Proposed Rule2021-20125
Assessment and Collection of Regulatory Fees for Fiscal Year 2021
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 21, 2021
Issuing agencies
Federal Communications Commission
Abstract
In this document, the Federal Communications Commission (Commission) seeks comment on two issues that impact regulatory fees. First, what methodology should we use to assess regulatory fees on unlicensed spectrum users, and second, how should we calculate the fee for small satellites that will become a feeable category in FY 2022.
Full Text
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[Federal Register Volume 86, Number 180 (Tuesday, September 21, 2021)]
[Proposed Rules]
[Pages 52429-52437]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-20125]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[MD Docket 21-190; FCC 21-98; FRS 47254]
Assessment and Collection of Regulatory Fees for Fiscal Year 2021
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks comment on two issues that impact regulatory fees.
First, what methodology should we use to assess regulatory fees on
unlicensed spectrum users, and second, how should we calculate the fee
for small satellites that will become a feeable category in FY 2022.
DATES: Submit comments on or before October 21, 2021 and reply comments
on or before November 5, 2021.
ADDRESSES: Interested parties may file comments and reply comments
identified by MD Docket No. 21-190, by any of the following methods
below.
<bullet> Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: <a href="http://apps.fcc.gov/ecfs/">http://apps.fcc.gov/ecfs/</a>.
<bullet> Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
<bullet> Filings can be sent by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
<bullet> Commercial overnight mail (other than U.S. Postal Service
Express Mail
[[Page 52430]]
and Priority Mail) must be sent to 9050 Junction Drive, Annapolis
Junction, MD 20701.
<bullet> U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 45 L Street NE, Washington, DC 20554.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing
Director at (202) 418-0444.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), FCC 21-98, MD Docket No. 21-190, adopted
on August 25, 2021 and released on August 26, 2021. The full text of
this document is available for inspection and copying during normal
business hours in the FCC Reference Center, 45 L Street NE, Washington,
DC 20554, and may also be purchased from the Commission's copy
contractor, BCPI, Inc., 45 L Street, NE, Washington, DC 20554.
Customers may contact BCPI, Inc. via their website, <a href="http://www.bcpi.com">http://www.bcpi.com</a>, or call 1-800-378-3160. This document is available in
alternative formats (computer diskette, large print, audio record, and
braille). Persons with disabilities who need documents in these formats
may contact the FCC by email: <a href="/cdn-cgi/l/email-protection#b8fefbfb8d888cf8dedbdb96dfd7ce"><span class="__cf_email__" data-cfemail="0e484d4d3b3e3a4e686d6d20696178">[email protected]</span></a> or phone: 202-418-0530 or
TTY: 202-418-0432. Effective March 19, 2020, and until further notice,
the Commission no longer accepts any hand or messenger delivered
filings. This is a temporary measure taken to help protect the health
and safety of individuals, and to mitigate the transmission of COVID-
19. See FCC Announces Closure of FCC Headquarters Open Window and
Change in Hand-Delivery Policy, Public Notice, DA 20-304 (March 19,
2020). <a href="https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy">https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy</a>. During the time the
Commission's building is closed to the general public and until further
notice, if more than one docket or rulemaking number appears in the
caption of a proceeding, paper filers need not submit two additional
copies for each additional docket or rulemaking number; an original and
one copy are sufficient.
I. Procedural Matters
1. Ex Parte Information. This proceeding shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda, or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with section 1.1206(b) of the Commission's rules.
In proceedings governed by section 1.49(f) of the Commission's rules or
for which the Commission has made available a method of electronic
filing, written ex parte presentations and memoranda summarizing oral
ex parte presentations, and all attachments thereto, must be filed
through the electronic comment filing system available for that
proceeding, and must be filed in their native format (e.g., .doc, .xml,
.ppt, searchable .pdf). Participants in this proceeding should
familiarize themselves with the Commission's ex parte rules.
2. Initial Regulatory Flexibility Analysis. An initial regulatory
flexibility analysis (IRFA) is contained in this summary. Comments to
the IRFA must be identified as responses to the IRFA and filed by the
deadlines for comments on the Notice of Proposed Rulemaking. The
Commission will send a copy of the Notice of Proposed Rulemaking,
including the IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration.
3. Initial Paperwork Reduction Act of 1995 Analysis. This document
does not contain new or modified information collection requirements
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, therefore, it does not contain any new or modified
information collection burden for small business concerns with fewer
than 25 employees, pursuant to the Small Business Paperwork Relief Act
of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
II. Notice of Proposed Rulemaking
A. New Regulatory Fee Categories
1. We seek comment on whether we should adopt new regulatory fee
categories and on ways to improve our regulatory fee process regarding
any and all categories of service. Some commenters suggest that we
impose fees on particular industry participants, essentially asking
that we consider new fee categories, such as unlicensed spectrum users,
especially large technology companies, to pay regulatory fees. We seek
comment on the legal basis for assessing regulatory fees on such users,
consistent with the precedent interpreting our section 9 authority.
