our enforcement, policy and
rule making, user information, and international activities. 47 U.S.C.
Sec. 159(b)(1)(A). 159(b)(1)(A). Third, we determine the amount to be
recovered from each fee category, e.g., Common Carrier, by estimating
the number of FTEs assigned to each fee category. 47 U.S.C.
Sec. 159(b)(2). Finally, we make proportionate adjustments to the
individual fees set forth in Section 9(g)'s Regulatory Fee Schedule in
order to determine the revised fee for the particular services within
each service category for FY 1995. Id. In determining individual
service fees, we take into consideration the estimated number of
payment units, e.g., licensees, for each service. 47 U.S.C.
Sec. (b)(2)(A).
10. Once we have determined each service's ``mandatory fee,'' as
described above, Section 9(b)(3), relating to ``Permitted Amendments''
to the Schedule, provides that, if necessary, we shall amend the
Schedule of Regulatory Fees, as provided in Section 9(b)(1)(A) to,
inter alia, reflect the benefits of our regulation to the payers of the
fees for each service by considering factors that we determine are
necessary in the public interest. 47 U.S.C. Secs. 159(b)(3), (b)(1)(A).
In making these amendments, we ``shall add, delete, or reclassify
services in the Schedule to reflect additions, deletions or changes in
the nature of its services * * *.'' 47 U.S.C. Sec. 159(b)(3). Finally,
while the fees are not judicially reviewable, we are required to notify
Congress of any permitted amendments to the Regulatory Fee Schedule 90
days before those amendments become effective. 47 U.S.C.
Sec. 159(b)(2), (3), (4)(B).

III. Discussion

A. FY 1995 Regulatory Fees

1. General Discussion
11. In adjusting our regulatory fees pursuant to Section 9(b)(2)'s
provisions for ``Mandatory Adjustments'', we first identified our
directly assigned FY 1995 regulatory fee FTEs in the Wireless,
International, Mass Media, Common Carrier and Cable Services Bureaus.
We next allocated these regulatory fee FTEs to the appropriate Section
9 regulatory fee category (i.e. Private Radio, Mass Media, Cable
Services, and Common Carrier). We then identified additional FTEs from
bureaus and offices supporting the regulatory fee activities of the
operating bureaus.\7\

\7\ The Compliance and Information Bureau (CIB) (formerly the
Field Operations Bureau), the Office of Engineering and Technology
(OET), and the Office of Managing Director (OMD) perform activities
supporting the operating Bureaus. FTEs assigned to CIB, OET and some
elements of OMD supporting the regulatory activities of the
operating Bureaus were allocated to the Private Radio, Mass Media,
Common Carrier, and Cable Services fee categories on a pro rata
basis.
Appendix C contains a more detailed description of our allocation
of FTEs by activity. The resulting allocation of FTEs, rounded to the
nearest tenth of a percent, is as follows:

[[Page 34006]]
------------------------------------------------------------------------
Regulatory Percentage
Regulatory fee category Regulatory fee of total
fee FTEs percentage FCC FTEs
------------------------------------------------------------------------
Private Radio.................... 103 7.3 4.5
Mass Media....................... 253 18.0 11.1
Common Carrier................... 689 49.0 30.3
Cable Services................... 361 25.7 15.9
--------------------------------------
Total........................ 1,406 100.0 61.9
------------------------------------------------------------------------

12. Next, we allocated our $116,400,000 revenue requirement to the
Private Radio, Mass Media, Common Carrier, and Cable Services
activities, based on the regulatory fee percentages shown above. For
example, to derive the amount to be recovered from cable services, we
calculated that the 25.7 percent of total FTEs representing the 361
FTEs assigned to the cable services activity resulted in $29,914,800 to
be recovered through the collection of cable services fees. The
resulting allocation of costs, rounded to tenths of a million, by
regulatory fee category, is as follows:

------------------------------------------------------------------------
Cost
Regulatory fee category allocation
(million)
------------------------------------------------------------------------
Private Radio............................................... $8.5
Mass Media.................................................. 21.0
Common Carrier.............................................. 57.0
Cable Services.............................................. 29.9
------------------------------------------------------------------------

13. After determining these cost allocations, we updated the number
of FY 1995 payment units for the individual services within each fee
category. For example, we estimate that there are approximately
60,000,000 payment units for cable television systems, i.e., cable
subscribers. The number of payment units is based upon information
provided by Commission program experts and supplemented by information
contained in actual licensee data bases maintained by the Commission,
information provided by industry groups or contained in trade
publications, actual data from FY 1994 regulatory fee collections, and
from data provided in the comments in this proceeding.\8\ See
Appendices D through G.

\8\ We have made a number of changes to our payment unit
estimates. The revised estimates are provided in each Section
pertinent to individual fees beginning at paragraph 27 and are also
contained in Appendixes D through G. In applying the pro-rata
formula for determining individual fee amounts within each fee
category, revised payment units have the effect of raising or
lowering the allocated costs (revenue requirements) for individual
services, as well as, the calculated fees for all fees in a category
depending on whether the payment unit volumes increased or decreased
from those shown in the NPRM.
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14. Next, in order to make the proportionate changes in the
statutory schedule of fees required by Section 9(b)(2), we compared our
FY 1995 revenue requirement in each regulatory fee category, e.g.,
Cable Services, with the total amount that would be collected from all
of the services within each category under the FY 1994 fee schedule.
For example, we estimated that approximately $22.7 million, or $7.2
million less than its $29.9 million FY 1995 revenue requirement, would
be collected from cable system payers based upon our FY 1994 fees.
Therefore, we pro-rated the $7.2 million shortfall to the individual
services within the cable services fee category (i.e., CARS licensees
and cable system subscribers).\9\ We then divided the revenue
requirement in each service by the payment units to determine the
revised amount of the individual fee. These revised fees constitute the
``mandatory adjustments'' required by Section 9(2).

\9\ Due to revisions to payment units, cost allocations (revenue
requirements) may change for a particular service. In addition, cost
allocations may change due to changes made pursuant to permitted
amendments (see Paragraph 12).
15. Following our determination of ``Mandatory Adjustments'', we
reviewed each service and its associated fee assessment to determine if
the nature of a service or the public interest warranted a fee
adjustment pursuant to Section 9(b)(3)'s requirements for ``Permitted
Amendments.'' Pursuant to our authority to make permitted amendments to
the fees, we revised our method for calculating fees for local exchange
carriers (LECs), interexchange carriers (IXCs), and other common
carriers and certain international services. Additionally, we are
establishing a reduced fee for satellite television stations to
distinguish those stations from full service television stations and we
are adding a fee requirement for licensees of FM and TV translator and
booster stations. Also, we established a fee for one-way paging
services separate from the fee for other common carrier mobile
services, reduced the fee for space stations, and eliminated the fee
for receive only earth stations. After making these permitted
amendments, we revised the remaining fees within the affected service
category to take into account the impact of the fee modification upon
other services within the category.\10\

\10\ We have not proposed regulatory fees in FY 1995 for the
Personal Communications Service (PCS), Commercial Mobile Radio
Service (CMRS) other than those listed here (cellular and public
mobile), Low Earth Orbital (LEO) Satellite Service an the Direct
Broadcasting Satellite (DBS) Service because no facilities were
authorized on our proposed dates for calculating fees or a
negligible number of FTEs applicable to the regulatory fee program
are assigned to these services.
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16. Comsat General and Comsat Video argue that their proposed fee
increases are disproportionately high when compared to the increases
proposed in other categories of service and within their own category
of service, and that the increase constitutes a violation of Section
9(b)(2)'s requirement that we make proportionate adjustments to the
statutory fees when recalculating the fees to collect a greater or
lesser amount than previously required by Congress. These parties
assert that our proposed fee increases with respect to Common Carrier
activities and, in particular, geosynchronous space stations are
neither proportionate nor in the public interest, and, that they
constitute illegal taxes because they do not reasonably reflect the
true cost of regulatory service provided to these entities. See
National Cable Television Ass'n. v. United States, 415 U.S. 336, 340
(1974) (NCTA I). COMSAT General and Comsat Video state that a fee is
distinguishable from a tax in that a fee is ``a payment for a special
privilege or service rendered, and not a revenue measure.'' National
Cable Television Ass'n. v. F.C.C., 554 F.2d 1094, 1106 (D.C. 1976).
According to these parties, the fee must be calculated to return the
cost of the service or benefit at a rate that reasonably reflects the
costs of the services performed and the value conferred on the payor.
Electronic Industries Ass'n. v. F.C.C., 554 F.2d 1109, 1117 (D.C.
1976).
17. In addition, the parties argue that our proposed allocation of
FTEs to the major categories of service fails to comply with the
requirements of

[[Page 34007]]
Section 9. These parties contend that our proposed allocation of FTEs
to the various major service categories violates Section 9(b)(1)(a)
because, in their view, the Notice contains insufficient supporting
information to permit analysis of the basis for our FTE allocations.
Comsat General argues that a detailed accounting of the overhead and
employees' time, based on a task code charge system, is necessary to
justify the reasonableness of our assignment of FTEs to the common
carrier and other categories and to the individual services within
these categories.
18. Also, several parties contend that the Notice fails to
demonstrate that individual fees are ``reasonably related to the
benefits provided to the payor of the fee,'' in violation of Section
9(b)(1)(A), and are contrary to the intent of Congress as reflected in
the legislative history of Section 9. They also contend that the
regulation of their particular service does not justify the fee
proposed for the service. GE America Communications, Inc. (GE Americom)
states that the amount of cost recovery that we allocated to
geosynchronous satellites should be reduced because our regulatory
activities with respect to in-orbit domestic satellites are de minimis
since their licensees are not the subject of enforcement proceedings,
our domestic satellite policies are well-established with little need
for rule makings, and our deregulatory policies have further reduced
the cost of space segment regulation.
19. We reject Comsat General and Comsat Video's arguments that our
proposed fees constitute unauthorized taxes. In reviewing a similar fee
program enacted by Congress, the Supreme Court held that NCTA I stood
only for the proposition that Congress must indicate clearly its
intention to delegate ``discretionary authority to recover
administrative costs not inuring directly to the benefit of regulated
parties by imposing additional financial burdens, whether characterized
as `fees' or `taxes' on those parties.'' Skinner v. Mid-American Pipe
Line Co., 490 U.S. 212, 224; 109 S.Ct. 1762, 1733 (1989).\11\ Skinner
thus bars any interpretation of NCTA I and its progeny in the courts of
appeals that would limit Congress to allowing agencies to set
regulatory fees only in amounts that reflect services received by the
regulated entities. Skinner also stated that a congressional delegation
of authority to raise funds was proper where Congress provides
sufficient guidance to the collecting agency concerning the identity of
the entities subject to the fee, the purposes for which the funds may
be used, the manner in which the fees are to be established, and the
aggregate amount of the fees to be collected. 490 U.S. 219-220, 109 S.
Ct. 1731.

