[Federal Register Volume 79, Number 207 (Monday, October 27, 2014)]
[Proposed Rules]
[Pages 63883-63889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24939]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket Nos. 12-201; 13-140; 14-92; FCC 14-129]


Assessment and Collection of Regulatory Fees for Fiscal Year 
2014; Assessment and Collection of Regulatory Fees for Fiscal Year 
2013; and Procedures for Assessment and Collection of Regulatory Fees

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks comment on two regulatory fee issues. First, the 
Commission seeks comment on methods to ensure and encourage compliance 
with a new toll free regulatory fee requirement, and the appropriate 
procedures necessary to enforce non-payment of toll free regulatory 
fees. And second, the Commission seeks comment on a proposal to adopt a 
new direct broadcast satellite (DBS) regulatory fee category based on 
Media Bureau FTEs (Full-Time Equivalents) who perform work related to 
DBS regulatees.

DATES: Submit comments on November 26, 2014, and reply comments on 
December 26, 2014.

ADDRESSES: You may submit comments, identified by MD Docket No. 14-92, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs. Follow the instructions for submitting comments.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: <a href="/cdn-cgi/l/email-protection#feb8bdbdcbcecabe989d9dd0999188"><span class="__cf_email__" data-cfemail="783e3b3b4d484c381e1b1b561f170e">[email protected]</span></a>

[[Page 63884]]

or phone: 202-418-0530 or TTY: 202-418-0432.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#6306000510230500004d040c15"><span class="__cf_email__" data-cfemail="781d1b1e0b381e1b1b561f170e">[email protected]</span></a>. Include MD Docket No. 14-92 in the 
subject line of the message.
    <bullet> Mail: Commercial overnight mail (other than U.S. Postal 
Service Express Mail, and Priority Mail, must be sent to 9300 East 
Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-
class, Express, and Priority mail should be addressed to 445 12th 
Street SW., Washington DC 20554.

For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Roland Helvajian, Office of Managing 
Director at (202) 418-0444.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking, FCC 14-129, MD Docket No. 14-92, 
MD Docket No. 13-140, and MD Docket No. 12-201, adopted on August 29, 
2014 and released on August 29, 2014. The full text of this document is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, 445 12th Street SW., Room CY-A257, Portals 
II, Washington, DC 20554, and may also be purchased from the 
Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street, 
SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, 
Inc. via their Web site, http://www.bcpi.com, or call 1-800-378-3160. 
This document is available in alternative formats (computer diskette, 
large print, audio record, and braille). Persons with disabilities who 
need documents in these formats may contact the FCC by email: 
<a href="/cdn-cgi/l/email-protection#f6b0b5b5c3c6c2b6909595d8919980"><span class="__cf_email__" data-cfemail="3d7b7e7e080d097d5b5e5e135a524b">[email protected]</span></a> or phone: 202-418-0530 or TTY: 202-418-0432.

I. Procedural Matters

Ex Parte Rules Permit-But-Disclose Proceeding

    1. The Further Notice of Proposed Rulemaking shall be treated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. Persons making ex parte presentations must file a copy 
of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and summarize all data presented and arguments 
made during the presentation. If the presentation consisted in whole or 
in part of the presentation of data or arguments already reflected in 
the presenter's written comments, memoranda, or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with section 1.1206(b). In proceedings governed by 
section 1.49(f) or for which the Commission has made available a method 
of electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

Comment Filing Procedures

    2. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using: (1) The 
Commission's Electronic Comment Filing System (ECFS), (2) the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(1998).
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: http://www.regulations.gov.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes must be disposed of before 
entering the building.
    [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street, SW., Washington DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="75131616404541351316165b121a03">[email protected]</a> or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    3. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 
20554. These documents will also be available free online, via ECFS. 
Documents will be available electronically in ASCII, Word, and/or Adobe 
Acrobat.
    4. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="99fffafaaca9add9fffafab7fef6ef">[email protected]</a> or call the Commission's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY). This document can also be downloaded in Word and 
Portable Document Format (``PDF'') at: http://www.fcc.gov.

