# Assessment and Collection of Regulatory Fees for Fiscal Year 2009

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URL: https://www.frixlaw.com/law-library/documents/fr%3AE9-12594

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** June 2, 2009
- **Citation:** 74 FR 26329

## Text

FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket No. 09-65; FCC 09-38]
Assessment and Collection of Regulatory Fees for Fiscal Year 2009

AGENCY:

Federal Communications Commission.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Commission will revise its Schedule of Regulatory Fees in order to recover an amount of $341,875,000 that Congress has required the Commission to collect for fiscal year 2009. Section 9 of the Communications Act of 1934, as amended, provides for the annual assessment and collection of regulatory fees under sections 9(b)(2) and 9(b)(3), respectively, for annual “Mandatory Adjustments” and “Permitted Amendments” to the Schedule of Regulatory Fees.

DATES:

Comments are due June 4, 2009, and reply comments are due June 11, 2009.

ADDRESSES:

You may submit comments, identified by MD Docket No. 09-65, by any of the following methods:

•
Federal eRulemaking Portal:

http://www.regulations.gov.
Follow the instructions for submitting comments.

•
Federal Communications Commission's Web Site:

http://www.fcc.gov/cgb/ecfs.
Follow the instructions for submitting comments.

•
E-mail:

ecfs@fcc.gov.
Include MD Docket No. 09-65 in the subject line of the message.

•
Mail:
Commercial overnight mail (other than U.S. Postal Service Express Mail) and Priority Mail, must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington DC 20554.

FOR FURTHER INFORMATION CONTACT:

Daniel Daly, Office of Managing Director at (202) 418-1832.

SUPPLEMENTARY INFORMATION:

Adopted: May 11, 2009; Released: May 14, 2009.

By the Commission: Acting Chairman Copps issuing a statement.

Table of Contents

Heading
Paragraph No.

I. INTRODUCTION
1

II. NOTICE OF PROPOSED RULEMAKING
2

A. FY 2009 Regulatory Fee Assessment Methodology—Development of FY 2009 Regulatory Fees
2

B. Regulatory Fee Obligations for Digital Broadcasters
5

C. Commercial Mobile Radio Service Messaging Service
8

D. International Bearer Circuits
9

E. Administrative and Operational Issues
11

1. Mandatory Use of Fee Filer
12

2. Notification and Collection of Regulatory Fees
16

a. Pre-bills
16

b. Future Streamlining of the Regulatory Fee Assessment and Collection Process
17

III. PROCEDURAL MATTERS
18

A. Public Notices and Fact Sheets
19

B. Assessment Notifications
20

1. Media Services Licensees
20

2. CMRS Cellular and Mobile Services Assessments
22

C. Streamlined Regulatory Fee Payment Process
25

1. Cable Television Subscribers
25

2. CMRS Cellular and Mobile Providers
26

3. Interstate Telecommunications Service Providers (“ITSP”)
27

D. Payment of Regulatory Fees
28

1. Lock Box Bank
28

2. Receiving Bank for Wire Payments
29

3. De Minimis Regulatory Fees
30

4. Standard Fee Calculations and Payment Dates
31

E. Enforcement
32

F. Final Regulatory Flexibility Certification
34

G. Initial Regulatory Flexibility Analysis
35

H. Congressional Review Act Analysis
36

I. Initial Paperwork Reduction Act Analysis
37

J. Ex Parte Rules
38

K. Filing Requirements
39

IV. ORDERING CLAUSES
44

• Initial Regulatory Flexibility Analysis

• Proposed Letter to Submarine Cable Operators

• Sources of Payment Unit Estimates for FY 2009

• Calculation of FY 2009 Revenue Requirements and Pro-Rata Fees

• Proposed FY 2009 Schedule of Regulatory Fees

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

• FY 2008 Schedule of Regulatory Fees

• Proposed Rules for FY 2009 International Bearer Circuit Fees

I. Introduction

1. Section 9 of the Communications Act of 1934, as amended (“the Act”), requires the Commission to assess fees to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities.
1

The Commission is obligated to collect $341,875,000 in regulatory fees during Fiscal Year (“FY”) 2009 to fund the Commission's operations.
2

In the accompanying Notice of Proposed Rulemaking (“NPRM”), we request comment on substantive and procedural aspects of our current regulatory fee program, including assessment of fees on digital broadcasting television licensees after the June 12, 2009 nation-wide digital transition date.

1
47 U.S.C. 159(a)(1).

2

See Omnibus Appropriations Act, 2009,
Public Law 111-8.

II. Notice of Proposed Rulemaking

A. FY 2009 Regulatory Fee Assessment Methodology—Development of FY 2009 Regulatory Fees

2. In this NPRM, we seek comment on the development of FY 2009 regulatory fees collected pursuant to section 9 of the Act. For FY 2009, we propose to retain the established methods and policies that the Commission has used to collect regulatory fees in the past except as discussed below. For the FY 2009 regulatory fee cycle, we propose to retain most of the administrative measures used for notification and assessment of regulatory fees of previous years. As we have in previous years, we seek comment on ways to improve the Commission's administrative processes for notifying entities of their regulatory fee obligations and collecting their payments.

3. The Commission is obligated to collect $341,875,000 in regulatory fees during FY 2009 to fund the Commission's operations.
3

Consistent with our established practice, we intend to collect these fees in the August-September 2009 time frame in order to collect the required amount by the end of the fiscal year.

3

See Omnibus Appropriations Act, 2009,
Public Law 111-8.

4. For our FY 2009 regulatory fee assessment, we propose to use essentially the same section 9 regulatory fee assessment methodology adopted for FY 2008, except with regard to submarine cable systems or as otherwise discussed below.
4

Each fiscal year, the Commission proportionally allocates to fee categories the total amount that must be collected through our section 9

regulatory fees.
5

Consistent with past practice, we propose to divide the FY 2009 payment amount by the number of payment units in each fee category to calculate the unit fee. For cases involving small fees, we propose to divide the resulting unit fee by the term of the license. We propose to round these fees consistent with the requirements of section 9(b)(2) of the Act. We seek comment on these proposals.

4
We recently revised the Commission's international bearer circuit (IBC) fee rules by adopting a new methodology for calculating regulatory fees on both common carrier and non-common carrier international submarine cable systems based on a per system fee.
See Assessment and Collection of Regulatory Fees for Fiscal Year 2008,
MD Docket No. 08-65, Second Report and Order (rel. March 24, 2009) (“
Submarine Cable Order”
). Under section 9(b)(4)(B) of the Act, we must notify Congress 90 days before a permitted amendment to the regulatory fees can take effect. The 90 day period will elapse as of July 15, 2009. For this reason, we are calculating proposed regulatory fees for FY 2009 for this service using both the new methodology and the old (pre-FY 2009) methodology. See Appendix A for the proposed regulatory fees for international submarine cable systems based on the new methodology adopted in the
Submarine Cable Order.
See Appendix I for the proposed regulatory fees for international submarine cable systems based on the current methodology which remains in effect pending the Congressional notification process. If the 90 day period elapses without Congressional objection to the permitted amendment, we will use the new methodology contained in Appendix A to calculate submarine cable fees in our FY 2009 report and order. Terrestrial and satellite facilities do not have cable landing licenses and will continue to pay regulatory fees on a per 64KB circuit basis, under our historic methodology as revised in the
Submarine Cable Order. See Submarine Cable Order
at paragraph 20.

5

See
Appendix H for the proposed FY 2009 regulatory fee assessment methodology, including a comparison to the FY 2008 results.

B. Regulatory Fee Obligations for Digital Broadcasters

5. The rules currently require that VHF and UHF stations pay regulatory fees; the rules do not specify “analog” or “digital.”
6

In our
FY 2005 Report and Order,
we stated that we had sought comment on whether to establish regulatory fee obligations for digital broadcasters but received no comments on the issue and did not establish regulatory fee obligations for digital broadcasters at that time.
7

We instead maintained that the regulatory fee obligation applied only for analog broadcaster facilities. Again in the Commission's
FY 2008 Report and Order,
we sought comment on how to assess regulatory fees after the conversion from analog to digital broadcasting, which will be completed on June 12, 2009 for full-power stations.
8

We again received no comments on this issue.

6

See
47 CFR 1.1153.

7

See Assessment and Collection of Regulatory Fees for Fiscal Year 2005,
MD Docket No. 05-59, Report and Order and Order on Reconsideration, 20 FCC Rcd 12259, 12266-67, paragraph 23 (2005) (“
FY 2005 Report and Order”
).

8

FY 2008 Report and Order
at paragraphs 44-46.

6. Consistent with past years, we will not assess FY 2009 regulatory fees for both digital and analog licenses from a licensee in the process of transitioning from analog to digital. Stations that were broadcasting in both analog and digital on October 1, 2008 will be assessed FY 2009 regulatory fees for their analog license only. Also consistent with our past practice, stations that were broadcasting in digital only on October 1, 2008 will not be assessed regulatory fees for their digital license for FY 2009.

7. Beginning in FY 2010, we plan to collect regulatory fees from digital broadcasters. We seek comment on our plan to collect regulatory fees on full-power digital broadcast stations beginning with FY 2010,
i.e.,
the fiscal year after the nation-wide transition date on June 12, 2009. Our goal is to ensure that digital broadcasters will pay their share of regulatory fees in the years after the nation-wide transition is complete. Therefore, in FY 2010, we plan to collect regulatory fees from digital broadcasters. During this transitional year, we seek comment on our plan to collect regulatory fees from digital broadcasters beginning in FY 2010, and whether an accompanying rule change is necessary.