\11\ Skinner stated that in NCTA I, the Court had expressed
doubt whether Congress had intended in the particular statute in
question to delegate the authority to recover the costs of benefits
to the public by assessing fees on regulated parties. For that
reason, it struck down the agency's efforts to recover such costs.
490 U.S. at 223-224; 109 S.Ct. at 1733.
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20. Subsequent to the Court's decision in Skinner, Congress adopted
Section 9 directing us to recover the full amount of specified
regulatory costs from regulatees. Consistent with the guidance in
Skinner, Congress identified the categories of service providers
subject to the fees, and declared that fees are to be assessed in a
rule making proceeding, based upon the number of FTEs within our
bureaus and offices performing enforcement, policy and rule making,
international, and user information activities. Section 9 further
requires us to take into account factors reasonably related to the
benefits provided to the payor of the fee by these activities, and we
are to recover the costs of these activities only if required in annual
Appropriations Acts and only in the aggregate amount annually
designated by Congress. As described below, our actions to revise the
regulatory fees are consistent with the requirements of Section 9.
Thus, our revisions to the Regulatory Fee Schedule in establishing
regulatory fees for FY 1995 satisfy the Court's concerns and guidelines
regarding unauthorized taxation of persons subject to a fee
requirement.
21. The FTE allocations used to calculate the amounts to be
recovered from each fee category were developed in full compliance with
the requirements of Section 9 of the Act. In developing the FY 1995
regulatory fee schedule, we relied upon estimates of year-end FTEs from
our Bureaus and Offices, because actual FTEs utilized are not known
until the completion of the fiscal year. Thus, to produce the best
possible estimates of FY 1995 year-end FTEs, we conducted a survey in
December 1994, immediately prior to releasing the Notice in this
proceeding to estimate FTEs for this rule making.\12\ The Commission
performed a review of its staffing, taking into consideration expected
new and replacement hiring and attrition through the end of the fiscal
year, in order to determine the most accurate estimate of projected FY
1995 year-end FTEs by organization. Next, the Bureaus and Offices
allocated their assigned year-end FTEs to each of their major
functional activities (e.g., Authorization of Service, Enforcement,
Public Information). The staff actually assigned to perform these
allocations within the Bureau and Offices were those individuals most
familiar with the regulatory programs and associated staffing under
their auspices.\13\

\12\ When the survey was conducted, in December 1994, only
approximately 20% of the total FTEs expected to be utilized for the
entire FY 1995 time frame were actually ``accrued''. As such,
approximately 80% or 1,125 of the 1,406 FTEs for FY 1995 were
estimated based on this small 20% ``sample''.
\13\ Congress recognized, in adopting the Schedule of Fees, that
the Commission has no cost accounting system in place to assist in
the estimation of final fiscal year FTEs and related costs. Public
Law 103-66, 107 Stat. 313 at 401 (1993). Although the Commission is
developing a cost accounting system and it should be in place for FY
1996, such a system would not provide a definitive count, but only
an estimate of year-end FTEs even when fully implemented. In
summary, we believe that the estimates of FTEs and costs utilized in
this proceeding are reasonable and represent the most accurate
information available. We have provided in Appendix C an explanation
of how FTEs were calculated for each fee category.
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22. In contending that their proposed fees are unduly high,
commenters generally have failed to recognize that Section 9 requires
that we add to our direct FTEs, i.e., those represented by staff
directly assigned to our operating Bureaus, any support FTEs
representing staff assigned to overhead functions such as our field and
laboratory staff and certain staff assigned to the Office of Managing
Director. 47 U.S.C. Sec. 159(b)(1)(A). These support FTEs comprise
nearly 40% of all FTEs associated with regulatory fees. Therefore,
personnel costs to be recovered through regulatory fees are
approximately 40% higher than the costs associated with staff directly
assigned to an operating Bureau and performing functions covered by the
regulatory fee program. Further, personnel costs represent only 75% of
our costs to be recovered through regulatory fees. Thus, the addition
of non-personnel costs (equipment, rents, contractual services,
supplies, etc.) to personnel costs results in an actual cost of
regulation significantly exceeding direct staff costs. The addition of
benefits and other obligations to the average Commission salary cost
results in an addition cost of approximately $33,000 per employee.
Although some of the parties view these costs of regulation to be
excessive, they often reflect costs associated with our regulatory
programs that they may not have fully considered.
23. Support FTEs, and ultimately costs, are allocated to each
regulatory fee category (e.g., cable television) based upon the number
of direct FTEs assigned to each fee category. We

[[Page 34008]]
believe our allocations of FTEs reasonably assign personnel and related
costs attributable to each fee category. As noted, actual FTE
assignments can only be determined once a fiscal year is completed.
However, we are satisfied that our estimates, based upon careful review
of current and anticipated FTE assignments conducted well into the
fiscal year and shortly before the adoption of the Notice in this
proceeding, yield an accurate estimate of FY 1995 FTE assignments.
24. We also note the concerns of several commenters that certain
individual fees seem unreasonable relative to the benefits provided. In
general, these commenters fail to recognize the formulaic approach to
setting the mandatory fee levels dictated by Congress. Section 9
provides that, in setting individual fee amounts, we prorate increases
or decreases to the individual services within each fee category. 47
U.S.C. Sec. 159(b)(2). This statutory requirement remains the
relationship between annually calculated fees and the fees initially
established by the Congress. It does not provide the flexibility to
adjust fees relative to benefits to the payor or in consideration of
other factors. These factors, however, are considered in the next stage
of the fee development process as permitted amendments, if warranted.
25. As discussed earlier, the Commission is not able to allocate
detailed costs to individual fee line items (e.g., VHF Television
Stations in the 51-100 markets). Rather, those costs are allocated to
broad categories of services by Section 9. Even when the Commission
implements a cost accounting system in FY 1996, it may not be cost
effective to obtain detailed cost data relative to our regulation of
individual services. Since we do not relate specific regulatory costs
to particular services within a fee category, we are constrained by
Section 9 and by our information collection systems to the formulaic
approach to the mandatory adjustment of regulatory fees. However, any
inequities resulting from this approach are likely to be small and
confined to like services due to the pro-rata formula applied by fee
category. As noted, in developing the individual fees, as discussed
below, we have carefully examined any apparent inequities computed
pursuant to the mandatory formula required by Section 9 and have
adjusted certain fees pursuant to our authority to make ``permitted''
amendments to the fees. In making the permitted amendments, the
Commission is not required to calibrate the amount of the regulatory
fee collected precisely to the cost of the benefits each regulatee
derives from the Commission's regulation. See United States v. Sperry
Corp., 493 U.S. 52, 60 (1989) (upholding a one and a half percent user
fee of amount recovered by claimant before Iran-U.S. Claims Tribunal);
Massachusetts v. United States 435 U.S. 444, 463 (1978) (upholding flat
registration fee on civil aircraft). Moreover, the Commission can
collect fees from regulatees for their use of frequencies and for the
potential benefits of its regulatory activities, even if they do not
utilize these activities. See United States v. Sperry Corp., 493 U.S.
supra at 63.
26. Also, many commenters have mistakenly correlated gross
increases in fee amounts from FY 1994 to FY 1995 to increases in
regulation. Although there may, in fact, be changes in regulatory
burden for certain services, the primary reason for increased fees
overall is the 93% increase in recoverable fees mandated by Congress.
Additionally, Section 9 prohibited any adjustment of individual fees
established in the Regulatory Fee Schedule for FY 1994. 9 U.S.C.
Sec. 159(b)(2). Thus, the FY 1994 fee was established by Congress and
was not adjusted to reflect changes in the allocation of FTEs not
considered by Congress. Our development of FY 1995 fees in accordance
with Section 9's requirements represents the first allocation of FTEs
to appropriate fee categories. This has resulted in a realignment of
costs between major fee categories and a redistribution of relative fee
revenue requirements among the four major fee categories. As the
commenters have noted, certain fees decrease from FY 1994 levels while
other fees increase. This primarily reflects the reallocation of FTEs
for FY 1995 compared to the Congressionally mandated Regulatory Fee
Schedule in effect in FY 1994.
27. We have retained, for fee determination purposes, the
regulatory fee category classifications (i.e., Private Radio, Common
Carrier, Cable Services and Mass Media) set forth in Section 159 in
order to minimize any adverse impact on the fees resulting from changes
in classification. Further, for ease in locating particular fees, we
have formatted the FY 1995 Schedule of Fees to reflect our new
organizational structure even though we have developed those fees based
upon the fee activities contained in the FY 1994 Regulatory Fee
Schedule. See Appendix B. With the exception of annual fees in the
amount of $5.00 or less, individual fee amounts have been rounded to
the nearest $5 in the case of fees under $1,000, or to the nearest $25
in the case of fees of $1,000 or more in accordance with Section
9(b)(2). Appendices C through G describe the method by which FTEs were
assigned to the fee categories and the development of the individual
fees within each major category.
28. We have revised the revenue requirements for individual fees in
several of the fee categories. Revenue requirements change whenever
volume estimates change due to the pro-rata formula associated with the
mandatory provisions of Section 9. Likewise, any permitted amendments
which reduce fees have the effect of reallocating to other services
within a fee category the revenues which would have been collected if
the permitted amendment had not been accepted. In effect, each volume
change and/or permitted amendment impacts the revenue requirement in
each service within the category. Zero-basing each revenue calculation
makes any attempt to explain the calculated difference between revenue
requirements shown in the Notice and in this Report and Order
meaningless. We, therefore, have not attempted to do this and instead,
have explained each permitted amendment we've made and also described
the source of any changes to volume estimates.
2. Private Radio Services.
29. In developing the FY 1995 regulatory fees for Private Radio
Services (set forth in the Wireless Radio Services category in the FY
1995 Regulatory Fee Schedule), we made mandatory adjustments to the
Regulatory Fee Schedule required by 47 U.S.C. Sec. 159, considering the
number of FTEs and the estimated volume of payments. We have also taken
into account the quality of the frequencies licensed. Accordingly, we
have decided to continue to assess the two levels of regulatory fees
applied to these services by Congress' fee schedule, i.e., exclusive
use services and shared use services, in recognition that those
licensees who generally receive a higher quality communications
channel, due to exclusive or lightly shared frequencies, should pay a
higher fee than licensees who operate on heavily shared frequencies. 47
U.S.C. Sec. 159(2).
30. We are implementing no changes to the rules for calculating fee
payments and submitting regulatory fee payments for Private Radio
Services. Due to the relatively small regulatory fees generally
assessed for the services, we will continue to require applicants for
new, reinstatement, and renewal licenses in these services to pay the
entire

[[Page 34009]]
regulatory fee for the full term of their requested license at the time
they file their license applications.\14\ See Appendix D for a
description of the development of the fees for the various services
within the Private Radio category.

