[Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
[Rules and Regulations]
[Pages 35847-35881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17222]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 98-36; FCC 98-115]


Assessment and Collection of Regulatory Fees for Fiscal Year 1998

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has revised its Schedule of Regulatory Fees in 
order to recover the amount of regulatory fees that Congress has 
required it to collect for fiscal year 1998. Section 9 of the 
Communications Act of 1934, as amended, provides for the annual 
assessment and collection of regulatory fees. For fiscal year 1998 
sections 9(b)(2) and (3) provide for annual ``Mandatory Adjustments'' 
and ``Permitted Amendments'' to the Schedule of Regulatory Fees. These 
revisions will further the National Performance Review goals of 
reinventing Government by requiring beneficiaries of Commission 
services to pay for such services.

EFFECTIVE DATE: August 31, 1998.

FOR FURTHER INFORMATION: Terry Johnson, (202) 418-0445, Office of 
Managing Director.

SUPPLEMENTARY INFORMATION:

Adopted: June 9, 1998; Released: June 16, 1998
By the Commission:

                            Table of Contents                           
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                                                              Paragraph 
                           Topic                                 No.    
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I. Introduction............................................            1
II. Background.............................................            5
III. Discussion                                                         
    A. Cost-Based Fee Methodology..........................            9
    B. Relationship of Cost Service to Revenue Requirement.           15
    C. The 25% Ceiling on Fees.............................           21
    D. Application of Cost-Based Methodology to Determine               
     Fee Amounts                                                        
        i. Adjustment of Payment Units.....................           25
        ii. Calculation of Revenue Requirements............           26
        iii. Calculation of Regulatory Costs...............           27
        iv. Application of 25% Revenue Ceiling.............           28
        v. Recalculation of Fees...........................           29
        vi. Proposed Changes to Fee Schedule...............           30
            a. Commercial AM & FM Radio....................           31
            b. CMRS........................................           41

[[Page 35848]]

                                                                        
            c. Space Stations and Bearer Circuits                       
                i. Geostationary Satellites................           50
                ii. Non-geostationary Satellites...........           54
                iii. Bearer Circuits.......................           57
            d. Interstate Telephone Service Providers......           64
    E. Schedule of Regulatory Fees.........................           68
    F. Effect of Revenue Redistributions on Major                       
     Constituencies........................................           69
    G. Procedures for Payment of Regulatory Fees                        
        i. Installment Payments for Large Fees.............           70
        ii. Annual Payments of Standard Fees...............           72
        iii. Advance Payment of Small Fees.................           73
        iv. Standard Fee Calculations and Payment Dates....           74
        v. Minimum Fee Payment Liability...................           76
IV. Ordering Clause........................................           77
V. Authority and Further Information.......................           78
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Attachment A--Final Regulatory Flexibility Analysis
Attachment B--Sources of Payment Unit Estimates
Attachment C--Calculation of Revenue Requirements
Attachment D--Calculation of Regulatory Costs
Attachment E--Calculation of FY 1998 Regulatory Fees
Attachment F--Schedule of Regulatory Fees
Attachment G--Comparison between FY 1997 and FY 1998 Proposed & 
Final Regulatory Fees
Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees
Attachment I--Description of FCC Activities
Attachment J--Factors, measurements and calculations that go into 
determining station signal contours and associated population 
coverages
Attachment K--Parties Filing Comments and Reply Comments
Attachment L--FY 1998 AM/FM Regulatory Fees

I. Introduction

    1. By this Report and Order, the Commission concludes its 
rulemaking proceeding to revise its Schedule of Regulatory Fees in 
order to recover the amount of regulatory fees that Congress has 
required it to collect for Fiscal Year (FY) 1998. See 47 U.S.C. 159(a).
    2. Congress has required us to collect $162,523,000 in regulatory 
fees in order to recover the costs of our enforcement, policy and 
rulemaking, international and user information activities for FY 1998. 
See Pub. L. 105-119 and 47 U.S.C. 159(a)(2). This amount is $10,000,000 
or nearly 7% more than the amount that Congress designated for recovery 
through regulatory fees for FY 1997. See Assessment and Collection of 
Regulatory Fees for Fiscal Year 1997, FCC 97-215, released June 26, 
1997, 62 FR 37408, July 11, 1997. Thus, we are revising our fees in 
order to collect the increased amount as specified by Congress. 
Additionally, we are amending the Schedule in order to simplify and 
streamline the Fee Schedule, including clarification of feeable 
categories in the Commercial Mobile Radio Services (CMRS), renaming the 
LEO category as Space Stations Non-geostationary, and clarifying when 
those stations must begin paying regulatory fees. We have also revised 
our methodologies for assessing AM and FM radio fees. See 47 U.S.C. 
159(b)(3).
    3. In revising the fees, we have adjusted the payment units and 
revenue requirement for each service subject to a fee, consistent with 
sections 159(b)(2) and (3). In addition, we have made changes to the 
fees pursuant to public interest considerations such as the 25% cap on 
increases in the fees which is explained in more detail below. We are 
amending Secs. 1.1152 through 1.1156 to reflect the fee revisions. See 
47 CFR 1.1152 through 1.1156. See also Rule Changes and Attachment F 
for our revised fee schedule for FY 1998.
    4. Finally, we have included, as Attachment H, Guidance containing 
detailed descriptions of each fee category, information on the 
individual or entity responsible for paying a particular fee and other 
critical information designed to assist potential fee payers in 
determining the extent of their fee liability, if any, for FY 1998. In 
the following paragraphs, we describe in greater detail our methodology 
for establishing our FY 1998 regulatory fees.

II. Background

    5. Section 9(a) of the Communications Act of 1934, as amended, 
authorizes the Commission to assess and collect annual regulatory fees 
to recover the costs, as specified each year by Congress, that it 
incurs in carrying out enforcement, policy and rulemaking, 
international, and user information activities. See 47 U.S.C. 159(a). 
See Attachment I for a description of these activities. In our FY 1994 
Report and Order, 59 FR 30984, June 16, 1994, we adopted the Schedule 
of Regulatory Fees that Congress established and we prescribed rules to 
govern payment of the fees, as required by Congress. See 47 U.S.C. 
159(b), (f)(1). Subsequently, in our FY 1995, FY 1996, and FY 1997 
Reports and Orders, 60 FR 34004, June 29, 1995, 61 FR 36629, July 12, 
1996, and 62 FR 37408, July 11, 1997, we modified the Schedule to 
increase by approximately 93 percent, 9 percent, and 21 percent, 
respectively, the revenue generated by these fees in accordance with 
the amounts Congress required us to collect for each of those fiscal 
years. Also, in our FY 1995, FY 1996, and FY 1997 fee decisions, we 
amended certain rules governing our regulatory fee program based upon 
our experience administering the program in prior years. See 47 CFR 
1.1151 et seq.
    6. For fiscal years after FY 1994, however, sections 9(b)(2) and 
(3), respectively, provide for ``Mandatory Adjustments'' and 
``Permitted Amendments'' to the Schedule of Regulatory Fees.
    See  47 U.S.C. 159(b)(2), (b)(3). Section 9(b)(2), entitled 
``Mandatory Adjustments,'' requires that we revise the Schedule of 
Regulatory Fees whenever Congress changes the amount that we are to 
recover through regulatory fees. See 47 U.S.C. 159(b)(2).
    7. Section 9(b)(3), entitled ``Permitted Amendments,'' requires us 
to determine annually whether additional adjustments to the fees are 
warranted, taking into account factors that are reasonably related to 
the payer of the fee and factors that are in the public interest. In 
making these amendments, we are required to ``add, delete, or

[[Page 35849]]

reclassify services in the Schedule to reflect additions, deletions or 
changes in the nature of its services.'' See 47 U.S.C. 159(b)(3).
    8. Section 9(i) requires us to develop an accounting system to 
adjust our fees to reflect changes in the costs of regulating various 
services and for other purposes. See 47 U.S.C. 9(i). We developed and 
implemented the cost accounting system in conjunction with FY 1997 
fees. For FY 1998, we continue to rely on cost accounting data to 
identify our regulatory costs and to develop fees based upon these 
costs. Also, for FY 1998, we have limited the increase in the amount of 
the fee for any service in order to phase in our reliance on cost-based 
fees for those services whose revenue requirement would be more than 25 
percent above the revenue requirement which would have resulted from 
the ``mandatory adjustments'' to the FY 1997 fees without incorporation 
of costs. This methodology enables us to develop regulatory fees which 
more closely reflect our costs of regulation. Finally, section 
9(b)(4)(B) requires that we notify Congress of any permitted amendments 
90 days before those amendments go into effect. See 47 U.S.C. 
159(b)(4)(B).

III. Discussion

A. Cost-Based Fee Methodology

    9. Congress has required us to recover $162,523,000 in FY 1998 
regulatory fees, representing the costs applicable to our enforcement, 
policy and rulemaking, international, and user information 
activities.\1\ See 47 U.S.C. 159(a).
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    \1\ The impact of regulatory fees on the FCC's appropriation is 
substantial. For example, without regulatory fees to offset the 
Commission's costs, the FCC would require a Congressional 
appropriation of $186.5 million for FY 1998. When offsetting 
regulatory fees are taken into consideration, only $24 million must 
be appropriated from tax receipts to fund the Commission. Thus, 
taxpayers are spared the expense of funding almost 87% of the 
Commission's annual budget. Funds collected as application or filing 
fees pursuant to section 8 of the Act are deposited into the General 
Fund of the U.S. Treasury as reimbursement to the United States but, 
unlike section 9 regulatory fees, do not offset funds appropriated 
to the Commission. 47 U.S.C. 158(a).
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    10. In our FY 1998 NPRM we developed our proposed FY 1998 fee 
schedule using the same general methodology as we used in developing 
fees for FY 1997. We estimated payment units \2\ for FY 1998 in order 
to determine the aggregate amount of revenue we would collect without 
any revision to our FY 1997 fees. Because the total was greater than 
$162,523,000, we pro-rated the overage among all the existing fee 
categories reducing the revenue amounts to total $162,523,000.
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    \2\ Payment units are the number of subscribers, mobile units, 
pagers, cellular telephones, licenses, call signs, adjusted gross 
revenue dollars, etc. which represent the base units for which fees 
are calculated.
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    11. The NPRM provided notice that we would rely on the cost 
accounting system implemented in FY 1997 to assist us in determining 
our costs of regulation of those services subject to a fee for FY 1998. 
In response, several interested parties, including the Personal 
Communications Industry Association (PCIA), BellSouth Cellular Corp., 
BellSouth Wireless Data, L.P. (BellSouth), and PanAmSat Corporation 
(PanAmSat), contend that we failed to explain the accounting system 
sufficiently to permit interested parties to determine how the system 
distributes costs among our various services. PrimeCo argues that we 
merely disclosed the results of the cost accounting system and, 
therefore, interested parties cannot evaluate our cost accounting 
system or suggest improvements. In addition, PCIA, among others, argues 
that without more data concerning our assignment of costs, they cannot 
determine whether the costs attributed to their services are reasonable 
estimates of our actual costs.
    12. The NPRM provided sufficient information describing the 
accounting system to afford interested parties the opportunity to 
comment. Our NPRM made it clear that our cost accounting system relied 
upon information derived from our personnel/payroll system and our 
fiscal accounting system as the basis for recording direct and indirect 
costs, separately and combined, for every major category of service 
subject to a fee. The cost accounting system was designed to identify 
the actual costs of regulation by category of service and this 
information, combined with other data, yield fees more closely 
reflecting the cost of our regulation. The accounting system collects 
cost of service information on an employee-by-employee basis.
    13. The NPRM provided sufficient detail concerning our manner of 
distributing costs of personnel directly assigned to regulatory 
activities, and other costs included in our determination of regulatory 
costs. The system separately identifies direct costs, including salary 
and expenses for staff directly assigned to our operating Bureaus, and 
other costs, such as rent, utilities and contracts, directly 
attributable to such personnel. Also, included as indirect costs are 
those costs attributable to personnel assigned to overhead functions, 
including such functions as field and laboratory staff, on a 
proportional basis; i.e., spread among all categories of service 
subject to a fee according to their share of direct costs. Finally, in 
Attachment D of the NPRM, we provided a precise calculation of the 
regulatory costs, including separate discussions of the cost accounting 
system's accumulation of the direct, indirect and total actual costs 
for each major category of service. Thus, our NPRM, consistent with 
section 9(i) of the Act, sufficiently described our cost accounting 
system, including how it distributes actual costs among the various 
categories of service, affording parties an understanding of the system 
sufficient for them to submit comments on how the system allocated 
costs among those services subject to a regulatory fee. 47 U.S.C. 
159(i)
    14. Our cost accounting system was developed under contract by 
American Management Systems, Inc. (AMS) in FY 1995. The system has been 
integrated with the Commission's bi-weekly payroll and fiscal 
accounting systems and, as such, its procedures conform to generally 
accepted cost accounting principles and standards as mandated by the 
General Accounting Office
    (GAO) and by the U.S. Treasury Department. Because the methodology 
we employed in developing FY 1998 fees is the same as the one that was 
used to develop the FY 1997 fees, we adopt by incorporation paragraphs 
16-20 of the FY 1997 Report and Order which provides detailed 
information covering how our cost accounting system operates.

B. Relationship of Cost Service to Revenue Requirement

    15. PCIA and other commenters contend that the fees are unlawful 
because allegedly there is no basis for or relationship between the 
fees the Commission is proposing to collect from a particular class of 
licenses or regulatees and the amount of regulatory work or oversight 
associated with those regulatees. We reject the arguments that our 
proposed fees are inconsistent with the statute or otherwise unlawful 
because they are not completely cost-based or do not reflect the 
benefits received by entities subject to a fee payment. Section 9(a) 
requires that we recover our costs ``in the total amounts required in 
Appropriations Acts.'' 47 U.S.C. 159(a).
    Section 9(a) does not require that we base our fees solely on 
benefits to regulatees or that the fees recover from an entity only its 
particular cost of regulation. In our FY 1995 Report and Order, we 
stated that we are not limited to setting regulatory fees only in the 
amount that reflects services received by regulated entities. 10 FCC 
Rcd at 13521,

[[Page 35850]]

citing Skinner v. Mid-America Pipe Line Co., 490 U.S. 212, 224 (1989). 
Rather, once Congress, as in section 9, has made a proper delegation of 
authority to raise funds, ``so long as the fees in question are within 
the scope of Congress' lawful delegation of authority in section 9, 
they are constitutional.'' Id. Thus, as we noted in our FY 1995 Report 
and Order, we ``can collect fees from regulatees for their use of 
frequencies and for the potential benefits of regulatory activities, 
even if they do not utilize these activities.'' See 60 FR 34000, (June 
29, 1995), citing United States v. Sperry Corp., 493 U.S. 52, 63. Thus, 
there is no requirement that the fees we establish be designed to 
recover only the costs of those benefits directly received by an 
entity. Rather, we may adjust the fees by taking into consideration 
``factors that the Commission determines are in the public interest.'' 
47 U.S.C. 159(b)(1) (A).
    16. We must collect in regulatory fees the amount specified by 
Congress. Direct costs, such as salary and expenses for (a) staff 
directly assigned to our operating Bureaus and performing regulatory 
activities and (b) staff assigned outside the operating Bureaus to the 
extent that their time is spent performing regulatory activities 
pertinent to an operating Bureau, are only part of the costs to be 
recovered from each licensee. Indirect costs, which include costs of 
support personnel assigned to overhead functions such as field and 
laboratory staff and certain staff assigned to the Office of Managing 
Director, and support costs, including rent, utilities, equipment, and 
contractual costs attributable to regulatory oversight, must also be 
recovered.\3\
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    \3\ One commenter questioned how the Commission's use of 
contractors affected its computation of Full Time Equivalency (FTE) 
employee numbers. While the Commission used FTE numbers in 
developing its FY 1995 and FY 1996 fee schedules it discontinued 
using FTE numbers after it adopted a cost accounting system in FY 
1997. PCIA also questions the allocation of such overhead costs as 
office moves. As with all overhead, we allocate it to the functional 
area where the cost was incurred, if this is feasible.
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    17. Regulatory fees also recover costs attributable to regulatees 
that Congress, has exempted from the fees, such as Citizen's Band Radio 
and most recreational ship and aircraft radio station operators, 
amateur radio licensees, governmental entities, licensees in the public 
safety radio services, and non-profit groups, as well as costs 
attributable to licensees which have been granted waivers of the fees. 
47 U.S.C. 159(b)(d). The costs of regulating these entities is borne by 
those regulatees subject to a fee requirement, with no direct 
measurable benefit accruing to such fee payers. We recover our costs of 
regulation for exempt entities, and licensees who have received waivers 
of the fees by allocating our regulatory costs attributable to them on 
a proportional basis across all fee categories so as not to unduly 
impact any particular category of fee payers.
    18. PCIA points out that our NPRM did not provide actual FY 1997 
fee collection data, including the number of actual payment units and 
the actual amount of fees collected in certain fee categories. These 
commenters contend that such information is essential to the evaluation 
of the Commission's FY 1998 fee proposal and to insure that costs are 
properly allocated among all regulatees or licensees in a given 
service. We recognize that we did not provide a detailed listing of 
actual FY 1997 collections data in the NPRM. However, Attachment B, of 
the NPRM, contained a service-by-service explanation of the basis of 
our estimated FY 1998 payment units.
    Several of these are based on actual FY 1997 payments. Others are 
based on estimates obtained from Commission program experts or from 
regulated industries. In any case, as we noted in the NPRM, we 
consider, as one factor in estimating payment units, the actual number 
of payment units recorded in our fees collection system for FY 1997. 
These payment unit estimates used ``as of'' dates corresponding to the 
beginning of the current fiscal year, or, for some fee categories, at 
the end of the previous calendar year. We believe that this reliance 
upon actual ``historical'' or retrospective FY 1997 data provides us a 
much greater confidence level than would an estimate of payment units 
made prospectively.\4\ Finally, from the inception of the regulatory 
fee collection program, actual historical payment units and collection 
amounts for the various categories of services have been routinely 
available for inspection to interested persons upon request. In sum, we 
cannot find that there is a basis for concluding that these commenters 
could not fairly evaluate our proposed fees for FY 1998 given the 
information pertaining to payment units contained in the NPRM and 
detailed collections data readily available from the Commission. 
Additionally, we note that no interested party proposed alternative 
payment units for any category of service for FY 1998.
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    \4\ In this regard the Commission has been checking the payments 
received from broadcast licensees against the name of the licensees 
in the Commission's database. The Commission has written to each 
licensee requesting payment or evidence of payment or exempt status, 
in order to perfect its database and ensure that the numbers of 
licensees upon which fees are based is accurate.
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    19. Finally, PCIA and other interested parties are concerned about 
the amount of the proposed increase in their revenue requirements and 
in their fee amounts for FY 1998 compared with those established for FY 
1997. They question how estimates of actual costs for FY 1997 and FY 
1998 could differ so significantly from one year to the next in certain 
fee categories. These differences can be attributed to the increase in 
the amount to be collected as specified by Congress, changes in the 
numbers of units subject to the fees, and changes in services. For 
example, in reassigning services from the CMRS Mobile category to the 
CMRS Messaging category, we adjusted the estimated payment units of 
both fee categories. Moreover, as we have noted, because each service 
must offset a portion of our overhead costs, and subsidize costs not 
related to its regulation, the resulting fee will invariably exceed the 
payer's direct regulatory costs, not withstanding the efforts by 
Congress and the Commission to reduce the regulatory burden on our 
licensees.
    20. As noted in our FY 1997 Report and Order, an important 
consideration in utilizing a revenue ceiling is the impact on other fee 
payers. Because the Commission is required to collect a full 
$162,523,000 in FY 1998 regulatory fees, the additional revenue that 
would have been collected from licensees subject to a revenue ceiling 
had there been no ceiling, needs to be collected instead from licensees 
not subject to the ceiling. Revenues from current fee payers already 
offset costs attributable to regulatees exempt from payment of a fee or 
otherwise not subject to a fee pursuant to section 9(h) of the Act or 
the Commission's rules. For example, CB and ship radio station users, 
amateur radio licensees, governmental entities, licensees in the public 
safety radio services, and all non-profit groups are not required to 
pay a fee. The costs of regulating these entities is borne by those 
regulatees subject to a fee requirement. We believe, however, that the 
public interest is best served by this methodology. To do otherwise 
would subject payers in some fee categories to unexpected major fee 
increases which could severely impact the economic well being of 
certain licensees. Attachment E displays the step-by-step process we 
used to calculate adjusted revenue requirements for each fee category 
for FY 1998, including the reallocation of revenue requirements

[[Page 35851]]

resulting from the application of our revenue ceilings.\5\
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    \5\ For example, PCIA has requested that we establish a cost-
increase benchmark at which point an explanation of the increase for 
any affected category must be included. A line-by-line explanation 
of all accounting data is not feasible, nor, do we believe, 
necessary in this item. Specific cost accounting data is available 
to interested parties upon request.
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C. The 25% Ceiling on Fees

    21. After separately projecting the revenue requirements for each 
service category using data generated by our cost accounting system, we 
established a revenue ceiling no higher than 25 percent above the 
revenue that regulatees would have paid if FY 1998 fees had remained at 
FY 1997 levels (adjusted only for changes in volume and the increase 
required by Congress).
    22. SBC Communications (SBC) argues that the 25 percent ceiling is 
increasing the difference between the fees and the costs of regulation 
for some regulatees. Comcast Cellular Communications, Inc. (Comcast) 
and Small Business in Telecommunications (SBT) argue that the 25% 
ceiling unfairly results in the subsidization of some fee payer classes 
by other services.
    23. Capping each fee category's revenue requirement at no more than 
a 25 percent increase enables us to continue the process of reducing 
fees for services with lower costs and increasing fees for services 
with higher costs in order to close the gap between actual costs and 
fees designed to recover these costs.\6\ Congress in its original fee 
schedule, established fee amounts for each fee category that were to be 
used until the FCC could implement an agency-wide cost accounting 
system to track costs by fee category. The Congressional fee schedule 
inherently subsidized certain services at the expense of others. 
Furthermore, the Congressional mandate to collect significantly larger 
amounts in regulatory fees each year had made it more difficult to 
eliminate the imbalances first established in the statutory fee 
schedule. The full extent of these imbalances became clear when the 
Commission moved to a cost-based system in FY 1997. Thus, for FY 1997 
we adopted a ceiling on fees in order to establish a mechanism that 
would smooth the transition to cost based fees.
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    \6\ We are not suggesting that fee increases are limited to a 25 
percent increase over the FY 1997 fees. The 25 percent increase is 
over and above the revenue which would be required after adjusting 
for projected FY 1998 payment units and the proportional share of 
the 6.56 percent increase in the amount that Congress is requiring 
us to collect. Thus, FY 1998 fees may increase more than 25 percent 
over FY 1997 fees depending upon the number of payment units. We are 
also not suggesting that this methodology will always result in a 
continuous closing of an existing gap between costs and fees 
designed to recover these costs. Since actual costs for a fee 
category may increase or decrease in consecutive years, the gap 
could either close or widen depending upon whether or not actual 
costs go down or up and by how much.
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    24. As noted in our FY 1997 Report and Order, an important 
consideration in utilizing a revenue ceiling is the impact on other fee 
payers. We are required to collect a full $162,523,000 in FY 1998 
regulatory fees. The additional revenue that would have been collected 
from licensees subject to a revenue ceiling had there been no ceiling, 
needs to be collected instead from services where increases are less 
than 25%. Utilization of the 25% ceiling permits us to close the gap 
between regulatory fees and actual costs while minimizing the potential 
adverse impact of substantial fee increases. In sum, we believe that 
the public interest is best served again by adopting the 25% ceiling.