C. Commercial Mobile Radio Service Messaging Service

8. Commercial Mobile Radio Service (“CMRS”) Messaging Services, which replaced the CMRS One-Way Paging fee category in FY 1997, includes all narrowband services.
9

We have maintained the CMRS Messaging Service regulatory fee at the rate that was first established in FY 2002,
10

$0.08 per subscriber, because the subscriber base in this industry has declined significantly.
11

We found that maintaining the CMRS Messaging regulatory fee rate at $0.08 per subscriber, rather than allowing it to increase, was the appropriate level of relief to be afforded to the messaging industry. We propose to maintain the messaging service regulatory fee at $0.08 per subscriber. We seek comment on this proposal.

9

See Assessment and Collection of Regulatory Fees for Fiscal Year 1997,
MD Docket No. 96-186, Report and Order, 12 FCC Rcd 17161, 17184-85, paragraph 60 (1997) (“
FY 1997 Report and Order”
).

10

See Assessment and Collection of Regulatory Fees for Fiscal Year 2003,
MD Docket No. 03-83, Report and Order, 18 FCC Rcd 15985, 15992, paragraph 21 (2003) (“
FY 2003 Report and Order”
).

11
The subscriber base in the paging industry declined 83 percent from 40.8 million to 6.95 million, from FY 1997 to FY 2008, according to FY 2008 collection data as of September 30, 2008.

D. International Bearer Circuits

9. Under our current policy, International Bearer Circuits (“IBC”) fees are paid by facilities-based common carriers that have active (used or leased) international bearer circuits as of December 31 of the prior year in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier, which includes active circuits to themselves or to their affiliates. Submarine cable operators pay IBC fees for common carrier and non-common carrier circuits based on a per system fee.
12

Initially, in 1994 when the Commission first established regulatory fees, it only required that terrestrial, satellite and submarine cable common carriers providing IBCs and non-common carrier submarine cable operators providing IBCs pay the regulatory fees.
13

Since 1997 operators of non-common carrier satellites also must pay a fee for each circuit sold or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services.
14

12
We recently revised our IBC fee rules to assess fees on both common carrier and non-common carrier international subcable systems based on a per system fee.
Submarine Cable Order
at paragraph 13.

13

See Implementation of Section 9 of the Communications Act; Assessment and Collection of Regulatory Fees for the 1994 Fiscal Year,
Report and Order, MD Docket No. 94-19, FCC 94-140, 9 FCC Rcd 5333, 5367, paragraph 98 (1994).

14

See Assessment and Collection of Regulatory Fees for Fiscal Year 1997 (1997 Regulatory Fees Order),
Report and Order, MD Docket No. 96-186, FCC 97-215, 12 FCC Rcd 17161 (1997)
aff'd Panamsat Corporation
v.
FCC,
198 F.3d 890, 898 (D.C. Cir 1998). When including non-common carrier satellite operators providing international communications among the payors of regulatory fees for international bearer circuits, the Commission stated that “although we have not in the past required these providers to pay the international bearer circuit regulatory fees, we conclude that it is now appropriate to impose the fee, due to these satellite providers extensive participation in services once reserved to the common carriers and [non-common carrier] undersea cable operators and, in particular, to the important role they now play in the provision of international bearer circuits.” 12 FCC Rcd at 17189, at paragraph 71 (1997).

10. We propose to collect IBC regulatory fees in FY 2009 consistent with our current policy.
15

In the
FY 2008 Report and Order,
the Commission initiated a Further NPRM to review its regulatory fee methodology and explore ways to “comprehensively make the Commission's regulatory fee process more equitable.”
16

We note that our review is continuing. On March 17, 2009, we adopted the
Submarine Cable Order,
which made the methodology for calculating regulatory fees more equitable among international submarine cable operators, without distinguishing between common carriers and non-common carriers.
17

That decision did not, however, substantively address the IBC fees for terrestrial operators.
18

As part of our comprehensive effort to review our regulatory fees process for possible ways to make the process more equitable, we

now seek comment on whether, beginning in FY 2010, carriers providing international service over terrestrial circuits also should pay IBC fees on non-common carrier circuits.
19

Carriers primarily provide terrestrial international services through microwave and fiber links across the U.S.-Canada and U.S.-Mexico borders.
20

Non-common carrier terrestrial circuits play an important role in the provision of international services on the U.S.-Canada and U.S.-Mexico routes. Due to their proximity to the United States, these two border countries are among the largest telecommunications routes, and the Commission regularly engages with counterparts in Canada and Mexico on a wide range of issues related to cross-border communications.
21

If carriers were to pay regulatory fees for their non-common carrier terrestrial circuits, we note that this would not increase the total amount of IBC fees that need to be collected each year.

15
On March 17, 2009, the Commission adopted the
Submarine Cable Order,
which changed the methodology for calculating regulatory fees for international submarine cable operators. After a pending 90-day congressional notification period, this new methodology will be incorporated into the FY 2009 regulatory fee
Report and Order
and will become effective in fiscal year 2009.

16

See FY 2008 Report and Order
at paragraph 2. The Further NPRM, however, did not seek comment on any issues specifically related to IBC fees.
See id.
at paragraph 25-58.

17

See Submarine Cable Order
at paragraph 2.

18

Id.,
at paragraph 20 n.48 (encouraging terrestrial IBC providers, among others, to propose any changes to the regulatory fee methodology that would better serve their interests).

19
A carrier may have both common carrier and non-common carrier circuits.

20
Terrestrial facilities, particularly microwave, may also be used on other short range international routes such as the U.S. Virgin Islands-British Virgin Islands and the American Samoa-Samoa routes.

21

See
2006 International Telecommunications Data, Strategic Analysis and Negotiations Division, Multilateral Negotiations and Industry Analysis Branch, International Bureau (August 2008); International Bureau Report: 2007 Section 43.61 Circuit Status Report, Policy Division (March 2009). These reports, and reports from previous years, are available on the International Bureau Web site at
http://www.fcc.gov/ib/
.

E. Administrative and Operational Issues

11. We seek comment on the administrative and operational processes used to collect the annual section 9 regulatory fees. These issues do not affect the amount of regulatory fees parties are obligated to submit; however, the administrative and operational issues affect the process of submitting payment. We invite comment on ways to improve these processes.

1. Mandatory Use of Fee Filer

12. In the past we have strongly encouraged regulatees to electronically file their regulatory fee payments via Fee Filer, instead of submitting payment with a completed hardcopy Form 159, Form 159-B, or Form 159-W.
22

Although we have strongly urged the use of Fee Filer, we have not required it. This year, we seek comment on whether the Commission should require all regulatees to enter critical information in Fee Filer, even if they do not pay through Fee Filer. By entering the Fee Filer system, even if the regulatee does not pay electronically, certain information will be entered into our system by the regulatee, such as the FRN, a correct address, and key electronic data attributes such as a call sign, payment amount, fee code, and quantity of subscribers. By instituting a mandatory filing requirement (but not a mandatory electronic payment requirement), we believe this will reduce errors resulting from illegible handwriting on hardcopy Form 159's as well as create an electronic record of licensees who have paid regulatory fees. For those licensees who use the Commission's electronic payment system (also known as “Fee Filer”), but who choose to mail in their payments using the Form 159-E voucher generated by Fee Filer, the Commission will have an electronic record of licensee payment attributes that are more easily traced than those payments that are simply mailed in with a hardcopy Form 159. Those who file and pay through Fee Filer are also certifying to the accuracy of their payment, their subscriber count, and their revenue amount.

22
Fee Filer can be accessed at
http://www.fcc.gov/fees/feefiler.html
.

13. Although we do not propose at this time to require
payment
through Fee Filer, we strongly encourage regulatees to do so. There are many benefits: (1) Expeditious submission of payment; (2) no postage or courier costs; (3) fewer errors caused by illegible handwriting or payments submitted without an FRN number or the appropriate data attributes (
e.g.,
payers will avoid false delinquencies due to payment submission errors); (4) improved recordkeeping and payment reconciliation; (5) reduced administrative burden on both licensees and on Commission staff trying to process regulatory fee payments; (6) less expensive than a wire transfer; and (7) a significant reduction in the use of payment remittance forms such as Form 159-C's submitted in support of a regulatory fee payment. These benefits will not only reduce the paper burden on licensees, but the administrative burden of preparing and mailing such documents.

14. For regulatees who choose not to
pay
online, such as those licensees whose credit card transactions exceed $99,999.99, Fee Filer also provides an opportunity to make a payment using your bank account, also known as an Automated Clearing House (“ACH”) payment, or generating an electronic remittance voucher form (Form 159-E) that can be printed directly from Fee Filer and mailed in with a check. ACH payments do not have restrictions on the amount remitted.

15. For the reasons given in paragraphs 18 through 20, we tentatively conclude that we should require regulatees to file key information into Fee Filer, even if they do not use Fee Filer to make their payment. In instances where payment cannot be made using Fee Filer, which include credit card transactions exceeding $99,999.99, wire transfers, and licensees wishing to pay using a check, we propose that those licensees still enter the Fee Filer system in order to generate a Form 159-E remittance voucher to accompany their payment. We seek comment on this proposal. Commenters opposing the mandatory Fee Filer requirement should provide the reasons for their argument, and should provide supporting facts and other data, particularly with respect to any claimed burdens of this approach.

2. Notification and Collection of Regulatory Fees

a. Pre-Bills

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

to holders of Cable Television Relay Service (“CARS”) licenses, and earth station licensees.
24

The remaining regulatees do not receive pre-bills. Consistent with the Commission's proposal to require mandatory use of Fee Filer above, pre-bill information would be loaded into Fee Filer for viewing, but would not be mailed directly to the licensee via surface mail. We seek comment on the impact of our proposal not to mail pre-bills to ITSP providers, GSO and NGSO

licensees, CARS licensees, and earth station licensees.

23
Geostationary orbit space station (“GSO”) licensees received regulatory fee pre-bills for satellites that (1) were licensed by the Commission and operational on or before October 1 of the respective fiscal year; and (2) were not co-located with and technically identical to another operational satellite on that date (
i.e.,
were not functioning as a spare satellite). Non-geostationary orbit space station (“NGSO”) licensees received regulatory fee pre-bills for systems that were licensed by the Commission and operational on or before October 1 of the respective fiscal year.