\14\ In the event that the subject application is not granted,
the entire regulatory fee submitted will be returned upon request of
the payor of the fee. See 47 CFR 1.1159(a)(2)(iii).
---------------------------------------------------------------------------

a. Exclusive use services. 31. Land Mobile Services. The fees for
Land Mobile Services are set forth in the FY 1995 Regulatory Fee
Schedule within the Wireless Radio Service category and include
services authorized under Part 90 of the Commission's Rules to provide
high quality voice or digital communications between vehicles or to
fixed stations to further the business activities of the licensee.
These services, using the 220-222 MHz band and frequencies at 470 MHz
and above, may be offered on a private carrier basis in the Specialized
Mobile Radio Service (SMRS).
32. The FY 1995 revenue requirement for Land Mobile Services is
$396,390. Our estimated payment units for Land Mobile are 13,213 units.
Dividing the revenue requirement by the number of payment units and its
license term of five years results in an annual fee of $6 per license
rather than the $7 annual fee proposed in the Notice.\15\ Thus, Land
Mobile licensees are subject to a $6 annual regulatory fee per license,
payable for an entire five or ten year license term at the time of
application for a new, renewal, or reinstatement license. The total
regulatory fee due is $30 for a license with a five year term or $60
for a license with a 10 year term. See Guidelines, Appendix H at para.
4.

\15\ Although this fee category includes licenses with ten year
terms, the estimated volume of ten year license applications is less
than one tenth of one percent and, therefore, is statistically
insignificant.
---------------------------------------------------------------------------

33. Microwave Services. The fees for Microwave Services are set
forth in the FY 1995 Regulatory Fee Schedule within the Wireless Radio
Service category. Microwave Services include private microwave systems
and private carrier systems authorized under Part 94 of the
Commission's Rules to provide telecommunications services between fixed
points on a high quality channel of communications. Microwave systems
are often used to relay data and to control railroad, pipeline, and
utility equipment.
34. The FY 1995 revenue requirement for Microwave Services is
$193,200. Payment units for Microwave Services are estimated to be
6,440 licensees. Dividing the revenue requirement for Microwave
Services by its payment units and license term of five years results in
an annual fee of $6 per license. Thus, Microwave licensees are subject
to a $6 annual regulatory fee per license, rather than the $7 annual
fee proposed in the Notice, payable for an entire five year license
term at the time of application for a new, reinstatement or renewal
license. The total regulatory fee due is $30 for the five year license
term. See Guidelines, Appendix H at para. 6.
35. Interactive Video Data Service (IVDS). The fees for IVDS are
set forth in the FY 1995 Regulatory Fee Schedule within the Wireless
Radio service category. IVDS is a two-way point-to-multi-point radio
service allocated high quality channels of communications and
authorized under Part 95 of the Commission's Rules. IVDS provides
information, products and services, and also the capability to obtain
responses from subscribers in a specific service area. IVDS is offered
on a private carrier basis.
36. The FY 1995 revenue requirement for IVDS is $43,500. Payment
units for IVDS are estimated to be 1,450 licenses. Dividing the revenue
requirement of IVDS by its payment units and license term of five years
results in an annual fee of $6 per license rather than the $7 fee we
proposed in the Notice. Thus, IVDS licensees are subject to a $6 annual
regulatory fee per license, payable for an entire five year license
term at the time of application for a new, reinstatement or renewal
license. The total regulatory fee due is $30 for the five year term of
the license. See Guidelines, Appendix H at para. 7.
b. Shared use services. 37. Marine (Ship) Service. Fees for marine
(Ship) Service are set forth in the FY 1995 Regulatory Fee Schedule for
the Wireless Radio Service category. Marine (Ship) Service is a
shipboard radio service authorized under Part 80 of the Commission's
Rules to provide telecommunications between watercraft or between
watercraft and shore-based stations. Radio installations are required
by domestic and international law for large passenger or cargo vessels.
Radio equipment may be voluntarily installed on smaller vessels, such
as recreational boats.
38. The FY 1995 revenue requirement for the Marine (Ship) Service
fee category is $5,070,420. Payment units are estimated to be 169,014
stations. Dividing the revenue requirement of the Marine (Ship) Service
by its payment units and license term of ten years results in an annual
fee of $3 per station. Thus, as proposed in the Notice, Marine (Ship)
Station licensees are subject to a $3 annual regulatory fee per
station, payable for an entire ten year license term at the time of
application for a new, reinstatement or renewal license. The total
regulatory fee due is $30 for the ten year license term. See
Guidelines, Appendix H at para.8.
39. Marine (Coast) Service. Fees for Marine (Coast) Service are set
forth in the FY 1995 Regulatory Fee Schedule for the Wireless Radio
service category. Marine (Coast) Service stations are land-based
stations in the maritime services, authorized under Part 80 of the
Commission's Rules, to provide communications services to ships and
other watercraft in coastal and inland waterways.
40. The FY 1995 revenue requirement for this service is $41,955 and
the estimated payment units are 2,797 licenses. Dividing the revenue
requirement of the Marine (Coast) Service by its payment units and
license term of five years results in an annual fee of $3 per license.
Thus, as proposed in the Notice, Marine (Coast) licensees are subject
to a $3 annual regulatory fee per call sign, payable for the entire
five year license term at the time of application for a new,
reinstatement or renewal license. The total regulatory fee due is $15
per call sign for the five year license term. See Guidelines, Appendix
H at para. 9.
41. Private Land Mobile (Other) Services. Fees for Private Land
Mobile (Other) Services are set forth in the FY 1995 Regulatory Fee
Schedule for the Wireless Radio Service category. Private Land Mobile
Radio Services are authorized under Parts 90 and 95 of the Commission's
Rules. Stations in this category provide one or two way communications
between vehicles, persons or to fixed stations on a shared basis and
include radiolocation services, private carrier paging services,
industrial radio services and land transportation radio services.
42. The FY 1995 revenue requirement for Private Land Mobile (Other)
Services is $1,396,275. Payment units are estimated to be 93,085
licenses. Dividing the revenue requirement of these services by their
payment units and license term of five years results in an annual fee
of $3 per license. Thus, as proposed in the Notice, licensees of these
services are subject to a $3 annual regulatory fee per call sign,
payable for an entire five year license term at the time of application
for a new, reinstatement or renewal license. The total regulatory fee
is $15 for the five year license term. See Guidelines, Appendix H at
para. 10.
43. Aviation (Aircraft) Service. The fee for Aviation (Aircraft)
Service is set

[[Page 34010]]
forth in the FY 1995 Regulatory Fee Schedule for the Wireless Radio
service category. Aviation (Aircraft) stations are authorized to
provide communications between aircraft and from aircraft to ground
stations. The service includes frequencies used to communicate with air
traffic control facilities pursuant to Part 87 of the Commission's
Rules.
44. The FY 1995 revenue requirement for the Aviation (Aircraft)
Service is $1,130,430. The payment units are estimated to be 37,681
licenses. Dividing the revenue requirement of the Aviation (Aircraft)
Service by its payment units and license term of ten years results in
an annual fee of $3 per station, as proposed in the Notice. Thus,
licensees of aircraft stations are subject to a $3 annual regulatory
fee per station, payable for the entire ten year license term at the
time of application for a new, reinstatement or renewal license. The
total regulatory fee due is $30 per station for the ten year license
term. See Guidelines, Appendix H at para. 11.
45. Aviation (Ground) Service. Fees for Aviation (Ground) Service
are set forth in the FY 1995 Regulatory Fee Schedule for the Wireless
Radio service category. Aviation (Ground) Service stations provide
ground-based communications to aircraft for weather or landing
information, or for logistical support pursuant to Part 87 of the
Commission's Rules.
46. The FY 1995 revenue requirement for the Aviation (Ground)
Service is $39,900. Payment units for the Aviation (Ground) Service are
estimated to be 2,660 licenses. Dividing the Service's revenue
requirement by its payment units and license term of five years results
in an annual fee of $3 per license. Thus, as proposed in the Notice,
licensees of Aviation Ground stations are subject to a $3 annual
regulatory fee per call sign, payable for the entire five year license
term at the time of application for a new, reinstatement or renewal
license. The total regulatory fee due is $15 per call sign for the five
year license term. See Guidelines, Appendix H at para. 12.
47. General Mobile Radio Service (GMRS). Fees for the GMRS are set
forth in the FY 1995 Regulatory Fee Schedule within the Wireless Radio
service category. GMSR licensees provide personal and limited business
communications between vehicles or to fixed stations for short-range,
two-way communications pursuant to Part 95 of the Commission's Rules.
48. The FY 1995 revenue requirement for GMRS is $41,775. Payment
units for GMRS are estimated to be 2,785 licenses. Dividing GMRS'
revenue requirement by its payment units and license term of five years
results in an annual fee of $3 per license. Thus, as proposed in the
Notice, GMRS licensees are subject to a $3 annual regulatory fee per
license, payable for an entire five year license term at the time of
application for a new, reinstatement or renewal license. The total
regulatory fee due is $15 per license for the five year license term.
See Guidelines, Appendix H at para. 13.
c. Amateur vanity call signs. 49. Fees for Amateur Vanity Call
signs are set forth in the FY 1995 Regulatory Fee Schedule within the
Wireless Radio service category. The fee covers voluntary requests for
specific call signs in the Amateur Radio Service. We have concluded our
rule making proceeding related to the authorization of vanity call
signs. See Report and Order in PR Docket No. 93-305, 10 FCC Rcd 1039
(1995), 59 FR 558 (1994). Therefore, amateur radio operators are
required to submit a regulatory fee payment with their vanity call sign
application in FY 1995.
50. The revenue requirement for vanity call signs is $840,000. We
have revised our estimated payment units to 28,000 vanity call sign
applications, as a result of further analysis by the Wireless
Telecommunications Bureau. Dividing the service's revenue requirement
by its estimated payment units and license term of ten years results in
a fee of $3 per year per license as proposed in the Notice. Thus,
holders of amateur vanity call signs are subject to a $3 annual
regulatory fee per call sign, payable for an entire ten year license
term at the time of application for a vanity call sign. The total
regulatory fee is $30 per license for the ten year license term.\16\
See Guidelines, Appendix H at para. 14.