C. Application of Cost-Based Methodology to Determine Fee Amounts

i. Adjustment of Payment Units
    25. As the first step in calculating individual service regulatory 
fees for FY 1998, we adjusted the estimated payment units for each 
service because payment units for many services have changed 
substantially since we adopted our FY 1997 fees. We obtained our 
estimated payment units through a variety of means, including our 
licensee data bases, actual prior year payment records, and industry 
and trade group projections. Whenever possible, we verified these 
estimates from multiple sources to ensure the accuracy of these 
estimates.\7\ Attachment B provides a summary of how payment units were 
determined for each fee category.
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    \7\ Certain payment unit estimates have been revised since 
release of the NPRM due to additional or updated information 
obtained by the Commission. This may result in changed fee amounts 
from those proposed in the NPRM. It is important to also note that 
Congress' required revenue increase in regulatory fee payments of 
approximately seven percent in FY 1998 will not fall equally on all 
fee payers because payment units have changed in several services. 
When the number of payment units in a service increase from one year 
to another, fees do not have to rise as much as they would if 
payment units had decreased or remained stable. Declining payment 
units have the opposite effect on fees.
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ii. Calculation of Revenue Requirements
    26. We next multiplied the revised payment units for each service 
by our FY 1997 fee amounts in each fee category to determine how much 
revenue we would collect in FY 1998 without any change to the existing 
Schedule of Regulatory Fees. The amount of revenue we would collect is 
approximately $171.5 million. This amount is approximately $9 million 
more than the amount the Commission is required to collect in FY 1998. 
We therefore adjusted the revenue requirements for each fee category on 
a proportional basis, consistent with section 9(b)(2) of the Act, to 
obtain an estimate of revenue requirements for each fee category 
necessary to collect the $162,523,000 amount required by Congress for 
FY 1998. Attachment C provides detailed calculations showing how we 
determined the revised revenue amount for each service.
iii. Calculation of Regulatory Costs
    27. In order to utilize actual costs as derived from our accounting 
system we combined support costs and direct costs \8\ and then adjusted 
the results to approximate the amount of revenue that Congress requires 
us to collect in FY 1998 ($162,523,000).\9\ In effect, we 
proportionally adjusted the actual cost data pertaining to regulatory 
fee activities recorded for the period October 1, 1996, through 
September 30, 1997, (FY 1997) among all the fee categories so that 
total costs approximated $162,523,000. For fee categories where fees 
are further differentiated by sub-categories, we distributed the 
revenue requirements to each sub-category. The results of these 
calculations are shown in detail in Attachment D and represent our best 
estimate of actual total attributable costs relative to each fee 
category and sub-category for FY 1998. However, the fee schedule for AM 
and FM radio stations was differentiated by class of station and 
population served in such a manner as to further differentiate small 
stations from larger stations.
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    \8\ One feature of the cost accounting system is that it 
separately identifies direct and indirect costs. Direct costs 
include salary and expenses for (a) staff directly assigned to our 
operating Bureaus and performing regulatory activities and (b) staff 
assigned outside the operating Bureaus to the extent that their time 
is spent performing regulatory activities pertinent to an operating 
Bureau. These costs include rent, utilities and contractual costs 
attributable to such personnel. Indirect costs include support 
personnel assigned to overhead functions such as field and 
laboratory staff and certain staff assigned to the Office of 
Managing Director. The combining of direct and indirect costs is 
accomplished on a proportional basis among all fee categories as 
shown on Attachment D.
    \9\ Congress' estimate of costs to be recovered through 
regulatory fees is generally determined at least twelve months 
before the end of the fiscal year to which the fees actually apply. 
As such, year-end actual activity costs will not equal exactly the 
amount Congress designates for collection in a particular fiscal 
year.

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[[Page 35852]]

iv. Application of 25 Percent Revenue Ceiling
    28. We applied the 25% ceiling on the increase in the revenue 
requirement of each fee category (over and above the Congressionally 
mandated increase in the overall revenue requirement and the difference 
in unit counts) using the same methodology we described in detail in 
our FY 1997 Report and Order.
v. Recalculation of Fees
    29. Once we determined the amount of fee revenue that it is 
necessary to collect from each class of licensee, we divided the 
revenue requirement by the number of payment units (and by the license 
term, if applicable, for ``small'' fees) to obtain actual fee amounts 
for each fee category. These calculated fee amounts were then rounded 
in accordance with section 9(b)(3) of the Act. See Attachment E.
vi. Proposed Changes to Fee Schedule
    30. We examined the results of our calculations made in paragraphs 
25-27 to determine if further adjustments of the fees and/or changes to 
payment procedures were warranted based upon the public interest and 
other criteria established in 47 U.S.C. 159(b)(3). As a result of this 
review, we are adopting the following changes to our Fee Schedule:
a. Commercial AM & FM Radio
    31. In FY 1997 we revised the methodology for assessing radio 
regulatory fees, by determining each station's daytime protected field 
strength signal contour which was then overlaid upon U.S. Census data 
to estimate the population coverage for each station.\10\ Under the FY 
1997 methodology, stations with larger populations within their 
protected service area were assessed higher fees than stations with 
smaller populations within their protected service area. The FY 1997 
radio regulatory fees were also based on the ratio between the 
differences in fees assessed for different classes of stations in the 
Statutory Fee Schedule. 47 U.S.C. 159(g). We will modify these 
procedures to assess regulatory fees by calculating the populations 
within each station's narrower city strength service contour. We 
anticipate that this methodology will reduce the populations to be 
considered for fee purposes to the populations which most licensees 
consider to be within their ``core'' service area. We also will 
increase the differences between fee payments for different classes of 
stations with different populations, so that stations serving larger 
populations would pay a greater share of the regulatory fee burden.
---------------------------------------------------------------------------

    \10\ In FY 1997 we determined that the signal contour for AM 
radio stations would be based upon a calculated signal strength of 
0.5 mV/m from the transmitter location. For Class B FM stations the 
contour was based upon a signal strength of 54 dBuV/m from the 
transmitter location and for Class B1 FM stations the contour was 
based upon a signal strength of 57 dBuV/m. For all other FM Classes, 
a 60 dBuV/m contour was used. Attachment J describes in detail the 
factors, measurements and calculations that go into determining 
station signal contours and associated population coverages.
---------------------------------------------------------------------------

    32. We received complaints from licensees stating that the 
protected field strength contours used to calculate the fees, 
overstated actual market areas and populations served. In several 
instances licensees contended that rural stations whose contours 
intersected major metropolitan areas, were assigned populations far in 
excess of the populations within their primary or even their secondary 
market areas. See, for example, letters from KTXC, dated September 10, 
1997; Music Express Broadcasting Corporation of Northeast Ohio, dated 
August 28, 1997; and Martin Broadcasting Company, dated August 26, 
1997.
    33. We also received complaints from licensees that they could not 
determine how the size of their regulatory fees were affected by their 
class of station, and that there was not a sufficient differentiation 
in fees between stations serving large populations and other stations. 
Several licensees argue that stations serving smaller populations have 
paid a disproportionate share of the regulatory fees. See letter from 
Heckler Broadcasting, Inc., received October 2, 1997; and Petition for 
Reduction of Regulatory Fee filed September 18, 1997 by Family 
Communications, Inc.
    34. Comments filed by 19 State Broadcaster Associations, and by the 
NAB support reliance on city grade contours, a fee schedule which 
separated stations by class and population, and a fee schedule that 
increased the differentiation between the fees paid by stations serving 
larger markets and by stations serving smaller markets. The NAB also 
maintained that specifically dividing stations by class and population 
will provide a greater understanding to individual licensees concerning 
how their fees were calculated. Finally, the NAB argued that it is 
inequitable to base fees on the number of licensees who have paid their 
fees in the past and, therefore, shifting the fee payment obligation 
from the number of licensees that did not pay their fees. The NAB urges 
the Commission to adopt a broadcast fee schedule based on the total 
number of operating stations, excluding only those stations that have 
documented non-profit status.
    35. In part, as a response to these concerns and comments, the NPRM 
proposed to modify the fee schedule for FY 1998 by utilizing the same 
general methodology for determining regulatory fees as we did in FY 
1997, but by increasing the strength of the applicable signal contours 
to 5 mV/m for AM radio stations and 70 dBuV/m for FM radio stations, 
their city strength service contours. The city strength signal contours 
should reduce the populations used to assess fees to the populations 
within each station's primary local market area.
    36. The FY 1998 NPRM proposed alternative fee schedules. In the 
first schedule, we determined the population in each station's city 
strength service contours, and then multiplied each population served 
by the same ratios between the fees for individual classes and types of 
stations (AM or FM), as established in the original Statutory Fee 
Schedule to determine the weighted population for each station in the 
FY 1998 Fee Schedule. See 47 U.S.C. 159(g). We then proposed to combine 
all of the AM and FM stations into a single schedule. We developed a 
range of fees for the schedule by selecting a minimum fee not lower 
than the AM Construction Permit fee which we determined to be $235, and 
a maximum fee which would not place an undue burden on any licensee. 
Therefore, we proposed to set the lowest radio fee at $250, and to 
increase the fees in $250 increments to $2,500 for stations serving the 
largest populations. We further proposed to retain the same number of 
actual fee classifications (ten) as in our FY 1997 Report and 
Order.\11\
---------------------------------------------------------------------------

    \11\ The number of stations is not exactly divisible by 10, 
leaving group 10 with five less stations than the other groups.
---------------------------------------------------------------------------

    37. We agree with the NAB and the State Broadcaster Associations 
that separately listing AM and FM stations by class of station, and by 
increasing the burden to be paid by the stations serving larger 
populations, is more equitable. Although that schedule would depart 
from the original ratios in the statutory fee schedule, we are 
authorized to modify the schedule and implement the following schedule 
which is responsive to the concerns expressed by our licensees. 47 
U.S.C. 159(b).

[[Page 35853]]



                                          Radio Station Regulatory Fees                                         
----------------------------------------------------------------------------------------------------------------
                                                                                                      FM classes
         Population served           AM class A   AM class B   AM class C   AM class D   FM classes   B, C, C1 &
                                                                                         A, B1 & C3       C2    
----------------------------------------------------------------------------------------------------------------
<=20,000..........................         $400         $300         $200         $250         $300         $400
20,001-50,000.....................          750          600          300          400          600          750
50,001-125,000....................        1,250          800          400          600          800        1,250
125,001-400,000...................        1,750        1,250          600          750        1,250        1,750
400,001-1,000,000.................        2,500        2,000        1,000        1,250        2,000        2,500
>1,000,000........................        4,000        3,250        1,500        2,000        3,250        4,000
----------------------------------------------------------------------------------------------------------------

    38. As can be seen from the above chart, the same class stations in 
different size cities generally have different fees, with stations 
serving larger populations paying higher fees. In addition, different 
class stations in the same city generally have different fees, with 
stations which provide a higher class of service paying higher fees. 
The same class stations in the same city will have the same fee. Thus, 
the adopted fee schedule achieves the objectives of assessing fees 
based on class of station and populations served, thereby providing a 
fair and equitable means of distinguishing between stations located in 
metropolitan areas and in rural areas.
    39. Moreover, if a licensee believes that it has been improperly 
placed in a particular fee classification group or that it will suffer 
undue financial hardship from the fee assessment, our rules provide for 
waiver, reduction or deferral of a fee as described in Sec. 1.1166 of 
our rules. See 47 CFR 1.1166.
    40. We also agree with the NAB that the fee schedule should reflect 
the total number of non-exempt operating stations. We have identified 
those licensees who have not paid their regulatory fees and have 
requested that they pay the fee or submit evidence establishing that 
they have paid their fee or are entitled to an exemption from the 
regulatory fee. In addition, in Assessment and Collection of Regulatory 
Fees for Fiscal Year 1997, FCC 97-384, adopted October 17, 1997, we 
required licensees to submit evidence of their non-profit status. For 
FY 1998, we have made adjustments to the number of licensees subject to 
fee payment based on responses received pertaining to non-profit 
status. Further, for FY 1999, we will consider the number of licensees 
who have paid their fees, as adjusted to account for licensees that 
have established their exempt status, and to account for responses to 
our letters requesting fee payments. Moreover, it is our intention to 
follow up on the FY 1998 fee payments to again identify and collect 
fees from those licensees that have not paid their fees and to further 
adjust and perfect our station counts.
    41. The Commission will again inform radio station licensees of 
their exact fee obligation. A Public Notice listing each station's call 
letters, location, population, and the required fee will be mailed to 
each licensee. The same information will also be available at our 
internet web site (http://www.fcc.gov). Interested parties may also 
obtain their applicable fee amount for FY 1998 by calling the FCC's 
National Call Center at 1-888-225-5322. We have also provided detailed 
payment information for each radio station as Attachment L to this 
Report and Order.
b. CMRS
    42. In the NPRM, we proposed for FY 1998 fees of $.29 per unit for 
the CMRS Mobile Service and $.04 per unit for the CMRS Messaging 
Service. In addition, we sought comment on how best to assign the 
various CMRS services between the two fee categories. For FY 1997, 
licensees authorized for operation on broadband spectrum were subject 
to payment of the CMRS Mobile Service fee and licensees authorized for 
operation on narrowband spectrum were subject to payment of the CMRS 
Messaging fee without regard to the nature of the services actually 
offered. We invited interested parties to comment on our proposal to 
continue the FY 1998 fee structure, and we specifically invited 
comments on whether licensees in the 900 MHZ Specialized Mobile Radio 
(SMR) Service were properly included in the CMRS Mobile fee category. 
Further, we tentatively proposed to include the Wireless Communications 
Service in the CMRS Wireless fee category.
    43. Several interested parties filed comments, in particular, 
concerning the demarcation between the CMRS Mobile and CMRS Messaging 
fee categories. SBC Communications Inc. (SBC) urges us to adopt only a 
single CMRS fee covering all CMRS services contending that both 
Congress and the Commission intended in establishing SMRS to create 
regulatory symmetry among the CMRS services and, thereby, avoid any 
competitive advantage to narrowband PCS and SMR Services over Cellular 
and broadband PCS.\12\ In contrast, Paging Network, Inc. (Pagenet) 
supports retention of the existing fee category structure, but 
recommends adoption of a subcategory for non-voice networks and 
services within the CMRS Mobile Service fee category which would be 
subject to the same fee payment as licensees within the CMRS Messaging 
fee category.
---------------------------------------------------------------------------

    \12\ Id.
---------------------------------------------------------------------------

    44. Bell South, a provider of mobile wireless data, supported by 
American Mobile Telecommunications Association (AMTA), suggests that 
900 MHZ SMR licensees should be classified in the CMRS Messaging Fee 
category not the CMRS Mobile Services Category. BellSouth WD argues 
that regulatory fees should be governed by how the service bands are 
predominantly used. BellSouth WD states that the Commission has 
allocated 5 MHz of spectrum in each geographic region for 900 MHz SMR 
systems and that, in practice, this spectrum is licensed in 20 blocks, 
each consisting of 10 two-way 12.5 KHz paths, or 0.25 MHz per ten-
channel block.\13\ Further, Bell South contends that 900 MHz SMRs do 
not have the capacity to compete with true broadband systems, lacking 
the amount of spectrum of those services included in the CMRS Mobile 
Fee category. Thus, Bell South WD suggests that we either include any 
license authorization providing 25 KHz or less spectrum in the CMRS 
Messaging Service category or that we establish a third CMRS fee 
payment category for systems that operate in the 900 MHz SMR band and 
other services that are allocated no more than 5 MHz of spectrum. Small 
Business in Telecommunications (SBT), representing several SMR 
licensees, argues that, because we classified narrowband PCS, which 
operates on 50 KHz paired channels, in the CMRS

[[Page 35854]]

Messaging Service category,\14\ we should clarify that all CMRS 
stations which are authorized with channel bandwidth not exceeding 50 
KHz are within the CMRS Messaging Service category.
---------------------------------------------------------------------------

    \13\ See BellSouth WD Comments at 2.
    \14\ See FY 1997 Fees Order at paragraph 61.
---------------------------------------------------------------------------

    45. Moreover, SBT contends that we should clarify that SMR systems 
and Public Coast stations are within the CMRS Messaging Fees category 
since these stations are authorized with substantially less channel 
capacity than narrowband PCS stations. SBT also believes that SMR 
licensees, which are small businesses should receive discounts on their 
fees similar to the discounts given to small businesses in spectrum 
auctions. AMTA also supports relief for small businesses. SBC also 
contends that we incorrectly included the Rural Radio Service and the 
Basic Exchange Telecommunications Radio Service (BETRS) in the CMRS fee 
category.
    46. We decline to adopt suggestions to base our fees on the 
predominant use of assigned spectrum and on a licensee by licensee 
basis. We are aware of no existing records or other information that 
would permit development of a sub-category of CMRS Mobile Services for 
those CMRS licensees who use broadband spectrum to deliver CMRS 
Messaging Services. Thus, adoption of those proposals could impose upon 
the licensees themselves and our staff an undue expenditure of 
administrative resources in the course of preparing the fee payments 
and processing them.
    47. Furthermore, we reject SBC's contention that all CMRS licensees 
should pay the same regulatory fee. The statutory fee schedule makes 
plain that Congress in enacting the regulatory fee program contemplated 
that our fee levels would recognize the benefit of the spectrum 
authorized to licensees in the various services. 47 U.S.C. 159(g). 
Furthermore, interested parties should note that in the past our CMRS 
fee schedules have adhered to Congress' principle that our fee 
categories are to be based on the authorization provided to a licensee 
rather than the use a particular licensee makes of its authorized 
spectrum. Thus, we have considered the nature of the services offered 
only to the extent that service offered on broadband spectrum and 
services offered on narrowband spectrum are subject to different 
categories of fee payment.
    48. While, at this time, we lack an adequate record to modify 
classifications within the CMRS fee category, we intend to adopt 
shortly a Notice of Inquiry to seek comment on revisiting several of 
our regulatory fee categories, including CMRS. We encourage CMRS 
licensees to participate in that proceeding by submitting comments and 
supporting data.
    49. Finally, we did not receive any comments opposing our tentative 
conclusion that the Wireless Communications Service (WCS) should be 
classified as a CMRS Mobile Service and, therefore, we will classify 
WCS as service within the CMRS Mobile Service fee category. Also, we 
agree with SBC that Sec. 20.7(a) of the rules excludes licensees in the 
Rural Radio Service from CMRS. Therefore, licensees in this Service 
shall pay annual regulatory fees under the category, GMRS/Other Land 
Mobile. For FY 1998, the GMRS/Other Land Mobile fee is $6 per license, 
payable in advance for the entire license term and at the time of 
application for a new, modification or reinstatement license. The total 
regulatory fee due is $30 for a five-year license term.
c. Space Stations and Bearer Circuits
i. Geostationary Satellites
    50. For FY 1997 and prior years, we have adopted the statutory fee 
schedule's ``per satellite'' method for assessment of fees upon 
licensees of space stations. 47 U.S.C. 159(g). In the NPRM, we proposed 
retaining this approach. See FY 1998 NPRM, Attachment F. Columbia asks 
that we modify our methodology to take into account the difference 
between transponder and bandwidth capacity that exists among different 
satellites. Columbia states that its satellites are limited to just 
twelve C-band transponders, which, it contends, is only about one-third 
the capacity of the typical geostationary satellite. Further, it argues 
that satellite operators benefit from our regulation in close 
proportion to its capacity because a satellite's commercial capacity 
dictates the benefit it receives from our regulation, i.e., its ability 
to generate income. Thus, Columbia suggests that we base the space 
station fees on the transponder capacity of each satellite measured in 
36 MHZ equivalent circuits.
    51. Both GE Americom and Lorel contend that the Commission engages 
in little oversight once a satellite is licensed and that application 
processing costs should not be included in the regulatory fee schedule. 
The costs attributed to the regulation of geostationary satellites are 
based on the Commission's cost accounting system which separates 
application processing costs from regulatory costs.
    52. Finally, GE Americom and others contend that any costs related 
to the development of new services rather than existing services should 
be treated as overhead and recovered proportionately from all fee 
payers. They also state that high regulatory fees adversely affect the 
U.S. satellite industry's capability to compete with foreign licensed 
companies. We continue to believe that it would be inappropriate to 
transfer costs directly attributable to one industry group to other 
unrelated industries or groups. Benefits need not be received or used 
by a particular licensee to satisfy the ``reasonably related'' 
criteria. It is enough that the benefits are available to all. The FCC, 
by statute, may only regulate costs of domestic licensed companies and 
we do not believe that our regulatory fees substantially affect 
American companies ability to compete with foreign entities.
    53. After a careful review of the arguments, we have concluded that 
due to the tight collection schedule we face at this point, as a 
practical matter, we have no viable alternative other than adoption of 
the fee as proposed in the NPRM. Our action today is not intended to 
prejudge any pending waiver applications regarding these fees. 
Moreover, since the calculation of annual regulatory fees for 
geostationary satellites has been a matter of dispute for several 
years, we will soon issue a Notice of Inquiry which will entertain 
suggestions for alternative approaches based on different criteria and 
information. We will also ask the satellite industry to specify the 
data upon which we can base each alternative approach and the most 
feasible method for obtaining this information.
ii. Non-Geostationary Satellites
    54. In the NPRM, we proposed to revise the fee payment requirement 
for non-geostationary satellite systems by requiring a fee payment 
``upon the commencement of operation of a system's first satellite as 
reported annually pursuant to Secs. 25.142(c), 25.143(e) 25.145(g) or 
upon certification of operation of a single satellite pursuant to 
Sec. 25.120(d).''\15\ See NPRM at paragarph 32. In its comments, 
ORBCOMM contends that we should recover our non-geostationary space 
station regulatory costs from all non-geostationary satellite licensees 
rather than only those that have launched their initial satellites 
because all licensees benefit from our policy, enforcement and 
information activities and services.
---------------------------------------------------------------------------

    \15\ Section 25,120(d) has been renumbered to Sec. 25.121(d).
---------------------------------------------------------------------------

    55. In the past, we have not assessed fees upon licensees of LEO 
systems that

[[Page 35855]]

do not operate at least one in-orbit space station. Nevertheless, we 
believe that ORBCOMM's proposal to impose a fee on all licensees of LEO 
systems warrants consideration due to developments in satellite 
technology permitting the deployment of LEO systems containing large 
numbers of satellites. However, before further considering the 
proposal, we believe an opportunity for comments by the interested 
parties would be useful. Therefore, we adopt the fee as proposed in the 
NPRM. Nevertheless, we will include ORBCOMM's proposal in the Notice of 
Inquiry we will initiate to review various methodologies for assessing 
fees in various fee categories. This will provide an opportunity to 
fully explore this proposal with input from all affected parties.
    56. Finally, we will adopt the NPRM's proposal to reclassify the 
LEO regulatory fee category as the ``Space Stations (Non-
geostationary)'' fee category because advances in satellite technology 
have made possible medium and high orbit satellite systems operating in 
non-geostationary orbits. See NPRM at paragraph 33.
iii. Bearer Circuits
    57. For FY 1997, for the first time, we applied the international 
bearer circuit fee to satellite non-common carriers providing 
international bearer circuits to end users. See FY 1997 Report and 
Order at paragraphs 66-72. Previously, we had assessed the bearer 
circuit fee only upon undersea cable operators and domestic and 
international common carriers. In the NPRM, we proposed to again assess 
the bearer circuit fee on both private and common carrier satellite 
providers of international bearer circuits to end users. See FY 1998 
NPRM, Attachment F.
    58. Columbia, Loral, and PanAmSat contend that assessment of the 
bearer circuit fee on private satellite providers of international 
bearer circuits is unlawful. These parties state that section 9(g) of 
the Communications Act specifically limits the assessment of the bearer 
circuit fee to ``carriers''. 47 U.S.C. 159(g). Because section 3(10) of 
the Act defines ``carriers'' as ``common carriers'', they contend that 
we are limited to imposing the fee only on common carriers providing 
international bearer circuits. 47 U.S.C. 153(10). In addition, 
according to Columbia, the intent of Congress in including the bearer 
circuit fee in its statutory fee schedule was to assure the recovery 
from common carriers of the cost of their Title II regulation. Because 
non-common carriers are not subject to Title II regulation, Columbia 
argues that imposition of the bearer circuit fee on non-common carriers 
would result in recovery of the costs of Title II regulation from 
entities not subject to our Title II jurisdiction.
    59. As a separate matter, PanAmSat states that our justification 
underlying imposition of the FY 1997 bearer fee upon non-common carrier 
satellite providers was flawed because we mistakenly believed that non-
common carrier satellite operators would offer interconnected PSTN 
services in competition with common carriers following our elimination 
of the de jure prohibition on non-common carriers for the provision of 
these services. See FY 1997 Report and Order at paragraph 71. Instead, 
PanAmSat contends that the record in the pending Comsat Dominance 
proceeding demonstrates that the amount of PSTN traffic actually 
carried by non-common carrier satellites is so small as to be 
inconsequential from a competitive point of view. See 60-SAT-ISP-97. 
Thus, PanAmSat, supported by Columbia and Loral, argues that there has 
been no change in our regulation of non-common carriers to justify, 
pursuant to section 9(b)(3), subjecting non-common carrier satellites 
providers to a new fee. 47 U.S.C. 159(b)(3).
    60. Finally, PanAmSat contends that to assess non-common carrier 
satellite operators the international bearer circuit fee will create a 
competitive disparity. PanAmSat states that under our DISCO II 
policies, foreign-licensed satellites now may be used to provide 
satellite service in the United States. Foreign satellite operators are 
not, however, required to pay regulatory fees. See 12 FCC Rcd 24094 
(1997). As a result, the satellite systems against which U.S.-licensed 
non-common carriers actually compete will have a competitive advantage 
solely as a result of having used a foreign licensing administration. 
In sum, PanAmSat asks that we not impose the bearer circuit fee on non-
common carrier satellite operators in order to avoid skewing 
competition in the telecommunications markets by unfairly 
discriminating against U.S.-licensed service providers.
    61. We disagree with Columbia, Loral and PanAmSat that our 
assessment of the bearer circuit regulatory fee on them is unlawful. 
First, we disagree with their assertion that the intent of Congress in 
enacting section 9 of the Communications Act, under which the 
Commission is required to collect annual regulatory fees, including the 
bearer circuit fee at issue here, was to recover the costs of 
regulating common carriers under Title II of the Act. Section 9(a) 
clearly states that the purpose of the regulatory fees is to recover 
the costs of the Commission's enforcement activities, policy and 
rulemaking activities, user information services and international 
activities. Section 9(a) does not mention carriers or non-carriers or 
impose different criteria for each. Rather, the section requires the 
Commission to collect fees designed to recover its costs for these four 
general activities and to collect those fees from all entities that 
either require the Commission to engage in those activities or who 
benefit from them. As we noted in our FY 1997 Report and Order the 
Commission's costs for Title II regulation are recovered from the 
application fees under section 8 of the Communications Act.
    62. We further disagree with the argument of PanAmSat that our 
argument for recovering bearer circuit fees from non-carrier providers 
of such circuits is flawed. We see nothing in section 9 that would 
specifically exempt non-carriers from paying fees under section 9. 
While we agree that the Schedule of Regulatory Fees included in section 
9(g) states that we should impose bearer circuit fees upon 
``carriers,'' \16\ and that section 3(10) of the Act defines 
``carriers'' to mean ``common carriers,'' \17\ that is not the end of 
the issue. Section 9(b)(3) empowers the Commission to amend the 
Schedule of Regulatory Fees if the Commission deems such amendment 
necessary in the public interest.\18\ In our 1997 Report and Order we 
amended the schedule of regulatory fees to impose them upon non-carrier 
operators of international satellite systems under the terms of section 
9(g)(3). The basis for this amendment was that the non-carrier system 
operators had sought and obtained a significant expansion of the scope 
of services they are permitted to offer.\19\
---------------------------------------------------------------------------

    \16\ 47 U.S.C. 159(g).
    \17\ 47 U.S.C. 153(10).
    \18\ 47 U.S.C. 159(g)(3).
    \19\ See FCC 97-295 at paragraph 71, June 26, 1997.
---------------------------------------------------------------------------

    Our DISCO II Order also allowed them to provide unlimited domestic 
service,\20\ thereby increasing their permitted service areas. Because 
of these changes in their operation the non-carrier operators of 
international satellite systems impose more burdens upon the 
Commission's regulatory staff and derive a greater benefit from such 
staff's activities, particularly its international representation 
functions.