Initial Paperwork Reduction Act

    5. This Further Notice of Proposed Rulemaking document solicits 
possible proposed information collection requirements. The Commission, 
as part of its continuing effort to reduce paperwork burdens, invites 
the general public and the Office of Management and Budget (OMB) to 
comment on the possible proposed information collection requirements 
contained in this document, as required by the Paperwork Reduction Act 
of 1995,

[[Page 63885]]

Public Law 104-13. In addition, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4), the Commission seeks specific comment on how it can further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.

Initial Regulatory Flexibility Analysis

    6. An initial regulatory flexibility analysis (``IRFA'') is 
contained in section III. Comments to the IRFA must be identified as 
responses to the IRFA and filed by the deadlines for comments on this 
Notice of Proposed Rulemaking (NPRM). The Commission will send a copy 
of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration.

II. Introduction

    7. In this Further Notice of Proposed Rulemaking, the Commission 
seeks comment on two regulatory fee issues: (1) Methods to ensure and 
encourage compliance with a new toll free regulatory fee requirement, 
and the appropriate procedures necessary to enforce non-payment of toll 
free regulatory fees, and (2) a proposal to adopt a new direct 
broadcast satellite (DBS) regulatory fee category based on Media Bureau 
FTEs who perform work related to DBS regulatees.

A. Toll Free Numbers

    8. In the FY 2014 Report and Order, the Commission adopted a 
regulatory fee category for toll free numbers.\1\ The Commission agreed 
with the commenters \2\ that additional development in the record is 
needed regarding the appropriate procedures for enforcement for non-
payment such as revocation of numbers or decertifying a RespOrg.
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    \1\ 79 FR 54190 (September 11, 2014) at paras. 28-31.
    \2\ AT&T Comments at 5; US Telecom Reply Comments at 5; 
Bandwidth Reply Comments at 1.
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    9. Therefore, the Commission seeks comment on what procedures we 
may use to enforce a RespOrg's obligation to pay any regulatory fees 
assessed on toll free numbers. For instance, section 9(c)(3) of the Act 
states that in lieu of penalties and dismissals, ``the Commission may 
revoke any instrument of authorization held by an entity that has 
failed to make payment of a regulatory fee assessed pursuant to the 
section.'' \3\ The Commission seeks comment on whether section 9(c)(3) 
of the Act permits the Commission to classify toll free numbers as 
``instruments of authorizations,'' thereby allowing reclamation of 
those numbers if regulatory fees are not paid. The Commission also 
invites input on whether it may decertify (or direct SMS/800 to 
decertify) a RespOrg in instances of delinquent regulatory fee 
payments. Does the Commission have authority under section 9(c) to 
revoke a certification granted by a third party, such as the SMS/800 
Database Administrator? If so, would this certification be an 
``instrument of authorization'' under section 9(c) of the Act that 
could be revoked if the RespOrg failed to pay regulatory fees? For 
instance, we might treat an SMS/800, Inc. certification as sufficient 
(though perhaps not necessary) evidence that an entity is entitled to 
an FCC authorization to operate as a RespOrg. Then, in the event of 
non-payment of regulatory fees, the Commission might revoke the FCC-
issued authorization needed for the entity to serve as a RespOrg. The 
Commission seeks comment on this and any other possible approaches. In 
addition, the Commission also seeks comment on whether there are other 
statutory approaches for revoking such certification in the event of 
nonpayment. And finally, the Commission seeks comment on whether a 
RespOrg's application, either for certification by SMS/800, Inc. or to 
receive toll free numbers filed with SMS/800 Inc., can be delayed or 
denied, thus preventing either temporary or permanent access to the 
toll free database to reserve toll free numbers if regulatory fees are 
delinquent.\4\ If not, should the Commission require that a separate 
application be submitted for the use of toll free numbers and payment 
of regulatory fees?
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    \3\ 47 U.S.C. 159(c)(3). The Commission notes that under section 
9(c)(1) it has authority to issue penalties for late payment.
    \4\ Currently the SMS/800, Inc. tariff has a process in place to 
suspend or discontinue service to a RespOrg for nonpayment of SMS/
800 fees. See 800 Service Management System (SMS) Functions Tariff, 
FCC Tariff No. 1 at section 2.1.8, available at http://www.sms800.com/Controls/NAC/Tariff.aspx#.
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B. Direct Broadcast Satellites (DBS)