\16\ Section 9(h) exempts ``amateur radio operator licenses
under part 97 of the Commission's Rules (47 C.F.R. Part 97)'' from
the requirement to pay an annual regulatory fee. However, Section
9(g)'s Regulatory Fee Schedule explicitly includes ``Amateur Vanity
Call Signs'' as a category subject to the payment of a regulatory
fee.
---------------------------------------------------------------------------

3. Mass Media
51. The regulatory fees for the Mass Media fee category apply to
broadcast licensees and permittees in the television, AM and FM
services and in several auxiliary services. We have incorporated
changes in payment volume estimates for satellite television stations,
auxiliary radio licenses, and translator stations. The payment volumes
were adjusted after further review of the Commission's licensing data.
See Appendix E for a description of the development of the fees for
services within the Mass Media category; see also Guidelines, Appendix
H at Paras. 15-26.
a. Commercial AM and FM radio. 52. These categories include
licensed commercial AM (Classes A, B, C, and D) and FM (Classes A, B,
B1, C, C1, C2, and C3) radio stations operating under Part 73 of the
Commission's Rules. In developing our proposed FY 1995 fees for AM and
FM stations, we determined that the public interest requires that we
retain the operational class distinctions among AM and FM stations that
Congress established in its Regulatory Fee Schedule. 47 U.S.C.
Sec. 159. Also, as a permitted amendment, we proposed a further
distinction to recognize that the population density of a station's
geographic coverage is a public interest factor warranting recognition
in the fee schedule. We proposed to distinguish stations located in
Arbitron radio markets vis-a-vis those not located in these markets and
to allocate the fee burden utilizing a fee ratio between the Arbitron
and non-Arbitron markets similar to the ratio of the fee requirement
established for larger television station markets and ``remaining
markets'' set forth in the Regulatory Fee Schedule. We proposed no
change to the rules for calculating and submitting regulatory fees by
AM and FM radio station licensees.
53. Several commenters contend that Arbitron rankings are not
useful for establishing the AM and FM fee structure. These parties
state that markets are only ranked if a sufficient number of stations
located within the market subscribe to the Arbitron service. Also, a
station may be placed in a market if it competes with market stations
even though the station may not be physically located in a major
metropolitan area within the market. The National Association of
Broadcasters (NAB) also argues that a station may be placed in an
Arbitron market based on promotional programming during the rating
period and recommends that a licensee be allowed to show that its
placement in an Arbitron market is not representative of its service.
Washington Broadcasting Company argues that stations 20 kilometers from
the principal city in a market or serving less than 20 percent of the
population of a market should not be considered as an Arbitron Market
station. A number of licensees argue that fees should be based on a
graduated scale by market size, differentiating between markets 1-10;
11-25; 25-50; 51-100; and remaining markets in a manner similar to that
in the Regulatory Fee Schedule for television stations. Broadcast
Market Associates and James Wagner recommend the fees be based on

[[Page 34011]]
the population a station serves. Montana Broadcasters Association
argues that fees should be based on gross revenues. In contrast, Radio
840, Inc. argues that all stations in the same class be assessed the
same fee without distinction as to market size.
54. We agree with commenters that our proposal to base fees on
whether a licensee is ranked in an Arbitron market is flawed. The
Arbitron rankings data is incomplete for fee determination purposes,
and reliance upon it does not provide a sufficiently accurate and
equitable methodology for determining fees. we attempted, within the
limitations of available data, to compute fees on a graduated scale by
market size. The results produced unexpected inequities that not only
raised the fees significantly for markets 1-10 and 11-25, but also
raised the fees at the low end for remaining markets. Moreover, the
Commission's data bases do not contain population and gross revenue
data from which we could compute fees. Therefore, we have decided not
to implement the proposed fees methodology for AM and FM stations.
Instead, for FY 1995 we will retain the fee methodology enacted by
Congress for FY 1994.\17\ In this regard, we note that although the
Regulatory Fee Schedule does not differentiate between markets, the AM
and FM fees differentiate between classes of stations and are low
enough to avoid placing an onerous burden on most licensees. Thus, the
regulatory fees for AM and FM stations for FY 1995 are as follows and
represent the mandatory adjustments to the Regulatory Fee Schedule
consistent with Section 9 (b) (2):\18\

\17\ Interested parties may file petitions for rule making
setting forth a proposed AM and FM fee methodology as long as the
proposal is supported by readily available data to be considered in
connection with the development of the Notice of Proposed Rulemaking
for FY 1996.
\18\ Appendix E shows the payment volumes and cost allocations
for assessing regulatory fees for AM and FM radio.
AM Radio

Class A
$1,120
Class B
620
Class C
250
Class D
310

FM Radio

Classes C, C1, C2, B
$1,120
Classes A, B1, C3
745

We have made no change to the rules for calculating and submitting
regulatory fees by AM and FM radio station licensees. See Guidelines,
Appendix H at para. 16.
b. Construction permits--commercial AM radio. 55. This category
includes holders of permits to construct new AM stations under Part 73
of the Commission's Rules. The FY 1995 revenue requirement for the
Commercial AM Construction Permit fee category is $9,875. Payment units
for the service are estimated to be 79 AM Construction Permits.
Dividing the revenue requirement for AM Construction Permits by the
estimated payment units results in a regulatory fee of $125 per
Construction Permit. Thus, for FY 1995, we are assessing holders of
Construction Permits for Commercial AM Stations $125 for each permit
held. Upon issuance of an operating license, this fee would no longer
be assessed. Instead, for the next regulatory fee period, licensees are
required to pay the applicable fee for the designated class of the
station. We have made no change in the rules for calculating and
submitting the regulatory fee by AM construction permittees. See
Guidelines, Appendix H at para. 17.
c. Construction permits--Commercial FM radio. 56. This category
includes holders of permits to construct new commercial FM stations
covered under Part 73 of the Commission's Rules. The FY 1995 revenue
requirement for Commercial FM Radio Construction Permits is $435.860.
Our estimate of the payment units is 703 Construction Permits. Dividing
the revenue requirement for FM Construction Permits by the estimated
payment units results in a regulatory fee of $620 per permit. Thus, for
FY 1995, we are assessing permittees $620 for each permit held. Upon
issuance of an operating license, this fee would no longer be assessed.
Instead, for the next regulatory fee period, licensees must pay a
regulatory fee based upon the designated class of he station. We are
making no change in the rules for calculating and submitting regulatory
fees by FM construction permittees. See Guidelines, Appendix H at para.
18.
d. Commercial television stations. 57. This category includes
licensed Commercial VHF and UHF Television Stations covered under Part
73 of the Commission's Rules, except Television Satellite, Translator,
and Low Power Stations, addressed separately below. We are assessing
Commercial Television Stations annual fees based on a station's market
rankings as published by Warren Publishing in the 1994 Edition of the
Television and Cable Factbook (No. 62). The FY 1995 revenue
requirements for the different categories of VHF and UHF Commercial
Television Stations are shown in Appendix E. Payments units for
Commercial Television Stations are also shown in Appendix E. Dividing
the revenue requirements for each Commercial Television Station
category by the payment units for each category results in the
following fees for Television Stations in each ADI market grouping:

VHF Markets 1-10
$22,420
VHF Markets 11-25
$19,925
VHF Markets 26-50
$14,950
VHF Markets 51-100
$9, 975
VHF Remaining Markets
$6,225

UHF Markets 1-10
$17,925
UHF Markets 11-25
$15,950
UHF Markets 26-50
$11,950
UHF Markets 51-100
$7,975
UHF Remaining Markets
$4,975

See Guidelines, Appendix at para. 19.
58. Several commenters argue that the Arbitron market structure is
obsolete and should be replaced with the Nielsen Station Index.
Further, commenters argue that the Arbitron market structure is
disadvantageous to small non-ADI markets and the stations located on
the fringe of larger markets. Various solutions proposed include basing
fees on Grade B Contour coverage or percentage of audience share.
59. We decline to consider any change in the methodology
established by the Congress and affirmed in the FY 1994 schedule. We
were unable to obtain sufficient information to properly evaluate the
merits of using the Nielsen Station Index for establishing fees. The
Commission's data bases do not contain data necessary to establish fees
from Grade B Contour coverage or percentage of audience share. Thus, we
will retain the Arbitron market groupings for FY 1995.
e. Commercial television satellite stations. 60. Pursuant to our
authority to make permissive amendments to our regulatory fees,
Television Satellite Stations (authorized pursuant to Note 5 of Section
73.3555 of the Commission's Rules) that retransmit programming of the
primary station will be assessed a fee separate from the fee for fully
operational television stations. This fee is based upon the $500 fee
passed by the House of Representatives for Television Satellite
Stations for FY 1994. While not legally binding, the $500 base fee was
determined to be appropriate for licensees of Television Satellite
Stations in our FY 1994 authorization bill passed in the House of
Representatives. See H.R. 4522. In addition, pursuant to the
instructions of Section 9, 47 U.S.C. Sec. 159(b)(3), a separate fee for
Television Satellite Stations would take into account the public
interest factors reflected in comments filed in the proceeding to adopt
the FY 1994 Schedule of Regulatory Fees. In developing the FY 1995 fee
for Television Satellite Stations, we use the $500 fee proposed by the
House of

[[Page 34012]]
Representatives for FY 1994 to calculate a FY 1995 fee for Television
Satellite Stations. We divide a ``simulated'' FY 1994 revenue
requirement by the estimated number of Television Satellite Station
licensees. Our FY 1995 revenue requirement for Television Satellite
Stations is $68,200. Following release of our Notice, we revised our
estimate of payment units to 110 licensed Television Satellite Stations
based on an updated analysis of these stations. Therefore, we are
exercising our authority to make permitted amendments to the Regulatory
Fee Schedule to establish a Television Satellite fee of $620 per
station. We caution that only those stations designated as Television
Satellite Stations in the 1994 Edition of the Television and Cable
Factbook (No. 62) are eligible to submit the fee applicable to
Television Satellite Stations. Full-service television licensees are
subject to the regulatory fee payment required for their class of
station and market.\19\ See Guidelines, Appendix H at para. 20.

\19\ We recognize that an ongoing rule making proceeding is
addressing whether Television Satellite Stations should continue to
be exempt from the Commission's national television ownership
restrictions. Our decision to assess a regulatory fee for Television
Satellite Stations that is less than the amount for Commercial
Television Stations should not be taken as a signal that any
determination has been made with regard to the outcome of that
proceeding.
---------------------------------------------------------------------------