24
An assessment is a proposed statement of the amount of regulatory fees owed by an entity to the Commission (or proposed subscriber count to be ascribed for purposes of setting the entity's regulatory fee) but it is not entered into the Commission's accounting system as a current debt. A pre-bill is considered an account receivable in the Commission's accounting system. Pre-bills reflect the amount owed and have a payment due date of the last day of the regulatory fee payment window. Consequently, if a pre-bill is not paid by the due date, it becomes delinquent and is subject to our debt collection procedures.
See also
47 CFR 1.1161(c), 1.1164(f)(5), and 1.1910.

b. Future Streamlining of the Regulatory Fee Assessment and Collection Process

17. We continue to welcome comments concerning our commitment to reviewing, streamlining, and modernizing our statutorily required fee assessment and collection procedures. Our areas of particular interest include: (1) The process for notifying licensees about changes in the annual Schedule of Regulatory Fees and how it can be improved; (2) the most effective way to disseminate regulatory fee assessments and bills,
e.g.,
through surface mail, e-mail, list server using Listserv, online Web site, or some other mechanism; (3) the fee payment process, including how the agency's online regulatory fee filing system (Fee Filer) can be enhanced; (4) the timing of fee payments, including whether we should alter the existing section 9 regulatory fee payment window in any way; and (5) the timing of fee assessments and notifications.

III. Procedural Matters

18. Below are our current payment and collection procedures that we have revised over the past several years to expedite the processing of regulatory fee payments. We include these procedures here as a useful way to remind regulatory fee payers and the public about these aspects of the annual regulatory fee collection process.

A. Public Notices and Fact Sheets

19. Each year we post public notices and fact sheets pertaining to regulatory fees on our Web site. These documents contain information about the payment due date and the regulatory fee payment procedures. We will continue to post this information on
http://www.fcc.gov/fees/regfees.html
, but will not send out public notices and fact sheets to regulatees
en masse
.

B. Assessment Notifications

1. Media Services Licensees

20. Beginning in FY 2003, we sent fee assessment notifications via surface mail to media services entities on a per-facility basis.
25

The notifications provided the assessed fee amount for the facility in question, as well as the data attributes that determined the fee amount. We have since refined this initiative with improved results.
26

Consistent with procedures used last year, we will continue our notification assessment initiative in FY 2009 and mail media assessment notifications to licensees at their primary record of contact populated in our Consolidated Database System (“CDBS”), and to a secondary record of contact, if available.
27

We will also continue to make the Commission-authorized Web site available to licensees so that they can update or correct any information regarding their facilities and their fee-exempt status.
28

25
An assessment is a proposed statement of the amount of regulatory fees owed by an entity to the Commission (or proposed subscriber count to be ascribed for purposes of setting the entity's regulatory fee) but it is not entered into the Commission's accounting system as a current debt.

26
Some of those refinements have been to provide licensees with a Commission-authorized web site to update or correct any information concerning their facilities, and to amend their fee-exempt status, if need be. Also, our notifications now provide licensees with a telephone number to call in the event that they need customer assistance. The notifications themselves have been refined so that licensees of fewer than four facilities receive individual fee assessment postcards for their facilities; whereas licensees of four or more facilities now receive a single assessment letter that lists all of their facilities and the associated regulatory fee obligation for each facility.

27
We again propose to issue fee assessments for AM and FM Radio Stations, AM and FM Construction Permits, FM Translators/Boosters, VHF and UHF Television Stations, VHF and UHF Television Construction Permits, Satellite Television Stations, Low Power Television (“LPTV”) Stations and LPTV Translators/Boosters, to the extent that applicants, permittees and licensees of such facilities do not qualify as government entities or non-profit entities. Fee assessments have not been issued for broadcast auxiliary stations in prior years, nor will they be issued in FY 2009.

28
If there is a change of address for the facility, it is the licensee's responsibility to make the address change in the Media Bureau's CDBS system, as well as in the Commission's Registration System (“CORES”). The Commission-authorized web site for media services licensees is
http://www.fccfees.com
.

21. Although the Commission will continue to mail media assessment notifications, there is a proposal in this Notice of Proposed Rulemaking to institute a mandatory use of the Commission's online payment system (“Fee Filer”), which if adopted, will require all media service licensees to use Fee Filer as the first step to paying their regulatory fee obligations. The notification assessments are primarily intended to provide licensees with media data attributes, and are not intended to be used as a substitute for a remittance voucher when making a payment. Licensees wishing to pay by check or money order must first log onto the Commission's Fee Filer system and generate a Form 159-E directly from Fee Filer before mailing in their payment along with their Form 159-E.

2. CMRS Cellular and Mobile Services Assessments

22. As we have done in prior years, we will continue to mail an assessment letter to CMRS providers using data from the Numbering Resource Utilization Forecast (“NRUF”) report that is based on “assigned” number counts that have been adjusted for porting to net Type 0 ports (“in” and “out”).
29

This letter will include a listing of the carrier's Operating Company Numbers (“OCNs”) upon which the assessment is based.
30

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

29

See Assessment and Collection of Regulatory Fees for Fiscal Year 2005 and Assessment and Collection of Regulatory Fees for Fiscal Year 2004
, MD Docket Nos. 05-59 and 04-73, Report and Order and Order on Reconsideration, 20 FCC Rcd 12259, 12264, paragraphs 38-44 (2005).

30

Id.

23. We will also continue our procedure of giving entities an opportunity to revise their subscriber counts by sending an initial and a final assessment letter. If the carrier does not agree with the number of subscribers listed on the initial assessment letter, the carrier can correct its subscriber count by returning the initial assessment letter or by contacting the Commission and stating a reason for the change (
e.g.
, a purchase or sale of a subsidiary), the date of the transaction, and any other pertinent information that will help to justify a reason for the change. If we receive no response or correction to our initial assessment letter, we will expect the fee payment to be based on the number of subscribers listed on the initial assessment. We will review all responses to the initial assessment letters and determine whether a change in the number of subscribers is warranted. The final assessment letter will inform carriers as to whether we have accepted their revision in the number of subscribers.

24. Because some carriers do not file the NRUF report, they may not receive a letter of assessment. In these instances, the carriers should compute their fee payment using the standard methodology
31

that is currently in place for CMRS Wireless services (
e.g.
, compute their subscriber counts as of December 31, 2008), and submit their fee payment accordingly. Whether a carrier receives an assessment letter or not, the Commission reserves the right to audit the number of subscribers for which regulatory fees are paid. In the event that the Commission determines that the number of subscribers is inaccurate or that an insufficient reason is given for making a correction on the

initial assessment letter, the Commission will assess the carrier for the difference between what was paid and what should have been paid.

31

See
,
e.g.
, Federal Communications Commission,
Regulatory Fees Fact Sheet: What You Owe—Commercial Wireless Services for FY 2008
at 1 (rel. Aug. 2008).

C. Streamlined Regulatory Fee Payment Process

1. Cable Television Subscribers

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

2. CMRS Cellular and Mobile Providers

26. In FY 2006, we streamlined the CMRS payment process by eliminating the requirement for CMRS providers to identify their individual calls signs when making their regulatory fee payment, requiring instead for CMRS providers to pay their regulatory fees only at the aggregate subscriber level without having to identify their various call signs.
32

We will continue this practice in FY 2009. In FY 2007, we consolidated the CMRS cellular and CMRS mobile fee categories into one fee category and as one fee code, thereby eliminating the requirement for CMRS providers to separate their subscriber counts into CMRS cellular and CMRS mobile fee categories during the regulatory fee payment process. This consolidation of fee categories enabled the Commission to process payments more quickly and accurately. For FY 2009, we will continue this practice of combining the CMRS cellular and CMRS mobile fee categories into one regulatory fee category.

32

See Assessment and Collection of Regulatory Fees for Fiscal Year 2006
, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092, 8105, paragraph 48 (2006).

3. Interstate Telecommunications Service Providers (“ITSP”)

27. In FY 2007, we adopted a proposal to round lines 14 (total subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W to the nearest dollar. This revision enabled the Commission to process the ITSP regulatory fee payments more quickly because rounding was no longer a hindrance that slowed the processing of payments. In FY 2008, we continued to round lines 14 and 16 on FCC Form 159-W to the nearest dollar. We will continue rounding lines 14 and 16 when calculating the FY 2009 ITSP fee obligation.

D. Payment of Regulatory Fees

1. Lock Box Bank

28. All lock box payments to the Commission for FY 2009 will be processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC. For all regulatory fees, the address is: Federal Communications Commission, Regulatory Fees, P.O. Box 979084, St. Louis, MO 63197-9000.

2. Receiving Bank for Wire Payments

29. The receiving bank for all wire payments is the Federal Reserve Bank, New York, New York (TREAS NYC). When making a wire transfer, regulatees must fax a copy of their completed remittance instrument to U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour before initiating the wire transfer (but on the same business day), so as to not delay crediting their account. Wire transfers initiated after 6:00 p.m. (EDT) will be credited the next business day. Complete instructions for making wire payments are posted at
http://www.fcc.gov/fees/wiretran.html
.

3. De Minimis Regulatory Fees

30. Regulatees whose total FY 2009 regulatory fee liability, including all categories of fees for which payment is due, is less than $10 are exempted from payment of FY 2009 regulatory fees.

4. Standard Fee Calculations and Payment Dates

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

•
Media Services:
Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2008 for AM/FM radio stations, analog VHF/UHF full service television stations (including full service digital-only stations that were licensed as of October 1, 2008), and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2008. In instances where a permit or license is transferred or assigned after October 1, 2008, responsibility for payment rests with the holder of the permit or license as of the fee due date.