    10. In this Further NPRM, the Commission proposes to adopt a new 
fee category for DBS, based on the Media Bureau FTEs that perform work 
related to these regulatees. DBS providers are multichannel video 
programming distributors (MVPDs), pursuant to section 602(13) of the 
Act.\5\ These operators of U.S.-licensed geostationary space stations 
used to provide one-way subscription television service to consumers in 
the United States pay a regulatory fee under the category ``Space 
Station (Geostationary Orbit)'' in the regulatory fee schedule. DBS 
providers are also similar to cable operators and IPTV providers 
because DBS providers offer multi-channel video programming to end-
users. Despite this similarity, DBS providers do not pay the per-
subscriber regulatory fee assessed on cable operators and IPTV 
providers based on Media Bureau FTE regulation.
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    \5\ 47 U.S.C. 522(13).
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    11. In the FY 2014 NPRM, the Commission sought comment on ``whether 
regulatory fees paid by DBS providers should be included in the cable 
television and IPTV category and assessed in the same manner as cable 
television system operators.'' \6\ It noted that DBS providers 
currently pay less than nine percent of the regulatory fees they would 
be assessed if the Commission were to combine these categories 
($2,052,450 vs. $23,120,000) and required DBS to pay the same rate as 
cable television and IPTV.\7\ Various commenters have supported this 
proposal \8\ arguing that assessing regulatory fees on DBS providers is 
warranted because Media Bureau FTEs provide similar regulatory work to 
both cable operators and DBS providers.\9\ For example, DBS providers 
and cable operators are permitted to file program access complaints 
\10\ and complaints seeking relief under the retransmission consent 
good faith rules; \11\ and DBS providers are also required to comply 
with Media Bureau oversight and regulation such as Commercial 
Advertisement Loudness Mitigation Act (CALM Act),\12\ the Twenty-First 
Century Video Accessibility Act (CVAA),\13\ as well as the closed 
captioning and video description rules.\14\ ACA argues that because DBS 
providers do not pay fees to cover the Media Bureau FTE expenses, the 
Media Bureau costs are

[[Page 63886]]