f. Construction permits--Commercial VHF television stations. 61.
This category includes holders of permits to construct new Commercial
VHF Television Stations covered under Part 73 of the Commission's
Rules. The FY 1995 revenue requirement for this service category is
$54,725. The number of permits is 11. Dividing the revenue requirement
for VHF Television Construction Permits by its payment units results in
a fee of $4,975. Therefore, for FY 1995, we are assessing permittees
$4,975 for each VHF Television Construction Permit held. Upon issuance
of an operating license, this fee would no longer be assessed. Instead,
for the next regulatory fee period, licensees must pay a fee based upon
the designated market of the station. We are making no changes to the
rules for calculating and submitting regulatory fees by VHF Television
Construction Permittees. See Guidelines, Appendix H at para. 21.
g. Construction permits--Commercial UHF television stations. 62.
This category includes holders of permits to construct new UHF
Television Stations covered under Part 73 of the Commission's Rules.
The FY 1995 revenue requirement for this service category is $576,375.
Payment units for UHF Television Construction Permits are estimated to
be 145 permits. Dividing the revenue requirement for this service
category by its estimated payment units results in a fee of $3,975 for
each UHF Television Construction Permit held. Therefore, we are
assessing a fee of $3,975 per UHF Television Construction Permit. Upon
issuance of an operating license, this fee would no longer be assessed.
Instead, for the next regulatory fee period, licensees must pay a fee
based upon the designated market of the station. We are making no
changes to the rules for calculating and submitting regulatory fees by
UHF Television Construction Permittees. See Guidelines, Appendix H at
para. 22.
h. Construction permits--Satellite television stations. 63. We are
exercising our authority to make permitted amendments to add a new
service category to the Regulatory Fee Schedule in recognition that the
holders of Construction Permits for UHF and VHF Television Satellite
Stations should be charged a separate, lower fee than the fee charged
holders of Construction Permits for fully operational Television
Stations. See para. 56 above, where we exercised our authority to make
permitted amendments to the Regulatory Fee Schedule relating to the fee
for Television Satellite Stations. We developed the fee for Television
Satellite Construction Permits by taking the average fee for VHF and
UHF Television Stations and relating it to the average fee for
Construction Permits for VHF and UHF Television Stations. Using this
relationship and the revenue requirement for Television Satellite
Stations results in a computed fee of $225 for Construction Permits for
Television Satellite Stations. An individual regulatory fee payment is
to be made for each Television Satellite Station Construction Permit
held. Upon issuance of an operating license, this fee would no long be
assessable. Instead, for the next fee period the licensee will be
assessed the fee for an operating Television Satellite Station. See
Guidelines, Appendix H at para. 23.
i. Low power television, FM translator and booster stations, TV
translator and booster stations. 64. This category includes Low Power
UHF/VHF Television stations operating under Part 74 of the Commission's
Rules with a transmitter power output limited to 0.01kw for a UHF
facility and, generally, 1kw for a VHF facility. Low Power Television
(LPTV) stations may retransmit the programs and signals of a TV
broadcast station, originate programming, and/or operate as a
subscription service. This category also includes translators and
boosters operating under Part 74 that rebroadcast the signals of full
service stations on a frequency different from the parent station
(Translators) or on the same frequency (Boosters).
65. We are exercising our authority to make permitted amendments to
the Regulatory Fee Schedule to include FM Translator and Booster
Stations because we believe these facilities were inadvertently omitted
from the Regulatory Fee Schedule and we are unaware of any reason not
to establish a fee for these services. The stations in this category
are secondary to full service stations in terms of frequency priority.
66. We have also received requests for waivers of the regulatory
fees from operators of community based Translators. These Translators
are generally not affiliated with commercial broadcasters, they are
nonprofit, nonprofitable, or only marginally profitable, serve small
rural communities, and are supported financially by the residents of
the communities served. We are aware of the difficulties these
Translators have in paying even minimal regulatory fees, and we will
address those concerns in the ruling on reconsideration of the FY 1994
Order.
67. The revenue requirement for this service category is
$1,210,400. Our estimated payment units is 7,120 licenses, including
licenses covering FM translators. Dividing the revenue requirement for
this category by its estimated payment units results in a fee of $170
per license. Thus, for FY 1995, we assess licensees of Low Power
Television Stations and licensees of both FM and TV Translators and
Boosters an annual regulatory fee of $170 for each license held. We are
making no changes to the rules for calculating and submitting
regulatory fee payments by licensees in this service category. See
Guidelines, Appendix H at para. 24.
j. Broadcast auxiliary stations. 68. This category includes
licensees of Remote Pickup Stations, Aural Broadcast Auxiliary
Stations, Television Broadcast Auxiliary Stations, and Low Power
Auxiliary Stations, authorized under Part 74 of the Commission's Rules.
Auxiliary stations are generally associated with a particular
Television or Radio Broadcast Station or Cable Television System.
69. The FY 1995 revenue requirement for this category is $900,000.
We have revised estimated payment units to 30,000 licenses based upon a
review of our license records. Dividing the category's revenue
requirement by its estimated payment units results in a fee

[[Page 34013]]
of $30 per license. Thus, we are assessing licensees of Commercial
Auxiliary Stations a $30 annual regulatory fee for FY 1995 on a per
call sign basis. We are making no changes to the rules for calculating
or submitting regulatory fee payments by licensees of facilities in
this service category. See Guidelines, Appendix at para. 25.
k. International HF broadcast (Short Wave). 70. This category
covers International HF Broadcast Stations licensed under Part 73 of
the Commission's Rules to operate on a frequency in the 5,950 Khz to
26,100 Khz range to provide service to the general public in foreign
countries. The proposed fees for International HF Broadcast are set
forth in the International Service category in the FY 1995 fee
schedule.
71. For FY 1995, the revenue requirement for this category is
$4,750. Payment units are estimated to be 19 short wave licenses.
Dividing the category's revenue requirement by its estimated payment
units results in a fee of $250 per license. See Appendix E Thus, for FY
1995, we are assessing an annual regulatory fee of $250 per station
license. We are making no changes to the rules for calculating and
submitting fees by licensees of facilities in this service category.
See Guidelines, Appendix at para. 26.
4. Cable Services
a. Cable television systems. 72. This category includes operators
of Cable Television Systems, as that term is defined in Section 76.5 of
the Commission's Rules, providing or distributing programming or other
services to subscribers under Part 76 of the Commission's Rules.
73. The National Cable Television Association (NCTA), the Small
Cable Business Association (SCBA), and the Cable Telecommunications
Association contend that our allocation of full-time equivalents (FTEs)
to cable television is unsupported and is unduly high. SCBA urges us to
exempt small systems from payment of regulatory fees. Finally, NCTA and
SCBA contend that we have understated the number of payment units,
i.e., cable television subscribers, subject to the fee.
74. We have addressed in paras. 11 through 26 our allocation of
FTEs. Therefore, no further discussion of this issue is required here.
Further, we find that the Regulatory Fee Schedule adequately considers
the financial circumstances of small cable systems by basing the fee
payment for cable systems on their number of subscribers so that
payments by cable systems reflect their relative size and their
relative benefits from our regulation. We have divided the cable system
revenue requirement of $29,400,000 by our estimate of 60,000,000
payment units to derive the FY 1995 fee for cable systems of $.49 per
subscriber. See Appendix F. Therefore, we are assessing a fee of $.49
per cable television subscriber.\20\

\20\ Consistent with our earlier interpretation of congressional
intent, we require payment of the cable system regulatory fees on a
per subscriber basis rather than per 1,000 subscribers as set forth
in the statutory Regulatory Fee Schedule. See FY 1994 Order at para.
100.
---------------------------------------------------------------------------

75. Payments for cable systems are to be made on a per subscriber
basis by community unit determined as of December 31, 1994 as reported
on each cable system's 1994 Annual Report of Cable Systems (FCC Form
325). We are making no change in the rules for calculating or
submitting regulatory fees by cable system operators. See Appendix F
for a description of the development of the fee for cable systems, See
also, Guidelines, Appendix H at para. 27.
b. Cable antenna relay service. 76. This category includes Cable
Television Relay Service (CARS) Stations authorized under Part 78 of
the Commission's Rules. These stations transmit television and related
audio signals, signals of AM and FM broadcast stations and cablecasting
from the point of reception to a terminal point from which the signals
are distributed to the public by a cable television system.
77. SCBA contends that the CARS fee is out of proportion to the
benefits received from our regulation of these facilities. Since SCBA
has provided no support for its argument, we will give no consideration
to an adjustment of the CARS fee. Further, we reject the argument of
SCBA that we should exempt small cable systems from the CARS fee. SCBA
has not demonstrated that the fee is unreasonable or that small cable
systems receive any less benefit from our regulation than other cable
systems.
78. Our FY 1995 revenue requirements for CARS is $603,780 and our
estimated payment units are 2,082 licenses. Dividing the revised
revenue requirements for CARS by our estimated payment units results in
a fee of $290 per license. See Appendix F. Thus, for FY 1995, we are
assessing a $290 regulatory fee per CARS license. We are making no
change to the rules for calculating and submitting regulatory fees by
CARS licensees. See Appendix F for a description of the development of
the fee for CARS. See also, Guidelines, Appendix H at para. 29.
5. Common Carrier Services
79. We have received numerous comments from providers of Common
Carrier Services objecting to the amount of the fees proposed for their
particular categories of service. Several of these parties complain
that the FTEs assigned to the Common Carrier category and the costs
apportioned to their particular service category are unduly high, and
that the Notice miscalculated the estimated payment units for their
services. We have discussed our FTE allocations, cost allocations and
unit estimates in paragraphs 8 through 23. We will, however, address
issues related to cost allocation and payment units where the arguments
presented have not been previously considered. See Appendix G for a
description of the development of the fee for services within the
Common Carrier category.
80. The Commission is exercising its authority pursuant to Section
9(b)(3) in order to revise the fees associated with regulation by the
International Bureau. Numerous commenters have expressed concern that
the proposed fees would not be representative of the costs associated
with the regulatory activities of the International Bureau, nor would
the proposed fees reflect the benefits provided to the payers of the
proposed fees.
81. Section 9(b)(3) provides the Commission authority to adjust the
Schedule of Regulatory Fees provided the following two conditions are
met: (1) the Comission determines that the Schedule requires amendment
to comply with the requirements of paragraph (1)(A), which states,
``The fees assessed under subsection (a) shall be derived by
determining the full-time equivalent number of employees performing the
activities described in subsection (a) within the Private Radio Bureau,
Mass Media Bureau, Common Carrier Bureau, and other offices of the
Commission. . . ,'' and (2) the basis for changing or reclassifying
services in the Schedule reflects additions, deletions, or changes in
the nature of its services as a consequence of Commission rulemaking
proceedings or changes in law.
82. The Commission has determined that the reorganization
establishing the International Bureau satisfies both of the
requirements described above. Specifically, the reorganization was a
Commission rulemaking proceeding, as defined in 47 CFR 1.412(b)(5),
which resulted in the Commission being able to determine the full-time
equivalent number of employees performing regulatory fee-based
activities in the International Bureau.

[[Page 34014]]

83. Specifically, the Commission will adjust the Common Carrier Fee
category so that the total collected from the individual services
associated with International Bureau fees \21\ totals approximately
$8.3 million, which is the estimated regulatory cost associated with
the International Bureau.\22\ The revisions to the Common Carrier fee
category have been made by reallocating the difference between what
would have been collected under the International Bureau fees proposed
in the Notice and $8.3 million to all remaining services in the Common
Carrier fee category on a proportional basis.

\21\ Specifically: International Circuits, Space Stations, Earth
Stations and International Public Fixed Radio Stations.
\22\ There are 72 FTEs within the International Bureau that are
directly associated with regulatory fee activities. To the number we
have added an additional 40%, or 28 FTEs, for the indirect support
FTEs as explained in paragraph 8. The resulting cost is $8.3 million
(100 FTEs multiplied by $83,000 per FTE).
---------------------------------------------------------------------------

a. Public mobile/cellular radio services. 84. Fees for the Public
Mobile and Cellular Radio Services are set forth in the FY 1995
Regulatory Fee Schedule within the Wireless Radio service category.
These services include common carriers and others (e.g., cellular radio
licensees) offering a wide variety of land-based or air-to-ground
mobile telephone, paging or data transmission services to the public,
under Parts 22 and 24 of the Commission's Rules. Licensees include
those using radio to provide telephone services at fixed locations,
such as Basic Exchange Telecommunications Radio Services, Rural Radio
and Offshore Radio.
85. In the Notice, we proposed to assess a fee for this service
category based upon the total number of telephone numbers or call signs
that a licensee provides to its customers. The Regulatory Fee Schedule
assessed the fee based on the number of a licensee's subscribers.
Reliance on a subscriber count, however, does not fully reflect the
benefit of our regulation i.e., usage of channel capacity, because
individual subscribers vary in the number of mobile units or telephone
numbers utilized. In order to assure that all cellular/mobile units in
operation are, in fact, assessable as customers, we are reviving our
fee structure to assess the fee based on mobile units or telephone
numbers provided by a licensee as a more equitable payment formulation
because it better reflects actual usage of our frequency assignments
and related benefits of our regulation. Therefore, for FY 1995, we
amend our Regulatory Fee Schedule so that each cellular licensee will
pay an annual fee based on the number of telephone numbers provided,
and each licensee in the Public Mobile Radio Service pays an annual
regulatory fee for each mobile unit, including paging units, assigned
to its customers, including resellers of its services.
86. A number of commenters \23\ argue that our proposal to base the
fees on units (telephone numbers or mobile units) rather than
subscribers is inconsistent with the Regulatory Fee Schedule developed
by Congress. They assert that the change to units is not an adjustment
permitted under Section 9(b)(2) or a change pursuant to law or
regulation as required by Section 9(a)(3).