What would be the proposed methodology for assessing regulatory fees on
unlicensed spectrum users? We note that unlicensed spectrum users
include a significant number of equipment manufacturers, such as
appliance and other home goods equipment, many of which neither apply
for nor require authorization by the Commission. Commenters should also
explain, to the extent they advocate imposition of regulatory fees on
either a subset of users or certain entities benefitting from such use,
how to define any new fee category and how to calculate and assess such
fees on an annual basis. Alternatively, should the Commission assess
regulatory fees on large technology companies based on a different
basis, such as any advantages they receive because of the Commission's
universal service or other activities? Are there other categories that
should be added, deleted, or reclassified? In recommending the
addition, deletion, or reclassification of a fee category, commenters
should also explain the impact of such addition, deletion or
reclassification upon other regulatory fee categories and payors. We
also seek comment on possible methodologies for re-calculating the
regulatory fee allocation.
2. Section 9 of the Communications Act requires the Commission's
methodology for assessing regulatory fees to ``reflect the full-time
equivalent number of employees within the bureaus and offices of the
Commission, adjusted to take into account factors that are reasonably
related to the benefits provided to the payor of the fee by the
Commission's activities.'' Commenters should specifically discuss how a
proposed new fee category is consistent with the section 9 requirement
to base regulatory fees on the number of FTEs
[[Page 52431]]
devoted to the oversight and/or regulation of the industry. Further,
commenters should indicate how the new fee category fits within the
Commission's current regulatory fee methodology. To the extent
possible, commenters should support any proposed new fee category with
data and/or examples necessitating a revision of the Commission's
current regulatory fees framework.
B. Fees for Small Satellites
3. In anticipation of listing small satellites for the first time
on the FY 2022 regulatory fee schedule, we seek comment on several
proposals pertaining to this new category. In 2019, the Commission
adopted a new, optional licensing process for small satellites and
small spacecraft. The Commission also adopted a ``small satellite''
regulatory fee subcategory for licensed and operational satellite
systems authorized under the new process adopted in that proceeding. As
has been noted in prior year fee proceedings, small satellites
typically have a number of characteristics that distinguish them from
traditional NGSO satellite systems, such as having a lower mass,
shorter duration missions, and more limited spectrum needs.
4. Commenters suggest that under the streamlined process, less
agency resources are necessary to process than other systems because
they are exempt from processing rounds and must certify that their
operations will not interfere with those of existing operators or
materially constrain future operators from using the assigned frequency
band(s). For example, once small satellites are added to the
Commission's regulatory fee schedule, the NGSO regulatory fee
allocation be adjusted to a 5/5/90 split among small satellites, less
complex systems, and other systems, respectively. Another suggestion is
to assess a fee of 1/20th of the fee for NGSO systems, or a regulatory
fee of not more than 1/10th of the previously proposed NGSO fee, which
at the time was calculated to be $22,350.00 for small satellites. One
commenter believed that such a fee reflected the Commission's costs and
was fair, but substantial in the amount.
5. We expect the small satellite fees to be on the FY 2022 fee
schedule because there are several systems authorized under the small
satellite process that are beginning operations, and we expect these
systems to be operating as of the date for assessment of FY 2022 fees.
FY 2022 will be the first year where regulatory fees are assessed on
small satellites, and therefore we anticipate that we will continue to
review regulatory fees for small satellites on an ongoing basis as we
gain more experience with these licensees and market access grantees.
6. There are a number of factors to consider in assessing the
regulatory fee for such systems. There are a number of limitations on
the benefits that small satellite licensees and market access grantees
may receive from ongoing activities of the Commission. While small
satellites may receive interference protection when operating as
allocated, such satellites must be compatible with existing operations
in the requested frequency bands and not materially constrain future
operations of other satellites in those frequency bands. Moreover,
small satellite licensees are limited to a license term not to exceed
six years. As such, investments in any particular small satellite
system are likely to be smaller compared with other types of NGSO
systems, and therefore the overall benefits to a particular licensee
from Commission rulemakings and other activities of an ongoing nature
are also likely to be smaller. These systems are also less likely to be
involved in ongoing adjudications because of the scope of such systems
and the fact that they are not authorized under the Commission's
processing round procedures. Further, as a result of the structure of
the small satellite process, a single system may have multiple licenses
or market access grants. There will also only be a few small satellite
licensees which would commence operations as of the relevant date for
assessing FY 2022 fees. Given these limitations, and taking into
consideration the FTE regulatory benefits that may be associated with a
single license or grant of market access, we make several proposals
that would result in a fee for small satellites that is low, compared
to other types of satellites or systems, but will reasonably reflect
our FTE burden and the benefits received by these fee payors. We start
with considering the number of FTEs working on oversight for this
category of operators. Thus, we must estimate the relative number of
FTEs that are attributable to benefitting small satellite licensees or
grantees, based on the factors above. We also observe that due to the
small satellite licensing regulatory framework and the nascent nature
of these systems, currently, much of the IB FTE time that can be
associated with small satellites appear to cover small satellite
application processing.