shifted entirely to the entities that do pay regulatory fees based on 
Media Bureau FTEs.\15\ DBS providers have opposed this proposal; 
arguing that they are not cable television operators and they are not 
subject to all of the regulations historically imposed on the cable 
industry by the Media Bureau; instead, their business model is based on 
satellite technology and is subject to satellite licensing rules 
through the International Bureau.\16\
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    \6\ FY 2014 NPRM, 79 FR 37982 at 37985 at para. 18 (July 3, 
2014). The Commission sought comment on this issue in previous 
NPRMs. See, e.g., FY 2013 NPRM, 78 FR 34612 at 34625 at para. 43 
(June 10, 2013); FY 2008 FNPRM, 73 FR 50285 at 50290-50291, paras. 
24-25 (August 26, 2008).
    \7\ FY 2014 NPRM, 79 FR 37982 at 37991, Table 4.
    \8\ See, e.g., ACA Comments at 3-9; ITTA Comments at 11-12; NCTA 
Comments at 3-6; NCTA & ACA Reply Comments at 3-11 (``basic 
principles of fairness and technological neutrality require the 
Commission to assess [DBS] service providers regulatory fees as part 
of a . . . fee category that also includes cable operators and IPTV 
services.'').
    \9\ See FY 2014 NPRM, 79 FR 37982 at 37990, para. 48.
    \10\ 47 U.S.C. 548; 47 CFR 76.1000-1004.
    \11\ 47 U.S.C. sections 325(b)(1), (3)(C)(ii); 47 CFR 76.65(b).
    \12\ See Implementation of the Commercial Advertisement, 
Loudness Mitigation (CALM) Act, Report and Order, 26 FCC Rcd 17222 
(2011).
    \13\ 47 U.S.C. 618(b).
    \14\ 47 CFR Part 79.
    \15\ ACA Comments at 6.
    \16\ See DIRECTV and DISH Comments at 13-18.
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    12. The Commission recognizes that DBS providers are not subject to 
all of the regulations and requirements imposed on the cable 
industry.\17\ However, as discussed above, there are certain rules that 
both DBS providers and cable operators are subject to, and Media Bureau 
FTEs provide the oversight and regulation of the DBS industry in these 
areas.\18\ Last year, the Commission adopted a new category of 
regulatory fees for IPTV providers and cable television operators 
reasoning that ``assessing regulatory fees on cable television systems, 
but not on IPTV . . . may place cable providers at a competitive 
disadvantage,'' \19\ and noting that there is a ``relatively small 
difference from a regulatory perspective'' between IPTV providers and 
cable operators.\20\ This Media Bureau FTE involvement and the benefits 
received by DBS may support adoption of a new fee category. Therefore, 
the Commission believes that it may be appropriate under section 9 of 
the Act to recover the costs associated with Media Bureau FTE work.\21\ 
Accordingly, the Commission proposes to adopt a new fee category to 
recover the costs incurred by the Media Bureau due to the DBS industry. 
Alternatively, should Media Bureau FTEs working on DBS issues be 
assigned to the International Bureau or as indirect FTEs for regulatory 
fee purposes? The Commission invites comment on the legal and policy 
implications of such a proposal.
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    \17\ See, e.g., DIRECTV and DISH Comments at 13-17; SIA Comments 
at 7.
    \18\ See, e.g., 47 CFR 76.65(b); 76.1000-1004; Part 79; see also 
Implementation of Commercial Advertisement, Loudness Mitigation 
(CALM) Act, Report and Order, 26 FCC Rcd 17222 (2011); 47 U.S.C. 
618(b).
    \19\ FY 2013 Report and Order, 78 FR 52433 at 52443-52444, para. 
35 (August 23, 2013).
    \20\ Id., 78 FR 52433 at 52443, para. 35, footnote 81 (August 
23, 2013).
    \21\ 47 U.S.C. 159(a)(1).
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    13. Unlike cable television/IPTV, DBS providers already pay 
regulatory fees based on the oversight of their industry by 
International Bureau FTEs and do not pay any Media Bureau FTE fees. As 
a result, the Commission seeks comment on whether DBS providers should 
pay a regulatory fee under this category at a much lower rate than that 
for other MVPDs, such as one-tenth of the anticipated revenue if DBS 
were combined with MVPD, to recognize the International Bureau FTE fees 
DBS providers will continue to pay as well as the Media Bureau FTEs 
related to DBS regulation. The Commission estimates that this amount 
would be approximately $2.1 million.\22\ We invite comment on the 
appropriateness of this amount, or whether it should be higher or 
lower. In assessing this proposal, the Commission also intends to 
factor in any resulting ``rate shock'' on DBS providers, the financial 
impact of such a fee on economic wellbeing of the DBS industry and the 
customers it serves, and the appropriateness of phasing in any 
permanent adjustments to our rate structure for DBS. This regulatory 
fee category, if adopted, would apply to all operators of U.S.-licensed 
geostationary space stations used to provide one-way subscription 
television service to consumers in the United States. The Commission 
seeks comment on whether assessing this fee on the space station 
operator is an efficient assessment mechanism or if there are 
alternative mechanisms for assessing a fee on providers of one-way 
subscription television service to consumers in the United States.
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    \22\ See Table 4 in the FY 2014 NPRM, 79 FR 37982 at 37991, 
Table 4. If adopted, the regulatory fee rate will be proposed in the 
annual notice of proposed rulemaking seeking comment on regulatory 
fees for the upcoming fiscal year.
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    14. Commenters should discuss whether the payment obligations of 
this new category should increase over time to a larger percentage of 
the cable television/IPTV rate or if this fee category should be 
transitioned to a MVPD category together with cable television and 
IPTV. The Commission invites comment on the appropriateness of 
eventually adopting a new regulatory fee category that includes DBS, 
cable operators, and IPTV, all assessed using the same methodology and 
at the same rate. In doing so, the Commission asks for legal and policy 
implications of such a combination. The Commission also seeks comment 
on the time period the DBS providers should have in transitioning into 
such a fee category, and in what manner, or if they should continue to 
remain at a lower rate than cable operators and IPTV.
    15. If DBS providers are assessed a more significant fee rate 
(comparable or the same as cable operators and IPTV), commenters should 
discuss whether they should have an offset or credit for all or a 
portion of the regulatory fees that they pay based on the International 
Bureau FTEs.