\23\ See comments filed by Personal Communications Industry
Association (PCIA), Alltel Mobile Communications and Alltel Service
Corporation (Alltel), Frontier Cellular Holding, Inc. (Frontier),
Mobilmedia Communications, Inc., Vanguard Cellular Systems
(Vanguard), Arch Communications Group, and Metrocall, Inc. Vanguard
also argues that the computation of the regulatory fee based on
units could result in disclosure of commercially sensitive
information. To date we have not had FOIA or other requests for
access to the information submitted by cellular/mobile carriers with
their fee proposals. However, any carrier concerned that the
information submitted may be used to its detriment, can request that
the Commission protect its submission from routine disclosure to the
public.
87. Congress, however, has authorized the Commission to modify the
Regulatory Fee Schedule to ensure that the fees are reasonably related
to the benefits of the Commission's regulatory activities. See 47
U.S.C. 159(b)(1)(A). Under Section 9, ``the Commission is required to
adjust the fees to reflect proportionate changes in its appropriations,
and is permitted through a rule making, to make changes to the
Regulatory Fee Schedule, including adding, deleting or reclassifying
services when the Commission determines that such changes are necessary
to ensure such fees are reasonably related to the benefits provided to
the payor of the fee by the Commission's activities.'' Conference
Report H. Rept. No. 213, 103d Cong., 1st Sess. 1188 (1993). Thus,
Congress intended that we modify the fee structure in instances where
we find that a revision to the Regulatory Fee Schedule better reflects
the relative benefits licensees receive from our regulatory activities
and achieves a more equitable distribution of the fee burden. We find
that assessing fees on the basis of mobile units or telephone numbers,
equitably reflects the actual benefit received from the Commission's
regulation.
88. Alltel argues the Commission should modify the date for
determining fees so that the burden of the fees would be shared by new
service providers. It asserts that equity requires that the fee burden
be shared by licensees authorized during the year.
89. We recognize that Alltel's suggestion would distribute the fee
burden among additional service providers. However, such a system would
be difficult to administer and lead to confusion because regulatees are
directed to count payment units as of a date certain, and as new
regulatees are authorized, would involve utilization of different dates
for computing fees for different licensees. Moreover, we do not believe
that a calculation date later in the fiscal year would significantly
affect the amounts of the fee payments that we are adopting since many
new service providers subject to the fee would be in an early start-up
phase of their operations and existing providers would have accounted
for substantially all their units of payment under the calculation date
that we have proposed. In the FY 1994 Order, establishing December 31
as the calculation date for regulatees paying fees based upon
subscriber lines or circuits, we noted that many regulatees file
reports based upon information collected as of that date. 9 FCC Rcd at
5365-66 para. 96. In other instances, regulatees calculate subscriber
counts as of that date for internal purposes. Reliance on December 31
as a date certain for calculating fees facilitates both the computation
of fee payments and our verification that the correct fee payments are
submitted. 9 FCC Rcd at 5350, Paras. 48-49. Further, since our
regulatory fee program is ongoing, new carriers will be subject to
payment of fees in the next fiscal year. Thus, we have decided to adopt
December 31, 1994, as the date for calculation of fee payments for all
mobile regulatees.
90. Frontier and Alltel also argue that cellular and paging
licensees are being treated differently from carriers using the
interstate network. Frontier asserts that cellular resellers are exempt
from the regulatory fee and that this places an unfair burden on
facilities-based carriers who must pay for regulatory activities
benefitting resellers of mobile services. Also, these parties contend
that our treatment of mobile resellers is inconsistent with our
proposal to include resellers of interstate services in the fee
schedule.
91. We recognize that the fees for mobile service providers are
assessed in a manner different from the fee for users of the interstate
network and that we are including resellers of interstate services
directly in the fee schedule, but not resellers of mobile services. We
also recognize that there are substantial equity issues that must be
addressed

[[Page 34015]]
before assessing resellers a fee, in order to protect them from having
their mobile units or telephone numbers double counted. For non-mobile
common carriers we are adopting a proposal to assess fees on the basis
of gross revenues, and we are protecting resellers from double payments
by permitting them to deduct from their gross revenues the payment made
to facilities based carriers. In the case of mobile resellers, we do
not have the data necessary to structure a fee schedule on the basis of
gross revenues or in a manner which would protect mobile resellers from
double payments.
However, by revising the Regulatory Fee Schedule to require a fee
payment for every mobile unit or telephone number made available by a
licensee to a third party, we will collect a fee for each unit made
available to a licensee's customers, including resellers. Moreover, to
the extent that the regulatory fees are included in the carriers'
charges to the resellers, the resellers will be sharing in the
regulatory burden.
92. A number of mobile regulatees also assert that their fees are
increasing at a disproportionate rate because of the increase in the
per unit rate and because of the change in counting from subscribers to
mobile units or telephone numbers used. Our modification of the
methodology for computing fees was required because reliance on a
subscriber count does not fully reflect actual usage of the frequencies
we have authorized mobile providers to operate. For FY 1994, regulatees
often paid only a nominal $.06 fee for a single subscriber even though
that subscriber may have subscribed to numerous mobile units or
telephone numbers. Thus, as a result of the fee methodology, fee
payments did not necessarily reflect the direct benefit of our
regulation to individual licensees. For those regulatees whose fees
reflected actual usage, the modification in counting units will not
result in a significant increase in fees. However, the fact that other
regulatees may be subjected to larger increases is only a reflection of
the fact that their prior fees did not reflect the benefits they
received and does not establish that they are being subjected to an
unwarranted or disproportionate increase in fees.
93. Several parties, including PCIA, Mobile Media Communications,
and Airtouch Paging, requested that the Commission establish a separate
and lower fee category for regulatees offering one-way paging services.
We have reviewed these requests and determined that a reduced fee for
Part 22 one-way pagers is appropriate in view of the quality of the
channels afforded paging entities versus cellular providers. Pagers are
authorized only to transmit one-way data messages whereas cellular
providers operate systems providing two-way voice communications. We
are also aware that the paging industry is very competitive and
generally has low profit margins compared to the cellular industry and
to other public mobile services. We have therefore established a
reduced annual fee of $.02 per pager for FY 1995. This permitted
amendment should provide an equitable cost allocation among cellular
and other public mobile licensees and paging licensees based upon their
relative market pricing structures while minimizing any adverse impact
on the one-way paging industry.
94. Our revenue requirement for FY 1995 for Cellular and Other
Public Mobile (non-one way paging) carriers is $3,510,000. The revenue
requirement for Public Mobile One Way Pagers is $392,000. Based on the
comments of parties, we have also revised the estimated payment units
for these services to 19.6 million one way pagers and 23.4 million
Cellular/Other Public Mobile units. Dividing the revenue requirement
for Cellular/Other Public Mobile by its estimated units results in an
annual regulatory fee of $.15 per payment unit.\24\ Thus, we will
assess a fee of $.15 per mobile unit or telephone number in this
service. For one way pagers the resulting fee is $.02 per pager.\25\
\26\ See Guidelines, Appendix H at Paras. 30-33.

\24\ As we decided in our FY 1994 Order, we require licensees in
the Air-Ground Radiotelephone Service to pay their fee based upon
their number of transceivers leased for operation in aircraft.
\25\ PCIA notes that the fees for several categories of service
proposed in the Notice were the same and questions whether the then-
proposed fees were developed pursuant to the statutory scheme or
whether the Commission decided on the amount of the fee without
regard to Section 9's methodology for developing the fees. Plainly,
an examination of the methodology used to calculate the mandatory
adjustments required by Section 9 reveals that when fee amounts
within the same fee category (e.g., Common Carrier) are pro-rated
upward or downward, the existing relationship between each fee is
retained. Therefore, two fee amounts within the same fee category
having the same dollar value would both have similar values after
the pro-rata mandatory adjustment is made.
\26\ We will incorporate into our fee payment procedures the
substance of Public Notice No. 43189, Paying Regulatory Fees (July
8, 1994), requiring public mobile providers to list all their call
signs on the Form 159/159C and to distribute their total number of
mobile units for each call signs in one of the following ways: (1)
Allocate one mobile unit for every call sign, except one, and
allocate the remainder of mobile units to the remaining call sign;
or (2) determine the average number of mobile units per call sign
and use this number of mobile units for each call sign. The filer is
responsible for documenting its fee payment.
---------------------------------------------------------------------------

b. Domestic public fixed radio service. 95. The Domestic Public
Fixed Radio Service includes stations authorized under Part 21 of the
Commission's Rules to use microwave frequencies for video and data
distribution within the United States. This category includes licensees
in the Point-to-Point Microwave Radio Service, Local Television
Transmission Radio Service, Digital Electronic Message Service,
Multipoint Distribution Service (MDS), and Multichannel Multipoint
Distribution Service (MMDS).\27\ We received no comments related to the
proposed fee.

\27\ MDS and MMDS are now regulated by the Mass Media Bureau
and, therefore, the regulatory fees for these services are shown
within the Mass Media category in the FY 1995 fee schedule. See
Appendix B.
---------------------------------------------------------------------------

96. The FY 1995 revenue requirement for this service is $1,960,000,
and the payment units are estimated to be 14,000 licenses. Therefore,
we will adopt for Domestic Public Fixed Radio Service licensees a $140
annual regulatory fee per call sign payable on a specified date to be
announced by the Commission. Moreover, in response to Southwestern Bell
Corporation's request, we will modify our fee payment procedures to
permit licensees in the Public Fixed Radio Service to file a single
Form 159 stating their number of call signs and the total fee amount
with an attached listing of each call sign covered by the fee payment.
Licensees with up to 100 call signs may submit a hard copy list with
their Form 159. However, we require licensees with greater than 100
call signs to file a data diskette containing their listing of call
signs along with a hardcopy Form 159. We are adopting no other change
to the rules for calculation and submission of the fee payment by
licensees in the Domestic Public Fixed Radio Services. See Guidelines,
Appendix H at para.34.
c. International public fixed radio service. 97. The International
Public Fixed Radio Service (IPFRS) is set forth in the FY 1995
Regulatory Fee Schedule within the International fee category. It
includes common carriers authorized under Part 23 of the Commission's
Rules to provide radio communications between the United States and a
foreign point via microwave or H troposcatter systems, other than
satellites and satellite earth stations, but not including service
between the United States and Mexico and the United States and Canada
using frequencies above 72 MHz. The FY 1995 revenue requirement for
this service is $4,000, and the payment units are estimated to be 20
licenses. Thus, we are adopting a regulatory fee for IPFRS licensees of
$200 per call sign. We are proposing no