7. Given the various considerations above, we seek comment on
several proposals on the appropriate methodology to calculate the small
satellite fees. First, we seek comment on setting a fee for each small
satellite license or market access grant, in such a way that the amount
would not be dependent on the number of small satellite systems
operating in a given regulatory period. This type of fee, rather than a
fee that varies depending on the number of licensees or grantees, may
be appropriate, since the small satellite process is calibrated to
shorter duration missions, and therefore the number of small satellite
systems licensed and operational could fluctuate more significantly
from year to year than other types of NGSO systems that typically have
a 15-year license term, creating uncertainty. We seek comment on these
conclusions. There are several options for setting this type of fee. In
comparing the actual regulatory work involved, we estimate that for a
given small satellite system, the FTE activities would be approximately
1/20th of the FTE activities for a typical system in the category of
``other'' NGSO systems, similar to the Commission's findings in In the
FY 2018 Report and Order. Thus, one option would be to tie the small
satellite fee to the fee allocated for an individual ``other'' NGSO
system in a given year, and charge any individual small satellite
licensee or grantee 1/20th of that amount. Or, charge a small satellite
system (even if authorized under multiple licenses), 1/20th of that
amount. We recognize, however, that the fee for an individual ``other''
NGSO system may vary from year-to-year, and thus the fee for a small
satellite licensee would be dependent on how many ``other'' NGSO
systems are authorized and operational in a given year. As an
alternative, we could set a fee for individual small satellite
licensees (or systems), based on approximately 1/20th of FY 2021 NGSO
``other'' systems ($17,178)--and which we could reassess each year to
ensure that there was some predictability. We seek comment on these
proposals and other appropriate methodology. Commenters suggesting
other fee calculation methodologies should discuss how such
methodologies would reasonably reflect the FTE time spent on regulatory
activities or an objective measure that corresponds to the benefits of
FTE time devoted to oversight and regulation of such entities.
8. Second, we seek comment on whether to allocate a percentage of
the allocation for space station fees for small satellites. Under this
proposal, a certain percentage of the space station fees would need to
be recovered from small satellite regulatory fee payors, and therefore
the amount would fluctuate depending on the number of payors in
[[Page 52432]]
the small satellite category. In estimating the percentage, we must
consider that the number of systems in the small satellite category is
likely to be small initially. This percentage could be reassessed
depending on the number of small satellite systems in the category--as
the benefits to the category as a whole as well as FTE activities would
increase, as the number of systems increases. For example, if we
estimate that roughly two to three percent of the total NGSO system
regulatory FTE activities is comprised of activities for small
satellites, and allocate two percent of the total NGSO fee to small
satellites, based on the FY2021 regulatory fee amounts as an example,
this would allocate approximately $85,888 to the small satellite
category. Divided among three licenses, for example, this would result
in regulatory fees of approximately $28,629 per license. We seek
comment on this approach and generally on the best methods of fee
calculation. Planet and AWS appear to propose an approach similar to
this. AWS and Planet suggest an allocation that would be equivalent to
the allocation for ``less complex'' NGSO systems, for example. We seek
comment on these proposals as well. To the extent that commenters such
as AWS propose that the Commission redistribute a percentage solely of
the ``less complex'' NGSO system fee to systems authorized under the
streamlined small satellite process, we note that while there may be
overlap in the types of services being provided in some instances,
there are also important differences between small satellites and
``less complex'' and ``other'' NGSO space station systems that we
believe are likely to necessitate different regulatory fees. For
example, as noted above, the license or market access term for these
small systems are designed to be significantly shorter than other
systems, an individual satellite is limited to an orbital lifetime of
six years or less, and there is also no replenishment expectancy under
the small satellite process. Therefore, the scope of such systems is
inherently limited, as the Commission recognized in the Small Satellite
Report and Order, when it established a separate fee category for small
satellites only.
9. Both proposed fee approaches are estimates of the FTE burden and
the benefits received by small satellite systems. As noted, we could
revisit our adopted small satellite fee each year as the number of
small satellite systems change and we become more familiar with the
work involved in regulating such systems. We seek comment on how to
determine that amount each fiscal year to reflect any needed adjustment
in proportion to the changes to our budget and cost. Would such
approaches accurately capture the benefits to small satellite fee
payors? We believe that both proposals reflect a reasonable
approximation of the International Bureau's total FTE work relative to
these space station categories and the benefits each system receives.
We further seek comment, however, on the various factors, such as
rulemakings, adjudications, and international coordination, that are
relevant to systems authorized under the Commission's small satellite
process and the FTE time devoted to those systems.
10. As indicated above in connection with the proposals, we also
seek comment on whether we should assess regulatory fees per system or
differently than other NGSO fee categories, given that a single entity
may have multiple licenses for the same system, in accordance with the
structure of the small satellite process. We do not want to discourage
applicants from applying for multiple licenses, if such an approach is
a good fit for their system plans, because of potential regulatory
fees. Therefore, it is important that we account for the fact that one
system may have multiple associated small satellite licenses or market
access grants.
11. Finally, we also seek comment on how we should integrate the
small satellite fee category into the overall space stations category.
The total amount to be paid by small satellite regulatory fee payors
could be either subtracted from the total space station allocation,
before calculating the GSO/NGSO subcategories, or subtracted from the
NGSO subcategory before calculating the fees for the subcategories
among less complex and other NGSO systems. We seek comment on where we
should place the small satellite category and whether it would be
appropriate to include it as a third category under space stations, as
GSO, NGSO, and Small Satellite, or place it as a subcategory under NGSO
as NGSO Less Complex, NGSO Others, and Small Satellites. We seek
comment on these and any other alternatives that would best reflect the
statutory requirements of our regulatory fee authority under section 9
of the Communications Act and ensure that our actions in assessing
regulatory fees on small satellite operators are fair, administrable,
and sustainable.
III. Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in the Notice of
Proposed Rulemaking (NPRM). Written comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadline for comments on this NPRM. The Commission will
send a copy of the NPRM, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). In addition, the
NPRM and IRFA (or summaries thereof) will be published in the Federal
Register.
A. Need for, and Objectives of, the Proposed Rules
2. The NPRM seeks comment on a methodology for calculating
regulatory fees, as required by section 9 of the Communications Act of
1934, as amended (Communications Act or Act), specifically for small
satellites. The NPRM seeks comment on various factors, such as
rulemakings, adjudications, and international coordination, that are
relevant to systems authorized under the Commission's small satellite
process, and on the Commission's earlier tentative conclusion that
approximately 1/20 of FTEs are engaged in ongoing regulatory work
related to small satellite systems. Specifically, the Commission
observes that in assessing the regulatory fee for such small satellite
NGSO systems, there are a number of factors to consider, including the
fact that a single system may have multiple licenses, and therefore
multiple call signs. The Commission also seeks comment on whether we
should adopt new regulatory fee categories and on ways to improve our
regulatory fee process regarding any and all categories of service.
Additionally, the Commission notes that there are a number of
limitations on small satellite licensees and market access grantees
that limit the benefits such entities may receive from ongoing
activities of the Commission. The Commission observes that such systems
are by definition not authorized through processing rounds, and while
small satellites may receive interference protection when operating in
frequency bands allocated for the service they are providing, such
satellites must be compatible with existing operations in the requested
frequency bands and not materially constrain future operations of other
satellites in those frequency bands. Moreover, small satellite
licensees are limited to a license term not to exceed six years. Given
these limitations, and taking into
[[Page 52433]]
consideration the regulatory benefits that may be associated with a
single license, the Commission proposes a flat regulatory fee for small
satellite licenses and market access grants that would be not change
based on the number of small satellite fee payors in a given fiscal
year. Specifically, the Commission proposes a flat fee for small
satellites that would be equal to 1/20th of the fee applicable to each
NGSO systems in ``other'' NGSO subcategory. The Commission seeks
comment on this proposal in the NPRM.
3. This regulatory fee NPRM is needed because the Commission is
required by Congress to adopt regulatory fees each year ``to recover
the costs of carrying out the activities described in section 6(a) only
to the extent, and in the total amounts, provided for in Appropriation
Acts.'' The objective of the NPRM is to determine a methodology for
calculating small satellite regulatory fees.
B. Legal Basis
4. This action, including publication of proposed rules, is
authorized under sections (4)(i) and (j), 159, and 303(r) of the
Communications Act of 1934, as amended.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
5. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and policies, if adopted. The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' In addition, the term ``small business''
has the same meaning as the term ``small business concern'' under the
Small Business Act. A ``small business concern'' is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
SBA.
6. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. Our actions, over time, may affect small entities that
are not easily categorized at present. We therefore describe here, at
the outset, three broad groups of small entities that could be directly
affected herein. First, while there are industry specific size
standards for small businesses that are used in the regulatory
flexibility analysis, according to data from the Small Business
Administration's (SBA) Office of Advocacy, in general a small business
is an independent business having fewer than 500 employees. These types
of small businesses represent 99.9% of all businesses in the United
States, which translates to 30.7 million businesses.
7. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. Nationwide, for tax year 2018, there were
approximately 571,709 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
8. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2017 Census of Governments indicate that there
were 90,075 local governmental jurisdictions consisting of general
purpose governments and special purpose governments in the United
States. Of this number there were 36,931 general purpose governments
(county, municipal and town or township) with populations of less than
50,000 and 12,040 special purpose governments--independent school
districts with enrollment populations of less than 5ll governmental
jurisdictions.''
9. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as ``establishments primarily engaged in
operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired communications
networks. Transmission facilities may be based on a single technology
or a combination of technologies. Establishments in this industry use
the wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including Voice over internet Protocol (VoIP) services, wired (cable
and IPTV) audio and video programming distribution, and wired broadband
internet services. By exception, establishments providing satellite
television distribution services using facilities and infrastructure
that they operate are included in this industry.'' The SBA has
developed a small business size standard for Wired Telecommunications
Carriers, which consists of all such companies having 1,500 or fewer
employees. U.S. Census Bureau data for 2012 show that there were 3,117
firms that operated that year. Of this total, 3,083 operated with fewer
than 1,000 employees. Thus, under this size standard, the majority of
firms in this industry can be considered small.
10. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable NAICS
Code category is Wired Telecommunications Carriers. Under the
applicable SBA size standard, such a business is small if it has 1,500
or fewer employees. U.S. Census Bureau data for 2012 show that there
were 3,117 firms that operated for the entire year. Of that total,
3,083 operated with fewer than 1,000 employees. Thus under this
category and the associated size standard, the Commission estimates
that the majority of local exchange carriers are small entities.