•
Wireline (Common Carrier) Services:
Regulatory fees must be paid for authorizations that were granted on or before October 1, 2008. In instances where a permit or license is transferred or assigned after October 1, 2008, responsibility for payment rests with the holder of the permit or license as of the fee due date. We note that audio bridging service providers are included in this category.
33

33
Audio bridging services are toll teleconferencing services, and audio bridging service providers are required to contribute directly to the universal service fund based on revenues from these services. On June 30, 2008, the Commission released the
InterCall Order
, in which the Commission stated that InterCall, Inc. and all similarly situated audio bridging service providers are required to contribute directly to the universal service fund.
See Request for Review by InterCall, Inc. of Decision of Universal Service Administrator
, CC Docket No. 96-45, Order, 23 FCC Rcd 10731 (2008) (“
InterCall Order”
).

•
Wireless Services:
CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2008. The number of subscribers, units, or telephone numbers on December 31, 2008 will be used as the basis from which to calculate the fee payment.

• The first eleven regulatory fee categories in our Schedule of Regulatory Fees pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire amount of their five-year or ten-year term of initial license, and only pay regulatory fees again when the license is renewed or a new license is obtained. We include these fee categories in our Schedule of Regulatory Fees to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2009.

•
Multichannel Video Programming Distributor Services (cable television operators and CARS licensees):
Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2008.
34

Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2008. In instances where a CARS license is transferred or assigned after October 1, 2008, responsibility for payment rests with the holder of the license as of the fee due date.

34
Cable television system operators should compute their basic subscribers as follows: Number of single family dwellings + number of individual households in multiple dwelling units (apartments, condominiums, mobile home parks,
etc.
) paying at the basic subscriber rate + bulk-rate customers + courtesy and free service. Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by basic annual subscription rate for individual households. Operators may base their count on “a typical day in the last full week” of December 2008, rather than on a count as of December 31, 2008.

•
International Services:
Regulatory fees must be paid for earth stations, geostationary orbit space stations and non-geostationary orbit satellite systems that were licensed and operational on or

before October 1, 2008. In instances where a license is transferred or assigned after October 1, 2008, responsibility for payment rests with the holder of the license as of the fee due date. Regulatory fees will be paid for international bearer circuits under our newly adopted methodology pending a 90-day Congressional notification for this permitted amendment;
35

if for any reason the methodology change is not instituted in FY 2009, the pre-FY 2009 methodology will be used to calculate FY 2009 bearer circuit regulatory fees.

35

See Submarine Cable Order
.

E. Enforcement

32. Regulatory fee payment must be received and stamped at the lockbox bank by the last day of the regulatory fee filing window to be considered timely. Section 9(c) of the Act requires us to impose an additional charge as a penalty for late payment of any regulatory fee.
36

A late payment penalty of 25 percent of the amount of the required regulatory fee will be assessed on the first day following the deadline date for filing of these fees. Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including the Commission's Red Light Rule
37

and the provisions set forth in the Debt Collection Improvement Act of 1996 (“DCIA”).
38

We also assess administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and section 1.1940(d) of the Commission's rules.
39

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

36
47 U.S.C. 159(c).

37

See
47 CFR 1.1910.

38
Delinquent debt owed to the Commission triggers application of the “red light rule” which requires offsets or holds on pending disbursements. 47 CFR 1.1910. In 2004, the Commission adopted rules implementing the requirements of the DCIA.
See Amendment of Parts 0 and 1 of the Commission's Rules
, MD Docket No. 02-339, Report and Order, 19 FCC Rcd 6540 (2004); 47 CFR Part 1, Subpart O, Collection of Claims Owed the United States.

39
47 CFR 1.1940(d).

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

Failure to pay regulatory fees can also result in the initiation of a proceeding to revoke any and all authorizations held by the entity responsible for paying the delinquent fee(s).

40

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

F. Final Regulatory Flexibility Certification

34. A final regulatory flexibility certification for the changes adopted in the Order herein is contained in this document. The Commission will send a copy of the Order, including the final regulatory flexibility certification, to the Chief Counsel for Advocacy of the Small Business Administration.

G. Initial Regulatory Flexibility Analysis

35. An initial regulatory flexibility analysis (“IRFA”) is contained in this document. Comments to the IRFA must be identified as responses to the IRFA and filed by the deadlines for comments on this NPRM. The Commission will send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

H. Congressional Review Act Analysis

36. The Commission will send a copy of this Notice of Proposed Rulemaking and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act,
see
5 U.S.C. 801(a)(1)(A).

I. Initial Paperwork Reduction Act Analysis

37. This Report and Order contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (“PRA”), Public Law 104-13. It will be submitted to the Office of Management and Budget (“OMB”) for review under section 3507(d) of the PRA.
41

Our proposed new form for submarine cable operators is contained in this document. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see
44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

41
44 U.S.C. 3507(d).

J. Ex Parte Rules

38. This is as a “permit-but-disclose” proceeding subject to the requirements under section 1.1206(b) of the Commission's rules.
42

Ex parte
presentations are permissible if disclosed in accordance with Commission rules, except during the Sunshine Agenda period when presentations,
ex parte
or otherwise, are generally prohibited. Persons making oral
ex parte
presentations are reminded that a memorandum summarizing a presentation must contain a summary of the substance of the presentation and not merely a listing of the subjects discussed. More than a one- or two-sentence description of the views and arguments presented is generally required.
43

Additional rules pertaining to oral and written presentations are set forth in section 1.1206(b).

42

See
47 CFR 1.1206(b);
see also
47 CFR 1.1202, 1.1203.

43

See
47 CFR 1.1206(b)(2).

K. Filing Requirements

39.
Comments and Replies
. Pursuant to sections 1.415 and 1.419 of the Commission's rules,
44

interested parties may file comments under MD Docket No. 09-65 on or before the dates indicated on the first page of this document. Comments may be filed using: (1) The Commission's Electronic Comment Filing System (“ECFS”), (2) the Federal Government's eRulemaking Portal, or (3) procedures for filing paper copies.
45

44

See
47 CFR 1.415, 1.419.

45

See Electronic Filing of Documents in Rulemaking Proceedings
, 13 FCC Rcd 11322 (1998).

40.
Electronic Filers:
Comments may be filed electronically using the Internet by accessing the ECFS:
http://www.fcc.gov/cgb/ecfs
or the Federal eRulemaking Portal:
http://www.regulations.gov
. Filers should follow the instructions provided on the web site for submitting comments. For ECFS filers, if multiple docket or rulemaking numbers appear in the caption of this proceeding, filers must transmit one electronic copy of the comments for each docket or rulemaking number referenced in the caption. In completing the transmittal screen, filers should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions, filers should send an e-mail to
ecfs@fcc.gov
, and include the

following words in the body of the message, “get form.” A sample form and directions will be sent in response.

41.
Paper Filers:
Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

• U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington, DC 20554.

42.
Availability of Documents
. Comments, reply comments, and
ex parte
submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. These documents will also be available free online, via ECFS. Documents will be available electronically in ASCII, Word, and/or Adobe Acrobat.

43.
Accessibility Information
. To request information in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to
fcc504@fcc.gov
or call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). This document can also be downloaded in Word and Portable Document Format (“PDF”) at:
http://www.fcc.gov
.

IV. Ordering Clauses

44. Accordingly,
it is ordered
that, pursuant to sections 4(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 159, and 303(r), this Notice of Proposed Rulemaking and Order is
hereby adopted
.

45.
It is further ordered
that Part 1 of the Commission's Rules
are amended
as set forth herein, and these rules shall become effective 90 days after Congressional notification.

46.
It is further ordered
that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center,
shall send
a copy of this Notice of Proposed Rulemaking and Order, including the Final Regulatory Flexibility Certification and Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the U.S. Small Business Administration.

Initial Regulatory Flexibility Analysis

47. As required by the Regulatory Flexibility Act (“RFA”),
46

the Commission has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities by the policies and rules in the present NPRM. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed on or before the dates indicated on the first page of this NPRM. The Commission will send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.
47

In addition, the NPRM and IRFA (or summaries thereof) will be published in the
Federal Register
.
48

46
5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by the Contract With America Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996) (“CWAAA”). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”).

47
5 U.S.C. 603(a).

48

Id.

I. Need for, and Objectives of, the Proposed Rules

48. This rulemaking proceeding is initiated to obtain comments concerning the Commission's proposed amendment of its Schedule of Regulatory Fees in the amount of $341,875,000, the amount that Congress has required the Commission to recover. The Commission seeks to collect the necessary amount through its proposed Schedule of Regulatory Fees in the most efficient manner possible and without undue public burden.

II. Legal Basis

49. This action, including publication of proposed rules, is authorized under sections (4)(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended.
49

49
47 U.S.C. 154(i) and (j), 159, and 303(r).

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

50. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted.
50

The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.”
51

In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.
52

A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
53

50
5 U.S.C. 603(b)(3).

51
5 U.S.C. 601(6).

52
5 U.S.C. 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the
Federal Register
.”

53
15 U.S.C. 632.

51.
Small Businesses.
Nationwide, there are a total of 22.4 million small businesses, according to SBA data.
54

54

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

52.
Small Organizations.
Nationwide, there are approximately 1.6 million small organizations.
55

55
Independent Sector, The New Nonprofit Almanac & Desk Reference (2002).

53.
Small Governmental Jurisdictions.
The term “small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.”
56

Census Bureau data for 2002 indicate that there were 87,525 local governmental jurisdictions in the United States.
57

We estimate that, of this total, 84,377 entities were “small governmental jurisdictions.”
58

Thus, we estimate that

most governmental jurisdictions are small.

56
5 U.S.C. 601(5).

57
U.S. Census Bureau,
Statistical Abstract of the United States:
2006, Section 8, p. 272, Table 415.

58
We assume that the villages, school districts, and special districts are small, and total 48,558.
See
U.S. Census Bureau,
Statistical Abstract of the United States:
2006, Section 8, p. 273, Table 417. For 2002, Census Bureau data indicate that the total number of county, municipal, and township

governments nationwide was 38,967, of which 35,819 were small.
Id.