[[Page 35856]]

We concluded, therefore, that it would be appropriate to begin to 
collect regulatory fees from such operators.
---------------------------------------------------------------------------

    \20\ See 63 FR 6496 (February 9, 1997). Amendment of the 
Commission's Regulatory Policies to Allow Non-U.S. Licensed Space 
Stations to Provide Domestic and International Satellite Service in 
the United States, Report and Order in IB Docket No. 96-111, 12 FCC 
Rcd 24094 (1997), 62 FR 64167 (December 4, 1997).
---------------------------------------------------------------------------

    63. The commenting parties do not directly challenge the 
conclusions of our FY 1997 Report and Order. At most, PanAmSat argues 
that we may have overestimated the number of circuits such entities 
interconnect to the public switched telephone network (PSTN) and that 
the number is actually ``competitively inconsequential.'' Our decision, 
however, was not solely based upon the connection of circuits to the 
PSTN. The non-carrier international satellite operators have become 
substantial providers of international private-line circuits. Such 
circuits are international bearer circuits, whether or not they are 
interconnected to the PSTN. They offer substantial competition to 
carrier offerings of international bearer circuits. Commission staff 
has also spent considerable time representing non-carrier satellite 
operators in international forums. Therefore, we continue to believe 
that our regulation of these entities has sufficiently changed so that 
it is now appropriate for them to contribute to the recovery of 
Commission costs through payment of the bearer circuit fee. Finally, we 
find no merit in PanAmSat's argument that our imposition of bearer 
circuit fees on U.S.-licensed satellite systems discriminates in favor 
of foreign-owned systems. Congress requires the Commission to recover 
regulatory fees from firms who are subject to the Commission's 
regulatory jurisdiction. Foreign-licensed satellite systems do not fall 
within Commission jurisdiction. Therefore, they neither directly impose 
burdens on the Commission's staff nor receive benefits from Commission 
representation in international fora.
d. Interstate Telephone Service Providers
    64. In the NPRM, we proposed to adopt the methodology for assessing 
fees upon Interstate Telephone Service Providers that we had employed 
in past years. Under this methodology, carriers calculate their fees 
based upon their proportionate share of interstate revenues using the 
methodology we developed for contribution to the TRS Fund. See 
Telecommunications Relay Services, 8 FCC Rcd 5300 (1993). However, in 
order to avoid imposing upon resellers a double fee payment, we permit 
carriers to remove from their gross interstate revenue payments made to 
underlying carriers for telecommunications facilities and services, 
including payments for interstate access services.
    65. SBC contends that our methodology imposes an undue burden upon 
the LECs because we permit interexchange carriers (IXCs) to deduct 
payments made to underlying common carriers from their gross revenues 
while local exchange carriers (LECs) do not have such payments to 
deduct. SBC suggests that use of end user revenues--the same 
contribution base used for Universal Service--to develop the annual 
fees would alleviate that burden and be more competitively neutral.
    66. We find merit to SBC's proposal and, indeed, we have previously 
recognized administrative advantages to using end user revenues as 
opposed to net revenues when assessing carrier contributions.\21\ 
However, SBC is mistaken in describing end user revenues as more 
competitively neutral than the mechanism we have proposed. Assuming 
that all fees are recovered from customers, including carrier customers 
that purchase their service for resale, retail customers would still 
pay the same rates. Further, to the extent that SBC provides services 
in competition with other carriers, those carriers would pay the same 
percentage amounts as SBC when providing the same services to the same 
customers. Since modifying the fee basis would not result in any 
material difference in the rates that consumers pay, we cannot conclude 
that the LEC's pay an undue share under our proposed methodology.
---------------------------------------------------------------------------

    \21\ Federal-State Joint Board on Universal Service, Report and 
Order, FCC 97-157, CC Docket No. 96-45, 12 FCC Rcd 8776, 9206-9209 
(rel. May 8, 1997) (Universal Service Order).
---------------------------------------------------------------------------

    67. Interested parties should note that we are adopting our net 
revenue methodology as the fee basis for the Interstate Telephone 
Service Providers fee category again this year, in part, because we do 
not yet have adequate data to estimate total common carrier interstate 
end user revenue for FY 1997. While we could make such an estimate 
using data available for the first half of FY 1997 based on USF filings 
submitted on September 1, 1997, we believe that for FY 1998 we can make 
a better calculation of net revenues using historic data from 
regulatory fees as well as published gross revenue data based on TRS 
Fund filings. Thus, we expect to revisit SBC's proposal in the course 
of developing our regulatory fees for FY 1999.

E. Schedule of Regulatory Fees

    68. The Commission's Schedule of Regulatory Fees for FY 1998 is 
contained in Attachment F of this Report and Order.

F. Effect of Revenue Redistributions on Major Constituencies

    69. The chart below illustrates the relative percentages of the 
revenue requirements borne by major constituencies since inception of 
regulatory fees in FY 1994.

                                Revenue Requirement Percentages by Constituencies                               
----------------------------------------------------------------------------------------------------------------
                                                   FY 1994      FY 1995      FY 1996      FY 1997      FY 1998  
                                                   (actual)     (actual)     (actual)     (actual)    (proposal)
----------------------------------------------------------------------------------------------------------------
Cable TV Operators(Inc. CARS Licenses).........         41.4         24.0         33.4         21.8         18.1
Broadcast Licensees............................         23.8         13.8         14.6         14.1         15.3
Satellite Operators (Inc. Earth Stations)......          3.3          3.6          4.0          5.0          5.0
Common Carriers................................         25.0         44.5         40.9         49.8         47.8
Wireless Licensees.............................          6.5         14.1          7.1          9.3         13.8
                                                ----------------------------------------------------------------
    Total......................................        100.0        100.0        100.0        100.0        100.0
----------------------------------------------------------------------------------------------------------------

G. Procedures for Payment of Regulatory Fees

i. Installment Payments for Large Fees
    70. Generally, we are retaining the procedures that we have 
established for the payment of regulatory fees. Section
  
9(f) requires that we permit ``payment by installments in the case of 
fees in large amounts, and in the case of small amounts, shall require 
the payment of the fee in advance for a number of years not to exceed 
the term of the license held by the payer.'' See 47 U.S.C.
  
159(f)(1). Consistent with section 9(f), we are again establishing 
three categories of fee payments, based upon the category of service 
for which the fee payment is due and the amount of the fee to be paid. 
The fee categories are (1)

[[Page 35857]]

``standard'' fees, (2) ``large'' fees, and (3) ``small'' fees.
    71. We proposed in the NPRM that regulatees in any category of 
service with a liability of $12,000 or more be eligible to make 
installment payments and that eligibility for installment payments be 
based upon the amount of either a single regulatory fee payment or 
combination of fee payments by the same licensee or regulatee. However, 
statutory constraints requiring notification to Congress prior to 
actual collection of the fees prevents us from allowing installment 
payments in FY 1998. The payment dates for each regulatory fee category 
will be announced by Public Notice and published in the Federal 
Register following termination of this proceeding. However, regulatees 
otherwise eligible to make installment payments may pay their fees on 
the last date that fee payments may be submitted, as established in our 
Public Notice.
ii. Annual Payments of Standard Fees
    72. Standard fees are those regulatory fees that are payable in 
full on an annual basis. Payers of standard fees are not required to 
make advance payments for their full license term and are not eligible 
for installment payments. As in the past, all standard fees will be 
payable in full on the date we establish for payment of fees in their 
regulatory fee category. The payment dates for each regulatory fee 
category will be announced by Public Notice and published in the 
Federal Register following termination of this proceeding.
iii. Advance Payment of Small Fees
    73. As we have in the past, we are proposing to treat regulatory 
fee payments by certain licensees as ``small'' fees subject to advance 
payment consistent with the requirements of section 9(f)(2). Advance 
payments will be required from licensees of those services that we 
identified would be subject to advance payments in our FY 1994 Report 
and Order, and to those additional payers set forth herein. \22\ Payers 
of small fees must submit the entire fee due for the full term of their 
licenses when filing their initial, renewal, or reinstatement 
application. Regulatees subject to a payment of small fees shall pay 
the amount due for the current fiscal year multiplied by the number of 
years in the term of their requested license. In the event that the 
required fee is adjusted following their payment of the fee, the payer 
would not be subject to the payment of a new fee until filing an 
application for renewal or reinstatement of the license. Thus, payment 
for the full license term would be made based upon the regulatory fee 
applicable at the time the application is filed. The effective date of 
the FY 1998 small fees will be announced by Public Notice and published 
in the Federal Register following termination of this proceeding.
---------------------------------------------------------------------------

    \22\ Applicants for new, renewal and reinstatement licenses in 
the following services will be required to pay their regulatory fees 
in advance: Land Mobile Services, Microwave services, Marine (Ship) 
Service, Marine (Coast) Service, Private Land Mobile (Other) 
Services, Aviation (Aircraft) Service, Aviation (Ground) Service, 
General Mobile Radio Service (GMRS). In addition, applicants for 
Amateur Radio Vanity Call Signs will be required to submit an 
advance payment.
---------------------------------------------------------------------------

iv. Standard Fee Calculations and Payment Dates
    74. As noted, the time for payment of standard fees will be 
published in the Federal Register. For licensees, permittees and 
holders of other authorizations in the Common Carrier, Mass Media and 
Cable Services, fees should be submitted for any authorization held as 
of October 1, 1997. As in the past, this is the date to be used for 
establishing liability for payment of these fees since it is the first 
day of the federal government's fiscal year.
    75. In the case of other regulatees whose fees are based upon a 
subscriber, unit or circuit count, the number of a regulatees' 
subscribers, units or circuits on December 31, 1997, will be used to 
calculate the fee payment.\23\ As in the past, we have selected the 
last date of the calendar year because many of these entities file 
reports with us as of that date. Others calculate their subscriber 
numbers as of that date for internal purposes. Therefore, calculation 
of the regulatory fee as of that date will facilitate both an entity's 
computation of its fee payment and our verification that the correct 
fee payment has been submitted.
---------------------------------------------------------------------------

    \23\ Cable system operators are to compute their subscribers as 
follows: Number of single family dwellings + number of individual 
households in multiple dwelling unit (apartments, condominiums, 
mobile home parks, etc.) paying at the basic subscriber rate + bulk 
rate customers + courtesy and free service. Note: Bulk-Rate 
Customers= Total annual bulk-rate charge divided by basic annual 
subscription rate for individual households. Cable system operators 
may base their count on ``a typical day in the last full week'' of 
December 1996, rather than on a count as of December 31, 1996.
---------------------------------------------------------------------------

v. Minimum Fee Payment Liability
    76. Regulatees whose total fee liability amounts to less than $10, 
including all categories of fees for which payment is due by an entity, 
are exempted from fee payment in FY 1998.

IV. Ordering Clause

    77. Accordingly, it is ordered that the rule changes specified 
herein are adopted. It is further ordered that the rule changes made 
herein will become effective 60 days from date of publication in the 
Federal Register, except that changes to the Schedule of Regulatory 
Fees, made pursuant to section 9(b)(3) of the Communications Act, and 
incorporating regulatory fees for FY 1998, will become effective 
September 13, 1998, which is 90 days from the date of notification to 
Congress. Finally, it is ordered that this proceeding is Terminated.

V. Authority and Further Information

    78. This action is taken pursuant to sections 4(i), 4(j), 9 and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i) 
and (j) and 9 and 303(r).
    79. Further information about this proceeding may be obtained by 
contacting the Fees Hotline at (202) 418-0192.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure, Communications common 
carriers, Radio, Telecommunications, Television.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    For the reasons discussed in the preamble part 1 of Title 47 of the 
Code of Federal Regulations is amended as follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for part 1 continues to read as follows:

    Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154 (j), 
155 225, and 303(r).

    2. Section 1.1152 is revised to read as follows:


Sec. 1.1152  Schedule of annual regulatory fees and filing locations 
for wireless radio services.

[[Page 35858]]



------------------------------------------------------------------------
   Exclusive use services  (per     Fee amount                          
             license)                  \1\               Address        
------------------------------------------------------------------------
1. Land Mobile (Above 470 MHz,                                          
 Base Station & SMRS)(47 CFR,                                           
 Part 90):                                                              
    (a) 800 MHz, New, Renewal,          $12.00  FCC, 800 MHz, PO Box    
     Reinstatement (FCC 600).                    358235, Pittsburgh, PA 
                                                 15251-5235.            
    (b) 900 MHz, New, Renewal,           12.00  FCC, 900 MHz, PO Box    
     Reinstatement (FCC 600).                    358240, Pittsburgh, PA 
                                                 15251-5240.            
    (c) 470-512,800,900, 220 MHz,        12.00  FCC, 470-512, PO Box    
     220 MHz Nationwide Renewal                  358245, Pittsburgh, PA 
     (FCC 574R, FCC 405A).                       15251-5245.            
    (d) Correspondence, Blanket          12.00  FCC, Corres., PO Box    
     Renewal, (470-                              358305, Pittsburgh, PA 
     512,800,900,220 MHz)                        15251-5305.            
     (Remittance Advice,                                                
     Correspondence).                                                   
    (e) 220 MHz, New, Renewal,           12.00  FCC, 220 MHz, PO Box    
     Reinstatement (FCC 600).                    358360, Pittsburgh, PA 
                                                 15251-5360.            
    (f) 470-512 MHz, New,                12.00  FCC, 470-512,           
     Renewal, PO Box 358810,                     Pittsburgh, PA 15251-  
     Reinstatement (FCC 600).                    5810.                  
    (g) 220 MHz Nationwide, New,         12.00  FCC, Nationwide, PO Box 
     Renewal, Reinstatement (FCC                 358820, Pittsburgh, PA 
     600).                                       15251-5820.            
2. Microwave (47 CFR Pt. 101):                                          
    (a) Microwave, New, Renewal,         12.00  FCC, Microwave, PO Box  
     Reinstatement (FCC 415).                    358250, Pittsburgh, PA 
                                                 15251-5250.            
    (b) Microwave, Renewal (FCC          12.00  FCC, Microwave, PO Box  
     402R).                                      358255, Pittsburgh, PA 
                                                 15251-5255.            
    (c) Correspondence, Blanket          12.00  FCC, Corres., PO Box    
     Renewal (Microwave)                         358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
3. Shared Use Services:                                                 
    (a) Land Transportation (LT),         6.00  FCC, Land Trans., PO Box
     New, Renewal, Reinstatement                 358215, Pittsburgh, PA 
     (FCC 600).                                  15251-5215.            
    (b) Business (Bus.), New,             6.00  FCC, Business, PO Box   
     Renewal, Reinstatement (FCC                 358220, Pittsburgh, PA 
     600).                                       15251-5220.            
    (c) Other Industrial (OI),            6.00  FCC, Other Indus., PO   
     New, Renewal, Reinstatement                 Box 358225 Pittsburgh, 
     (FCC 600).                                  PA 15251-5225.         
    (d) General Mobile Radio,             6.00  FCC, GMRS, PO Box       
     Service (GMRS) New, Renewal,                358230, Pittsburgh, PA 
     Reinstatement (FCC 574).                    15251-5230.            
    (e) Business, Other                   6.00  FCC, Bus., OI, LT, GMRS,
     Industrial, Land                            PO Box 358245          
     Transportation, GMRS,                       Pittsburgh, PA 15251-  
     Renewal (FCC 574R, FCC 405A).               5245.                  
    (f) Ground, New, Renewal,             6.00  FCC, Ground, PO Box     
     Reinstatement (FCC 406).                    358260, Pittsburgh, PA 
                                                 15251-5260.            
    (g) Coast, New, Renewal,              6.00  FCC, Coast, PO Box      
     Reinstatement (FCC 503).                    358265, Pittsburgh, PA 
                                                 15251-5265.            
    (h) Ground, Renewal (FCC              6.00  FCC, Ground, PO Box     
     452R).                                      358270, Pittsburgh, PA 
                                                 15251-5270.            
    (i) Coast, FCC, Coast Renewal         6.00  PO Box 358270,          
     (FCC 452R).                                 Pittsburgh, PA 15251-  
                                                 5270.                  
    (j) Ship, New, Renewal,               6.00  FCC, Ship, PO Box       
     Reinstatement (FCC 506).                    358275, Pittsburgh, PA 
                                                 15251-5275.            
    (k) Aircraft, New, Renewal,           6.00  FCC, Aircraft, PO Box   
     Reinstatement (FCC 404).                    358280, Pittsburgh, PA 
                                                 15251-5280.            
    (l) Ship, Renewal (FCC 405B).         6.00  FCC, Ship, PO Box       
                                                 358290, Pittsburgh, PA 
                                                 15251-5290.            
    (m) Aircraft, Renewal (FCC            6.00  FCC, Aircraft, PO Box   
     405B).                                      358290, Pittsburgh, PA 
                                                 15251-5290.            
    (n) Correspondence, Blanket           6.00  FCC, Corres., PO Box    
     Renewal (Bus.,OI,LT,GMRS)                   358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
    (o) Correspondence, Blanket           6.00  FCC, Corres., PO Box    
     Renewal (Ground) (Remittance                358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
    (p) Correspondence, Blanket           6.00  FCC, Corres., PO Box    
     Renewal (Coast) (Remittance                 358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
    (q) Correspondence, Blanket           6.00  FCC, Corres., PO Box    
     Renewal (Aircraft)                          358305, Pittsburgh, PA 
     (Remittance Advice,                         15251-5305.            
     Correspondence).                                                   
    (r) Correspondence, Blanket           6.00  FCC, Corres., PO Box    
     Renewal (Ship) (Remittance                  358305, Pittsburgh, PA 
     Advice, Correspondence).                    15251-5305.            
4. Amateur Vanity Call Signs.....         1.30  FCC, Amateur Vanity, PO 
                                                 Box 358924, Pittsburgh,
                                                 PA 15251-5924.         
5. CMRS Mobile Services (per               .29  FCC, Cellular, PO Box   
 unit).                                          358835, Pittsburgh, PA 
                                                 15251-5835.            
6. CMRS Messaging Services (per            .04  FCC, Messaging, PO Box  
 unit).                                          358835, Pittsburgh, PA 
                                                 15251-5835.            
------------------------------------------------------------------------
\1\ Note that ``small fees'' are collected in advance for the entire    
  license term. Therefore, the annual fee amount shown in this table    
  must be multiplied by the 5- or 10-year license term, as appropriate, 
  to arrive at the total amount of regulatory fees owned. It should be  
  further noted that application fees may also apply as detailed in     
  1.1102 of this chapter.                                               

    3. Section 1.1153 is revised to read as follows:


Sec. 1.1153  Schedule of annual regulatory fees and filing locations 
for mass media services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
I. Radio [AM and FM] (47 CFR,                                           
 Part 73):                                                              
    1. AM Class A                                                       
        (a) <=20,000 population..          400  FCC, Radio, PO Box      
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
        (b) 20,001-50,000                  750                          
         population.                                                    
        (c) 50,001-125,000               1,250                          
         population.                                                    
        (d) 125,001-400,000              1,750                          
         population.                                                    
        (e) 400,001-1,000,000            2,500                          
         population.                                                    
        (f) >1,000,000 population        4,000                          
    2. AM Class B                                                       
        (a) <=20,000 population..          300                          
        (b) 20,001-50,000                  750                          
         population.                                                    
        (c) 50,001-125,000                 800                          
         population.                                                    
        (d) 125,001-400,000              1,250                          
         population.                                                    

[[Page 35859]]

                                                                        
        (e) 400,001-1,000,000            2,000                          
         population.                                                    
        (f) >1,000,000 population        3,250                          
    3. AM Class C                                                       
        (a) <=20,000 population..          200                          
        (b) 20,001-50,000                  300                          
         population.                                                    
        (c) 50,001-125,000                 400                          
         population.                                                    
        (d) 125,001-400,000                600                          
         population.                                                    
        (e) 400,001-1,000,000            1,000                          
         population.                                                    
        (f) >1,000,000 population        1,500                          
    4. AM Class D                                                       
        (a) <=20,000 population..          250                          
        (b) 20,001-50,000                  400                          
         population.                                                    
        (c) 50,001-125,000                 600                          
         population.                                                    
        (d) 125,001-400,000                750                          
         population.                                                    
        (e) 400,001-1,000,000            1,250                          
         population.                                                    
        (f) >1,000,000 population        2,000                          
    5. AM Construction Permit....          235                          
    6. FM Classes A, B1 and C3                                          
        (a) <=20,000 population..          300                          
        (b) 20,001-50,000                  600                          
         population.                                                    
        (c) 50,001-125,000                 800                          
         population.                                                    
        (d) 125,001-400,000              1,250                          
         population.                                                    
        (e) 400,001-1,000,000            2,000                          
         population.                                                    
        (f) >1,000,000 population        3,250                          
    7. FM Classes B, C, C1 and C2                                       
        (a)<=20,000 population...          400  ........................
        (b) 20,001-50,000                  750  ........................
         population.                                                    
        (c) 50,001-125,000               1,250  ........................
         population.                                                    
        (d) 125,001-400,000              1,750  ........................
         population.                                                    
        (e) 400,001-1,000,000            2,500  ........................
         population.                                                    
        (f) >,000,000 population.        4,000  ........................
    8. FM Construction Permits...        1,150  ........................
II. TV (47 CFR, Part 73) VHF                                            
 Commercial:                                                            
    1. Markets 1 thru 10.........       37,575  FCC, TV Branch, PO Box  
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
    2. Markets 11 thru 25........       31,275  ........................
    3. Markets 26 thru 50........       21,400  ........................
    4. Markets 51 thru 100.......       11,975  ........................
    5. Remaining Markets.........        3,100  ........................
    6. Construction Permits......        2,525  ........................
III. TV (47 CFR, Part 73) UHF                                           
 Commercial:                                                            
    1. Markets 1 thru 10.........       14,175  FCC, UHF                
                                                Commercial, PO Box      
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
    2. Markets 11 thru 25........       10,725  ........................
    3. Markets 26 thru 50........        6,650  ........................
    4. Markets 51 thru 100.......        3,975  ........................
    5. Remaining Markets.........        1,075  ........................
    6. Construction Permits......        2,650  ........................
IV. Satellite UHF/VHF Commercial:                                       
    1. All Markets...............        1,175  FCC Satellite TV PO Box 
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
    2. Construction Permits......          420  ........................
V. Low Power TV, TV/FM                     265  FCC, Low Power PO Box   
 Translator, & TV/FM Booster (47                 358835, Pittsburgh, PA 
 CFR, Part 74).                                  15251-5835.            
VI. Broadcast Auxiliary..........           11  FCC, Auxiliary, PO Box  
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
VII. Multipoint Distribution.....          260  FCC, Multipoint, PO Box 
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            
------------------------------------------------------------------------

Sec. 1.1154  Schedule of annual regulatory charges and filing locations 
for common carrier services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
I. Radio Facilities:                                                    
    1. Microwave (Domestic Public          $12  FCC, Common Carrier,    
     Fixed).                                     P.O. Box 358680,       
                                                 Pittsburgh, PA 15251-  
                                                 5680.                  
II. Carriers:                                                           
    1. Interstate Telephone              .0011  FCC, Carriers, P.O. Box 
     Service Providers (per                      358835, Pittsburgh, PA 
     dollar contributed to TRS                   15251-5680.            
     Fund).                                                             
------------------------------------------------------------------------

    5. Section 1.1155 is revised to read as follows:


Sec. 1.1155  Schedule of regulatory fees and filing locations for cable 
television services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
1. Cable Antenna Relay Service...          $50  FCC, Cable, P.O. Box    
                                                 358835, Pittsburgh, PA 
                                                 15251-5835.            