11. Incumbent LECs. Neither the Commission nor the SBA has
developed a small business size standard specifically for incumbent
local exchange services. The closest applicable NAICS Code category is
Wired Telecommunications Carriers. Under the applicable SBA size
standard, such a business is small if it has 1,500 or fewer employees.
U.S. Census Bureau data for 2012 indicate that 3,117 firms operated the
entire year. Of this total, 3,083 operated with fewer than 1,000
employees. Consequently, the Commission estimates that most providers
of incumbent local exchange service are small businesses that may be
affected by our actions. According to Commission data, one thousand
three hundred and seven (1,307) Incumbent Local Exchange Carriers
reported that they were incumbent local exchange service providers. Of
this total, an estimated 1,006 have 1,500 or fewer employees. Thus,
using the SBA's size standard the majority of incumbent LECs can be
considered small entities.
12. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate NAICS Code category is Wired
Telecommunications Carriers and under that size standard, such a
business is small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2012 indicate that 3,117 firms operated during that
year. Of that
[[Page 52434]]
number, 3,083 operated with fewer than 1,000 employees. Based on these
data, the Commission concludes that the majority of Competitive LECS,
CAPs, Shared-Tenant Service Providers, and Other Local Service
Providers, are small entities. According to Commission data, 1,442
carriers reported that they were engaged in the provision of either
competitive local exchange services or competitive access provider
services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or
fewer employees. In addition, 17 carriers have reported that they are
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500
or fewer employees. Also, 72 carriers have reported that they are Other
Local Service Providers. Of this total, 70 have 1,500 or fewer
employees. Consequently, based on internally researched FCC data, the
Commission estimates that most providers of competitive local exchange
service, competitive access providers, Shared-Tenant Service Providers,
and Other Local Service Providers are small entities.
13. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically for
Interexchange Carriers. The closest applicable NAICS Code category is
Wired Telecommunications Carriers. The applicable size standard under
SBA rules is that such a business is small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms
operated for the entire year. Of that number, 3,083 operated with fewer
than 1,000 employees. According to internally developed Commission
data, 359 companies reported that their primary telecommunications
service activity was the provision of interexchange services. Of this
total, an estimated 317 have 1,500 or fewer employees. Consequently,
the Commission estimates that the majority of interexchange service
providers are small entities.
14. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate NAICS code category for
prepaid calling card providers is Telecommunications Resellers. This
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. Mobile virtual network operators (MVNOs)
are included in this industry. 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. U.S. Census Bureau data for 2012 show that 1,341 firms
provided resale services during that year. Of that number, 1,341
operated with fewer than 1,000 employees. Thus, under this category and
the associated small business size standard, the majority of these
resellers can be considered small entities. According to Commission
data, 193 carriers have reported that they are engaged in the provision
of prepaid calling cards. All 193 carriers have 1,500 or fewer
employees. Consequently, the Commission estimates that the majority of
prepaid calling card providers are small.
15. Local Resellers. The SBA has not developed a small business
size standard specifically for Local Resellers. The SBA category of
Telecommunications Resellers is the closest NAICs code category for
local resellers. The Telecommunications Resellers industry comprises
establishments engaged in purchasing access and network capacity from
owners and operators of telecommunications networks and reselling wired
and wireless telecommunications services (except satellite) to
businesses and households. Establishments in this industry resell
telecommunications; they do not operate transmission facilities and
infrastructure. Mobile virtual network operators (MVNOs) are included
in this industry. Under the SBA's size standard, such a business is
small if it has 1,500 or fewer employees. U.S. Census Bureau data from
2012 show that 1,341 firms provided resale services during that year.
Of that number, all operated with fewer than 1,000 employees. Thus,
under this category and the associated small business size standard,
the majority of these resellers can be considered small entities.
According to Commission data, 213 carriers have reported that they are
engaged in the provision of local resale services. Of these, an
estimated 211 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.
16. Toll Resellers. The Commission has not developed a definition
for Toll Resellers. The closest NAICS Code Category is
Telecommunications Resellers. The Telecommunications Resellers industry
comprises establishments engaged in purchasing access and network
capacity from owners and operators of telecommunications networks and
reselling wired and wireless telecommunications services (except
satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. MVNOs are included in this industry. 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. 2012 Census Bureau data
show that 1,341 firms provided resale services during that year. Of
that number, 1,341 operated with fewer than 1,000 employees. Thus,
under this category and the associated small business size standard,
the majority of these resellers can be considered small entities.
According to Commission data, 881 carriers have reported that they are
engaged in the provision of toll resale services. Of this total, an
estimated 857 have 1,500 or fewer employees. Consequently, the
Commission estimates that the majority of toll resellers are small
entities.
17. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator
service providers, prepaid calling card providers, satellite service
carriers, or toll resellers. The closest applicable NAICS code category
is for Wired Telecommunications Carriers, as defined in paragraph 6 of
this IRFA. Under that size standard, such a business is small if it has
1,500 or fewer employees. U.S. Census Bureau data for 2012 show that
there were 3,117 firms that operated that year. Of this total, 3,083
operated with fewer than 1,000 employees. Thus, under this size
standard, the majority of firms in this industry can be considered
small. According to Commission data, 284 companies reported that their
primary telecommunications service activity was the provision of other
toll carriage. Of these, an estimated 279 have 1,500 or fewer
employees. Consequently, the Commission estimates that most Other Toll
Carriers are small entities.