54. We have included small incumbent local exchange carriers in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (
e.g.,
a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.”
59

The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not “national” in scope.
60

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

59
15 U.S.C. 632.

60
Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small Business Act contains a definition of “small-business concern,” which the RFA incorporates into its own definition of “small business.”
See
15 U.S.C. 632(a) (“Small Business Act”); 5 U.S.C. 601(3) (“RFA”). SBA regulations interpret “small business concern” to include the concept of dominance on a national basis.
See
13 CFR 121.102(b).

55.
Incumbent Local Exchange Carriers (“ILECs”).
Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
61

According to Commission data,
62

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

61
13 CFR 121.201, North American Industry Classification System (NAICS) code 517110.

62
FCC, Wireline Competition Bureau, Industry Analysis and Technology Division,
“Trends in Telephone Service”
at Table 5.3, Page 5-5 (Aug. 2008) (
“Trends in Telephone Service”
).

56.
Competitive Local Exchange Carriers (“CLECs”), Competitive Access Providers (“CAPs”), “Shared-Tenant Service Providers,” and “Other Local Service Providers.”
Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
63

According to Commission data,
64

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

63
13 CFR 121.201, NAICS code 517110.

64

“Trends in Telephone Service”
at Table 5.3.

57.
Local Resellers.
The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
65

According to Commission data,
66

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

65
13 CFR 121.201, NAICS code 517310.

66

“Trends in Telephone Service”
at Table 5.3.

58.
Toll Resellers.
The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
67

According to Commission data,
68

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

67
13 CFR 121.201, NAICS code 517310.

68

“Trends in Telephone Service”
at Table 5.3.

59.
Payphone Service Providers (“PSPs”).
Neither the Commission nor the SBA has developed a small business size standard specifically for payphone services providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
69

According to Commission data,
70

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

69
3 CFR 121.201, NAICS code 517110.

70

“Trends in Telephone Service”
at Table 5.3.

60.
Interexchange Carriers (“IXCs”).
Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
71

According to Commission data,
72

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

71
13 CFR 121.201, NAICS code 517110.

72

“Trends in Telephone Service”
at Table 5.3.

61.
Operator Service Providers (“OSPs”).
Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
73

According to Commission data,
74

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

73
13 CFR 121.201, NAICS code 517110.

74

“Trends in Telephone Service”
at Table 5.3.

62.
Prepaid Calling Card Providers.
Neither the Commission nor the SBA

has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
75

According to Commission data,
76

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

75
13 CFR 121.201, NAICS code 517310.

76

“Trends in Telephone Service”
at Table 5.3.

63.
800 and 800-Like Service Subscribers.
77

Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.
78

The most reliable source of information regarding the number of these service subscribers appears to be data the Commission receives from Database Service Management on the 800, 866, 877, and 888 numbers in use.
79

According to our data, at the end of December 2007, the number of 800 numbers assigned was 7,860,000; the number of 888 numbers assigned was 5,210,184; the number of 877 numbers assigned was 4,388,682; and the number of 866 numbers assigned was 7,029,116. We do not have data specifying the number of these subscribers that are independently owned and operated or have 1,500 or fewer employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, we estimate that there are 7,860,000 or fewer small entity 800 subscribers; 5,210,184 or fewer small entity 888 subscribers; 4,388,682 or fewer small entity 877 subscribers, and 7,029,116 or fewer entity 866 subscribers.

77
We include all toll-free number subscribers in this category.

78
13 CFR 121.201, NAICS code 517310.

79

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

64.
International Service Providers.
There is no small business size standard developed specifically for providers of international service. The appropriate size standards under SBA rules are for the two broad census categories of “Satellite Telecommunications” and “Other Telecommunications.” Under both categories, such a business is small if it has $13.5 million or less in average annual receipts.
80

80
13 CFR 121.201, NAICS codes 517410 and 517910.

65. The first category of Satellite Telecommunications “comprises establishments primarily engaged in providing point-to-point telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.”
81

For this category, Census Bureau data for 2002 show that there were a total of 371 firms that operated for the entire year.
82

Of this total, 307 firms had annual receipts of under $10 million, and 26 firms had receipts of $10 million to $24,999,999.
83

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

81
U.S. Census Bureau, 2002 NAICS Definitions, “517410 Satellite Telecommunications”;
http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.

82
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization),” Table 4, NAICS code 517410.

83

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

66. The second category of Other Telecommunications “comprises establishments primarily engaged in (1) Providing specialized telecommunications applications, such as satellite tracking, communications telemetry, and radar station operations; or (2) providing satellite terminal stations and associated facilities operationally connected with one or more terrestrial communications systems and capable of transmitting telecommunications to or receiving telecommunications from satellite systems.”
84

For this category, Census Bureau data for 2002 show that there were a total of 332 firms that operated for the entire year.
85

Of this total, 259 firms had annual receipts of under $10 million and 15 firms had annual receipts of $10 million to $24,999,999.
86

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

84
U.S. Census Bureau, 2002 NAICS Definitions, “517910 Other Telecommunications”;
http://www.census.gov/epcd/naics02/def/NDEF517.HTM
.

85
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization),” Table 4, NAICS code 517910.

86

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

67.
Wireless Service Providers.
The SBA has developed a small business size standard for wireless firms within the two broad economic census categories of “Paging”
87

and “Cellular and Other Wireless Telecommunications.”
88

Under both categories, the SBA deems a wireless business to be small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 2002 show that there were 807 firms in this category that operated for the entire year.
89

Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more.
90

Thus, under this category and associated small business size standard, the majority of firms can be considered small. For the census category of Cellular and Other Wireless Telecommunications, Census Bureau data for 2002 show that there were 1,397 firms in this category that operated for the entire year.
91

Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more.
92

Thus, under this second category and size standard, the majority of firms can, again, be considered small.

87
13 CFR 121.201, NAICS code 517211.

88
13 CFR 121.201, NAICS code 517212.

89
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization,” Table 5, NAICS code 517211.

90

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

91
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization),” Table 5, NAICS code 517212.

92

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

68.
Internet Service Providers.
The SBA has developed a small business size standard for Internet Service Providers. This category comprises establishments “primarily engaged in providing direct access through telecommunications networks to computer-held information compiled or published by others.”
93

Under the SBA size standard, such a business is small if it has average annual receipts of $21 million or less.
94

According to Census Bureau data for 1997, there were 2,751 firms in this category that operated for

the entire year.
95

Of these, 2,659 firms had annual receipts of under $10 million, and an additional 67 firms had receipts of between $10 million and $24,999,999.
96

Thus, under this size standard, the great majority of firms can be considered small entities.

93
Office of Management and Budget, North American Industry Classification System, p. 515 (1997). NAICS code 518111, “On-Line Information Services.”

94
13 CFR 121.201, NAICS code 518111.

95
U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 4, Receipts Size of Firms Subject to Federal Income Tax: 1997, NAICS code 514191.

96
U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 4, Receipts Size of Firms Subject to Federal Income Tax: 1997, NAICS code 514191.

69.
Cellular Licensees.
The SBA has developed a small business size standard for wireless firms within the two broad economic census categories of “Paging”
97

and “Cellular and Other Wireless Telecommunications.”
98

Under both categories, the SBA deems a wireless business to be small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 2002 show that there were 807 firms in this category that operated for the entire year.
99

Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more.
100

Thus, under this category and associated small business size standard, the majority of firms can be considered small. For the census category of Cellular and Other Wireless Telecommunications, Census Bureau data for 2002 show that there were 1,397 firms in this category that operated for the entire year.
101

Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more.
102

Thus, under this second category and size standard, the majority of firms can, again, be considered small.

97
13 CFR 121.201, NAICS code 517211.

98
13 CFR 121.201, NAICS code 517212.

99
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization,” Table 5, NAICS code 517211.

100

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

101
U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, “Establishment and Firm Size (Including Legal Form of Organization,” Table 5, NAICS code 517212.

102

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

70.
Common Carrier Paging.
As noted, the SBA has developed a small business size standard for wireless firms within the broad economic census categories of “Cellular and Other Wireless Telecommunications.”
103

Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census category of Paging, U.S. Census Bureau data for 1997 show that there were 1,320 firms in this category, total, that operated for the entire year.
104

Of this total, 1,303 firms had employment of 999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more.
105

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

103
13 CFR 121.201, NAICS code 517212.

104
U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms Subject to Federal Income Tax: 1997, NAICS code 513321.

105
U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms Subject to Federal Income Tax: 1997, NAICS code 513321. The census data do not provide a more precise estimate of the number of firms that have employment of 1,500 or fewer employees; the largest category provided is “Firms with 1000 employees or more.”

71. In addition, in the
Paging Second Report and Order,
the Commission adopted a size standard for “small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.
106

A small business is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years.
107

The SBA has approved this definition.
108

An auction of Metropolitan Economic Area (“MEA”) licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold.
109

Fifty-seven companies claiming small business status won 440 licenses.
110

An auction of MEA and Economic Area (“EA”) licenses commenced on October 30, 2001, and closed on December 5, 2001. Of the 15,514 licenses auctioned, 5,323 were sold.
111

One hundred thirty-two companies claiming small business status purchased 3,724 licenses. A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs commenced on May 13, 2003, and closed on May 28, 2003. Seventy-seven bidders claiming small or very small business status won 2,093 licenses.
112

106

Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging Systems,
Second Report and Order, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (“
Paging Second Report and Order
”);
see also

Revision of Part 22 and Part 90 of the Commission's Rules To Facilitate Future Development of Paging Systems,
Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 10030, 10085-10088, paragraphs 98-107 (1999).

107

Paging Second Report and Order,
12 FCC Rcd at 2811, paragraph 179.

108

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

109

See
“
929 and 931 MHz Paging Auction Closes,
” Public Notice, 15 FCC Rcd 4858 (WTB 2000).

110

See id.

111

See
“
Lower and Upper Paging Band Auction Closes,
” Public Notice, 16 FCC Rcd 21821 (WTB 2002).