[[Page 35860]]

                                                                        
2. Cable TV System (per                    .44                          
 subscriber).                                                           
------------------------------------------------------------------------

    6. Section 1.1156 is revised to read as follows:


Sec. 1.1156  Schedule of regulatory fees and filing locations for 
international services.

------------------------------------------------------------------------
                                    Fee amount           Address        
------------------------------------------------------------------------
I. Radio Facilities:                                                    
    1. International (HF)                 $475  FCC, International, P.O.
     Broadcast.                                  Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
    2. International Public Fixed          375  FCC, International, P.O.
                                                 Box 358835, Pittsburgh,
                                                 PA 15251-5835.         
II. Space Stations (Geostationary      119,000  FCC, Space Stations,    
 Orbit).                                         P.O. Box 358835,       
                                                 Pittsburgh, PA 15251-  
                                                 5835.                  
III. Space Stations (Non-              164,800  FCC, Space Stations,    
 Geostationary Orbit).                           P.O. Box 358835,       
                                                 Pittsburgh, PA 15251-  
                                                 5835.                  
IV. Earth Stations, Transmit/              165  FCC, Earth Station, P.O.
 Receive & Transmit Only (per                    Box 358835, Pittsburgh,
 authorization or registration).                 PA 15251-5835.         
V. Carriers:                                                            
    1. International Bearer               6.00  FCC, International, P.O.
     Circuits (per active 64KB                   Box 358835, Pittsburgh,
     circuit or equivalent).                     PA 15251-5835.         
------------------------------------------------------------------------

Attachment A--Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act (RFA),\24\-\25\ an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the 
Notice of Proposed Rulemaking In the Matter of Assessment and 
Collection of Regulatory Fees for Fiscal Year 1998, 63 FR 16188 (April 
2, 1998). The Commission sought written public comments on the 
proposals in its FY 1998 regulatory fees NPRM, including on the IRFA. 
This present Final Regulatory Flexibility Analysis (FRFA) conforms to 
the RFA, as amended.\26\
---------------------------------------------------------------------------

    \24\-\25\ U.S.C. 603.
    \26\ See 5 U.S.C. 604. The RFA, see 5 U.S.C. 601 et seq., has 
been amended by the Contract with America Advancement Act (CWAAA), 
Pub. L. 104-121, 110 Stat. 847 (1996). Title II of the CWAAA is 
``The Small Business Regulatory Enforcement Fairness Act of 1996'' 
(SBREFA).
---------------------------------------------------------------------------

I. Need for and Objectives of this Report and Order

    2. This rulemaking proceeding was initiated in order to collect 
regulatory fees in the amount of $162,523,000, the amount that Congress 
has required the Commission to recover through regulatory fees in FY 
1998. The Commission seeks to collect the necessary amount through its 
revised regulatory fees, as contained in the attached Schedule of 
Regulatory Fees, in the most efficient manner possible and without 
undue burden on the public.

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

    3. None.

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

    4. 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, if adopted.\27\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \28\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\29\ 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 Small Business Administration (SBA).\30\ A small 
organization is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
\31\ Nationwide, as of 1992, there were approximately 275,801 small 
organizations.\32\ ``Small governmental jurisdiction'' generally means 
``governments of cities, counties, towns, townships, villages, school 
districts, or special districts, with a population of less than 
50,000.'' \33\ As of 1992, there were approximately 85,006 such 
jurisdictions in the United States.\34\ This number includes 38,978 
counties, cities, and towns; of these, 37,566, or 96 percent, have 
populations of fewer than 50,000.\35\ The Census Bureau estimates that 
this ratio is approximately accurate for all governmental entities. 
Thus, of the 85,006 governmental entities, we estimate that 81,600 (91 
percent) are small entities. Below, we further describe and estimate 
the number of small entity licensees and regulatees that may be 
affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \27\ 5 U.S.C. 603(b)(3).
    \28\ Id. section 601(6).
    \29\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the 
RFA, 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. 5 U.S.C. 601(3).
    \30\ Small Business Act, 15 U.S.C. 632 (1996).
    \31\ 5 U.S.C. 601(4).
    \32\ 1992 Economic Census, U.S. Bureau of the Census, Table 6 
(special tabulation of data under contract to Office of Advocacy of 
the U.S. Small Business Administration).
    \33\ 5 U.S.C. 601(5).
    \34\ U.S. Dept. of Commerce, Bureau of the Census, ``1992 Census 
of Governments.''
    \35\ Id.
---------------------------------------------------------------------------

Cable Services or Systems

    5. The SBA has developed a definition of small entities for cable 
and other pay television services, which includes all such companies 
generating $11 million or less in revenue annually.\36\ This definition 
includes cable systems operators, closed circuit television services, 
direct broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems and subscription television services. 
According to the Census Bureau data from 1992, there were 1,788 total 
cable and other pay

[[Page 35861]]

television services and 1,423 had less than $11 million in revenue.\37\
---------------------------------------------------------------------------

    \36\ 13 CFR 121.201, SIC code 4841.
    \37\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4841 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
---------------------------------------------------------------------------

    6. The Commission has developed its own definition of a small cable 
system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.\38\ Based on our most recent 
information, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995.\39\ Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, we 
estimate that there are fewer than 1,439 small entity cable system 
operators.
---------------------------------------------------------------------------

    \38\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determination that a small cable system operator is one 
with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 
60 FR 10534 (February 27, 1995).
    \39\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for December 30, 1995).
---------------------------------------------------------------------------

    7. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 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.'' \40\ The Commission has determined that there are 
66,000,000 subscribers in the United States. Therefore, we found that 
an operator serving fewer than 660,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate.\41\ Based on available data, we find that the number of 
cable operators serving 660,000 subscribers or less totals 1,450.\42\ 
We do not request nor do we collect information concerning whether 
cable system operators are affiliated with entities whose gross annual 
revenues exceed $250,000,000,\43\ and thus 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. It should be further noted that recent industry 
estimates project that there will be a total 66,000,000 subscribers, 
and we have based our fee revenue estimates on that figure.
---------------------------------------------------------------------------

    \40\ 47 U.S.C. 543(m)(2).
    \41\ Id. 76.1403(b).
    \42\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
    \43\ We do receive such information on a case-by-case basis only 
if a cable operator appeals a local franchise authority's finding 
that the operator does not qualify as a small cable operator 
pursuant to section 76.1403(b) of the Commission's rules See 47 CFR 
76.1043(d).
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    8. Other Pay Services. Other pay television services are also 
classified under Standard Industrial Classification (SIC) 4841, which 
includes cable systems operators, closed circuit television services, 
direct broadcast satellite services (DBS),\44\ multipoint distribution 
systems (MDS),\45\ satellite master antenna systems (SMATV), and 
subscription television services.
---------------------------------------------------------------------------

    \44\ Direct Broadcast Services (DBS) are discussed with the 
international services, infra.
    \45\ Multipoint Distribution Services (MDS) are discussed with 
the mass media services, infra.
---------------------------------------------------------------------------

Common Carrier Services and Related Entities

    9. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the numbers of commercial wireless entities, appears to be data 
the Commission publishes annually in its Telecommunications Industry 
Revenue report, regarding the Telecommunications Relay Service 
(TRS).\46\ According to data in the most recent report, there are 3,459 
interstate carriers.\47\ These carriers include, inter alia, local 
exchange carriers, wireline carriers and service providers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, providers of telephone toll 
service, providers of telephone exchange service, and resellers.
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    \46\ FCC, Telecommunications Industry Revenue: TRS Fund 
Worksheet Data, Figure 2 (Number of Carriers Paying Into the TRS 
Fund by Type of Carrier) (Nov. 1997) (Telecommunications Industry 
Revenue).
    \47\ Id.
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    10. The SBA has defined establishments engaged in providing 
``Radiotelephone Communications'' and ``Telephone Communications, 
Except Radiotelephone'' to be small businesses when they have no more 
than 1,500 employees.\48\ Below, we discuss the total estimated number 
of telephone companies falling within the two categories and the number 
of small businesses in each, and we then attempt to refine further 
those estimates to correspond with the categories of telephone 
companies that are commonly used under our rules.
---------------------------------------------------------------------------

    \48\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
codes 4812 and 4813. See also Executive Office of the President, 
Office of Management and Budget, Standard Industrial Classification 
Manual 1987).
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    11. Although some affected incumbent local exchange carriers 
(ILECs) may have 1,500 or fewer employees, we do not believe that such 
entities should be considered small entities within the meaning of the 
RFA because they are either dominant in their field of operations or 
are not independently owned and operated, and therefore by definition 
not ``small entities'' or ``small business concerns'' under the RFA. 
Accordingly, our use of the terms ``small entities'' and ``small 
businesses'' does not encompass small ILECs. Out of an abundance of 
caution, however, for regulatory flexibility analysis purposes, we will 
separately consider small ILECs within this analysis and use the term 
``small ILECs'' to refer to any ILECs that arguably might be defined by 
the SBA as ``small business concerns.'' \49\
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    \49\ See 13 CFR 121.201, SIC code 4813. Since the time of the 
Commission's 1996 decision, Implementation of the Local Competition 
Provisions in the Telecommunications Act of 1996, First Report and 
Order, 11 FCC Rcd 15499, 16144-45 (1996), 61 FR 45476 (August 29, 
1996), the Commission has consistently addressed in its regulatory 
flexibility analyses the impact of its rules on such ILECs.
---------------------------------------------------------------------------

    12. Total Number of Telephone Companies Affected. The U.S. Bureau 
of the Census (``Census Bureau'') reports that, at the end of 1992, 
there were 3,497 firms engaged in providing telephone services, as 
defined therein, for at least one year.\50\ This number contains a 
variety of different categories of carriers, including local exchange 
carriers, interexchange carriers, competitive access providers, 
cellular carriers, mobile service carriers, operator service providers, 
pay telephone operators, personal communications services providers, 
covered specialized mobile radio providers, and resellers. It seems 
certain that some of those 3,497 telephone service firms may not 
qualify as small entities or small ILECs because they are not 
``independently owned and operated.'' \51\ For example, a PCS provider 
that is affiliated with an interexchange carrier having more than 1,500 
employees would not meet the definition of a small business. It is 
reasonable to conclude that fewer than 3,497 telephone service firms 
are small entity telephone service firms or small

[[Page 35862]]

ILECs that may be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \50\ U.S. Department of Commerce, Bureau of the Census, 1992 
Census of Transportation, Communications, and Utilities: 
Establishment and Firm Size, at Firm Size 1-123 (1995) (1992 
Census).
    \51\ See generally 15 U.S.C. 632(a)(1).
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    13. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
except radiotelephone (wireless) companies. The Census Bureau reports 
that there were 2,321 such telephone companies in operation for at 
least one year at the end of 1992.\52\ According to the SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing no more than 1,500 persons.\53\ 
All but 26 of the 2,321 non-radiotelephone companies listed by the 
Census Bureau were reported to have fewer than 1,000 employees. Thus, 
even if all 26 of those companies had more than 1,500 employees, there 
would still be 2,295 non-radiotelephone companies that might qualify as 
small entities or small ILECs. We do not have data specifying the 
number of these carriers that are not independently owned and operated, 
and thus are unable at this time to estimate with greater precision the 
number of wireline carriers and service providers that would qualify as 
small business concerns under the SBA's definition. Consequently, we 
estimate that fewer than 2,295 small telephone communications companies 
other than radiotelephone companies are small entities or small ILECs 
that may be affected by the proposed rules, if adopted.
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    \52\ 1992 Census, supra, at Firm Size 1-123.
    \53\ 13 CFR 121.201, SIC code 4813.
---------------------------------------------------------------------------

    14. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange services 
(LECs). The closest applicable definition under the SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies.\54\ According to the most recent Telecommunications Industry 
Revenue data, 1,371 carriers reported that they were engaged in the 
provision of local exchange services.\55\ We do not have data 
specifying the number of these carriers that are either dominant in 
their field of operations, are not independently owned and operated, or 
have more than 1,500 employees, and thus are unable at this time to 
estimate with greater precision the number of LECs that would qualify 
as small business concerns under the SBA's definition. Consequently, we 
estimate that fewer than 1,371 providers of local exchange service are 
small entities or small ILECs that may be affected by the proposed 
rules, if adopted.
---------------------------------------------------------------------------

    \54\ Id.
    \55\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    15. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies.\56\ According 
to the most recent Telecommunications Industry Revenue data, 143 
carriers reported that they were engaged in the provision of 
interexchange services.\57\ We do not have data specifying the number 
of these carriers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of IXCs that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 143 small entity IXCs that may be affected by 
the proposed rules, if adopted.
---------------------------------------------------------------------------

    \56\ 13 CFR 121.201, SIC code 4813.
    \57\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    16. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers (CAPs). The closest 
applicable definition under the SBA rules is for telephone 
communications companies other than except radiotelephone (wireless) 
companies.\58\ According to the most recent Telecommunications Industry 
Revenue data, 109 carriers reported that they were engaged in the 
provision of competitive access services.\59\ We do not have data 
specifying the number of these carriers that are not independently 
owned and operated, or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
CAPs that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 109 
small entity CAPs that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \58\ 13 CFR 121.201, SIC code 4813.
    \59\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    17. Operator Service Providers. Neither the Commission nor the SBA 
has developed a definition of small entities specifically applicable to 
providers of operator services. The closest applicable definition under 
the SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies.\60\ According to the most recent 
Telecommunications Industry Revenue data, 27 carriers reported that 
they were engaged in the provision of operator services.\61\ We do not 
have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of operator service providers that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 27 small entity operator service providers 
that may be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \60\ 13 CFR 121.201, SIC code 4813.
    \61\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    18. Pay Telephone Operators. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to pay 
telephone operators. The closest applicable definition under SBA rules 
is for telephone communications companies other than radiotelephone 
(wireless) companies.\62\ According to the most recent 
Telecommunications Industry Revenue data, 441 carriers reported that 
they were engaged in the provision of pay telephone services.\63\ We do 
not have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of pay telephone operators that would qualify as small business 
concerns under the SBA's definition. Consequently, we estimate that 
there are fewer than 441 small entity pay telephone operators that may 
be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \62\ 13 CFR 121.201, SIC code 4813.
    \63\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    19. Resellers (including debit card providers). Neither the 
Commission nor the SBA has developed a definition of small entities 
specifically applicable to resellers. The closest applicable SBA 
definition for a reseller is a telephone communications company other 
than radiotelephone (wireless) companies.\64\ According to the most 
recent Telecommunications Industry Revenue data, 339 reported that they 
were engaged in the resale of telephone service.\65\ We do not have 
data specifying the number of these carriers that are not independently 
owned and

[[Page 35863]]

operated or have more than 1,500 employees, and thus are unable at this 
time to estimate with greater precision the number of resellers that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 339 small entity 
resellers that may be affected by the proposed rules, if adopted.
---------------------------------------------------------------------------

    \64\ 13 CFR 121.201, SIC code 4813.
    \65\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    20. 800 Service Subscribers.\66\ Neither the Commission nor the SBA 
has developed a definition of small entities specifically applicable to 
800 service (``toll free'') subscribers. The most reliable source of 
information regarding the number of 800 service subscribers appears to 
be data the Commission collects on the 800 numbers in use.\67\ 
According to our most recent data, at the end of 1995, the number of 
800 numbers in use was 6,987,063. Similarly, the most reliable source 
of information regarding the number of 888 service subscribers appears 
to be data the Commission collects on the 888 numbers in use.\68\ 
According to our most recent data, at the end of August 1996, the 
number of 888 numbers that had been assigned was 2,014,059. We do not 
have data specifying the number of these subscribers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of toll free subscribers that would qualify as small business 
concerns under the SBA's definition. Consequently, we estimate that 
there are fewer than 6,987,063 small entity 800 subscribers and fewer 
than 2,014,059 small entity 888 subscribers that may be affected by the 
proposed rules, if adopted.
---------------------------------------------------------------------------

    \66\ We include all toll-free number subscribers in this 
category, including 888 numbers.
    \67\ FCC, CCB Industry Analysis Division, FCC Releases, Study on 
Telephone Trends, Tbl. 20 (May 16, 1996).
    \68\ FCC, CCB Industry Analysis Division, Long Distance Carrier 
Code Assignments, p. 80, Tbl. 10B (Oct. 18, 1996).
---------------------------------------------------------------------------

International Services

    21. The Commission has not developed a definition of small entities 
applicable to licensees in the international services. Therefore, the 
applicable definition of small entity is generally the definition under 
the SBA rules applicable to Communications Services, Not Elsewhere 
Classified (NEC).\69\ This definition provides that a small entity is 
expressed as one with $11.0 million or less in annual receipts.\70\ 
According to the Census Bureau, there were a total of 848 
communications services providers, NEC, in operation in 1992, and a 
total of 775 had annual receipts of less than $9,999 million.\71\ The 
Census report does not provide more precise data.
---------------------------------------------------------------------------

    \69\ An exception is the Direct Broadcast Satellite (DBS) 
Service, infra.
    \70\ 13 CFR 120.121, SIC code 4899.
    \71\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4899 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
---------------------------------------------------------------------------

    22. International Broadcast Stations. Commission records show that 
there are 20 international broadcast station licensees. We do not 
request nor collect annual revenue information, and thus are unable to 
estimate the number of international broadcast licensees that would 
constitute a small business under the SBA definition. However, the 
Commission estimates that only six international broadcast stations are 
subject to regulatory fee payments.
    23. International Public Fixed Radio (Public and Control Stations). 
There are 3 licensees in this service subject to payment of regulatory 
fees. We do not request nor collect annual revenue information, and 
thus are unable to estimate the number of international broadcast 
licensees that would constitute a small business under the SBA 
definition.
    24. Fixed Satellite Transmit/Receive Earth Stations. There are 
approximately 3000 earth station authorizations, a portion of which are 
Fixed Satellite Transmit/Receive Earth Stations. We do not request nor 
collect annual revenue information, and thus are unable to estimate the 
number of the earth stations that would constitute a small business 
under the SBA definition.
    25. Fixed Satellite Small Transmit/Receive Earth Stations. There 
are 3000 earth station authorizations, a portion of which are Fixed 
Satellite Small Transmit/Receive Earth Stations. We do not request nor 
collect annual revenue information, and thus are unable to estimate the 
number of fixed satellite transmit/receive earth stations may 
constitute a small business under the SBA definition.
    26. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. 
These stations operate on a primary basis, and frequency coordination 
with terrestrial microwave systems is not required. Thus, a single 
``blanket'' application may be filed for a specified number of small 
antennas and one or more hub stations. The Commission has processed 377 
applications. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of VSAT systems that 
would constitute a small business under the SBA definition.
    27. Mobile Satellite Earth Stations. There are two licensees. We do 
not request nor collect annual revenue information, and thus are unable 
to estimate of the number of mobile satellite earth stations that would 
constitute a small business under the SBA definition.
    28. Radio Determination Satellite Earth Stations. There are four 
licensees. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of radio determination 
satellite earth stations that would constitute a small business under 
the SBA definition.
    29. Space Stations (Geostationary). Commission records reveal that 
there are 46 space station licensees. We do not request nor collect 
annual revenue information, and thus are unable to estimate of the 
number of geostationary space stations that would constitute a small 
business under the SBA definition.
    30. Space Stations (Non-Geostationary). There are six Non-
Geostationary Space Station licensees, of which only two systems are 
operational. We do not request nor collect annual revenue information, 
and thus are unable to estimate of the number of non-geostationary 
space stations that would constitute a small business under the SBA 
definition.
    31. Direct Broadcast Satellites. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of ``Cable and 
Other Pay Television Services.'' \72\ This definition provides that a 
small entity is one with $11.0 million or less in annual receipts.\73\ 
As of December 1996, there were eight DBS licensees. However, the 
Commission does not collect annual revenue data for DBS and, therefore, 
is unable to ascertain the number of small DBS licensees that could be 
impacted by these proposed rules. Although DBS service requires a great 
investment of capital for operation, there are several new entrants in 
this field that may not yet have generated $11 million in annual 
receipts, and therefore may be categorized as small businesses, if 
independently owned and operated.
---------------------------------------------------------------------------

    \72\ 13 CFR 120.121, SIC code 4841.
    \73\ 13 CFR 120.201, SIC code 4841.
---------------------------------------------------------------------------

Mass Media Services

    32. Commercial Radio and Television Services. The proposed rules 
and policies will apply to television broadcasting licensees and radio 
broadcasting licensees.\74\ The SBA

[[Page 35864]]

defines a television broadcasting station that has $10.5 million or 
less in annual receipts as a small business.\75\ Television 
broadcasting stations consist of establishments primarily engaged in 
broadcasting visual programs by television to the public, except cable 
and other pay television services.\76\ Included in this industry are 
commercial, religious, educational, and other television stations.\77\ 
Also included are establishments primarily engaged in television 
broadcasting and which produce taped television program materials.\78\ 
Separate establishments primarily engaged in producing taped television 
program materials are classified under another SIC number.\79\ There 
were 1,509 television stations operating in the nation in 1992.\80\ 
That number has remained fairly constant as indicated by the 
approximately 1,564 operating television broadcasting stations in the 
nation as of December 31, 1997.\81\ For 1992,\82\ the number of 
television stations that produced less than $10.0 million in revenue 
was 1,155 establishments.\83\ Only commercial stations are subject to 
regulatory fees.
---------------------------------------------------------------------------

    \74\ While we tentatively believe that the SBA's definition of 
``small business'' greatly overstates the number of radio and 
television broadcast stations that are small businesses and is not 
suitable for purposes of determining the impact of the proposals on 
small television and radio stations, for purposes of this Report and 
Order we utilize the SBA's definition in determining the number of 
small businesses to which the proposed rules would apply. We reserve 
the right to adopt, in the future, a more suitable definition of 
``small business'' as applied to radio and television broadcast 
stations or other entities subject to the proposed rules in this 
Report and Order, and to consider further the issue of the number of 
small entities that are radio and television broadcasters or other 
small media entities. See Report and Order in MM Docket No. 93-48 
(Children's Television Programming), 11 FCC Rcd 10660, 10737-38 
(1996), 61 FR 43981 (August 27, 1996), citing 5 U.S.C. 601(3).
    \75\ 13 CFR 120.201, SIC code 4833.
    \76\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce, 1992 Census of Transportation, 
Communications and Utilities, Establishment and Firm Size, Series 
UC92-S-1, Appendix A-9 (1995) 1992 Census, Series UC92-S-1).
    \77\ Id.; see Executive Office of the President, Office of 
Management and Budget, Standard Industrial Classification Manual 
(1987), at 283, which describes ``Television Broadcasting Stations'' 
(SIC code 4833) as:
    Establishments primarily engaged in broadcasting visual programs 
by television to the public, except cable and other pay television 
services. Included in this industry are commercial, religious, 
educational and other television stations. Also included here are 
establishments primarily engaged in television broadcasting and 
which produce taped television program materials.
    \78\ 1992 Census, Series UC92-S-1, at Appendix A-9.
    \79\ Id., SIC code 7812 (Motion Picture and Video Tape 
Production); SIC code 7922 (Theatrical Producers and Miscellaneous 
Theatrical Services) (producers of live radio and television 
programs).
    \80\ FCC News Release No. 31327 (Jan. 13, 1993); 1992 Census, 
Series UC92-S-1, at Appendix A-9.
    \81\ FCC News Release, ``Broadcast Station Totals as of December 
31, 1997.''
    \82\ A census to determine the estimated number of 
Communications establishments is performed every five years, in 
years ending with a ``2'' or ``7''. See 1992 Census, Series UC92-S-
1, at III.
    \83\ The amount of $10 million was used to estimate the number 
of small business establishments because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No 
category for $10.5 million existed. Thus, the number is as accurate 
as it is possible to calculate with the available information.
---------------------------------------------------------------------------