18. Wireless Telecommunications Carriers (except Satellite). This
industry comprises establishments engaged in operating and maintaining
switching
[[Page 52435]]
and transmission facilities to provide communications via the airwaves.
Establishments in this industry have spectrum licenses and provide
services using that spectrum, such as cellular services, paging
services, wireless internet access, and wireless video services. The
appropriate size standard under SBA rules is that such a business is
small if it has 1,500 or fewer employees. For this industry, U.S.
Census Bureau data for 2012 show that there were 967 firms that
operated for the entire year. Of this total, 955 firms had employment
of 999 or fewer employees and 12 had employment of 1,000 employees or
more. Thus under this category and the associated size standard, the
Commission estimates that the majority of wireless telecommunications
carriers (except satellite) are small entities.
19. Television Broadcasting. This Economic Census category
``comprises establishments primarily engaged in broadcasting images
together with sound.'' These establishments operate television
broadcast studios and facilities for the programming and transmission
of programs to the public. These establishments also produce or
transmit visual programming to affiliated broadcast television
stations, which in turn broadcast the programs to the public on a
predetermined schedule. Programming may originate in their own studio,
from an affiliated network, or from external sources. The SBA has
created the following small business size standard for such businesses:
Those having $41.5 million or less in annual receipts. The 2012
Economic Census reports that 751 firms in this category operated in
that year. Of that number, 656 had annual receipts of $25,000,000 or
less. Based on this data we therefore estimate that the majority of
commercial television broadcasters are small entities under the
applicable SBA size standard.
20. The Commission has estimated the number of licensed commercial
television stations to be 1,377. Of this total, 1,258 stations (or
about 91 percent) had revenues of $41.5 million or less, according to
Commission staff review of the BIA Kelsey Inc. Media Access Pro
Television Database (BIA) on November 16, 2017, and therefore these
licensees qualify as small entities under the SBA definition. In
addition, the Commission has estimated the number of licensed
noncommercial educational television stations to be 384.
Notwithstanding, the Commission does not compile and otherwise does not
have access to information on the revenue of NCE stations that would
permit it to determine how many such stations would qualify as small
entities. There are also 2,300 low power television stations, including
Class A stations (LPTV) and 3,681 TV translator stations. Given the
nature of these services, we will presume that all of these entities
qualify as small entities under the above SBA small business size
standard.
21. In assessing whether a business concern qualifies as ``small''
under the above definition, business (control) affiliations must be
included. Our estimate, therefore, likely overstates the number of
small entities that might be affected by our action, because the
revenue figure on which it is based does not include or aggregate
revenues from affiliated companies. In addition, another element of the
definition of ``small business'' requires that an entity not be
dominant in its field of operation. We are unable at this time to
define or quantify the criteria that would establish whether a specific
television broadcast station is dominant in its field of operation.
Accordingly, the estimate of small businesses to which rules may apply
does not exclude any television station from the definition of a small
business on this basis and is therefore possibly over-inclusive. Also,
as noted above, an additional element of the definition of ``small
business'' is that the entity must be independently owned and operated.
The Commission notes that it is difficult at times to assess these
criteria in the context of media entities and its estimates of small
businesses to which they apply may be over-inclusive to this extent.
22. Radio Stations. This Economic Census category ``comprises
establishments primarily engaged in broadcasting aural programs by
radio to the public. Programming may originate in their own studio,
from an affiliated network, or from external sources.'' The SBA has
established a small business size standard for this category as firms
having $41.5 million or less in annual receipts. Economic Census data
for 2012 show that 2,849 radio station firms operated during that year.
Of that number, 2,806 firms operated with annual receipts of less than
$25 million per year, 17 with annual receipts between $25 million and
$49,999,999 million and 26 with annual receipts of $50 million or more.
Therefore, based on the SBA's size standard the majority of such
entities are small entities.
23. According to Commission staff review of the BIA/Kelsey, LLC's
Media Access Pro Radio Database as of January 2018, about 11,261 (or
about 99.9 percent) of 11,383 commercial radio stations had revenues of
$41.5 million or less and thus qualify as small entities under the SBA
definition. The Commission has estimated the number of licensed
commercial AM radio stations to be 4,633 stations and the number of
commercial FM radio stations to be 6,738, for a total number of 11,371.
We note the Commission has also estimated the number of licensed
noncommercial (NCE) FM radio stations to be 4,128. Nevertheless, the
Commission does not compile and otherwise does not have access to
information on the revenue of NCE stations that would permit it to
determine how many such stations would qualify as small entities. We
also note, that in assessing whether a business entity qualifies as
small under the above definition, business control affiliations must be
included. The Commission's estimate therefore likely overstates the
number of small entities that might be affected by its action, because
the revenue figure on which it is based does not include or aggregate
revenues from affiliated companies. In addition, to be determined a
``small business,'' an entity may not be dominant in its field of
operation. We further note, that it is difficult at times to assess
these criteria in the context of media entities, and the estimate of
small businesses to which these rules may apply does not exclude any
radio station from the definition of a small business on these basis,
thus our estimate of small businesses may therefore be over-inclusive.