112

See
“
Lower and Upper Paging Bands Auction Closes,
” Public Notice, 18 FCC Rcd 11154 (WTB 2003).

72. Currently, there are approximately 74,000 Common Carrier Paging licenses. According to the most recent
Trends in Telephone Service,
281 carriers reported that they were engaged in the provision of “paging and messaging” services.
113

Of these, an estimated 279 have 1,500 or fewer employees and two have more than 1,500 employees.
114

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

113
“
Trends in Telephone Service
” at Table 5.3.

114
“
Trends in Telephone Service
” at Table 5.3.

73.
Wireless Communications Services.
This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (“WCS”) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years.
115

The SBA has approved these definitions.
116

The Commission auctioned geographic area licenses in the WCS service. In the auction, which commenced on April 15, 1997 and closed on April 25, 1997, there were seven bidders that won 31 licenses that qualified as very small business entities, and one bidder that won one license that qualified as a small business entity.

115

Amendment of the Commission's Rules To Establish Part 27, the Wireless Communications Service (WCS),
Report and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).

116

See Alvarez Letter

1998.

74.
1670-1675 MHz Services.
An auction for one license in the 1670-1675 MHz band commenced on April 30, 2003 and closed the same day. One license was awarded. The winning bidder was not a small entity.

75.
Wireless Telephony.
Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. The SBA has developed a small business size standard for “Cellular and

Other Wireless Telecommunications” services.
117

Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees.
118

According to
Trends in Telephone Service
data, 434 carriers reported that they were engaged in wireless telephony.
119

Of these, an estimated 222 have 1,500 or fewer employees and 212 have more than 1,500 employees.
120

We have estimated that 222 of these are small under the SBA small business size standard.

117
13 CFR 121.201, NAICS code 517212.

118
13 CFR 121.201, NAICS code 517212.

119
“
Trends in Telephone Service
” at Table 5.3.

120
“
Trends in Telephone Service
” at Table 5.3.

76.
Broadband Personal Communications Service.
The broadband personal communications services (“PCS”) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission has created a small business size standard for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years.
121

For Block F, an additional small business size standard for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years.
122

These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA.
123

No small businesses within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 “small” and “very small” business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F.
124

On March 23, 1999, the Commission reauctioned 155 C, D, E, and F Block licenses; there were 113 small business winning bidders.
125

121

See Amendment of Parts 20 and 24 of the Commission's Rules—Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap,
Report and Order, 11 FCC Rcd 7824, 7850-7852, paras. 57-60 (1996) (“
PCS Report and Order
”);
see also
47 CFR 24.720(b).

122

See PCS Report and Order,
11 FCC Rcd at 7852, para. 60.

123

See Alvarez Letter

1998.

124
FCC News, “Broadband PCS, D, E and F Block Auction Closes,” No. 71744 (rel. Jan. 14, 1997).

125

See
“C, D, E, and F Block Broadband PCS Auction Closes,”
Public Notice,
14 FCC Rcd 6688 (WTB 1999).

77. On January 26, 2001, the Commission completed the auction of 422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in this auction, 29 qualified as “small” or “very small” businesses.
126

Subsequent events, concerning Auction 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant. On February 15, 2005, the Commission completed an auction of 188 C block licenses and 21 F block licenses in Auction No. 58. There were 24 winning bidders for 217 licenses.
127

Of the 24 winning bidders, 16 claimed small business status and won 156 licenses. On May 21, 2007, the Commission completed an auction of 33 licenses in the A, C, and F Blocks in Auction No. 71.
128

Of the 14 winning bidders, six were designated entities.
129

126

See
“C and F Block Broadband PCS Auction Closes; Winning Bidders Announced,”
Public Notice,
16 FCC Rcd 2339 (2001).

127

See
“Broadband PCS Spectrum Auction Closes; Winning Bidders Announced for Auction No. 58,”
Public Notice,
20 FCC Rcd 3703 (2005).

128

See
“Auction of Broadband PCS Spectrum Licenses Closes; Winning Bidders Announced for Auction No. 71,”
Public Notice,
22 FCC Rcd 9247 (2007).

129

Id.

78.
Narrowband Personal Communications Services.
The Commission held an auction for Narrowband PCS licenses that commenced on July 25, 1994, and closed on July 29, 1994. A second auction commenced on October 26, 1994 and closed on November 8, 1994. For purposes of the first two Narrowband PCS auctions, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less.
130

Through these auctions, the Commission awarded a total of 41 licenses, 11 of which were obtained by four small businesses.
131

To ensure meaningful participation by small business entities in future auctions, the Commission adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order.
132

A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million.
133

A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million.
134

The SBA has approved these small business size standards.
135

A third auction commenced on October 3, 2001 and closed on October 16, 2001. Here, five bidders won 317 (Metropolitan Trading Areas and nationwide) licenses.
136

Three of these claimed status as a small or very small entity and won 311 licenses.

130

Implementation of Section 309(j) of the Communications Act—Competitive Bidding Narrowband PCS,
Third Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175, 196, para. 46 (1994).

131

See
“Announcing the High Bidders in the Auction of Ten Nationwide Narrowband PCS Licenses, Winning Bids Total $617,006,674,”
Public Notice,
PNWL 94-004 (rel. Aug. 2, 1994); “Announcing the High Bidders in the Auction of 30 Regional Narrowband PCS Licenses; Winning Bids Total $490,901,787,”
Public Notice,
PNWL 94-27 (rel. Nov. 9, 1994).

132

Amendment of the Commission's Rules to Establish New Personal Communications Services,
Narrowband PCS, Second Report and Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 10456, 10476, para. 40 (2000) (“
Narrowband PCS Second Report and Order
”).

133

Narrowband PCS Second Report and Order,
15 FCC Rcd at 10476, para. 40.

134

Id.

135

See Alvarez Letter

1998.

136

See
“Narrowband PCS Auction Closes,”
Public Notice,
16 FCC Rcd 18663 (WTB 2001).

79.
Lower 700 MHz Band Licenses.
The Commission previously adopted criteria for defining three groups of small businesses for purposes of determining their eligibility for special provisions such as bidding credits.
137

The Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years.
138

A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years.
139

Additionally, the lower 700 MHz Service had a third category of small business status for Metropolitan/Rural Service Area (“MSA/RSA”) licenses. The third category is “entrepreneur,” which is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years.
140

The SBA approved these small size standards.
141

An auction of 740 licenses (one license in each of the 734 MSAs/RSAs and one license in each of the six Economic Area Groupings (EAGs)) commenced on August 27, 2002, and closed on September 18, 2002. Of the 740 licenses available for auction, 484 licenses were sold to 102 winning bidders. Seventy-two of the winning

bidders claimed small business, very small business or entrepreneur status and won a total of 329 licenses.
142

A second auction commenced on May 28, 2003, and closed on June 13, 2003, and included 256 licenses: 5 EAG licenses and 476 Cellular Market Area licenses.
143

Seventeen winning bidders claimed small or very small business status and won 60 licenses, and nine winning bidders claimed entrepreneur status and won 154 licenses.
144

On July 26, 2005, the Commission completed an auction of 5 licenses in the Lower 700 MHz band (Auction No. 60). There were three winning bidders for five licenses. All three winning bidders claimed small business status.

137

See Reallocation and Service Rules for the 698-746 MHz Spectrum Band (Television Channels 52-59),
Report and Order, 17 FCC Rcd 1022 (2002) (“
Channels 52-59 Report and Order
”).

138

See Channels 52-59 Report and Order,
17 FCC Rcd at 1087-88, paragraph 172.

139

See id.

140

See id,
17 FCC Rcd at 1088, paragraph 173.

141

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

142

See
“Lower 700 MHz Band Auction Closes,”
Public Notice,
17 FCC Rcd 17272 (WTB 2002).

143

See
“Lower 700 MHz Band Auction Closes,”
Public Notice,
18 FCC Rcd 11873 (WTB 2003).

144

See id.

80. The Commission recently reexamined its rules governing the 700 MHz band in the
700 MHz Second Report and Order.
145

An auction of 700 MHz licenses commenced January 24, 2008. For the Lower 700 MHz band, 176 licenses over Economic Areas in the A Block, 734 licenses over Cellular Market Areas in the B Block, and 176 licenses over EAs in the E Block are available for licensing.
146

Winning bidders may be eligible for small business status (those with attributable average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years), or very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years).

145

Service Rules for the 698-746, 747-762 and 777-792 MHz Bands,
WT Docket No. 06-150,
Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems,
CC Docket No. 94-102,
Section 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephones,
WT Docket No. 01-309,
Biennial Regulatory Review—Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services,
WT Docket 03-264,
Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules,
WT Docket No. 06-169,
Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band,
PS Docket No. 06-229,
Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010,
WT Docket No. 96-86, Second Report and Order, FCC 07-132 (2007) (“
700 MHz Second Report and Order
”).

146

See
“Auction of 700 MHz Band Licenses Scheduled for January 16, 2008; Comment Sought on Competitive Bidding Procedures For Auction 73,”
Public Notice,
FCC Rcd 15004 (WTB 2007).

81.
Upper 700 MHz Band Licenses.
In the
700 MHz Second Report and Order,
the Commission revised its rules regarding Upper 700 MHz licenses. On January 24, 2008, the Commission commenced Auction 73 in which several licenses in the Upper 700 MHz band are available for licensing: 12 licenses over Regional Economic Area Groupings (“REAGs”) in the C Block, and one nationwide license in the D Block.
147

Winning bidders may be eligible for small business status (those with attributable average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years), or very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years).

147

See id.

82.
700 MHz Guard Band Licenses.
In the 700 MHz Guard Band Order, the Commission adopted size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.
148

A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years.
149

Additionally, a very small business is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years.
150

SBA approval of these definitions is not required.
151

An auction of 52 Major Economic Area (“MEA”) licenses commenced on September 6, 2000, and closed on September 21, 2000.
152

Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.
153

148

See Service Rules for the 746-764 MHz Bands, and Revisions to Part 27 of the Commission's Rules,
Second Report and Order, 15 FCC Rcd 5299 (2000) (“
746-764 MHz Band Second Report and Order
”).