    33. Additionally, the Small Business Administration defines a radio 
broadcasting station that has $5 million or less in annual receipts as 
a small business.\84\ A radio broadcasting station is an establishment 
primarily engaged in broadcasting aural programs by radio to the 
public.\85\ Included in this industry are commercial, religious, 
educational, and other radio stations.\86\ Radio broadcasting stations 
which primarily are engaged in radio broadcasting and which produce 
radio program materials are similarly included.\87\ However, radio 
stations which are separate establishments and are primarily engaged in 
producing radio program material are classified under another SIC 
number.\88\ The 1992 Census indicates that 96 percent (5,861 of 6,127) 
radio station establishments produced less than $5 million in revenue 
in 1992.\89\ Official Commission records indicate that 11,334 
individual radio stations were operating in 1992.\90\ As of December 
31, 1997, Commission records indicate that 12,27 radio stations were 
operating, of which 7,465 were FM stations.\91\ Only commercial 
stations are subject to regulatory fees.
---------------------------------------------------------------------------

    \84\ 13 CFR 120.201, SIC code 4832.
    \85\ 1992 Census, Series UC92-S-1, at Appendix A-9.
    \86\ Id.
    \87\ Id.
    \88\ Id.
    \89\ The Census Bureau counts radio stations located at the same 
facility as one establishment. Therefore, each co-located AM/FM 
combination counts as one establishment.
    \90\ FCC News Release, No. 31327 (Jan. 13, 1993).
    \91\ FCC News Releases, ``Broadcast Station Totals as of 
December 31, 1997.''
---------------------------------------------------------------------------

    34. Thus, the proposed rules, if adopted, will affect approximately 
1,558 full power television stations, approximately 1,200 of which are 
considered small businesses.\92\ Additionally, the proposed rules will 
affect some 12,156 full power radio stations, approximately 11,670 of 
which are small businesses.\93\ These estimates may overstate the 
number of small entities because the revenue figures on which they are 
based do not include or aggregate revenues from non-television or non-
radio affiliated companies. There are also 1,952 low power television 
stations (LPTV).\94\ Given the nature of this service, we will presume 
that all LPTV licensees qualify as small entities under the SBA 
definition.
---------------------------------------------------------------------------

    \92\ We use the 77 percent figure of TV stations operating at 
less than $10 million for 1992 and apply if to be 1997 total of 1558 
TV stations to arrive at 1,200 stations categorized as small 
businesses.
    \93\ We use the 96% figure of radio station establishments with 
less than $5 million revenue from the Census data and apply it to 
the 12,088 individual station count to arrive at 11,605 individual 
stations as small businesses.
    \94\ FCC News Release, No. 7033 (Mar. 6, 1997).
---------------------------------------------------------------------------

Alternative Classification of Small Stations

    35. An alternative way to classify small radio and television 
stations is by number of employees. The Commission currently applies a 
standard based on the number of employees in administering its Equal 
Employment Opportunity Rule (EEO) for broadcasting.\95\ Thus, radio or 
television stations with fewer than five full-time employees are 
exempted from certain EEO reporting and record keeping 
requirements.\96\ We estimate that the total number of broadcast 
stations with 4 or fewer employees is approximately 4,239.\97\
---------------------------------------------------------------------------

    \95\ The Commission's definition of a small broadcast station 
for purposes of applying its EEO rules was adopted prior to the 
requirements of approval by the SBA pursuant to section 3(a) of the 
Small Business Act, 15 U.S.C. 632(a), as amended by section 222 of 
the Small Business Credit and Business Opportunity Enhancement Act 
of 1992, Pub. L. 102-366, 222(b)(1), 106 Stat. 999 (1992), as 
further amended by the Small Business Administration Reauthorization 
and Amendments Act of 1994, Pub. L. 103-403, 301, 108 Stat. 4187 
(1994). However, this definition was adopted after public notice and 
the opportunity for comment. See Report and Order in Docket No. 
18244, 23 FCC 2d 430 (1970), 35 8925 (June 6, 1970).
    \96\ See, e.g., 47 CFR 73.3612 (Requirements to file annual 
employment reports on Forms 395 applies to licensees with five or 
more full-time employees); First Report and Order in Docket No. 
21474 (Amendment of Broadcast Equal Employment Opportunity Rules and 
FCC Form 395), 70 FCC 2d 1466 (1979), 50 FR 50329 (December 10, 
1085). The Commission is currently considering how to decrease the 
administrative burdens imposed by the EEO rule on small stations 
while maintaining the effectiveness of our broadcast EEO 
enforcement. Order and Notice of Proposed Rule Making in MM Docket 
N0. 96-16 (Streamlining Broadcast EEO Rule and Policies, Vacating 
the EEO Forfeiture Policy Statement and Amending Section 1.80 of the 
Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd 
5154 (1996), 61 FR 9964 (March 12, 1996). One option under 
consideration is whether to define a small station for purposes of 
affording such relief as one with ten or fewer full-time employees.
    \97\ Compilation of 1994 Broadcast Station Annual Employment 
Reports (FCC Form B), Equal Opportunity Employment Branch, Mass 
Media Bureau, FCC.
---------------------------------------------------------------------------

Auxiliary, Special Broadcast and Other Program Distribution 
Services

    36. This service involves a variety of transmitters, generally used 
to relay broadcast programming to the public (through translator and 
booster stations)

[[Page 35865]]

or within the program distribution chain (from a remote news gathering 
unit back to the station). The Commission has not developed a 
definition of small entities applicable to broadcast auxiliary 
licensees. Therefore, the applicable definitions of small entities are 
those, noted previously, under the SBA rules applicable to radio 
broadcasting stations and television broadcasting stations.\98\
---------------------------------------------------------------------------

    \98\13 CFR 121.201, SIC code 4832.
---------------------------------------------------------------------------

    37. There are currently 2,720 FM translators and boosters, 4,952 TV 
translators.\99\ The FCC does not collect financial information on any 
broadcast facility and the Department of Commerce does not collect 
financial information on these auxiliary broadcast facilities. We 
believe, however, that most, if not all, of these auxiliary facilities 
could be classified as small businesses by themselves. We also 
recognize that most translators and boosters are owned by a parent 
station which, in some cases, would be covered by the revenue 
definition of small business entity discussed above. These stations 
would likely have annual revenues that exceed the SBA maximum to be 
designated as a small business (either $5 million for a radio station 
or $10.5 million for a TV station). Furthermore, they do not meet the 
Small Business Act's definition of a ``small business concern'' because 
they are not independently owned and operated.\100\
---------------------------------------------------------------------------

    \99\ FCC News Release, Broadcast Station Totals as of December 
31, 1996, No. 71831 (Jan. 21, 1997).
    \100\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    38. Multipoint Distribution Service (MDS). This service involves a 
variety of transmitters, which are used to relay programming to the 
home or office, similar to that provided by cable television 
systems.\101\ In connection with the 1996 MDS auction the Commission 
defined small businesses as entities that had annual average gross 
revenues for the three preceding years not in excess of $40 
million.\102\ This definition of a small entity in the context of MDS 
auctions has been approved by the SBA.\103\ These stations were 
licensed prior to implementation of section 309(j) of the 
Communications Act of 1934, as amended, 47 U.S.C. 309(j). Licenses for 
new MDS facilities are now awarded to auction winners in Basic Trading 
Areas (BTAs) and BTA-like areas.\104\ The MDS auctions resulted in 67 
successful bidders obtaining licensing opportunities for 493 BTAs. Of 
the 67 auction winners, 61 meet the definition of a small business. 
There are 1,573 previously authorized and proposed MDS stations 
currently licensed. Thus, we conclude that there are 1,634 MDS 
providers that are small businesses as deemed by the SBA and the 
Commission's auction rules. It is estimated, however, that only 1,878 
MDS licensees are subject to regulatory fees and the number which are 
small businesses is unknown.
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    \101\ For purposes of this item, MDC includes both the single 
channel Multipoint Distribution Service (MDS) and the Multichannel 
Multipoint Distribution Service (MMDS).
    \102\ See 47 CFR 1,2110 (a)(1).
    \103\ Amendment of Part 21 and 74 of the Commission's Rules with 
Regard to Filing Procedures in the Multipoint Distribution Service 
and in the Instructional Television Fixed Service and Implementation 
of Section 309(j) of the Communications Act-Competitive Bidding, 10 
FCC Rcd 9589 (1995), 60 FR 36524 (July 17, 1995).
    \104\ Id. A Basic Trading Area (BTA) is the geographic area by 
which the Multipoint Distribution Service is licensed. See Rand 
McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition, 
pp. 36-39.
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Wireless and Commercial Mobile Services

    39. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities applicable to cellular 
licensees. Therefore, the applicable definition of small entity is the 
definition under the SBA rules applicable to radiotelephone (wireless) 
companies. This provides that a small entity is a radiotelephone 
company employing no more than 1,500 persons.\105\ According to the 
Bureau of the Census, only twelve radiotelephone firms out of a total 
of 1,178 such firms which operated during 1992 had 1,000 or more 
employees.\106\ Therefore, even if all twelve of these firms were 
cellular telephone companies, nearly all cellular carriers were small 
businesses under the SBA's definition. In addition, we note that there 
are 1,758 cellular licenses; however, a cellular licensee may own 
several licenses. In addition, according to the most recent 
Telecommunications Industry Revenue data, 804 carriers reported that 
they were engaged in the provision of either cellular service or 
Personal Communications Service (PCS) services, which are placed 
together in the data.\107\ We do not have data specifying the number of 
these carriers that are not independently owned and operated or have 
more than 1,500 employees, and thus are unable at this time to estimate 
with greater precision the number of cellular service carriers that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 804 small cellular 
service carriers that may be affected by the proposed rules, if 
adopted.
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    \105\13 CFR 121.291, SIC code 4812.
    \106\1992 Census, Series UC92-S-1, at Table 5, SIC code 4812.
    \107\Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    40. 220 MHz Radio Services. Because the Commission has not yet 
defined a small business with respect to 220 MHz services, we will 
utilize the SBA definition applicable to radiotelephone companies, 
i.e., an entity employing no more than 1,500 persons.\108\ With respect 
to 220 MHz services, the Commission has proposed a two-tiered 
definition of small business for purposes of auctions: (1) For Economic 
Area (EA) licensees, a firm with average annual gross revenues of not 
more than $6 million for the preceding three years and (2) for regional 
and nationwide licensees, a firm with average annual gross revenues of 
not more than $15 million for the preceding three years. Given that 
nearly all radiotelephone companies under the SBA definition employ no 
more than 1,500 employees (as noted supra), we will consider the 
approximately 1,500 incumbent licensees in this service as small 
businesses under the SBA definition.
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    \108\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

    41. Private and Common Carrier Paging. The Commission has proposed 
a two-tier definition of small businesses in the context of auctioning 
licenses in the Common Carrier Paging and exclusive Private Carrier 
Paging services. Under the proposal, a small business will be defined 
as either (1) an entity that, together with its affiliates and 
controlling principals, has average gross revenues for the three 
preceding years of not more than $3 million, or (2) an entity that, 
together with affiliates and controlling principals, has average gross 
revenues for the three preceding calendar years of not more than $15 
million. Because the SBA has not yet approved this definition for 
paging services, we will utilize the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing no more than 1,500 
persons.\109\ At present, there are approximately 24,000 Private Paging 
licenses and 74,000 Common Carrier Paging licenses. According to the 
most recent Telecommunications Industry Revenue data, 172 carriers 
reported that they were engaged in the provision of either paging or 
``other mobile'' services, which are placed together in the data.\110\ 
We do not have data specifying the number of these carriers that are 
not independently owned and operated or have more than 1,500 employees, 
and thus are unable at this time to estimate with greater precision the 
number of paging carriers

[[Page 35866]]

that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 172 
small paging carriers that may be affected by the proposed rules, if 
adopted. We estimate that the majority of private and common carrier 
paging providers would qualify as small entities under the SBA 
definition.
---------------------------------------------------------------------------

    \109\ 13 CFR 121.201, SIC code 4812.
    \110\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    42. Mobile Service Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. As noted above in 
the section concerning paging service carriers, the closest applicable 
definition under the SBA rules is that for radiotelephone (wireless) 
companies,\111\ and the most recent Telecommunications Industry Revenue 
data shows that 172 carriers reported that they were engaged in the 
provision of either paging or ``other mobile'' services.\112\ 
Consequently, we estimate that there are fewer than 172 small mobile 
service carriers that may be affected by the proposed rules, if 
adopted.
---------------------------------------------------------------------------

    \111\ 13 CFR 121.201, SIC code 4812.
    \112\ Telecommunications Industry Revenue, Figure 2.
---------------------------------------------------------------------------

    43. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years.\113\ For Block F, an additional classification for 
``very small business'' was added and is defined as an entity that, 
together with their affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\114\ These 
regulations defining ``small entity'' in the context of broadband PCS 
auctions have been approved by the SBA.\115\ No small businesses within 
the SBA-approved definition 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% of the 1,479 licenses for Blocks D, E, 
and F.\116\ Based on this information, we conclude that the number of 
small broadband PCS licensees will include the 90 winning C Block 
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a 
total of 183 small entity PCS providers as defined by the SBA and the 
Commission's auction rules.
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    \113\ 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, FCC 96-278, WT Docket 
No. 96-59, paragraphs 57-60 (released June 24, 1996), 61 FR 33859 
(July 1, 1996); see also 47 CFR 24.720(b).
    \114\ 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, FCC 96-278, WT Docket 
No. 96-59, paragraph 60 (1996), 61 FR 33859 (July 1, 1996).
    \115\ See, e.g., Implementation of section 309(j) of the 
Communications Act--Competitive Bidding, PP Docket No. 93-253, Fifth 
Report and Order, 9 FCC Rcd 5532, 5581-84 (1994).
    \116\ FCC News, Broadband PCS, D, E and F Block Auction Closes, 
No. 71744 (released January 14, 1997).
---------------------------------------------------------------------------

    44. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded by auction. Such auctions have not 
yet been scheduled, however. Given that nearly all radiotelephone 
companies have no more than 1,500 employees and that no reliable 
estimate of the number of prospective MTA and BTA narrowband licensees 
can be made, we assume, for purposes of this IRFA, that all of the 
licenses will be awarded to small entities, as that term is defined by 
the SBA.
    45. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service.\117\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio Systems (BETRS).\118\ We will use 
the SBA's definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons.\119\ There are 
approximately 1,000 licensees in the Rural Radiotelephone Service, and 
we estimate that almost all of them qualify as small entities under the 
SBA's definition.
---------------------------------------------------------------------------

    \117\ The service is defined in 47 CFR 22.99.
    \118\ BETRS is defined in 47 CFR 22.757, 22.759.
    \119\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

    46. Air-Ground Radiotelephone Service.\120\ The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service. Accordingly, we will use the SBA's definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons.\121\ There are approximately 100 licensees in 
the Air-Ground Radiotelephone Service, and we estimate that almost all 
of them qualify as small under the SBA definition.
---------------------------------------------------------------------------

    \120\ The service is defined in 47 CFR 22.99.
    \121\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

    47. Specialized Mobile Radio (SMR). The Commission awards bidding 
credits in auctions for geographic area 800 MHz and 900 MHz SMR 
licenses to firms that had revenues of no more than $15 million in each 
of the three previous calendar years.\122\ In the context of 900 MHz 
SMR, this regulation defining ``small entity'' has been approved by the 
SBA; approval concerning 800 MHz SMR is being sought.
---------------------------------------------------------------------------

    \122\ See 47 CFR 90.814(b)(1).
---------------------------------------------------------------------------

    48. The proposed fees in the NPRM apply to SMR providers in the 800 
MHz and 900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. We do not know how 
many firms provide 800 MHz or 900 MHz geographic area SMR service 
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 
IRFA, that all of the remaining existing extended implementation 
authorizations are held by small entities, as that term is defined by 
the SBA.
    49. The Commission has held auctions for geographic area licenses 
in the 900 MHz SMR band, and recently completed an auction for 
geographic area 800 MHz SMR licenses. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. In the recently 
concluded 800 MHz SMR auction there were 524 licenses awarded to 
winning bidders, of which 38 were won by small or very small entities.
    50. 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. The Commission has not 
developed a definition of small entity specifically applicable to PLMR 
licensees due to the vast array of PLMR users. For the purpose of 
determining whether a licensee is a small business as defined by the 
SBA, each licensee would need to be evaluated within its own business 
area.

[[Page 35867]]

    51. The Commission is unable at this time to estimate the number of 
small businesses which could be impacted by the rules. However, the 
Commission's 1994 Annual Report on PLMRs \123\ indicates that at the 
end of FY 1994 there were 1,087,267 licensees operating 12,481,989 
transmitters in the PLMR bands below 512 MHz. Because any entity 
engaged in a commercial activity is eligible to hold a PLMR license, 
the proposed rules in this context could potentially impact every small 
business in the United States.
---------------------------------------------------------------------------

    \123\ Federal Communications Commission, 60th Annual Report, 
Fiscal Year 1994, at 116.
---------------------------------------------------------------------------

    52. Amateur Radio Service. We estimate that 10,000 applicants will 
apply for vanity call signs in FY 1998. All are presumed to be 
individuals. All other amateur licensees are exempt from payment of 
regulatory fees.
    53. Aviation and Marine Radio Service. Small businesses in the 
aviation and marine radio services use a marine very high frequency 
(VHF) radio, any type of emergency position indicating radio beacon 
(EPIRB) and/or radar, a VHF aircraft radio, and/or any type of 
emergency locator transmitter (ELT). The Commission has not developed a 
definition of small entities specifically applicable to these small 
businesses. Therefore, the applicable definition of small entity is the 
definition under the SBA rules for radiotelephone communications.\124\
---------------------------------------------------------------------------

    \124\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

    54. Most applicants for recreational licenses are individuals. 
Approximately 581,000 ship station licensees and 131,000 aircraft 
station licensees operate domestically and are not subject to the radio 
carriage requirements of any statute or treaty. Therefore, for purposes 
of our evaluations and conclusions in this IRFA, we estimate that there 
may be at least 712,000 potential licensees which are individuals or 
are small entities, as that term is defined by the SBA. We estimate, 
however, that only 16,500 will be subject to FY 1998 regulatory fees.
    55. Fixed Microwave Services. Microwave services include common 
carrier,\125\ private-operational fixed,\126\ and broadcast auxiliary 
radio services.\127\ 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 yet defined a small business with respect to 
microwave services. For purposes of this IRFA, we will utilize the 
SBA's definition applicable to radiotelephone companies--i.e., an 
entity with no more than 1,500 persons.\128\ We estimate, for this 
purpose, that all of the Fixed Microwave licensees (excluding broadcast 
auxiliary licensees) would qualify as small entities under the SBA 
definition for radiotelephone companies.
---------------------------------------------------------------------------

    \125\ 47 CFR 101 et seq. (formerly, Part 21 of the Commission's 
rules).
    \126\ 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.
    \127\ Auxiliary Microwave Service is governed by part 74 of 
Title 47 of the Commission's rules. See 47 CFR 74 et seq. 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 TV pickups, which 
relay signals from a remote location back to the studio.
    \128\ 13 CFR 121.201, SIC 4812.
---------------------------------------------------------------------------

    56. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, forestry conservation, highway 
maintenance, and emergency medical services.\129\ There are a total of 
approximately 127,540 licensees within these services. Governmental 
entities as well as private businesses comprise the licensees for these 
services. As indicated supra in paragraph 4 of this IRFA, all 
governmental entities with populations of less than 50,000 fall within 
the definition of a small entity.\130\ All licensees in this category 
are exempt from the payment of regulatory fees.
---------------------------------------------------------------------------

    \129\ With the exception of the special emergency service, these 
services are governed by subpart B of part 90 of the Commission's 
rules, 47 CFR 90.15-90.27. The police service includes 26,608 
licenses that serve state, county, and municipal enforcement through 
telephony (voice), telegraphy (code) and teletype and facsimile 
(printed material). The fire radio service includes 22,677 licensees 
comprised of private volunteer or professional fire companies as 
well as units under governmental control. The local government 
service that is presently comprised of 40,512 licensees that are 
state, county, or municipal entities that use the radio for official 
purposes not covered by other public safety services. There are 
7,325 licensees within the forestry service which is comprised of 
licensees from state departments of conservation and private forest 
organizations who set up communications networks among fire lookout 
towers and ground crews. The 9,480 state and local governments are 
licensed to highway maintenance service provide emergency and 
routine communications to aid other public safety services to keep 
main roads safe for vehicular traffic. The 1,460 licensees in the 
Emergency Medical Radio Service (EMRS) use the 39 channels allocated 
to this service for emergency medical service communications related 
to the delivery of emergency medical treatment. 47 CFR 90.15-90.27. 
The 19,478 licensees in the special emergency service include 
medical services, rescue organizations, veterinarians, handicapped 
persons, disaster relief organizations, veterinarians, handicapped 
persons, disaster relief organizations, school buses, beach patrols, 
establishments in isolated areas, communications standby facilities, 
and emergency repair of public communications facilities. 47 CFR 
90.33-90.55.
    \130\ 5 U.S.C. 601(5).
---------------------------------------------------------------------------

    57. Personal Radio Services. Personal radio services provide short-
range, low power radio for personal communications, radio signalling, 
and business communications not provided for in other services. The 
services include the citizen's band (CB) radio service, general mobile 
radio service (GMRS), radio control radio service, and family radio 
service (FRS).\131\ Inasmuch as the CB, GMRS, and FRS licensees are 
individuals, no small business definition applies for these services. 
We are unable at this time to estimate the number of other licensees 
that would qualify as small under the SBA's definition; however, only 
GMRS licensees are subject to regulatory fees.
---------------------------------------------------------------------------

    \131\ Licensees in the Citizens Band (CB) Radio Service, General 
Mobile Radio Service (GMRS), Radio Control (R/C) Radio Service and 
Family Radio Service (FRS) are governed by subpart D, subpart A, 
subpart C, and subpart B, respectively, of part 95 of the 
Commission's rules. 47 CFR 95.401-95.428; 95.1-95.181; 95.201-
95.225; 47 CFR 95.191-95.194.
---------------------------------------------------------------------------

    58. Offshore Radiotelephone Service. This service operates on 
several UHF TV broadcast channels that are not used for TV broadcasting 
in the coastal area of the states bordering the Gulf of Mexico.\132\ At 
present, there are approximately 55 licensees in this service. We are 
unable at this time to estimate the number of licensees that would 
qualify as small under the SBA's definition for radiotelephone 
communications.
---------------------------------------------------------------------------

    \132\ This service is governed by subpart I of part 22 of the 
Commission's rules. See 47 CFR 22.1001-22.1037.
---------------------------------------------------------------------------

    59. 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.
    The Commission auctioned geographic area licenses in the WCS 
service. In the auction, there were seven winning bidders that 
qualified as very small business entities, and one that qualified as a 
small business entity. We conclude that the number of geographic area 
WCS licensees affected includes these eight entities.