Also, as noted above, an additional element of the definition of
``small business'' is that the entity must be independently owned and
operated. The Commission notes that it is difficult at times to assess
these criteria in the context of media entities and the estimates of
small businesses to which they apply may be over-inclusive to this
extent.
24. Cable Companies and Systems (Rate Regulation). The Commission
has also developed its own small business size standards, for the
purpose of cable rate regulation. Under the Commission's rules, a
``small cable company'' is one serving 400,000 or fewer subscribers
nationwide. Industry data indicate that there are 4,600 active cable
systems in the United States. Of this total, all but five cable
operators nationwide are small under the 400,000-subscriber size
standard. In addition, under the Commission's rate regulation rules, a
``small system'' is a cable system serving 15,000 or fewer subscribers.
Commission records show 4,600 cable systems nationwide. Of this total,
3,900 cable systems have fewer than 15,000 subscribers, and 700 systems
have 15,000 or more subscribers, based on the same records. Thus, under
this standard
[[Page 52436]]
as well, we estimate that most cable systems are small entities.
25. Cable System Operators (Telecom Act Standard). The
Communications Act of 1934, as amended, also contains a size standard
for small cable system operators, which is ``a cable operator that,
directly or through an affiliate, serves in the aggregate fewer than
one percent of all subscribers in the United States and is not
affiliated with any entity or entities whose gross annual revenues in
the aggregate exceed $250,000,000.'' As of 2019, there were
approximately 48,646,056 basic cable video subscribers in the United
States. Accordingly, an operator serving fewer than 486,460 subscribers
shall be deemed a small operator if its annual revenues, when combined
with the total annual revenues of all its affiliates, do not exceed
$250 million in the aggregate. Based on available data, we find that
all but five cable operators are small entities under this size
standard. We note that the Commission neither requests nor collects
information on whether cable system operators are affiliated with
entities whose gross annual revenues exceed $250 million. Therefore, we
are unable at this time to estimate with greater precision the number
of cable system operators that would qualify as small cable operators
under the definition in the Communications Act.
26. Direct Broadcast Satellite (DBS) Service. DBS service is a
nationally distributed subscription service that delivers video and
audio programming via satellite to a small parabolic ``dish'' antenna
at the subscriber's location. DBS is included in SBA's economic census
category ``Wired Telecommunications Carriers.'' The Wired
Telecommunications Carriers industry comprises establishments primarily
engaged in operating and/or providing access to transmission facilities
and infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired telecommunications
networks. Transmission facilities may be based on a single technology
or combination of technologies. Establishments in this industry use the
wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including VoIP services, wired (cable) audio and video programming
distribution; and wired broadband internet services. By exception,
establishments providing satellite television distribution services
using facilities and infrastructure that they operate are included in
this industry. The SBA determines that a wireline business is small if
it has fewer than 1,500 employees. U.S. Census Bureau data for 2012
indicates that 3,117 wireline companies were operational during that
year. Of that number, 3,083 operated with fewer than 1,000 employees.
Based on that data, we conclude that the majority of wireline firms are
small under the applicable SBA standard. Currently, however, only two
entities provide DBS service, which requires a great deal of capital
for operation: DIRECTV (owned by AT&T) and DISH Network. DIRECTV and
DISH Network each report annual revenues that are in excess of the
threshold for a small business. Accordingly, we must conclude that
internally developed FCC data are persuasive that, in general, DBS
service is provided only by large firms.
27. All Other Telecommunications. The ``All Other
Telecommunications'' category is comprised of establishments primarily
engaged in providing specialized telecommunications services, such as
satellite tracking, communications telemetry, and radar station
operation. This industry also includes establishments primarily engaged
in providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems. Establishments providing internet services or
voice over internet protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry. The
SBA has developed a small business size standard for All Other
Telecommunications, which consists of all such firms with annual
receipts of $35 million or less. For this category, U.S. Census Bureau
data for 2012 shows that there were 1,442 firms that operated for the
entire year. Of those firms, a total of 1,400 had annual receipts less
than $25 million and 15 firms had annual receipts of $25 million to
$49,999,999. Thus, the Commission estimates that the majority of ``All
Other Telecommunications'' firms potentially affected by our action can
be considered small.
28. RespOrgs. Responsible Organizations, or RespOrgs, are entities
chosen by toll free subscribers to manage and administer the
appropriate records in the toll free Service Management System for the
toll free subscriber. Although RespOrgs are often wireline carriers,
they can also include non-carrier entities. Therefore, in the
definition herein of RespOrgs, two categories are presented, i.e.,
Carrier RespOrgs and Non-Carrier RespOrgs.
29. Carrier RespOrgs. Neither the Commission, the U.S. Census, nor
the SBA have developed a definition for Carrier RespOrgs. Accordingly,
the Commission believes that the closest NAICS code-based definitional
categories for Carrier RespOrgs are Wired Telecommunications Carriers,
and Wireless Telecommunications Carriers (except satellite).