[[Page 34016]]
change to the rules for calculating and submitting fees by licensees in
the International Public Fixed Radio Services. See Guidelines, Appendix
H at para.35.
d. Earth stations. 98. Earth stations are set forth in the FY 1995
Regulatory Fee Schedule within the International fee category. The
earth station category encompasses all domestic and international earth
station facilities authorized or registered under Part 25 of the
Commission's rules. These facilities include transmit/receive,
transmit-only, and receive-only earth stations; Very Small Aperture
Terminals (VSATs) operating in the \12/14\ GHz frequency bands; Mobile
Satellite Earth stations; and equivalent C-band antennas operating in
the \4/6\ GHz frequency bands authorized pursuant to blanket authority.
99. In Section 9's Schedule of Regulatory Fees, these facilities
were grouped into several categories. Within these categories, some
fees were assessed on a per meter basis; other fees were assessed on a
per 100 antennas basis. For example, in our FY 1994 Order, we adopted
the Regulatory Fee Schedule's requirement that a higher fee be assessed
for fixed satellite earth station antennas of 9 meters or more than for
those less than 9 meters. This distinction resulted in the anomaly that
antennas performing the same function were subjected to different fees,
a fee several thousand percent higher for large earth stations than for
small earth stations. To rectify this disparity, we proposed in the
Notice to exercise our permitted authority to eliminate the dual fee
levels for these earth stations. Therefore, we proposed that any earth
station antenna in this service category be charged a fee based upon
its size as measured in meters in order to eliminate the disparity in
fees under the former schedule and to assure that smaller antennas
would continue to be subject to a smaller fee requirement than larger
antennas.
100. EDS Corporation argues that their small transmit/receive and
transmit only earth stations should continue to be assessed fees
similar to those charged for earth stations in VSAT networks (a per
antenna fee), as Congress prescribed in its fee schedule, instead of
fees similar to those for larger transmit/receive, transmit only earth
stations (a per antenna-meter fee), as proposed in the Notice. EDS
contends that since the enactment of Section 9, no change in the
regulation of small transmit/receive and transmit only earth stations
has taken place that would justify a revision in the manner in which
its fees are assessed. In addition, COMSAT Video contends that C-band
transmit/receive and transmit only earth stations should be assessed
fees distinct from the fees assessed for Ku-band transmit/receive and
transmit only earth stations. COMSAT Video questions our estimated
payment unit estimates for transmit-receive and receive only earth
stations.
101. We reject EDS's argument that we lack the authority to revise
the Regulatory Fee Schedule. As noted, Congress specifically provided
that we were to adjust the fees to ensure that they are reasonably
related to the benefits received. 9 U.S.C. 159(b)(1)(A). We conclude
that we cannot find sufficient difference in our regulation of earth
stations (regardless of size or intended use) to warrant establishing
separate fees for these facilities.
102. For FY 1995, we proposed to modify the Regulatory Fee Schedule
for receive-only earth stations by assessing the fee on a per meter
basis, in the amount of $120 per meter, regardless of whether a
facility was more or less than 9 meters in diameter.
103. The Associated Press (AP) the National Cable Television
Association (NCTA), the Cable Telecommunications Association (CATA),
Joint Cable Commenters \28\ and the Wireless Cable Industry Association
(WCIA) object to the substantial increase in fees proposed for receive
only earth stations of less than 9 meters. NCTA and the Joint
Commenters contend that the proposed fee would amount to as much as a
10,000 percent increase for receive only earth stations smaller than 9
meters in diameter. CATA and WCIA claim that the burden of the increase
would fall upon small cable and wireless cable operators in rural
areas, unable to share earth stations among systems. Further, CATA and
WCIA argue that Congress distinguished between the fees for large and
small receive only earth stations in order not to overburden cable and
wireless entities.

\28\ The Cable Industries Corp., Multimedia Cablevision, Inc.,
Providence Journal Company, and Star Cable Associates jointly filed
comments.
104. NCTA argues that the assessment for small receive only earth
stations is not substantiated by a description of how the assessment
was developed. GE American states that our unit estimate for receive
only earth stations is low. Further, AP, CATA and NCTA contend that our
deregulation of receive only earth stations and, in particular, our
policy to permit operators to decide individually whether to register
their facilities for interference protection, demonstrates that only a
minimal degree of our regulatory activities are involved with
regulation of receive only earth stations.
105. In view of the comments received, we have reevaluated our
proposed fee for receive only earth stations. We are aware that our
regulatory requirements for these facilities have been substantially
modified in recent years, notwithstanding the inclusion of receive only
earth stations in Section 9(g)'s fee schedule. In particular, we
recognize that domestic receive only earth stations are no longer
subject to licensing. (International receive only earth stations are
currently licensed). Rather, operations of receive only earth stations
may register these facilities with us in order to obtain interference
protection and other benefits. Further, our review of the resource
burden of providing interference protection to receive only earth
stations demonstrates to us that regulation of these facilities
accounts for an insignificant portion of the costs attributable to
these activities. Therefore, we have decided to exercise our authority
to make ``permitted amendments'' and to delete receive only earth
stations as a service subject to a regulatory fee requirement for FY
1995. See 47 U.S.C. Sec. 159(b)(3). Therefore, we will assess no fee
for receive only earth stations.
106. In addition, we have received the fee structure in effect in
FY 1994 for earth stations and conclude that the current structure is
not the most equitable for regulatory fee purposes. As noted, all
satellite earth stations require a certain amount of regulatory
activity. Commenters have focused on individual elements of our
regulatory activities in arguing against the changes in fees for
particular types of earth stations. For example, certain classes of
earth stations require more international activity than others (i.e.,
coordination and consultation); other classes of earth stations require
more rulemaking and enforcement activity than others (i.e., zoning
related matters). Since we do not yet have a cost accounting system
capable of assigning the cost of specific regulatory activities to
specific classes of earth stations, we find that assessing the fee on a
per authorization or registration basis, rather than a per meter or 100
antennas basis is the most equitable method of allocating the
regulatory costs assigned to satellite earth stations. Moreover, we
find no reasonable basis for charging a per meter fee when it appears
that the regulatory costs associated with a five or nine meter antenna
are similar and the benefits to the payer are no less at five meters
than at nine meters. Consequently, we are eliminating the

[[Page 34017]]
size distinctions and assessing fees on a per authorization or
registration basis.\29\

\29\ An ``authorization'' is defined on a per call sign basis. A
single call sign may either authorize one earth station antenna, or
may provide a ``blanket authorization'' covering several earth
station antennas.
---------------------------------------------------------------------------

107. Accordingly, we have revised our estimate of the number of
payment units to conform to the number of authorizations or
registrations contained in this service category (includes VSATs,
mobile equivalents, transmit/receive and transmit only earth stations).
As of October 1, 1994, 3,378 authorizations and registrations had been
issued. The FY 1995 revenue requirement attributable to all earth
stations is $1,114,740. Dividing the requirement requirement by our
estimate of 3,378 earth stations results in a fee of $330 per
authorization or registration. See Appendix G.
e. Space stations (Geosynchronous). 108. Geosynchronous space
stations are domestic and international satellites positioned in orbit
to remain fixed relative to the earth. They are authorized under Part
25 of the Commission's Rules to provide communications between
satellites and earth stations on a common carrier and/or private
carrier basis.
109. In addition to issues addressed above relating to FTEs, the
satellite parties raise several issues in opposing our proposed space
segment fees. Columbia and Panamsat, supported by GE Americom, argue
that Comsat is obligated to pay space segment fees for its Intelsat and
Inmarsat satellites in addition to the fees it pays for its domestic
satellites. Also, Columbia and Panamsat argue that we should base our
space segment fee on the number of transponders operated by a licensee
rather than its number of operational satellites because transponder
usage and bandwidth capacity more rationally reflect the benefits that
licensees receive from our regulation. Finally, these parties argue
that the number of satellites in operation as of October 1, 1994, the
date for calculating fees, is higher than the estimated number of
satellites we used to calculate the per satellite fee.
110. We reject the parties' contention that Comsat General must pay
fees on a per space station basis for the Intelsat and Inmarsat
satellites that it manages. Section 9's legislative history discloses
that Congress intended that Comsat General would be subject to a space
segment fee only for its licensed operations. Specifically, Congress
stated with respect to space station fees that:

The Committee intends that fees in this category be assessed on
operators of U.S. facilities, consistent with FCC jurisdiction.
Therefore, these fees will only apply to space stations directly
licensed by the Commission under Title III of the Communications
Act. Fees will not be applied to space stations operated by
international organizations subject to the International
Organization Immunities Act, 22 U.S.C. Section 288 et seq.\30\

\30\ H.R. Rep. No. 102-207, 102d Cong., 1st Sess. 26. Both
Intelsat and Inmarsat are subject to the International Organizations
Immunities Act. See Exec. Order No. 11,996, 42 FR 4331 (1977); Exec.
Order No. 12,238, 45 FR 60,877 (1980).

This language was incorporated by reference in the Conference Report
accompanying the 1994 Budget Reconciliation Act, which included the
regulatory fee program.\31\ Thus Congress did not intend for the
Commission to assess a fee per space station for the space segment
facilities of Intelsat and Inmarsat. Therefore, we will not require
Comsat General to submit fee payments for their satellites. For FY
1996, however, we intend to explore other ways to recover the
regulatory costs imposed on the Commission on behalf of Comsat's
participation in the Intelsat and Inmarsat programs.

\31\ Conference Report H. Rept. No. 213, 103d Cong., 1st Sess.
499 (1993).
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111. Further, we reject the parties' arguments that we should base
the space segment fee on transponders aboard operational satellites
rather than on the number of operational satellites. Our calculation of
fees using space segments rather than transponders is reasonable and
reflects Congress' decision to assess satellite fees based on
operational satellites. Moreover, Panamsat has provided us with no
demonstrable evidence that the costs of regulating the various
satellite systems is more closely related to the number of transponders
that a satellite carries than to the total number of operational
satellites. Nor has Panamsat considered the administrative burden of
its proposed fee structure on regulatees subject to the fee and upon
our own resources. Because the cost of satellite regulatory activities
is reasonably related to the number of operational satellites, we find
no basis for modifying our reliance on space stations as payment units.
112. COMSAT General contends that the proposed fee is contrary to
the public interest because it will discourage maintenance of older
satellites even thought they may remain viable providers of low-cost,
full time and occasional use commercial services. COMSAT General
further contends that the proposed fee will discourage competitive
discounting or exploitation of innovative satellite technologies and is
harmful to consumers of satellite services, particularly start-up and
small businesses, because it results in higher prices for services.
113. We reject Comsat General's contention that our fees may have
an adverse impact on innovation in the satellite and other industries
by precluding the use of older satellites. Newer satellites offer the
public access to faster, more efficient, and more advanced
telecommunications services. Providing an incentive to maintain older,
less efficient satellites may have a negative impact on the end users
of satellite services. Newer satellites are available to perform any
service that Comsat general may have intended for older generation
satellites. Although Comsat General states that older satellites ``may
remain viable as providers of low-cost providers of full time and
occasional use commercial services'', they provide us no documentation
that the cost per user to least capacity on a newer, high capacity
satellite that can serve more customers.
114. Finally, several satellite parties contend that our estimate
of payment units for the satellite fee is flawed because we did not
calculate the number of satellites in operation on October 1, 1994, the
date for the calculation of fees. We have reviewed our records and find
that 39 satellites were operational on October 1, 1994. The revenue
requirement for regulation of satellites is $2,925,000. Dividing this
by 39 operational satellites yields a fee of $75,000. See Guidelines,
Appendix H at para.40.
f. International bearer circuits.
115. Regulatory fees for international bearer circuits are set
forth in the International Service category in the FY 1995 Regulatory
Fee Schedule. The fee proposed in the Notice is to be paid by the
facilities-based common carrier activating the circuit in any
transmission facility for the provision of service to an end user or
resale carrier. Also as proposed in the Notice, we are modifying our
requirements for payment of the fee for bearer circuits by private
submarine cable operators to require that they pay fees for circuits
sold on an indefeasible right of use (IRU) basis or leased to any
customer other than an international common carrier authorized by the
Commission to provide U.S. international common carrier services.
Compare FY 1994 Order at 5367. As provided in the FY 1995 fee schedule,
64 Kbps circuits or their equivalent will be assessed a fee. Equivalent
circuits include the 64 Kbps circuit equivalent of larger bit stream
circuits. For example, the 64 Kbps