[[Page 35868]]

IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    60. With certain exceptions, the Commission's Schedule of 
Regulatory Fees applies to all Commission licensees and regulatees. 
Most licensees will be required to count the number of licenses or call 
signs authorized, complete and submit an FCC Form 159, ``FCC Remittance 
Advice,'' and pay a regulatory fee based on the number of licenses or 
call signs.\133\ Interstate telephone service providers must compute 
their annual regulatory fee based on their adjusted gross interstate 
revenue using information they already supply to the Commission in 
compliance with the TRS Fund, and they must complete and submit the FCC 
Form 159. Compliance with the fee schedule will require some licensees 
to tabulate the number of units (e.g., cellular telephones, pagers, 
cable TV subscribers) they have in service, complete and submit an FCC 
Form 159. Licensees ordinarily will keep a list of the number of units 
they have in service as part of their normal business practices. 
Licensees/regulatees that must pay on the basis of subscriber counts 
shall submit documentation which supports the number of units for which 
payment is submitted. Each licensee/regulatee shall provide 
certification by affixing their signature to the FCC Form 159 that all 
information submitted is true and accurate. No additional outside 
professional skills are required to complete the FCC Form 159, and it 
can be completed by the employees responsible for an entity's business 
records.
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    \133\ The following categories are exempt from the Commission's 
Schedule of Regulatory Fees: Amateur radio licensees (except 
applicants for vanity call signs) and operators in other non-
licensed services (e.g., Personal Radio, part 15, ship and 
aircraft). Governments and non-profit (exempt under section 501(c) 
of the Internal Revenue Code) entities are exempt from payment of 
regulatory fees and need not submit payment. Non-commercial 
educational broadcast licensees are exempt from regulatory fees as 
are licensees of auxiliary broadcast services such as low power 
auxiliary stations, television auxiliary service stations, remote 
pickup stations and aural broadcast auxiliary stations where such 
licenses are used in conjunction with commonly owned non-commercial 
educational stations. Emergency Alert System licenses for auxiliary 
service facilities are also exempt as are instructional television 
fixed service licensees. Regulatory fees are automatically waived 
for the license of any translator station that: (1) Is not licensed 
to, in whole or in part, and does not have common ownership with, 
the licensee of a commercial broadcast station; (2) does not derive 
income from advertising; and (3) is dependent on subscriptions or 
contributions from members of the community served for support. 
Receive only earth station permittees are exempt from payment of 
regulatory fees. A regulatee will be relieved of its fee payment 
requirement if its total fee due, including all categories of fees 
for which payment is due by the entity, amounts to less than $10.
---------------------------------------------------------------------------

    61. Each licensee must submit the FCC Form 159 to the Commission's 
lockbox bank after computing the number of units subject to the fee. As 
an option, licensees are permitted to file electronically or on 
computer diskette to minimize the burden of submitting multiple copies 
of the FCC Form 159. Although not mandatory, the latter procedure may 
require additional technical skills. Licensees who pay small fees in 
advance supply fee information as part of their application and do not 
need to use the FCC Form 159.
    62. Licensees and regulatees are advised that failure to submit the 
required regulatory fee and/or the required supporting documentation in 
a timely manner will subject the licensee or regulatee to a late 
payment fee of an additional 25% in addition to the required fee.\134\ 
Until payment is received, no new or pending applications will be 
processed, and existing authorizations may be subject to 
rescission.\135\ Further, in accordance with the Debt Collection 
Improvement Act of 1996, federal agencies may bar a person or entity 
from obtaining a federal loan or loan insurance guarantees if that 
person or entity fails to pay a delinquent debt owed to any federal 
agency.\136\ Thus, debts owed to the Commission may result in a person 
or entity being denied a federal loan or loan guarantee pending before 
another federal agency until such obligations are paid.\137\
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    \134\ 47 U.S.C. 1.1164(a).
    \135\ 47 U.S.C. 1.1164(c).
    \136\ Pub. L. 104-134, 110 Stat. 1321 (1996).
    \137\ 31 U.S.C. 7701(c)(2)(B).
---------------------------------------------------------------------------

    63. The Commission's rules currently make provision for relief in 
exceptional circumstances. Persons or entities that believe they have 
been placed in the wrong regulatory fee category or are experiencing 
extraordinary and compelling financial hardship, upon a showing that 
such circumstances override the public interest in reimbursing the 
Commission for its regulatory costs, may request a waiver, reduction or 
deferment of payment of the regulatory fee.\138\ However, timely 
submission of the required regulatory fee must accompany requests for 
waivers or reductions. This will avoid any late payment penalty if the 
request is denied. The fee will be refunded if the request is granted. 
In exceptional and compelling instances (where payment of the 
regulatory fee along with the waiver or reduction request could result 
in reduction of service to a community or other financial hardship to 
the licensee), the Commission will accept a petition to defer payment 
along with a waiver or reduction request.
---------------------------------------------------------------------------

    \138\ 47 U.S.C. 1.1166.
---------------------------------------------------------------------------

V. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    64. The Omnibus Consolidated Appropriation Act, Pub. L. 105-119, 
requires the Commission to revise its Schedule of Regulatory Fees in 
order to recover the amount of regulatory fees that Congress, pursuant 
to section 9(a) of the Communications Act, as amended, has required it 
to collect for Fiscal Year (FY) 1998. See 47 U.S.C.159 (a). We have 
sought comment on the proposed methodology for implementing these 
statutory requirements and any other potential impact of these 
proposals on small business entities.
    65. With the use actual cost accounting data for computation of 
regulatory fees, we found that some fees which were very small in 
previous years would have increased dramatically. The statute 
establishing regulatory fees provides for permitted amendments to be 
made to the schedule of fees in the public interest.\139\ The 
methodology adopted in this Report and Order minimizes this impact by 
limiting the amount of increase and shifting costs to other services 
which, for the most part, are larger entities.
---------------------------------------------------------------------------

    \194\ See 47 U.S.C. <nothing> 159(b)(1)(A) and (b)(3).
---------------------------------------------------------------------------

    66. We have developed and adopted an alternative methodology for 
assessing fees to recover the regulatory costs attributable to AM and 
FM radio stations. The radio industry has requested additional relief 
for small stations, and we offered two alternative proposals for 
comment. One would update the schedule of fees adopted in the FY 1997 
Report and Order. The other proposal would increase the differences in 
the fee amount between larger and smaller stations. Both options 
benefitted by changing the service contours used to determine 
populations for determining station size. The impact of adoption of our 
proposal will result in lower fees for smaller, less powerful stations 
relative to larger, more powerful stations in the same radio market; or 
stations potentially serving a larger population.
    67. Several categories of licensees and regulatees are exempt from 
payment of regulatory fees. See, e.g., footnote 108, supra, and 
Attachment H of this Report and Order, infra.
    Report to Congress: The Commission shall include a copy of this 
Final

[[Page 35869]]

Regulatory Flexibility Analysis, along with this Report and Order, in a 
report to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996, 5 U.S.C. 801(a)(1)(A). A copy of this 
FRFA (or summary thereof) will also be published in the Federal 
Register, along with this Report and Order.

Attachment B--Sources of Payment Unit Estimates For FY 1998

    In order to calculate individual service fees for FY 1998, we 
adjusted FY 1997 payment units for each service to more accurately 
reflect expected FY 1998 payment liabilities. We obtained our updated 
estimates through a variety of means. For example, we used Commission 
licensee data bases, actual prior year payment records and industry and 
trade association projections when available. We tried to obtain 
verification for these estimates from multiple sources and, in all 
cases, we compared FY 1998 estimates with actual FY 1997 payment units 
to ensure that our revised estimates were reasonable. Where it made 
sense, we adjusted and/or rounded our final estimates to take into 
consideration the fact that certain variables that impact on the number 
of payment units cannot yet be estimated exactly. These include an 
unknown number of waivers and/or exemptions that may occur in FY 1998 
and the fact that, in many services, the number of actual licensees or 
station operators fluctuates from time to time due to economic, 
technical or other reasons. Therefore, when we note, for example, that 
our estimated FY 1998 payment units are based on FY 1997 actual payment 
units, it does not necessarily mean that our FY 1998 projection is 
exactly the same number as FY 1997. It means that we have either 
rounded the FY 1998 number or adjusted it slightly to account for these 
variables.

------------------------------------------------------------------------
         Fee category              Sources of payment unit estimates    
------------------------------------------------------------------------
Land Mobile (All), Microwave,  Based on Wireless Telecommunications     
 IVDS \140\, Marine (Ship &     Bureau (WTB) projections of new         
 Coast), Aviation (Aircraft &   applications and renewals taking into   
 Ground), GMRS, Amateur         consideration existing Commission       
 Vanity Call Signs, Domestic    licensee data bases. Aviation (Aircraft)
 Public Fixed.                  and Marine (Ship) estimates have been   
                                adjusted to take into consideration the 
                                licensing of portions of these services 
                                on a voluntary basis.                   
CMRS Mobile Services.........  Based on actual FY 1997 payment units    
                                adjusted to take into consideration     
                                industry estimates of growth between FY 
                                1997 and FY 1998 and Wireless           
                                Telecommunications Bureau projections of
                                new applications and average number of  
                                mobile units associated with each       
                                application.                            
CMRS Messaging Services......  Based on industry estimates of the number
                                of units in operation.                  
AM/FM Radio Stations.........  Based on actual FY 1997 payment units.   
UHF/VHF Television Stations..  Based on actual FY 1997 payment units.   
AM/FM/TV Construction Permits  Based on actual FY 1997 payment units.   
LPTV, Translators and          Based on actual FY 1997 payment units.   
 Boosters.                                                              
Auxiliaries..................  Based on actual FY 1997 payment units.   
MDS/MMDS.....................  Based on actual FY 1997 payment units.   
Cable Antenna Relay Service    Based on actual FY 1997 payment units.   
 (CARS).                                                                
Cable Television System        Based on Cable Services Bureau and       
 Subscribers.                   industry estimates of subscribership.   
Interstate Telephone Service   Based on actual FY 1997 interstate       
 Providers.                     revenues associated with contributions  
                                to the Telecommunications Relay System  
                                (TRS) Fund, adjusted to take into       
                                consideration FY 1998 revenue growth in 
                                this industry as estimated by the Common
                                Carrier Bureau.                         
Earth Stations...............  Based on actual FY 1997 payment units.   
Space Stations (GEOs & NGEOs)  Based on International Bureau licensee   
                                data bases.                             
International Bearer Circuits  Based on International Bureau estimate.  
International HF Broadcast     Based on actual FY 1997 payment units.   
 Stations, International                                                
 Public Fixed Radio Service.                                            
------------------------------------------------------------------------


---------------------------------------------------------------------------

    \140\ The Wireless Telecommunications Bureau's staff advises 
that they do not anticipate receiving any applications for IVDS in 
FY 1998. Therefore, since there is no volume, there will be no 
regulatory fee in the IVDS category for FY 1998.
---------------------------------------------------------------------------

Attachment C--Calculation of Revenue Requirements

----------------------------------------------------------------------------------------------------------------
                                                                                        (equals)                
                                                 FY 1998                   (times)    computed FY    Pro-rated  
                 Fee category                    payment     (times) FY    payment        1998        revenue   
                                                  units       1997 Fee      years       revenue    requirement**
                                                                                      requirement               
----------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base, SMRS)............        4,645           10            5      232,250       225,691 
Private Microwave............................        3,830           10           10      383,000       372,184 
Domestic Public Fixed/Comc'l Microwave.......        5,150           10           10      515,000       500,456 
IVDS.........................................            0            0            5            0             0 
Marine (Ship)................................       16,500            5           10      825,000       801,702 
GMRS/Other LM................................       72,465            5            5    1,811,625     1,760,465 
Aviation (Aircraft)..........................        3,500            5           10      175,000       170,058 
Marine (Coast)...............................        1,370            5            5       34,250        33,283 
Aviation (Ground)............................        1,865            5            5       46,625        45,308 
Amateur Vanity Call Signs....................       10,000            5           10      500,000       485,880 
AM/FM Radio..................................        8,646        1,126            1    9,735,396     9,460,469 
AM Construction Permits......................           62          195            1       12,090        11,749 
FM Construction Permits......................          473          950            1      449,350       436,660 
Satellite TV.................................          105          950            1       99,750        96,933 
Satellite TV Construction Permit.............           10          345            1        3,450         3,353 

[[Page 35870]]

                                                                                                                
VHF Markets 1-10.............................           42       35,025            1    1,471,050     1,429,508 
VHF Markets 11-25............................           61       28,450            1    1,735,450     1,686,441 
VHF Markets 26-50............................           71       18,600            1    1,320,600     1,283,306 
VHF Markets 51-100...........................          118        9,850            1    1,162,300     1,129,477 
VHF Remaining Markets........................          207        2,725            1      564,075       548,146 
VHF Construction Permits.....................           10        4,800            1       48,000        46,644 
UHF Markets 1-10.............................           94       16,850            1    1,583,900     1,539,171 
UHF Markets 11-25............................           96       13,475            1    1,293,600     1,257,069 
UHF Markets 26-50............................          124        8,750            1    1,085,000     1,054,360 
UHF Markets 51-100...........................          172        4,725            1      812,700       789,749 
UHF Remaining Markets........................          182        1,350            1      245,700       238,761 
UHF Construction Permits.....................           50        2,975            1      148,750       144,549 
Auxiliaries..................................       20,000           25            1      500,000       485,880 
International HF Broadcast...................            4          390            1        1,560         1,516 
LPTV/Translators/Boosters....................        2,290          220            1      503,800       489,573 
CARS.........................................        1,800           65            1      117,000       113,686 
Cable Systems................................   66,000,000         0.54            1   35,640,000    34,633,530 
Interstate Telephone Service Providers.......   70,103,000      0.00116            1   81,319,480    79,023,026 
CMRS Mobile Services (Cellular/Public Mobile)   55,540,000         0.24            1   13,329,600    12,953,173 
CMRS Messaging Services......................   39,592,000         0.03            1    1,187,760     1,154,218 
MDS/MMDS.....................................        1,878          215            1      403,770       392,368 
International Circuits.......................      325,000            5            1    1,625,000     1,579,110 
International Public Fixed...................            3          310            1          930           904 
Earth Stations...............................        3,000          515            1    1,545,000     1,501,369 
Space Stations (Geostationary)...............           46       97,975            1    4,506,850     4,379,577 
Space Stations (Non-geostationary)...........            2      135,675            1      271,350       263,687 
                                              ------------------------------------------------------------------
    Total Estimated Revenue Collected........  ...........  ...........  ...........  167,246,011   162,523,000 
                                              ------------------------------------------------------------------
    Total Revenue Requirement................  ...........  ...........  ...........  162,523,000   162,523,000 
        Difference...........................  ...........  ...........  ...........    4,723,011             0 
                                              ==================================================================
----------------------------------------------------------------------------------------------------------------
 **0.971760098 factor applied.                                                                                  


                                  Attachment D--Calculation of Regulatory Costs                                 
----------------------------------------------------------------------------------------------------------------
                                                                     Total costs                                
                                      Actual FY 1997    Overhead    with overhead   Total costs                 
            Fee category                regulatory     and other      and other      pro-rated    Adjusted pro- 
                                          costs         indirect     indirect pro     to $162    rated costs ***
                                                       pro rated        rated        Million **                 
----------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base, SMRS)..       1,952,428        98,195       2,050,623     2,113,136       2,113,136 
Microwave..........................       4,860,809       244,469       5,105,277     5,260,912       5,260,912 
IVDS...............................       2,122,499       106,749       2,229,248     2,297,206       2,297,206 
Marine (Ship)......................       2,754,238       138,521       2,892,759     2,980,945       2,980,945 
GMRS/Other LM......................       5,943,682       298,930       6,242,612     6,432,918       6,432,918 
Aviation (Aircraft)................         980,895        49,333       1,030,228     1,061,635       1,061,635 
Marine (Coast).....................         685,608        34,482         720,090       742,041         742,041 
Aviation (Ground)..................         562,239        28,277         590,516       608,518         608,518 
Amateur Vanity Call Signs..........          88,615         4,457          93,072        95,909          95,909 
AM/FM Radio........................      14,125,529       710,427      14,835,955    15,288,230      14,396,926 
AM Construction Permits............  ...............  ...........  ...............  ...........         103,960 
FM Construction Permits............  ...............  ...........  ...............  ...........         787,344 
Satellite TV.......................  ...............  ...........  ...............  ...........         138,603 
Satellite TV Construction Permit...  ...............  ...........  ...............  ...........           3,489 
VHF Television.....................       4,957,533       249,333       5,206,866     5,365,598                 
    VHF Markets 1-10...............  ...............  ...........  ...............  ...........       1,177,538 
    VHF Markets 11-25..............  ...............  ...........  ...............  ...........       1,423,609 
    VHF Markets 26-50..............  ...............  ...........  ...............  ...........       1,134,321 
    VHF Markets 51-100.............  ...............  ...........  ...............  ...........       1,055,080 
    VHF Remaining Markets..........  ...............  ...........  ...............  ...........         479,377 
    VHF Construction Permits.......  ...............  ...........  ...............  ...........          18,765 
UHF Television.....................       2,954,865       148,611       3,103,476     3,198,086                 
    UHF Markets 1-10...............  ...............  ...........  ...............  ...........         993,777 
    UHF Markets 11-25..............  ...............  ...........  ...............  ...........         767,939 
    UHF Markets 26-50..............  ...............  ...........  ...............  ...........         614,629 
    UHF Markets 51-100.............  ...............  ...........  ...............  ...........         510,374 
    UHF Remaining Markets..........  ...............  ...........  ...............  ...........         147,610 
    UHF Construction Permits.......  ...............  ...........  ...............  ...........          98,573 

[[Page 35871]]

                                                                                                                
Auxiliaries........................         146,460         7,366         153,826       158,515         158,515 
International HF Broadcast.........         217,931        10,961         228,891       235,869         235,869 
LPTV/Translators/Boosters..........         736,547        37,044         773,590       797,173         797,173 
CARS...............................          61,797         3,108          64,905        66,883          66,883 
Cable Systems......................      20,125,023     1,012,164      21,137,187    21,781,555      21,781,555 
Interstate Telewphone Service                                                                                   
 Providers.........................      53,234,026     2,677,341      55,911,367    57,615,828      57,615,828 
CMRS Mobile Services (Cellular/                                                                                 
 Public Mobile)....................      11,273,798       567,002      11,840,801    12,201,768      12,201,768 
CMRS Messaging Services............       6,015,701       302,552       6,318,254     6,510,866       6,510,866 
MDS/MMDS...........................       1,357,260        68,262       1,425,521     1,468,979       1,468,979 
International Circuits.............       8,253,772       415,114       8,668,886     8,933,157       8,933,157 
International Public Fixed.........         193,436         9,729         203,165       209,358         209,358 
Earth Stations.....................         339,999        17,100         357,099       367,985         367,985 
Space Stations (Geostationary).....       5,677,889       285,563       5,963,452     6,145,248       6,145,248 
Space Stations (Non-Geostationary).         540,215        27,169         567,385       584,681         584,681 
Overhead & Other Indirect Costs....       7,552,257   ...........  ...............  ...........  ...............
                                    ----------------------------------------------------------------------------
    Total..........................     157,715,049     7,552,257     157,715,049   162,523,000     159,839,216 
                                    ----------------------------------------------------------------------------
    Total Revenue Requirement......     162,523,000   ...........     162,523,000   162,523,000     162,523,000 
                                    ============================================================================
        Difference.................      (4,807,951)  ...........      (4,807,951)            0      (2,683,784)
                                    ----------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
** 1.046987 factor applied.                                                                                     
*** The pro rated costs shown in the previous column needed to be adjusted to sub-allocate actual TV and radio  
  costs.                                                                                                        
                                                                                                                
Note: Columns may not add due to rounding.                                                                      


[[Page 35872]]


                                                                                          Attachment E--Calculation of FY 1998 Regulatory Fees                                                                                          
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Costs vs.       Pro-rated                                                                                                     Computed     Rounded                 
                                     Pro-rated                        revenue         revenue                         Round 1      Round 1 pro-                       Round 2      Round 2 pro-     new FY      new FY                  
          Fee category                revenue        Adjusted       requirement     requirement   Round 1 target    adjustable     rated target   Round 2 target    adjustable     rated target      1998        1998       Expected FY 
                                    requirement   activity costs    difference       plus 25%         revenue     target revenue     revenue**        revenue     target revenue    revenue***    regulatory  regulatory   1998 revenue 
                                                                     (percent)        ceiling                                                                                                         fee         fee                   
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
LM (220 MHz, >470 MHZ-Base,                                                                                                                                                                                                             
 SMRS)..........................         225,691      2,113,136          836.30          282,114        282,114   ..............         282,114        282,114   ..............         282,114          12          12        278,700 
Microwave.......................         872,640      5,260,912          502.87        1,090,800      1,090,800   ..............       1,090,800      1,090,800   ..............       1,090,800          12          12      1,077,600 
IVDS............................               0      2,297,206   ..............               0              0   ..............               0              0   ..............               0           0           0              0 
Marine (Ship)...................         801,702      2,980,945          271.83        1,002,128      1,002,128   ..............       1,002,128      1,002,128   ..............       1,002,128           6           6        990,000 
GMRS/Other LM...................       1,760,465      6,432,918          265.41        2,200,581      2,200,581   ..............       2,200,581      2,200,581   ..............       2,200,581           6           6      2,173,950 
Aviation (Aircraft).............         170,058      1,061,635          524.28          212,573        212,573   ..............         212,573        212,573   ..............         212,573           6           6        210,000 
Marine (Coast)..................          33,283        742,041         2129.49           41,604         41,604   ..............          41,604         41,604   ..............          41,604           6           6         41,100 
Aviation (Ground)...............          45,308        608,518         1243.07           56,635         56,635   ..............          56,635         56,635   ..............          56,635           6           6         55,950 
Amateur Vanity Call Signs.......         485,880         95,909          (80.26)         607,350         95,909           95,909         128,372        128,372          128,372         128,527        1.29        1.30        130,000 
AM/FM Radio.....................       9,460,469     14,396,926           52.18       11,825,586     11,825,586   ..............      11,825,586     11,825,586   ..............      11,825,586       1,368       1,375     11,888,250 
AM Construction Permits.........          11,749        103,960          784.84           14,686         14,686   ..............          14,686         14,686   ..............          14,686         237         235         14,570 
FM Construction Permits.........         436,660        787,344           80.31          545,825        545,825   ..............         545,825        545,825   ..............         545,825       1,154       1,150        543,950 
Satellite TV....................          96,933        138,603           42.99          121,166        121,166   ..............         121,166        121,166   ..............         121,166       1,166       1,175        123,375 
Satellite TV Construction Permit           3,353          3,489            4.06            4,191          3,489            3,489           4,670          4,191   ..............           4,191         419         420          4,200 
VHF Markets 1-10................       1,429,508      1,177,538          (17.63)       1,786,885      1,177,538        1,177,538       1,576,112      1,576,112        1,576,112       1,578,013      37,572      37,575      1,578,150 
VHF Markets 11-25...............       1,686,441      1,423,609          (15.59)       2,108,051      1,423,609        1,423,609       1,905,473      1,905,473        1,905,473       1,907,772      31,275      31,275      1,907,775 
VHF Markets 26-50...............       1,283,306      1,134,321          (11.61)       1,604,133      1,134,321        1,134,321       1,518,267      1,518,267        1,518,267       1,520,098      21,410      21,400      1,519,400 
VHF Markets 51-100..............       1,129,477      1,055,080           (6.59)       1,411,846      1,055,080        1,055,080       1,412,204      1,411,846   ..............       1,411,846      11,965      11,975      1,413,050 
VHF Remaining Markets...........         548,146        479,377          (12.55)         685,183        479,377          479,377         641,637        641,637          641,637         642,411       3,103       3,100        641,700 
VHF Construction Permits........          46,664         18,765          (59.79)          58,350         18,765           18,765          25,117         25,117           25,117          25,147       2,515       2,525         25,250 
UHF Markets 1-10................       1,539,171        993,777          (35.43)       1,923,964        993,777          993,777       1,330,151      1,330,151        1,330,151       1,331,756      14,168      14,175      1,332,450 
UHF Markets 11-25...............       1,257,069        767,939          (38.91)       1,571,336        767,939          767,939       1,027,872      1,027,872        1,027,872       1,029,111      10,720      10,725      1,029,600 
UHF Markets 26-50...............       1,054,360        614,629          (41.71)       1,317,950        614,629          614,629         822,669        822,669          822,669         823,661       6,642       6,650        824,600 
UHF Markets 51-100..............         789,749        510,374          (35.38)         987,186        510,374          510,374         683,126        683,126          683,126         683,950       3,976       3,975        683,700 
UHF Remaining Markets...........         238,761        147,610          (38.18)         298,451        147,610          147,610         197,573        197,573          197,573         197,811       1,087       1,075        195,650 
UHF Construction Permits........         144,549         98,573          (31.81)         180,686         98,573           98,573         131,938        131,938          131,938         132,097       2,642       2,650        132,500 
Auxiliaries.....................         485,880        158,515          (67.38)         607,350        158,515          158,515         212,169        212,169          212,169         212,425          11          11        220,000 
International HF Broadcast......           1,516        235,869        15458.64            1,895          1,895   ..............           1,895          1,895   ..............           1,895         474         475          1,900 
LPTV/Translators/Boosters.......         489,573        797,173           62.83          611,966        611,966   ..............         611,966        611,966   ..............         611,966         267         265        606,850 
CARS............................         113,696         66,883          (41.17)         142,120         66,883           66,883          89,522         89,522           89,522          89,630          50          50         90,000 
Cable Systems...................      34,633,530     21,781,555          (37.11)      43,291,913     21,781,555       21,781,555      29,154,192     29,154,192       29,154,192      29,189,360        0.44        0.44     29,189,360 
Interstate Telephone Service                                                                                                                                                                                                            
 Providers......................      79,023,026     57,615,828          (27.09)      98,778,783     57,615,828       57,615,828      77,117,676     77,117,676       77,117,676      77,210,702      0.0011      0.0011     77,210,702 
CMRS Mobile Services (Cellular/                                                                                                                                                                                                         
 Public Mobile).................      12,953,173     12,201,768           (5.80)      16,191,466     12,201,768       12,201,768      16,331,831     16,191,466   ..............      16,191,466        0.29        0.29     16,191,466 
CMRS Messaging Services.........       1,154,218      6,510,866          464.09        1,442,773      1,442,773   ..............       1,442,773      1,442,773   ..............       1,442,773        0.04        0.04      1,442,773 
MDS/MMDS........................         392,368      1,468,979          274.39          490,460        490,460   ..............         490,460        490,460   ..............         490,460         261         260        488,280 
International Circuits..........       1,579,110      8,933,157          465.71        1,973,888      1,973,888   ..............       1,973,888      1,973,888   ..............       1,973,888           6           6      1,950,000 
International Public Fixed......             904        209,358        23059.07            1,130          1,130   ..............           1,130          1,130   ..............           1,130         377         375          1,125 
Earth Stations..................       1,501,369        367,985          (75.49)       1,876,711        367,985          367,985         492,541        492,541          492,541         493,135         164         165        495,000 
Space Stations (Geostationary)..       4,379,577      6,145,248           40.32        5,474,471      5,474,471   ..............       5,474,471      5,474,471   ..............       5,474,471     119,010     119,000      5,474,000 
Space Stations (Non-                                                                                                                                                                                                                    
 Geostationary).................         263,687        584,681          121.73          329,609        329,609   ..............         329,609        329,609   ..............         329,609     164,804     164,800        329,000 
                                 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Estimated Revenue                                                                                                                                                                                                                 
 Collected......................     162,523,019    162,522,999   ..............     203,153,774    128,433,413      100,713,524     162,523,000    162,381,798      117,054,406     162,524,243  ..........  ..........    162,506,526 
                                 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenue Requirement.......     162,523,000    162,523,000   ..............     162,523,000    162,523,000   ..............     162,523,000    162,523,000   ..............     162,523,000  ..........  ..........    162,523,000 
                                 =======================================================================================================================================================================================================
Difference......................              19             (1)  ..............      40,630,774    (34,089,587)  ..............               0       (141,202)  ..............           1,243  ..........  ..........        (16,474) 
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
**1.33782803 factor applied.                                                                                                                                                                                                            
***1.003487295 factor applied.                                                                                                                                                                                                          