30. The U.S. Census Bureau defines Wired Telecommunications
Carriers as ``establishments primarily engaged in operating and/or
providing access to transmission facilities and infrastructure that
they own and/or lease for the transmission of voice, data, text, sound,
and video using wired communications networks. Transmission facilities
may be based on a single technology or a combination of technologies.
Establishments in this industry use the wired telecommunications
network facilities that they operate to provide a variety of services,
such as wired telephony services, including VoIP services, wired
(cable) audio and video programming distribution, and wired broadband
internet services. By exception, establishments providing satellite
television distribution services using facilities and infrastructure
that they operate are included in this industry.'' The SBA has
developed a small business size standard for Wired Telecommunications
Carriers, which consists of all such companies having 1,500 or fewer
employees. U.S. Census Bureau data for 2012 show that there were 3,117
firms that operated that year. Of this total, 3,083 operated with fewer
than 1,000 employees. Based on that data, we conclude that the majority
of Carrier RespOrgs that operated with wireline-based technology are
small.
31. The U.S. Census Bureau defines Wireless Telecommunications
Carriers (except satellite) as establishments engaged in operating and
maintaining switching and transmission facilities to provide
communications via the airwaves, such as cellular services, paging
services, wireless internet access, and wireless video services. The
appropriate size standard under SBA rules is that such a business is
small if it has 1,500 or fewer employees. Census data for 2012 show
that 967 Wireless Telecommunications Carriers operated in that year. Of
that number, 955 operated with less than 1,000 employees. Based on that
data, we conclude that the majority of Carrier RespOrgs that operated
with wireless-based technology are small.
32. Non-Carrier RespOrgs. Neither the Commission, the U.S. Census,
nor the SBA have developed a definition of Non-Carrier RespOrgs.
Accordingly, the
[[Page 52437]]
Commission believes that the closest NAICS code-based definitional
categories for Non-Carrier RespOrgs are ``Other Services Related to
Advertising'' and ``Other Management Consulting Services.''
33. The U.S. Census defines Other Services Related to Advertising
as comprising establishments primarily engaged in providing advertising
services (except advertising agency services, public relations agency
services, media buying agency services, media representative services,
display advertising services, direct mail advertising services,
advertising material distribution services, and marketing consulting
services). The SBA has established a size standard for this industry as
annual receipts of $16.5 million dollars or less. Census data for 2012
show that 5,804 firms operated in this industry for the entire year. Of
that number, 5,612 operated with annual receipts of less than $10
million. Based on that data we conclude that the majority of Non-
Carrier RespOrgs who provide toll-free number (TFN)-related advertising
services are small.
34. The U.S. Census defines Other Management Consulting Services as
establishments primarily engaged in providing management consulting
services (except administrative and general management consulting;
human resources consulting; marketing consulting; or process, physical
distribution, and logistics consulting). Establishments providing
telecommunications or utilities management consulting services are
included in this industry. The SBA has established a size standard for
this industry of $16.5 million dollars or less. Census data for 2012
show that 3,683 firms operated in this industry for that entire year.
Of that number, 3,632 operated with less than $10 million in annual
receipts. Based on this data, we conclude that a majority of non-
carrier RespOrgs who provide TFN-related management consulting services
are small.
35. In addition to the data contained in the four (see above) U.S.
Census NAICS code categories that provide definitions of what services
and functions the Carrier and Non-Carrier RespOrgs provide, Somos, the
trade association that monitors RespOrg activities, compiled data
showing that as of July 1, 2016 there were 23 RespOrgs operational in
Canada and 436 RespOrgs operational in the United States, for a total
of 459 RespOrgs currently registered with Somos.
D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements for Small Entities
36. This NPRM does not propose any changes to the Commission's
current information collection, reporting, recordkeeping, or compliance
requirements. Licensees, including small entities, will be required to
pay application fees after such fees are adopted.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
37. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the following four alternatives, among others: (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
38. The NPRM seeks comment on a methodology to calculate regulatory
fees for small satellites. These small satellite systems are NGSOs;
however, the Commission is proposing assessing a much smaller
regulatory fee than the fee currently assessed on other NGSO systems.
This new methodology would minimize the impact on small entities
because the fee would be much lower than the existing NGSO fee. We also
seek comment on whether we should adopt new regulatory fee categories
and on ways to improve our regulatory fee process regarding any and all
categories of service. We also seek comment on possible methodologies
for re-calculating the regulatory fee allocation.
39. In addition, the Commission has taken steps to minimize the
economic impact on small entities by adopting a de minimis threshold
under the section 9(e)(2) exemption in the Act. Under the section
9(e)(2) exemption, a regulatee is exempt from paying regulatory fees if
the sum total of all of its annual regulatory fee liabilities is $1,000
or less for the fiscal year. The threshold applies only to filers of
annual regulatory fees, not regulatory fees paid through multi-year
filings.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
40. None.
IV. Ordering Clauses
41. Accordingly, it is ordered that, pursuant to the authority
found in sections 4(i) and (j), 9, 9A, and 303(r) of the Communications
Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 159, 159A, and
303(r), this Notice of Proposed Rulemaking is hereby adopted.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2021-20125 Filed 9-20-21; 8:45 am]
BILLING CODE 6712-01-P
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