149

See 746-764 MHz Band Second Report and Order,
15 FCC Rcd at 5343, para. 108.

150

See id.

151

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

152

See
“700 MHz Guard Bands Auction Closes: Winning Bidders Announced,”
Public Notice,
15 FCC Rcd 18026 (2000).

153

See
“700 MHz Guard Bands Auction Closes: Winning Bidders Announced,”
Public Notice,
16 FCC Rcd 4590 (WTB 2001).

83.
Specialized Mobile Radio.
The Commission awards “small entity” bidding credits in auctions for Specialized Mobile Radio (SMR) geographic area licenses in the 800 MHz and 900 MHz bands to firms that had revenues of no more than $15 million in each of the three previous calendar years.
154

The Commission awards “very small entity” bidding credits to firms that had revenues of no more than $3 million in each of the three previous calendar years.
155

The SBA has approved these small business size standards for the 900 MHz Service.
156

The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 1995, and closed on April 15, 1996. Sixty bidders claiming that they qualified as small businesses under the $15 million size standard won 263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper 200 channels began on October 28, 1997, and was completed on December 8, 1997. Ten bidders claiming that they qualified as small businesses under the $15 million size standard won 38 geographic area licenses for the upper 200 channels in the 800 MHz SMR band.
157

A second auction for the 800 MHz band was held on January 10, 2002 and closed on January 17, 2002 and included 23 BEA licenses. One bidder claiming small business status won five licenses.
158

154
47 CFR 90.814(b)(1).

155
47 CFR 90.814(b)(1).

156

See Alvarez Letter 1999.

157

See
“Correction to Public Notice DA 96-586 ‘FCC Announces Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz SMR in Major Trading Areas,’”
Public Notice,
18 FCC Rcd 18367 (WTB 1996).

158

See
“Multi-Radio Service Auction Closes,”
Public Notice,
17 FCC Rcd 1446 (WTB 2002).

84. The auction of the 1,053 800 MHz SMR geographic area licenses for the General Category channels began on August 16, 2000, and was completed on September 1, 2000. Eleven bidders won 108 geographic area licenses for the General Category channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard.
159

In an auction completed on December 5, 2000, a total of 2,800 Economic Area licenses in the lower 80 channels of the 800 MHz SMR service were awarded.
160

Of the 22 winning

bidders, 19 claimed small business status and won 129 licenses. Thus, combining all three auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR band claimed status as small business.

159

See
“800 MHz Specialized Mobile Radio (SMR) Service General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction Closes; Winning Bidders Announced,”
Public Notice,
15 FCC Rcd 17162 (2000).

160

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

Announced,”
Public Notice,
16 FCC Rcd 1736 (2000).

85. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations in the 800 and 900 MHz bands. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. One firm has over $15 million in revenues. We assume, for purposes of this analysis, that all of the remaining existing extended implementation authorizations are held by small entities, as that small business size standard is approved by the SBA.

86.
220 MHz Radio Service—Phase I Licensees.
The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the small business size standard under the SBA rules applicable to “Cellular and Other Wireless Telecommunications” companies. This category provides that a small business is a wireless company employing no more than 1,500 persons.
161

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

161
13 CFR 121.201, NAICS code 517212.

87.
220 MHz Radio Service—Phase II Licensees.
The 220 MHz service has both Phase I and Phase II licenses. The Phase II 220 MHz service is a new service, and is subject to spectrum auctions. In the 220 MHz Third Report and Order, the Commission adopted a small business size standard for defining “small” and “very small” businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments.
162

This small business standard indicates that a “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years.
163

A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years.
164

The SBA has approved these small size standards.
165

Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998.
166

In the first auction, 908 licenses were auctioned in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (“EAG”) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold.
167

Thirty-nine small businesses won 373 licenses in the first 220 MHz auction. A second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.
168

A third auction included four licenses: 2 BEA licenses and 2 EAG licenses in the 220 MHz Service. No small or very small business won any of these licenses.
169

The Commission conducted a fourth auction in 2007 with three of the five winning bidders claiming small or very small business status.
170

162
Amendment
of Part 90 of the Commission's Rules to Provide For the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service,
Third Report and Order, 12 FCC Rcd 10943, 11068-70, paras. 291-295 (1997).

163

Id.
at 11068, para. 291.

164

Id.

165

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

166

See generally
“220 MHz Service Auction Closes,”
Public Notice,
14 FCC Rcd 605 (1998).

167

See
“FCC Announces It is Prepared to Grant 654 Phase II 220 MHz Licenses After Final Payment is Made,”
Public Notice,
14 FCC Rcd 1085 (1999).

168

See
“Phase II 220 MHz Service Spectrum Auction Closes,”
Public Notice,
14 FCC Rcd 11218 (1999).

169

See
“Multi-Radio Service Auction Closes,”
Public Notice,
17 FCC Rcd 1446 (2002).

170

See
“Auction of Phase II 220 MHz Service Spectrum Licenses Closes,”
Public Notice,
22 FCC Rcd 11573 (WTB 2007).

88.
Private Land Mobile Radio (“PLMR”).
PLMR systems serve an essential role in a range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories, and are often used in support of the licensee's primary (non-telecommunications) business operations. For the purpose of determining whether a licensee of a PLMR system is a small business as defined by the SBA, we use the broad census category, “Cellular and Other Wireless Telecommunications.” This definition provides that a small entity is any such entity employing no more than 1,500 persons.
171

The Commission does not require PLMR licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many PLMR licensees constitute small entities under this definition. We note that PLMR licensees generally use the licensed facilities in support of other business activities, and therefore, it would also be helpful to assess PLMR licensees under the standards applied to the particular industry subsector to which the licensee belongs.
172

171

See
13 CFR 121.201, NAICS code 517212.

172

See generally
13 CFR 121.201.

89. The Commission's 1994 Annual Report on PLMRs
173

indicates that at the end of fiscal year 1994, there were 1,087,267 licensees operating 12,481,989 transmitters in the PLMR bands below 512 MHz. We note that any entity engaged in a commercial activity is eligible to hold a PLMR license, and that the revised rules in this context could therefore potentially impact small entities covering a great variety of industries.

173
Federal Communications Commission, 60th Annual Report, Fiscal Year 1994, at paragraph 116.

90.
Fixed Microwave Services.
Fixed microwave services include common carrier,
174

private operational-fixed,
175

and broadcast auxiliary radio services.
176

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

category “Cellular and Other Telecommunications,” which is 1,500 or fewer employees.
177

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

174

See
47 CFR 101
et seq.
for common carrier fixed microwave services (except Multipoint Distribution Service).

175
Persons eligible under parts 80 and 90 of the Commission's Rules can use Private Operational-Fixed Microwave services.
See
47 CFR Parts 80 and 90. Stations in this service are called operational-fixed to distinguish them from common carrier and public fixed stations. Only the licensee may use the operational-fixed station, and only for communications related to the licensee's commercial, industrial, or safety operations.

176
Auxiliary Microwave Service is governed by Part 74 of Title 47 of the Commission's Rules.
See
47 CFR Part 74. This service is available to licensees of broadcast stations and to broadcast and cable network entities. Broadcast auxiliary microwave stations are used for relaying broadcast television signals from the studio to the transmitter, or between two points such as a main studio and an auxiliary studio. The service also includes mobile television pickups, which relay signals from a remote location back to the studio.

177
13 CFR 121.201, NAICS code 517212.

91.
39 GHz Service.
The Commission created a special small business size standard for 39 GHz licenses—an entity that has average gross revenues of $40 million or less in the three previous calendar years.
178

An additional size standard for “very small business” is: an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years.
179

The SBA has approved these small business size standards.
180

The auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses.

178

See Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands,
ET Docket No. 95-183, Report and Order, 12 FCC Rcd 18600 (1997).

179

Id.

180

See
Letter from Aida Alvarez, Administrator, SBA, to Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis Division, WTB, FCC (Feb. 4, 1998);
See
Letter from Hector Barreto, Administrator, SBA, to Margaret Wiener, Chief, Auctions and Industry Analysis Division, WTB, FCC (Jan. 18, 2002).

92.
Local Multipoint Distribution Service.
Local Multipoint Distribution Service (“LMDS”) is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications.
181

The auction of the 986 LMDS licenses began on February 18, 1998 and closed on March 25, 1998. The Commission established a small business size standard for LMDS licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years.
182

An additional small business size standard for “very small business” was added as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years.
183

The SBA has approved these small business size standards in the context of LMDS auctions.
184

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

181

See Rulemaking to Amend Parts 1, 2, 21, 25, of the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services,
Second Report and Order, Order on Reconsideration, and Fifth Notice of Proposed Rule Making, 12 FCC Rcd 12545, 12689-90, paragraph 348 (1997) (“
LMDS Second Report and Order”).

182

See LMDS Second Report and Order,
12 FCC Rcd at 12689-90, paragraph 348.

183

See id.

184

See Alvarez to Phythyon Letter 1998.

93.
218-219 MHz Service.
The first auction of 218-219 MHz (previously referred to as the Interactive and Video Data Service or IVDS) spectrum resulted in 178 entities winning licenses for 594 Metropolitan Statistical Areas (“MSAs”).
185

Of the 594 licenses, 567 were won by 167 entities qualifying as a small business. For that auction, the Commission defined a small business as an entity that, together with its affiliates, has no more than a $6 million net worth and, after Federal income taxes (excluding any carry over losses), has no more than $2 million in annual profits each year for the previous two years.
186

In the
218-219 MHz Report and Order and Memorandum Opinion and Order,
we defined a small business as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and their affiliates, has average annual gross revenues not exceeding $15 million for the preceding three years.
187

A very small business is defined as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and its affiliates, has average annual gross revenues not exceeding $3 million for the preceding three years.
188

The SBA has approved of these definitions.
189

A subsequent auction is not yet scheduled. Given the success of small businesses in the previous auction, and the prevalence of small businesses in the subscription television services and message communications industries, we assume for purposes of this analysis that in future auctions, many, and perhaps most, of the licenses may be awarded to small businesses.