[[Page 34018]]
circuit equivalent of a 2.048 Mbps circuit is thirty 64 Kbps circuits.
Analog circuits such as 3 and 4 KHz circuits used for international
service are also included as 64 Kbps circuits. However, circuits
derived from 64 Kbps circuits by the use of digital circuit
multiplication systems are not equivalent 64 Kbps circuits. Such
circuits are not subject to fees. Only the 64 Kbps circuit from which
they have been derived will be subject to payment of a fee.
116. In the Notice we estimated the volume of active 64 Kbps
circuits or equivalent to be 62,000. AT&T, supported by Sprint,
contends that our estimate of the number of bearer circuits subject to
the fee was low. We have re-examined our estimate of the number of
bearer circuits subject to a fee as of October 1, 1994. Based on this
re-examination, we have revised the number of bearer circuits to
125,000. The FY 1995 revenue requirement for this service is $500,000.
Dividing the revenue requirement for this service by the number of
active bearer circuits results in a fee of $4.00 per circuit.
117. For purposes of calculating equivalent units subject to the
bearer circuit fee, we will assess fees as follows:

No. of
equivalent
Analog television channel, size in MHz 64 Kbps,
circuits

36......................................................... 630
24......................................................... 288
18......................................................... 240

See Appendix G. for a description of the development of the fees
for international bearer circuits; see also Guidelines, Appendix H at
para.41.
g. Inter-exchange and local exchange carriers, competitive access
providers, pay telephone providers, and other non-mobile providers of
interstate service.
118. Inter-Exchange Carriers (long distance telephone companies)
and Local Exchange Carriers (local telephone operating companies)
provide commercial and private residential telephone service.
119. In the Notice, we proposed to require a regulatory fee payment
from inter-exchange carriers (IXLs), local exchange carriers (LECs),
and competitive access providers (CAPs), consistent with our FY 1994
fee schedule. Also, we proposed to add to the schedule all domestic and
international carriers that provide operator services, WATS, 800, 900,
telex, telegraph, video, other switched services, interstate access,
special access, and alternative access services. We stated that the fee
requirement would apply to carriers using their own facilities or
reselling facilities and services of other carriers or telephone
holding companies, including companies other than traditional telephone
companies that provide interstate access service to long distance
companies and other customers.
120. In addition, we proposed to modify our methodology for
assessing fees upon these carriers generally, including CAPs and
resellers, by basing the fee upon the number of customer units, i.e.,
the number of users of a service. As in FY 1994, inter-exchange and
local exchange carriers would be required to calculate their total fee
payments based upon their total number of presubscribed lines (PSLs).
In the alternative, we proposed to assess fees on providers of
interstate services based on their minutes of interstate service in
calendar year 1994. For each methodology, we proposed the use of
certain equivalency assumptions in recognition that several categories
of service providers would be unable to calculate their fees based on
either PSLs or minutes of use (MOUs). Moreover, we invited interested
parties to file comments proposing ``the most efficient and equitable
method for assessment of fees.'' See Notice at paragraph 58.
121. Numerous parties submitted comments opposing our proposal to
add resellers and other users of the interstate network to the fee
schedule.\32\ The parties argue that Section 9 authorizes us to add
services to the Regulatory Fee Schedule only if a regulation or change
in the law so dictates. See 47 U.S.C. Sec. 159(b)(3). Thus, in the view
of these parties, no such rule making or change in the law has occurred
since the enactment of Section 9 to justify the addition of resellers
to the fee schedule. Further the interested parties contend that the
Regulatory Fee Schedule precludes inclusion of resellers because it
specifically limits the fees to providers of ``presubscribed lines,''
and resellers do not provide presubscribed lines. See 47 U.S.C.
Sec. 9(g). Finally, the commenters argue that the imposition of a fee
on resellers is contrary to our procompetitive and deregulatory
policies, particularly since resellers, in their view, are subject to
minimal regulation and derive little benefit from our regulation.

\32\ Parties opposed to adding resellers to the Regulatory Fee
Schedule include America's Carriers Telecommunications Association
(ACTA), Airtouch, Avis Rent A Car (AVIS), Competitive
Telecommunications Association (Comptel), GTE Service Corporation
(GTE), Hertz Technologies, Inc., LDDS Communications, Inc., and the
Telecommunications Resellers Association (TRA). The American Public
Communication Counsel (APCC), a trade association consisting, in
part, of pay telephone operators, while not opposing inclusion of
independent pay phone (IPP) operators in the fee schedule, argues
that the fee for OPPs must be reasonable, fairly allocated fee and
imposed on all payphones, including payphones operated by the local
exchange carriers (LECs).
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122. We disagree with the argument that our regulation of resellers
is so minimal that these carriers should not be subject to a fee
requirement. As we observed in the Notice, we required facilities based
carriers to remove any restrictions on the resale and sharing of
private line facilities and services and our oversight of the
interstate communications market has fostered the growth of the strong
resale market that currently exists.\33\ Nothing that the parties have
presented persuades us that their regulation is so minimal or their
benefits so attenuated that these carriers should not be subject to a
fee. Resellers are subject to tariffing requirements and are obligated
to provide their services pursuant to just, reasonable and
nondiscriminatory rates and practices in accordance with Sections 201
and 202 of the Act. Their rates and services are also subject to our
review pursuant to Section 208 of the Act.

\33\ See Resale and Shared Use of Common Carrier Services, 60
FCC Rcd 2d 588, 600 (1977) (In allowing resellers to obtain lines
from facilities based carriers, we declared that `` ` [resale
carriers] * * *', whether they be brokers or value added carriers *
* *, are equally subject to the requirements of Title II of the
Communications Act.''); see also American Tel. and Tel. Co. v.
F.C.C., 978 F.2d 727, 735 (D.C. Circuit 1992) (finding that
resellers and other nondominant carriers must file tariffs and offer
their services pursuant to just, reasonable and nondiscriminatory
rates and practices pursuant to Sections 201 and 202 of the Act.)
Resellers currently are subject to filing fees pursuant to Section 8
of the Communications Act.
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123. In addition, we reject the argument that Section 9 requires a
rule making other than the instant proceeding to add services to the
Regulatory Fee Schedule. Nor do we believe that the fee schedule's
provision that we assess fees for FY 1994 based upon PSLs amounts to a
congressional directive that we limit our assessment of fees to
interstate service providers capable of calculating their fees by a PSL
count. 47 U.S.C. Sec. 159(g). Section 9's legislative history
establishes that we ``are permitted through a rule making, to make
changes to the fee schedule, including adding, deleting, or
reclassifying services when the Commission determines that such changes
are necessary to ensure such fees are reasonably related to the
benefits provided to the payor of the fee by the Commission's
activities.'' \34\

\34\ Conference Report H. Rept. No. 213, 103d Cong., 1st Sess.
499 (1993).
Thus, our inclusion in the Regulatory Fee Schedule of resellers and
other

[[Page 34019]]
carriers using the interstate network is fully consistent with Section
9's provisions.
124. Many common carriers, including inter-exchange carriers, local
exchange carriers, resellers, CAPs, and pay telephone operators filed
comments addressing our proposal to revise our methodology for
assessing fees based on customers units or, in the alternative, on
MOUs. In addition, several commenters responded to our invitation to
propose a method for assessing regulatory fees on common carriers by
urging that we assess the fee based upon the gross revenues of the
subject carriers.
125. In describing our proposed methodology, we stated that fees
would be assessed based upon the number of customer units. We defined
customer units for LECs and pre-selected IXCs as their total number of
presubscribed lines, as defined by Section 69.116 of the rules. 47 CFR
69.116. For any other switched services, such as MTS, WATS, 800, 900
and operator service not billed to the number from which the call is
placed, the number of units would equal the number of billing accounts
less those already associated with those presubscribed lines reported
by the carrier. For non-switched service providers, including service
provided by CAPs, special access, and private (alternative access) line
providers, the number of customer units would be based on the total
capacity provided to customers measured as voice equivalent lines. For
this purpose, 4 Khz or 64 Kbps equivalents would equate to one voice
equivalent line. We proposed to assess the fee for pay phone operators
by their number of units based upon the number of pay telephones used
for pay telephone compensation.
126. The Notice's alternative fee structure based fee on a
carrier's number of MOUs of interstate service in calendar year 1994.
For access service provided by local exchange carriers, interstate
minutes would equal the number of originating and terminating access
minutes. For interstate service subject to access charges, the number
of minutes would equal the number of originating and terminating access
minutes. For other interstate services billed based on timed usage, the
number of minutes would equal the number of billed minutes. For
interstate services not billed on the basis of timed usage, minutes
would be estimated as the billed revenue in dollars times ten.
127. Several commenters support our proposed assessment of carrier
fees based upon customer units.\35\ These parties contend that the
customer unit methodology parallels the existing fee structure, under
which LECs have planned and budgeted for their payments of the fees,
and that a count of presubscribed access lines represents both an
equitable measure of a carrier's relative market presence and a
relatively stable measure. Also, they favor the proposal because its
methodology forms the basis for calculation of Universal Service Fund
requirements, familiar to the carriers, and because its calculations
are simple and straightforward.

\35\ Commenters supporting assessing the fee by customer units
include Bell Atlantic, MCI Telecommunications Corporation (MCI) and
Sprint Corporation (Sprint). In addition, Allnet Communications
Services, Inc. (Allnet), Avis, Hertz and TRA support assessing the
fee by customer units if resellers are added to the schedule.
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128. Other parties disagree that the customer unit approach is the
methodology best suited to assessing regulatory fees.\36\ These parties
claim that allocation mechanisms based on PSLs do not accurately
reflect the various interexchange carriers' shares of switched
services. According to AT&T, our FY 1994 PSL methodology failed to
assess fees upon inter-exchange carrier's i

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A95-15827. Public record. Not legal advice.