[[Page 35873]]


            Attachment F--FY 1998 Schedule of Regulatory Fees           
------------------------------------------------------------------------
                                                               Annual   
                       Fee category                          regulatory 
                                                                 fee    
------------------------------------------------------------------------
PMRS (per license) (Formerly Land Mobile--Exclusive Use at              
 220-222 MHz, above 470 MHz, Base Station and SMRS) (47                 
 CFR Part 90).............................................            12
Microwave (per license) (47 CFR Part 101).................            12
Interactive Video Data Service (per license) (47 CFR Part               
 95) .....................................................           \1\
Marine (Ship) (per station) (47 CFR Part 80)..............             6
Marine (Coast) (per license) (47 CFR Part 80).............             6
General Mobile Radio Service (per license) (47 CFR Part                 
 95)......................................................             6
Land Mobile (per license) (all stations not covered by                  
 PMRS and CMRS)...........................................             6
Aviation (Aircraft) (per station) (47 CFR Part 87)........             6
Aviation (Ground) (per license) (47 CFR Part 87)..........             6
Amateur Vanity Call Signs (per call sign) (47 CFR Part 97)          1.30
CMRS Mobile Services (per unit) (47 CFR Parts 20, 22, 24,               
 80 and 90)...............................................           .29
CMRS Messaging Services (per unit) (47 CFR Parts 20, 22                 
 and 90)..................................................           .04
Multipoint Distribution Services (per call sign) (47 CFR                
 Part 21).................................................           260
TV (47 CFR Part 73) VHF Commercial:                                     
    Markets 1-10..........................................        37,575
    Markets 11-25.........................................        31,275
    Markets 26-50.........................................        21,400
    Markets 51-100........................................        11,975
    Remaining Markets.....................................         3,100
    Construction Permits..................................         2,525
TV (47 CFR Part 73) UHF Commercial:                                     
    Markets 1-10..........................................        14,175
    Markets 11-25.........................................        10,725
    Markets 26-50.........................................         6,650
    Markets 51-100........................................         3,975
    Remaining Markets.....................................         1,075
    Construction Permits..................................         2,650
Satellite Television Stations (All Markets)...............         1,175
Construction Permits--Satellite Television Stations.......           420
Low Power TV, TV/FM Translators & Boosters (47 CFR Part                 
 74)......................................................           265
Broadcast Auxiliary (47 CFR Part 74)......................            11
Cable Antenna Relay Service (47 CFR Part 78)..............            50
Cable Television Systems (per subscriber) (47 CFR Part 76)           .44
Interstate Telephone Service Providers (per revenue                     
 dollar)..................................................         .0011
Earth Stations (47 CFR Part 25)...........................           165
Space Stations (per operational station in geostationary                
 orbit) (47 CFR Part 25) also includes Direct Broadcast                 
 Satellite Service (per operational station) (47 CFR Part               
 100).....................................................       119,000
Space Stations (per operational system in non-                          
 geostationary orbit) (47 CFR Part 25)....................       164,800
International Bearer Circuits (per active 64KB circuit)...             6
International Public Fixed (per call sign) (47 CFR Part                 
 23)......................................................           375
International (HF) Broadcast (47 CFR Part 73).............          475 
------------------------------------------------------------------------
\1\ No fee.                                                             


                                          Radio Station Regulatory Fees                                         
----------------------------------------------------------------------------------------------------------------
                                                                                                      FM classes
         Population served           AM class A   AM class B   AM class C   AM class D   FM classes   B, C, C1 &
                                                                                         A, B1 & C3       C2    
----------------------------------------------------------------------------------------------------------------
<=20,000..........................          400          300          200          250          300          400
20,001-50,000.....................          750          600          300          400          600          750
50,001-125,000....................        1,250          800          400          600          800        1,250
125,001-400,000...................        1,750        1,250          600          750        1,250        1,750
400,001-1,000,000.................        2,500        2,000        1,000        1,250        2,000        2,500
>1,000,000........................        4,000        3,250        1,500        2,000        3,250        4,000
----------------------------------------------------------------------------------------------------------------


             Attachment G--Comparison Between FY 1997 and FY 1998 Proposed and Final Regulatory Fees            
----------------------------------------------------------------------------------------------------------------
                                                                      Annual                          Annual    
                          Fee category                            regulatory fee   NPRM proposed  regulatory fee
                                                                      FY 1997       fee FY 1998       FY 1998   
----------------------------------------------------------------------------------------------------------------
PMRS (per license) (Formerly Land Mobile-Exclusive Use at 220-                                                  
 222 Mhz, above 470 Mhz, Base Station and SMRS) (47 CFR Part 90)        10               12              12     
Microwave (per license) (47 CFR Part 101).......................        10               12              12     
Interactive Video Data Service (per license) (47 CFR Part 95)...       (<SUP>1)              (<SUP>1)             (<SUP>1)     
Marine (Ship) (per station) (47 CFR Part 80)....................         5                6               6     
Marine (Coast) (per license) (47 CFR Part 80)...................         5                6               6     
General Mobile Radio Service (per license) (47 CFR Part 95).....         5                6               6     

[[Page 35874]]

                                                                                                                
Land Mobile (per license) (all stations not covered by PMRS and                                                 
 CMRS)..........................................................         5                6               6     
Aviation (Aircraft) (per station) (47 CFR Part 87)..............         5                6               6     
Aviation (Ground) (per license) (47 CFR Part 87)................         5                6               6     
Amateur Vanity Call Signs (per call sign) (47 CFR Part 97)......         5                1.29            1.30  
CMRS Mobile Services (per unit) (47 CFR Parts 20, 22, 24, 80 and                                                
 90)............................................................          .24              .29             .29  
CMRS Messaging Services [formerly One Way Paging] (per unit) (47                                                
 CFR Parts 20, 22, and 90)......................................          .03              .04             .04  
Multipoint Distribution Services (per call sign) (47 CFR Part                                                   
 21)............................................................       215              260             260     
AM/FM Radio (47 CFR Part 73):                                                                                   
    Group 1.....................................................     2,000            2,500             (2)     
    Group 2.....................................................     1,800            2,250             (<SUP>2)     
    Group 3.....................................................     1,600            2,000             (<SUP>2)     
    Group 4.....................................................     1,400            1,750             (<SUP>2)     
    Group 5.....................................................     1,200            1,500             (<SUP>2)     
    Group 6.....................................................     1,000            1,250             (<SUP>2)     
    Group 7.....................................................       800            1,000             (<SUP>2)     
    Group 8.....................................................       600              750             (<SUP>2)     
    Group 9.....................................................       400              500             (<SUP>2)     
    Group 10....................................................       200              250             (<SUP>2)     
    AM Construction Permits.....................................       195              235             235     
    FM Construction Permits.....................................       950            1,150           1,150     
TV (47 CFR Part 73) VHF Commercial:                                                                             
    Markets 1-10................................................    35,025           41,275          37,575     
    Markets 11-25...............................................    28,450           24,850          31,275     
    Markets 26-50...............................................    18,600           22,600          21,400     
    Markets 51-100..............................................     9,850           11,375          11,975     
    Remaining Markets...........................................     2,725            3,250           3,100     
    Construction Permits........................................     4,800            4,100           2,525     
TV (47 CFR Part 73) UHF Commercial:                                                                             
    Markets 1-10................................................    16,850           14,625          14,175     
    Markets 11-25...............................................    13,575           10,575          10,725     
    Markets 26-50...............................................     8,750            5,750           6,650     
    Markets 51-100..............................................     4,725            3,775           3,975     
    Remaining Markets...........................................     1,350            1,500           1,075     
    Construction Permits........................................     2,975            3,625           2,650     
Satellite Television Stations (All Markets).....................       950              900           1,175     
Construction Permits--Satellite Television Stations.............       345              420             420     
Low Power TV, TV/FM Translators & Boosters (47 CFR Part 74).....       220              265             265     
Broadcast Auxiliary (47 CFR Part 74)............................        25               11              11     
Cable Antenna Relay Service (47 CFR Part 78)....................        65               50              50     
Earth Stations (47 CFR Part 25).................................       515              165             165     
Cable Television Systems (per subscriber) (47 CFR Part 76)......          .54              .44             .44  
Interstate Telephone Service Providers (per revenue dollar).....          .00116           .0011           .0011
Space Stations (per operational station in geostationary orbit)                                                 
 (47 CFR Part 25) also includes Direct Broadcast Satellite                                                      
 Service (per operational station) (47 CFR Part 100)............    97,975          119,000         119,000     
Space Stations (per operational system in non-geostationary                                                     
 orbit) (47 CFR Part 25)........................................   135,675          164,800         164,800     
International Bearer Circuits (per active 64KB circuit).........         5                6               6     
International Public Fixed (per call sign) (47 CFR Part 23).....       310              375             375     
International (HF) Broadcast (47 CFR Part 73)...................       390              475            475      
----------------------------------------------------------------------------------------------------------------
\1\ No fee.                                                                                                     
\2\ See radio.                                                                                                  


                                          Radio Station Regulatory Fees                                         
----------------------------------------------------------------------------------------------------------------
                                                                                                      FMclasses 
         Populationserved            AM class A   AM class B   AM class C   AM class D   FMclasses    B, C, C1 &
                                                                                         A, B1 & C3       C2    
----------------------------------------------------------------------------------------------------------------
<=20,000..........................          400          300          200          250          300          400
20,001-50,000.....................          750          600          300          400          600          750
50,001-125,000....................        1,250          800          400          600          800        1,250
125,001-400,000...................        1,750        1,250          600          750        1,250        1,750
400,001-1,000,000.................        2,500        2,000        1,000        1,250        2,000        2,500
>1,000,000........................        4,000        3,250        1,500        2,000        3,250        4,000
----------------------------------------------------------------------------------------------------------------


[[Page 35875]]

Attachment H--Detailed Guidance on Who Must Pay Regulatory Fees

    1. The guidelines below provide an explanation of regulatory fee 
categories established by the Schedule of Regulatory Fees in section 
9(g) of the Communications Act, 47 U.S.C. 159(g) as modified in the 
instant Report and Order. Where regulatory fee categories need 
interpretation or clarification, we have relied on the legislative 
history of section 9, our own experience in establishing and regulating 
the Schedule of Regulatory Fees for Fiscal Years (FY) 1994, 1995, 1996, 
and 1997 and the services subject to the fee schedule, and the comments 
of the parties in our proceeding to adopt fees for FY 1998. The 
categories and amounts set out in the schedule have been modified to 
reflect changes in the number of payment units, additions and changes 
in the services subject to the fee requirement and the benefits derived 
from the Commission's regulatory activities, and to simplify the 
structure of the schedule. The schedule may be similarly modified or 
adjusted in future years to reflect changes in the Commission's budget 
and in the services regulated by the Commission. See 47 U.S.C. 159(b) 
(2), (3).
    2. Exemptions. Governments and nonprofit entities are exempt from 
paying regulatory fees and should not submit payment. A nonprofit 
entity may be asked to submit a current IRS Determination Letter 
documenting that it is exempt from taxes under section 501of the 
Internal Revenue Code or the certification of a governmental authority 
attesting to its nonprofit status. The governmental exemption applies 
even where the government-owned or community-owned facility is in 
competition with a commercial operation. Other specific exemptions are 
discussed below in the descriptions of other particular service 
categories.

1. Private Wireless Radio Services

    3. Two levels of statutory fees were established for the Private 
Wireless Radio Services--exclusive use services and shared use 
services. Thus, licensees who generally receive a higher quality 
communication channel due to exclusive or lightly shared frequency 
assignments will pay a higher fee than those who share marginal quality 
assignments. This dichotomy is consistent with the directive of section 
9, that the regulatory fees reflect the benefits provided to the 
licensees. See 47 U.S.C. 159(b)(1)(A). In addition, because of the 
generally small amount of the fees assessed against Private Wireless 
Radio Service licensees, applicants for new licenses and reinstatements 
and for renewal of existing licenses are required to pay a regulatory 
fee covering the entire license term, with only a percentage of all 
licensees paying a regulatory fee in any one year. Applications for 
modification or assignment of existing authorizations do not require 
the payment of regulatory fees. The expiration date of those 
authorizations will reflect only the unexpired term of the underlying 
license rather than a new license term.
a. Exclusive Use Services
    4. Private Mobile Radio Services (PMRS) (Formerly Land Mobile 
Services): Regulatees in this category include those authorized under 
part 90 of the Commission's rules to provide limited access Wireless 
Radio service that allows high quality voice or digital communications 
between vehicles or to fixed stations to further the business 
activities of the licensee. These services, using the 220-222 MHz band 
and frequencies at 470 MHz and above, may be offered on a private 
carrier basis in the Specialized Mobile Radio Services (SMRS).\141\ For 
FY 1998, PMRS licensees will pay a $12 annual regulatory fee per 
license, payable for an entire five or ten year license term at the 
time of application for a new, renewal, or reinstatement license.\142\ 
The total regulatory fee due is either $60 for a license with a five 
year term or $120 for a license with a 10 year term.
---------------------------------------------------------------------------

    \141\ This category only applies to licensees of shared-use 
private 220-222 MHz and 470 MHz and above in the Specialized Mobile 
Radio (SMR) service who have elected not to change to the Commercial 
Mobile Radio Service (CMRS). Those who have elected to change to the 
CMRS are referred to paragraph 14 of this Attachment.
    \142\ Although this fee category includes licenses with ten-year 
terms, the estimated volume of ten-year license applications in FY 
1997 is less than one-tenth of one percent and, therefore, is 
statistically insignificant.
---------------------------------------------------------------------------

    5. Microwave Services: These services include private and 
commercial microwave systems and private and commercial carrier systems 
authorized under part 101 of the Commission's rules to provide 
telecommunications services between fixed points on a high quality 
channel of communications. Microwave systems are often used to relay 
data and to control railroad, pipeline, and utility equipment. 
Commercial systems typically are used for video or data transmission or 
distribution. For FY 1998, Microwave licensees will pay a $12 annual 
regulatory fee per license, payable for an entire ten year license term 
at the time of application for a new, renewal, or reinstatement 
license. The total regulatory fee due is $120 for the ten year license 
term.
    6. Interactive Video Data Service (IVDS): The IVDS is a two-way, 
point-to-multi-point radio service allocated high quality channels of 
communications and authorized under part 95 of the Commission's rules. 
The IVDS provides information, products, and services, and also the 
capability to obtain responses from subscribers in a specific service 
area. The IVDS is offered on a private carrier basis. The Commission 
does not anticipate receiving any applications in the IVDS during FY 
1998. Therefore, for FY 1998, there is no regulatory fee for IVDS 
licensees.
b. Shared Use Services
    7. Marine (Ship) Service: This service is a shipboard radio service 
authorized under part 80 of the Commission's rules to provide 
telecommunications between watercraft or between watercraft and shore-
based stations. Radio installations are required by domestic and 
international law for large passenger or cargo vessels. Radio equipment 
may be voluntarily installed on smaller vessels, such as recreational 
boats. The Telecommunications Act of 1996 gave the Commission the 
authority to license certain ship stations by rule rather than by 
individual license. Private boat operators sailing entirely within 
domestic U.S. waters and who are not otherwise required by treaty or 
agreement to carry a radio, are no longer required to hold a marine 
license, and they will not be required to pay a regulatory fee. For FY 
1998, parties required to be licensed and those choosing to be licensed 
for Marine (Ship) Stations will pay a $6 annual regulatory fee per 
station, payable for an entire ten-year license term at the time of 
application for a new, renewal, or reinstatement license. The total 
regulatory fee due is $60 for the ten year license term.
    8. Marine (Coast) Service: This service includes land-based 
stations in the maritime services, authorized under part 80 of the 
Commission's rules, to provide communications services to ships and 
other watercraft in coastal and inland waterways. For FY 1998, 
licensees of Marine (Coast) Stations will pay a $6 annual regulatory 
fee per call sign, payable for the entire five-year license term at the 
time of application for a new, renewal, or reinstatement license. The 
total regulatory fee due is $30 per call sign for the five-year license 
term.
    9. Private Land Mobile (Other) Services: These services include 
Land Mobile Radio Services operating under

[[Page 35876]]

parts 90 and 95 of the Commission's rules. Services in this category 
provide one- or two-way communications between vehicles, persons or 
fixed stations on a shared basis and include radiolocation services, 
industrial radio services, and land transportation radio services. For 
FY 1998, licensees of services in this category will pay a $6 annual 
regulatory fee per call sign, payable for an entire five-year license 
term at the time of application for a new, renewal, or reinstatement 
license. The total regulatory fee due is $30 for the five-year license 
term.
    10. Aviation (Aircraft) Service: These services include stations 
authorized to provide communications between aircraft and between 
aircraft and ground stations and include frequencies used to 
communicate with air traffic control facilities pursuant to part 87 of 
the Commission's rules. The Telecommunications Act of 1996 gave the 
Commission the authority to license certain aircraft radio stations by 
rule rather than by individual license. Private aircraft operators 
flying entirely within domestic U.S. airspace and who are not otherwise 
required by treaty or agreement to carry a radio are no longer required 
to hold an aircraft license, and they will not be required to pay a 
regulatory fee. For FY 1998, parties required to be licensed and those 
choosing to be licensed for Aviation (Aircraft) Stations will pay a $6 
annual regulatory fee per station, payable for the entire ten-year 
license term at the time of application for a new, renewal, or 
reinstatement license. The total regulatory fee due is $60 per station 
for the ten-year license term.
    11. Aviation (Ground) Service: This service includes stations 
authorized to provide ground-based communications to aircraft for 
weather or landing information, or for logistical support pursuant to 
part 87 of the Commission's rules. Certain ground-based stations which 
only serve itinerant traffic, i.e., possess no actual units on which to 
assess a fee, are exempt from payment of regulatory fees. For FY 1998, 
licensees of Aviation (Ground) Stations will pay a $6 annual regulatory 
fee per license, payable for the entire five-year license term at the 
time of application for a new, renewal, or reinstatement license. The 
total regulatory fee is $30 per call sign for the five-year license 
term.
    12. General Mobile Radio Service (GMRS): These services include 
Land Mobile Radio licensees providing personal and limited business 
communications between vehicles or to fixed stations for short-range, 
two-way communications pursuant to part 95 of the Commission's rules. 
For FY 1998, GMRS licensees will pay a $6 annual regulatory fee per 
license, payable for an entire five-year license term at the time of 
application for a new, renewal or reinstatement license. The total 
regulatory fee due is $30 per license for the five-year license term.
c. Amateur Radio Vanity Call Signs
    13. Amateur Vanity Call Signs: This fee covers voluntary requests 
for specific call signs in the Amateur Radio Service authorized under 
part 97 of the Commission's rules. For FY 1998, applicants for Amateur 
Vanity Call-Signs will pay a $1.30 annual regulatory fee per call sign, 
payable for an entire ten-year license term at the time of application 
for a vanity call sign. The total regulatory fee due would be $13 per 
license for the ten-year license term.\143\
---------------------------------------------------------------------------

    \143\ Section 9(h) exempts ``amateur radio operator licenses 
under part 97 of the Commission's rules (47 CFR part 97)'' from the 
requirement. However, section 9(g)'s fee schedule explicitly 
includes ``Amateur vanity call signs'' as a category subject to the 
payment of a regulatory fee.
---------------------------------------------------------------------------

d. Commercial Wireless Radio Services
    14. Commercial Mobile Radio Services (CMRS) Mobile Services: The 
Commercial Mobile Radio Service (CMRS) is an ``umbrella'' descriptive 
term attributed to various existing broadband services authorized to 
provide interconnected mobile radio services for profit to the public, 
or to such classes of eligible users as to be effectively available to 
a substantial portion of the public. CMRS Mobile Services include 
certain licensees which formerly were licensed as part of the Private 
Radio Services (e.g., Specialized Mobile Radio Services) and others 
formerly licensed as part of the Common Carrier Radio Services (e.g., 
Public Mobile Services and Cellular Radio Service). While specific 
rules pertaining to each covered service remain in separate parts 22, 
24, 80 and 90, general rules for CMRS are contained in part 20. CMRS 
Mobile Services will include: Specialized Mobile Radio Services (part 
90); \144\ Personal Communications Services (part 24), Public Coast 
Stations (part 80); Public Mobile Radio (Cellular, 800 MHz Air-Ground 
Radiotelephone, and Offshore Radio Services) (part 22). Each licensee 
in this group will pay an annual regulatory fee for each mobile or 
cellular unit (mobile or cellular call sign or telephone number), 
assigned to its customers, including resellers of its services. For FY 
1998, the regulatory fee is $.29 per unit.
---------------------------------------------------------------------------

    \144\ This category does not include licensees of private 
shared-use 220 MHz and 470 MHz and above in the Specialized Mobile 
Radio (SMR) service who have elected to remain non-commercial. Those 
who have elected not to change to the Commercial Mobile Radio 
Service (CMRS) are referred to paragraph 4 of this Attachment.
---------------------------------------------------------------------------

    15. Commercial Mobile Radio Services (CMRS) Messaging Services: The 
Commercial Mobile Radio Service (CMRS) is an ``umbrella'' descriptive 
term attributed to various existing narrowband services authorized to 
provide interconnected mobile radio services for profit to the public, 
or to such classes of eligible users as to be effectively available to 
a substantial portion of the public. CMRS Messaging Services include 
certain licensees which formerly were licensed as part of the Private 
Radio Services (e.g., Private Paging, qualifying interconnected 
Business Radio Services, and 220-222 MHz Land Mobile Systems), 
licensees formerly licensed as part of the Common Carrier Radio 
Services (e.g., Public Mobile One-Way Paging), and licensees of 
Personal Communications Service (PCS) one-way and two-way paging. While 
specific rules pertaining to each covered service remain in separate 
parts 22, 24 and 90, general rules for CMRS are contained in part 20. 
We have replaced the CMRS One-Way Paging regulatory fee category with a 
CMRS Messaging Services category for regulatory fee collection 
purposes. Each licensee in the CMRS Messaging Services will pay an 
annual regulatory fee for each unit (pager, telephone number, or 
mobile) assigned to its customers, including resellers of its services. 
For FY 1998, the regulatory fee is $.04 per unit.
    16. Finally, we are reiterating our definition of CMRS payment 
units to make it clear that fees are assessable on each PCS or cellular 
telephone and each one-way or two-way pager capable of receiving or 
transmitting information, whether or not the unit is ``active'' on the 
``as of'' date for payment of these fees. The unit becomes ``feeable'' 
if the end user or assignee of the unit has possession of the unit and 
the unit is capable of transmitting or receiving voice or non-voice 
messages or data and the unit is either owned and operated by the 
licensee of the CMRS system or a reseller, or the end user of a unit 
has a contractual agreement for provision of a CMRS service from a 
licensee of a CMRS system or a reseller of a CMRS service. The 
responsible payer is the CMRS licensee. For example, John Doe purchases 
a pager and contractually obtains paging services from Pagin Licensee 
X. Paging Licensee X is responsible for paying the applicable 
regulatory fee for this unit. Likewise, Cellular Licensee Y donates 
cellular

[[Page 35877]]

telephones to a high school and the high school either pays for or 
obtains free service from the Cellular Licensee Y. In this situation, 
Cellular Licensee Y is responsible for paying the applicable regulatory 
fee for these units.