185

See
“
Interactive Video and Data Service (IVDS) Applications Accepted for Filing,
” Public Notice, 9 FCC Rcd 6227 (1994).

186

Implementation of Section 309(j) of the Communications Act—Competitive Bidding,
Fourth Report and Order, 9 FCC Rcd 2330 (1994).

187

Amendment of Part 95 of the Commission's Rules to Provide Regulatory Flexibility in the 218-219 MHz Service,
Report and Order and Memorandum Opinion and Order, 15 FCC Rcd 1497 (1999).

188

Id.

189

See Alvarez to Phythyon Letter 1998.

94.
Location and Monitoring Service (“LMS”).
Multilateration LMS systems use non-voice radio techniques to determine the location and status of mobile radio units. For purposes of auctioning LMS licenses, the Commission has defined “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $15 million.
190

A “very small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $3 million.
191

These definitions have been approved by the SBA.
192

An auction for LMS licenses commenced on February 23, 1999, and closed on March 5, 1999. Of the 528 licenses auctioned, 289 licenses were sold to four small businesses.

190

Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle Monitoring Systems,
Second Report and Order, 13 FCC Rcd 15182, 15192, paragraph 20 (1998) (“
Automatic Vehicle Monitoring Systems Second Report and Order
”);
see also
47 CFR 90.1103.

191

Automatic Vehicle Monitoring Systems Second Report and Order,
13 FCC Rcd at 15192, para. 20;
see also
47 CFR 90.1103.

192

See Alvarez Letter 1998.

95.
Rural Radiotelephone Service.
The Commission has not adopted a size standard for small businesses specific to the Rural Radiotelephone Service.
193

A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio System (“BETRS”).
194

In the present context, we will use the SBA's small business size standard applicable to “Cellular and Other Wireless Telecommunications,”
i.e.
, an entity employing no more than 1,500 persons.
195

There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelephone Service that

may be affected by the rules and policies proposed herein.

193
The service is defined in section 22.99 of the Commission's rules, 47 CFR 22.99.

194
BETRS is defined in section 22.757 and 22.759 of the Commission's rules, 47 CFR 22.757 and 22.759.

195
13 CFR 121.201, NAICS code 517212.

96.
Air-Ground Radiotelephone Service.
196

The Commission has previously used the SBA's small business definition applicable to “Cellular and Other Wireless Telecommunications,”
i.e.
, an entity employing no more than 1,500 persons.
197

There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and under that definition, we estimate that almost all of them qualify as small entities under the SBA definition. For purposes of assigning Air-Ground Radiotelephone Service licenses through competitive bidding, the Commission has defined “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $40 million.
198

A “very small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $15 million.
199

These definitions were approved by the SBA.
200

In May 2006, the Commission completed an auction of nationwide commercial Air-Ground Radiotelephone Service licenses in the 800 MHz band (Auction No. 65). On June 2, 2006, the auction closed with two winning bidders winning two Air-Ground Radiotelephone Services licenses. Neither of the winning bidders claimed small business status.

196
The service is defined in section 22.99 of the Commission's rules, 47 CFR 22.99.

197
13 CFR 121.201, NAICS codes 517212.

198

Amendment of Part 22 of the Commission's Rules to Benefit the Consumers of Air-Ground Telecommunications Services, Biennial Regulatory Review—Amendment of Parts 1, 22, and 90 of the Commission's Rules, Amendment of Parts 1 and 22 of the Commission's Rules to Adopt Competitive Bidding Rules for Commercial and General Aviation Air-Ground Radiotelephone Service,
WT Docket Nos. 03-103 and 05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd 19663, paragraphs 28-42 (2005).

199

Id.

200

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

97.
Aviation and Marine Radio Services.
There are approximately 26,162 aviation, 34,555 marine (ship), and 3,296 marine (coast) licensees.
201

The Commission has not developed a small business size standard specifically applicable to all licensees. For purposes of this analysis, we will use the SBA small business size standard for the category “Cellular and Other Telecommunications,” which is 1,500 or fewer employees.
202

We are unable to determine how many of those licensed fall under this standard. For purposes of our evaluations in this analysis, we estimate that there are up to approximately 62,969 licensees that are small businesses under the SBA standard.
203

In December 1998, the Commission held an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For this auction, the Commission defined a “small” business as an entity that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $15 million dollars. In addition, a “very small” business is one that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $3 million dollars.
204

Further, the Commission made available Automated Maritime Telecommunications System (“AMTS”) licenses in Auctions 57 and 61.
205

Winning bidders could claim status as a very small business or a very small business. A very small business for this service is defined as an entity with attributed average annual gross revenues that do not exceed $3 million for the preceding three years, and a small business is defined as an entity with attributed average annual gross revenues of more than $3 million but less than $15 million for the preceding three years.
206

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

201
Vessels that are not required by law to carry a radio and do not make international voyages or communications are not required to obtain an individual license.
See
Amendment of Parts 80 and 87 of the Commission's rules to Permit Operation of Certain Domestic Ship and Aircraft Radio Stations Without Individual Licenses,
Report and Order,
WT Docket No. 96-82, 11 FCC Rcd 14849 (1996).

202
13 CFR 121.201, NAICS code 517212.

203
A licensee may have a license in more than one category.

204

Amendment of the Commission's Rules Concerning Maritime Communications,
PR Docket No. 92-257, Third Report and Order and Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).

205

See
“
Automated Maritime Telecommunications System Spectrum Auction Scheduled for September 15, 2004, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Auction Procedures,
” Public Notice, 19 FCC Rcd 9518 (WTB 2004); “
Auction of Automated Maritime Telecommunications System Licenses Scheduled for August 3, 2005, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Auction Procedures for Auction No. 61,
” Public Notice, 20 FCC Rcd 7811 (WTB 2005).

206
47 CFR 80.1252.

98.
Offshore Radiotelephone Service.
This service operates on several ultra high frequencies (“UHF”) television broadcast channels that are not used for television broadcasting in the coastal areas of States bordering the Gulf of Mexico.
207

There is presently 1 licensee in this service. We do not have information whether that licensee would qualify as small under the SBA's small business size standard for “Cellular and Other Wireless Telecommunications” services.
208

Under that SBA small business size standard, a business is small if it has 1,500 or fewer employees.
209

207
This service is governed by Subpart I of Part 22 of the Commission's Rules.
See
47 CFR 22.1001-22.1037.

208
13 CFR 121.201, NAICS code 517212.

209

Id.

99.
Multiple Address Systems (“MAS”).
Entities using MAS spectrum, in general, fall into two categories: (1) Those using the spectrum for profit-based uses, and (2) those using the spectrum for private internal uses. With respect to the first category, the Commission defines “small entity” for MAS licenses as an entity that has average gross revenues of less than $15 million in the three previous calendar years.
210

“Very small business” is defined as an entity that, together with its affiliates, has average gross revenues of not more than $3 million for the preceding three calendar years.
211

The SBA has approved of these definitions.
212

The majority of these entities will most likely be licensed in bands where the Commission has implemented a geographic area licensing approach that would require the use of competitive bidding procedures to resolve mutually exclusive applications. The Commission's licensing database indicates that, as of January 20, 1999, there were a total of 8,670 MAS station authorizations. Of these, 260 authorizations were associated with common carrier service. In addition, an auction for 5,104 MAS licenses in 176 EAs began November 14, 2001, and closed on November 27, 2001.
213

Seven winning bidders claimed status as small or very small businesses and won 611 licenses. On May 18, 2005, the Commission completed an auction (Auction No. 59) of 4,226 MAS licenses in the Fixed Microwave Services from the 928/959 and 932/941 MHz bands. Twenty-six winning bidders won a total

of 2,323 licenses. Of the 26 winning bidders in this auction, five claimed small business status and won 1,891 licenses.

210

See Amendment of the Commission's Rules Regarding Multiple Address Systems,
Report and Order, 15 FCC Rcd 11956, 12008, paragraph 123 (2000).

211

Id.

212

See Alvarez Letter 1999.

213

See
“
Multiple Address Systems Spectrum Auction Closes,”
Public Notice, 16 FCC Rcd 21011 (2001).

100. With respect to the second category, which consists of entities that use, or seek to use, MAS spectrum to accommodate internal communications needs, we note that MAS serves an essential role in a range of industrial, safety, business, and land transportation activities. MAS radios are used by companies of all sizes, operating in virtually all U.S. business categories, and by all types of public safety entities. For the majority of private internal users, the small business size standard developed by the SBA would be more appropriate. The applicable size standard in this instance appears to be that of “Cellular and Other Wireless Telecommunications”. This definition provides that a small entity is any such entity employing no more than 1,500 persons.
214

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

214

See
13 CFR 121.201, NAICS code 517212.

101.
1.4 GHz Band Licensees.
The Commission conducted an auction of 64 1.4 GHz band licenses, beginning on February 7, 2007,
215

and closing on March 8, 2007.
216

In that auction, the Commission defined “small business” as an entity that, together with its affiliates and controlling interests, had average gross revenues that exceed $15 million but do not exceed $40 million for the preceding three years, and a “very small business” as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years.
217

Neither of the two winning bidders sought designated entity status.
218

215

See
“
Auction of 1.4 GHz Bands Licenses Scheduled for February 7, 2007
,” Public Notice, 21 FCC Rcd 12393 (WTB 2006).

216

See
“
Auction of 1.4 GHz Band Licenses Closes; Winning Bidders Announced for Auction No. 69
,” Public Notice, 22 FCC

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3AE9-12594. Public record. Not legal advice.