2. Mass Media Services

    17. The regulatory fees for the Mass Media fee category apply to 
broadcast licensees and permittees. Noncommercial Educational 
Broadcasters are exempt from regulatory fees.

a. Commercial Radio

    18. These categories include licensed Commercial AM (Classes A, B, 
C, and D) and FM (Classes A, B, B1, C, C1, C2, and C3) Radio Stations 
operating under part 73 of the Commission's rules.\145\ In response to 
numerous requests, we have combined class of station and grade B 
contour population data to formulate a schedule of radio fees which 
differentiate between stations based on class of station and population 
served. In general, higher class stations and stations in metropolitan 
areas will pay higher fees than lower class stations and stations 
located in rural areas. The specific fee that a station must pay is 
determined by where it ranks after weighting its fee requirement 
(determined by class of station) with its population. The regulatory 
fee classifications for Radio Stations or FY 1998 are as follows:

    \145\ The Commission acknowledges that certain stations 
operating in Puerto Rico and Guam have been assigned a higher level 
station class than would be expected if the station were located on 
the mainland. Although this results in a higher regulatory fee, we 
believe that the increased interference protection associated with 
the higher station class is necessary and justifies the fee.Stations 
for FY 1998 are as follows:

                                                                                                                
                                          Radio Station Regulatory Fees                                         
----------------------------------------------------------------------------------------------------------------
                                                                                                      FM classes
         Population served           AM class A   AM class B   AM class C   AM class D   FM classes   B, C, C1 &
                                                                                         A, B1 & C3       C2    
----------------------------------------------------------------------------------------------------------------
                                                                                                                
<=20,000..........................          400          300          200          250          300          400
                                                                                                                
20,001-50,000.....................          750          600          300          400          600          750
                                                                                                                
50,001-125,000....................        1,250          800          400          600          800        1,250
                                                                                                                
125,001-400,000...................        1,750        1,250          600          750        1,250        1,750
                                                                                                                
400,001-1,000,000.................        2,500        2,000        1,000        1,250        2,000        2,500
                                                                                                                
>1,000,000........................        4,000        3,250        1,500        2,000        3,250        4,000
----------------------------------------------------------------------------------------------------------------


    19. Licensees may determine the appropriate fee payment by 
referring to the list provided at Attachment L to this Report and 
Order. This same information will be available on the FCC's internet 
world wide web site (http://www.fcc.gov), by calling the FCC's National 
Call Center (1-888-225-5322), and will be included in the Public 
Notices mailed to each licensee.

b. Construction Permits--Commercial AM Radio

    20. This category includes holders of permits to construct new 
Commercial AM Stations. For FY 1998, permittees will pay a fee of $235 
for each permit held. Upon issuance of an operating license, this fee 
would no longer be applicable and licensees would be required to pay 
the applicable fee for the designated class of the station.

c. Construction Permits--Commercial FM Radio

    21. This category includes holders of permits to construct new 
Commercial FM Stations. For FY 1998, permittees will pay a fee of 
$1,150 for each permit held. Upon issuance of an operating license, 
this fee would no longer be applicable. Instead, licensees would pay a 
regulatory fee based upon the designated class of the station.

d. Commercial Television Stations

    22. This category includes licensed Commercial VHF and UHF 
Television Stations covered under part 73 of the Commission's rules, 
except commonly owned Television Satellite Stations, addressed 
separately below. Markets are Nielsen Designated Market Areas (DMA) as 
listed in the Television & Cable Factbook, Stations Volume No. 66, 1998 
Edition, Warren Publishing, Inc. The fees for each category of station 
are as follows:


                                                                        
VHF Markets 1-10.............................................    $37,575
                                                                        
VHF Markets 11-25............................................     31,275
                                                                        
VHF Markets 26-50............................................     21,400
                                                                        
VHF Markets 51-100...........................................     11,975
                                                                        
VHF Remaining Markets........................................      3,100
                                                                        


                                                                        
UHF Markets 1-10.............................................    $14,175
                                                                        
UHF Markets 11-25............................................     10,725
                                                                        
UHF Markets 26-50............................................      6,650
                                                                        
UHF Markets 51-100...........................................      3,975
                                                                        
UHF Remaining Markets........................................      1,075
                                                                        


e. Commercial Television Satellite Stations

    23. Commonly owned Television Satellite Stations in any market 
(authorized pursuant to Note 5 of 73.3555 of the Commission's rules) 
that retransmit programming of the primary station are assessed a fee 
of $1,175 annually. Those stations designated as Television Satellite 
Stations in the 1998 Edition of the Television and Cable Factbook are 
subject to the fee applicable to Television Satellite Stations. All 
other television licensees are subject to the regulatory fee payment 
required for their class of station and market.

f. Construction Permits--Commercial VHF Television Stations

    24. This category includes holders of permits to construct new 
Commercial VHF Television Stations. For FY 1998, VHF permittees will 
pay an annual regulatory fee of $2,525. Upon issuance of an operating 
license, this fee would no longer be applicable. Instead, licensees 
would pay a fee based upon the designated market of the station.

g. Construction Permits--Commercial UHF Television Stations

    25. This category includes holders of permits to construct new UHF 
Television Stations. For FY 1998, UHF Television permittees will pay an 
annual regulatory fee of $2,650. Upon issuance of an operating license, 
this fee would no longer be applicable. Instead, licensees would pay a 
fee based upon the designated market of the station.


[[Page 35878]]


h. Construction Permits--Satellite Television Stations

    26. The fee for UHF and VHF Television Satellite Station 
construction permits for FY 1998 is $420. An individual regulatory fee 
payment is to be made for each Television Satellite Station 
construction permit held.

i. Low Power Television, FM Translator and Booster Stations, TV 
Translator and Booster Stations

    27. This category includes Low Power UHF/VHF Television stations 
operating under part 74 of the Commission's rules with a transmitter 
power output limited to 1 kW for a UHF facility and, generally, 0.01 kW 
for a VHF facility. Low Power Television (LPTV) stations may retransmit 
the programs and signals of a TV Broadcast Station, originate 
programming, and/or operate as a subscription service. This category 
also includes translators and boosters operating under part 74 which 
rebroadcast the signals of full service stations on a frequency 
different from the parent station (translators) or on the same 
frequency (boosters). The stations in this category are secondary to 
full service stations in terms of frequency priority. We have also 
received requests for waivers of the regulatory fees from operators of 
community based Translators. These Translators are generally not 
affiliated with commercial broadcasters, are nonprofit, nonprofitable, 
or only marginally profitable, serve small rural communities, and are 
supported financially by the residents of the communities served. We 
are aware of the difficulties these Translators have in paying even 
minimal regulatory fees, and we have addressed those concerns in the 
ruling on reconsideration of the FY 1994 Report and Order. Community 
based Translators are exempt from regulatory fees. For FY 19978 
licensees in low power television, FM translator and booster, and TV 
translator and booster category will pay a regulatory fee of $265 for 
each license held.

j. Broadcast Auxiliary Stations

    28. This category includes licensees of remote pickup stations 
(either base or mobile) and associated accessory equipment authorized 
pursuant to a single license, Aural Broadcast Auxiliary Stations 
(Studio Transmitter Link and Inter-City Relay) and Television Broadcast 
Auxiliary Stations (TV Pickup, TV Studio Transmitter Link, TV Relay) 
authorized under part 74 of the Commission's rules. Auxiliary Stations 
are generally associated with a particular television or radio 
broadcast station or cable television system. This category does not 
include translators and boosters (see paragraph 26 infra). For FY 1998, 
licensees of Commercial Auxiliary Stations will pay an $11 annual 
regulatory fee on a per call sign basis.

k. Multipoint Distribution Service

    29. This category includes Multipoint Distribution Service (MDS), 
and Multichannel Multipoint Distribution Service (MMDS), authorized 
under part 21 of the Commission's rules to use microwave frequencies 
for video and data distribution within the United States. For FY 1998, 
MDS and MMDS stations will pay an annual regulatory fee of $260 per 
call sign.

3. Cable Services

a. Cable Television Systems

    30. This category includes operators of Cable Television Systems, 
providing or distributing programming or other services to subscribers 
under part 76 of the Commission's rules. For FY 1998, Cable Systems 
will pay a regulatory fee of $.44 per subscriber.\146\ Payments for 
Cable Systems are to be made on a per subscriber basis as of December 
31, 1997. Cable Systems should determine their subscriber numbers by 
calculating the number of single family dwellings, the number of 
individual households in multiple dwelling units, e.g., apartments, 
condominiums, mobile home parks, etc., paying at the basic subscriber 
rate, the number of bulk rate customers and the number of courtesy or 
fee customers. In order to determine the number of bulk rate 
subscribers, a system should divide its bulk rate charge by the annual 
subscription rate for individual households. See FY 1994 Report and 
Order, Appendix B at paragraph 31.

    \146\ Cable systems are to pay their regulatory fees on a per 
subscriber basis rather than per 1,000 subscribers as set forth in 
the statutory fee schedule. See FY 1994 Report and Order at 
paragraph 100.

---------------------------------------------------------------------------
b. Cable Antenna Relay Service

    31. This category includes Cable Antenna Relay Service (CARS) 
stations used to transmit television and related audio signals, signals 
of AM and FM Broadcast Stations, and cablecasting from the point of 
reception to a terminal point from where the signals are distributed to 
the public by a Cable Television System. For FY 1998, licensees will 
pay an annual regulatory fee of $50 per CARS license.

4. Common Carrier Services

a. Commercial Microwave (Domestic Public Fixed Radio Service)

    32. This category includes licensees in the Point-to-Point 
Microwave Radio Service, Local Television Transmission Radio Service, 
and Digital Electronic Message Service, authorized under part 101 of 
the Commission's rules to use microwave frequencies for video and data 
distribution within the United States. These services are now included 
in the Microwave category (see paragraph 5 infra).

b. Interstate Telephone Service Providers

    33. This category includes Inter-Exchange Carriers (IXCs), Local 
Exchange Carriers (LECs), Competitive Access Providers (CAPs), domestic 
and international carriers that provide operator services, Wide Area 
Telephone Service (WATS), 800, 900, telex, telegraph, video, other 
switched, interstate access, special access, and alternative access 
services either by using their own facilities or by reselling 
facilities and services of other carriers or telephone carrier holding 
companies, and companies other than traditional local telephone 
companies that provide interstate access services to long distance 
carriers and other customers. This category also includes pre-paid 
calling card providers. These common carriers, including resellers, 
must submit fee payments based upon their proportionate share of gross 
interstate revenues using the methodology that we have adopted for 
calculating contributions to the TRS fund. See Telecommunications Relay 
Services, 8 FCC Rcd 5300 (1993), 58 FR 39671 (July 26, 1993). In order 
to avoid imposing any double payment burden on resellers, we will 
permit carriers to subtract from their gross interstate revenues, as 
reported to NECA in connection with their TRS contribution, any 
payments made to underlying common carriers for telecommunications 
facilities and services, including payments for interstate access 
service, that are sold in the form of interstate service. For this 
purpose, resold telecommunications facilities and services are only 
intended to include payments that correspond to revenues that will be 
included by another carrier reporting interstate revenue. For FY 1998, 
carriers must multiply their adjusted gross revenue figure (gross 
revenue reduced by the total amount of their payments to underlying 
common carriers for telecommunications facilities or

[[Page 35879]]

services) by the factor 0.0011 to determine the appropriate fee for 
this category of service. Regulatees may want to use the following 
worksheet to determine their fee payment:

------------------------------------------------------------------------
                                                   Total      Interstate
------------------------------------------------------------------------
                                                                        
(1) Revenue reported in TRS Fund worksheets...  ...........  ...........
                                                                        
(2) Less: Access charges paid.................  ...........  ...........
                                                                        
(3) Less: Other telecommunications facilities                           
 and services taken for resale................  ...........  ...........
                                                                        
(4) Adjusted revenues (1)minus(2)minus(3).....  ...........  ...........
                                                                        
(5) Fee factor................................  ...........       0.0011
                                                                        
(6) Fee due (4)times(5).......................  ...........  ...........
------------------------------------------------------------------------


5. International Services

a. Earth Stations

    34. Very Small Aperture Terminal (VSAT) Earth Stations, equivalent 
C-Band Earth Stations and antennas, and earth station systems comprised 
of very small aperture terminals operate in the 12 and 14 GHz bands and 
provide a variety of communications services to other stations in the 
network. VSAT systems consist of a network of technically-identical 
small Fixed-Satellite Earth Stations which often include a larger hub 
station. VSAT Earth Stations and C-Band Equivalent Earth Stations are 
authorized pursuant to part 25 of the Commission's rules. Mobile 
Satellite Earth Stations, operating pursuant to part 25 of the 
Commission's rules under blanket licenses for mobile antennas 
(transceivers), are smaller than one meter and provide voice or data 
communications, including position location information for mobile 
platforms such as cars, buses, or trucks.\147\ Fixed-Satellite 
Transmit/Receive and Transmit-Only Earth Station antennas, authorized 
or registered under part 25 of the Commission's rules, are operated by 
private and public carriers to provide telephone, television, data, and 
other forms of communications. Included in this category are telemetry, 
tracking and control (TT&C) earth stations, and earth station uplinks. 
For FY 1998, licensees of VSATs, Mobile Satellite Earth Stations, and 
Fixed-Satellite Transmit/Receive and Transmit-Only Earth Stations will 
pay a fee of $165 per authorization or registration as well as a 
separate fee of $165 for each associated Hub Station.

    \147\ Mobile earth stations are hand-held or vehicle-based units 
capable of operation while the operator or vehicle is in motion. In 
contrasts, transportable units are moved to a fixed location and 
operate in a stationary (fixed) mode. Both are assessed the same 
regulatory fee for FY 1997.

    35. Receive-only earth stations. For FY 1998, there is no 
---------------------------------------------------------------------------
regulatory fee for receive-only earth stations.

b. Space Stations (Geostationary)

    36. Geostationary Space Stations are domestic and international 
satellites positioned in orbit to remain approximately fixed relative 
to the earth. Most are authorized under part 25 of the Commission's 
rules to provide communications between satellites and earth stations 
on a common carrier and/or private carrier basis. In addition, this 
category includes Direct Broadcast Satellite (DBS) Service which 
includes space stations authorized under part 100 of the Commission's 
rules to transmit or re-transmit signals for direct reception by the 
general public encompassing both individual and community reception. 
For FY 1998, entities authorized to operate geostationary space 
stations (including DBS satellites) will be assessed an annual 
regulatory fee of $97,975 per operational station in orbit. Payment is 
required for any geostationary satellite that has been launched and 
tested and is authorized to provide service.

c. Space Stations (Non-Geostationary)

    37. Non-geostationary Orbit (NGSO) Systems (such as Low Earth Orbit 
Satellite Systems) are space stations that orbit the earth in non-
geostationary orbit. They are authorized under part 25 of the 
Commission's rules to provide communications between satellites and 
earth stations on a common carrier and/or private carrier basis. For FY 
1998, entities authorized to operate NGSOs will be assessed an annual 
regulatory fee of $164,800 per operational system in orbit. Payment is 
required for any NGSO System that has one or more satellites 
operational. In our FY 1997 Report and Order at paragraph 75 we 
retained our requirement that licensees of LEOs pay the LEO regulatory 
fee upon certification of operation of a single satellite pursuant to 
section 25.120(d) subsequently renumbered as Sec. 25.121(d). We require 
payment of this fee following commencement of operations of a system's 
first satellite to insure that we recover our regulatory costs related 
to LEO systems from licensees of these systems as early as possible so 
that other regulatees are not burdened with these costs any longer than 
necessary. Because Sec. 25.121(d) has significant implications beyond 
regulatory fees (such as whether the entire planned cluster is 
operational in conditions of the license) we are clarifying our current 
definition of an operational LEO satellite to prevent misinterpretation 
of our intent as follows:

    Licensees of non-geostationary satellite systems (such as LEOs) are 
assessed a regulatory fee upon the commencment of operation of a 
system's first satellite as reported annually pursuant to 
Secs. 25.142(c), 25.143(e), 25.145(g), or upon certification of 
operation of a single satellite pursuant to Sec. 25.120(d).

d. International Bearer Circuits

    38. Regulatory fees for International Bearer Circuits are to be 
paid by facilities-based common carriers (either domestic or 
international) activating the circuit in any transmission facility for 
the provision of service to an end user or resale carrier. Payment of 
the fee for bearer circuits by non-common carrier submarine cable 
operators is required for circuits sold on an indefeasible right of use 
(IRU) basis 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. 
Compare FY 1994 Report and Order at 5367. Payment of the international 
bearer circuit fee is also required by non-common carrier satellite 
operators for circuits 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. The fee is based upon active 64 Kbps circuits, 
or equivalent circuits. Under this formulation, 64 Kbps circuits or 
their equivalent will be assessed a fee. Equivalent circuits include 
the 64 Kbps

[[Page 35880]]

circuit equivalent of larger bit stream circuits. For example, the 64 
Kbps circuit equivalent of a 2.048 Mbps circuit is 30 64 Kbps circuits. 
Analog circuits such as 3 and 4 KHz circuits used for international 
service are also included as 64 Kbps circuits. However, circuits 
derived from 64 Kbps circuits by the use of digital circuit 
multiplication systems are not equivalent 64 Kbps circuits. Such 
circuits are not subject to fees. Only the 64 Kbps circuit from which 
they have been derived will be subject to payment of a fee. For FY 
1998, the regulatory fee is $6.00 for each active 64 Kbps circuit or 
equivalent. For analog television channels we will assess fees as 
follows:

------------------------------------------------------------------------
                                                                No. of  
                                                              equivalent
           Analog television channel size in MHz               64 Kbps  
                                                               circuits 
------------------------------------------------------------------------
                                                                        
36.........................................................          630
                                                                        
24.........................................................          288
                                                                        
18.........................................................          240
------------------------------------------------------------------------


e. International Public Fixed

    39. This fee category includes common carriers authorized under 
part 23 of the Commission's rules to provide radio communications 
between the United States and a foreign point via microwave or HF 
troposcatter systems, other than satellites and satellite earth 
stations, but not including service between the United States and 
Mexico and the United States and Canada using frequencies above 72 MHz. 
For FY 1998, International Public Fixed Radio Service licensees will 
pay a $375 annual regulatory fee per call sign.

f. International (HF) Broadcast

    40. This category covers International Broadcast Stations licensed 
under part 73 of the Commission's rules to operate on frequencies in 
the 5,950 KHz to 26,100 KHz range to provide service to the general 
public in foreign countries. For FY 1998, International HF Broadcast 
Stations will pay an annual regulatory fee of $475 per station license.

Attachment I--Description of FCC Activities

I. Activities That Are Not Included in Regulatory Fees

1. Authorization of Service

    The authorization or licensing of radio stations, 
telecommunications equipment, and radio operators, as well as the 
authorization of common carrier and other services and facilities. 
Includes policy direction, program development, legal services, and 
executive direction, as well as support services associated with 
authorization activities. Although Authorization of Service is 
described in this attachment, it is not one of the activities included 
as a feeable activity for regulatory fee purposes pursuant to section 
9(a)(1) of the Act. 47 U.S.C. 159(a)(1).

II. Activities That are Included in Regulatory Fees

2. Policy and Rulemaking

    Formal inquiries, rulemaking proceedings to establish or amend the 
Commission's rules and regulations, action on petitions for rulemaking, 
and requests for rule interpretations or waivers; economic studies and 
analyses; spectrum planning, modeling, propagation-interference 
analyses, and allocation; and development of equipment standards. 
Includes policy direction, program development, legal services, and 
executive direction, as well as support services associated with policy 
and rulemaking activities.

3. Enforcement

    Enforcement of the Commission's rules, regulations and 
authorizations, including investigations, inspections, compliance 
monitoring, and sanctions of all types. Also includes the receipt and 
disposition of formal and informal complaints regarding common carrier 
rates and services, the review and acceptance/rejection of carrier 
tariffs, and the review, prescription and audit of carrier accounting 
practices. Includes policy direction, program development, legal 
services, and executive direction, as well as support services 
associated with enforcement activities.

4. Public Information Services

    The publication and dissemination of Commission decisions and 
actions, and related activities; public reference and library services; 
the duplication and dissemination of Commission records and databases; 
the receipt and disposition of public inquiries; consumer, small 
business, and public assistance; and public affairs and media 
relations. Includes policy direction, program development, legal 
services, and executive direction, as well as support services 
associated with public information activities.

Attachment J--Factors, Measurements and Calculations That Go Into 
Determining Station Signal Contours and Associated Population 
Coverages

AM Stations

    Specific information on each day tower, including field ratio, 
phasing, spacing and orientation was retrieved, as well as the 
theoretical pattern RMS figure (mV/m @ 1 km) for the antenna system. 
The standard, or modified standard if pertinent, horizontal plane 
radiation pattern was calculated using techniques and methods specified 
in Sec. 73.150 and 73.152 of the Commission's rules. See 47 U.S.C. 
73.150 and 73.152. Radiation values were calculated for each of 72 
radials around the transmitter site (every 5 degrees of azimuth). Next, 
estimated soil conductivity data was retrieved from a database 
representing the information in FCC Figure M3. Using the calculated 
horizontal radiation values, and the retrieved soil conductivity data, 
the distance to the city grade (5 mV/m) contour was predicted for each 
of the 72 radials. The resulting distance to city grade contours were 
used to form a geographical polygon. Population counting was 
accomplished by determining which 1990 block centroids were contained 
in the polygon. The sum of the population figures for all enclosed 
blocks represents the total population for the predicted city grade 
coverage area.

FM Stations

    The maximum of the horizontal and vertical HAAT (m) and ERP (kW) 
was used. Where the antenna HAMSL was available, it was used in lieu of 
the overall HAAT figure to calculate specific HAAT figures for each of 
72 radials under study. Any available directional pattern information 
was applied as well, to produce a radial-specific ERP figure. The HAAT 
and ERP figures were used in conjunction with the propagation curves 
specified in Sec. 73.313 of the Commission's rules to predict the 
distance to the city grade (70 dBuV/m or 3.17 mV/m) contour for each of 
the 72 radials. See 47 U.S.C. 73.313. The resulting distance to city 
grade contours were used to form a geographical polygon. Population 
counting was accomplished by determining which 1990 block centroids 
were contained in the polygon. The sum of the population figures for 
all enclosed blocks represents the total population for the predicted 
city grade coverage area.

Attachment K--Parties Filing Comments and Reply Comments

Parties Filing Comments on the Notice of Proposed Rule Making

Named State Broadcasters Associations

National Association of Broadcasters

SBC Communications, Inc.

Columbia Communications Corp.

GE American Communications, Inc.


[[Page 35881]]


Loral Space & Communications Ltd.

Orbital Communications Corp.

PanAmSat Corp.

Satellite Industry Association

BellSouth Wireless Data

Paging Network, Inc.

Personal Communications Industry Association

Small business In Telecommunications

American Radio Relay League

Parties Filing Reply Comments on the Notice of Proposed Rule Making

GE American Communications, Inc.

PanAmSat Corp.

BellSouth Cellular Corp. & Wireless Data, L.P.

Paging Network, Inc.

PrimeCo Personal Communications

American Mobile Telecommunications Association, Inc.

Comcast Cellular Communications, Inc.

Attachment L--AM and FM Radio Regulatory Fees

(List will be filed in the Docket file for this proceeding to avoid 
publication costs.)


[FR Doc. 98-17222 Filed 6-30-98; 8:45 am]

BILLING CODE 6712-01-P