III. Initial Regulatory Flexibility Analysis

    16. As required by the Regulatory Flexibility Act (RFA),\23\ the 
Commission prepared this Initial Regulatory Flexibility Analysis (IRFA) 
of the possible significant economic impact on small entities by the 
policies and rules proposed in the Further Notice of Proposed 
Rulemaking (FNPRM). Written comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadline for comments on this FNPRM. The Commission will send a 
copy of the FNPRM, including the IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA).\24\ In addition, 
the FNPRM and IRFA (or summaries thereof) will be published in the 
Federal Register.\25\
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    \23\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
    \24\ 5 U.S.C. 603(a).
    \25\ Id.
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A. Need for, and Objectives of, the FNPRM

    17. The FNPRM seeks comment regarding the adoption and 
implementation of creating a new DBS fee category per section 9(b)(3), 
and how a Responsible Organization (RespOrgs) can be held to their 
regulatory fee obligation for lack of payment. With respect to 
establishing a new DBS fee category, the Commission has determined that 
DBS providers do not qualify as small business entities. With respect 
to RespOrgs, the Commission has discovered that while it provides 
oversight for RespOrgs in various numbering plans, it does not assess a 
regulatory fee for the resources that it expends. Consequently, the 
Commission has decided to assess a fee on this group of regulatees to 
ensure equitable access to toll free numbers and to minimize the chance 
that these toll free numbers are not unjustly controlled. In addition 
to holding RespOrgs responsible for payment of regulatory fees, the 
Commission also seeks comment on the extent to which it can revoke an 
instrument of authorization for failure to pay regulatory fees section 
9(c)(3). We invite comment on this topic to better inform the 
Commission concerning whether and/or how this service should be 
assessed under our regulatory fee methodology in future years.

[[Page 63887]]

B. Legal Basis

    18. This action, including publication of proposed rules, is 
authorized under Sections (4)(i) and (j), 9, and 303(r) of the 
Communications Act of 1934, as amended.\26\
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    \26\ 47 U.S.C. 154(i) and (j), 159, and 303(r).
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C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    19. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted.\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 SBA.\30\
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    \27\ 5 U.S.C. 603(b)(3).
    \28\ 5 U.S.C. 601(6).
    \29\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \30\ 15 U.S.C. 632.
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    20. Small Businesses. Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.\31\
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    \31\ See SBA, Office of Advocacy, ``Frequently Asked 
Questions,'' http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf.
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    21. Wired Telecommunications Carriers. The SBA has developed a 
small business size standard for Wired Telecommunications Carriers, 
which consists of all such companies having 1,500 or fewer employees. 
Census data for 2007 shows that there were 31,996 establishments that 
operated that year. Of this total, 1,818 operated with more than 100 
employees, and 30,178 operated with fewer than 100 employees.\32\ Thus, 
under this size standard, the majority of firms can be considered 
small.
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    \32\ See id.
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    22. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees.\33\ According to Commission data, census data for 2007 
shows that there were 31,996 establishments that operated that year. Of 
this total, 1,818 operated with more than 100 employees, and 30,178 
operated with fewer than 100 employees.\34\ The Commission estimates 
that most providers of local exchange service are small entities that 
may be affected by the rules and policies proposed in the FNPRM.
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    \33\ 13 CFR 121.201, NAICS code 517110.
    \34\ See id.
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    23. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\35\ According to Commission data, 1,307 carriers reported 
that they were incumbent local exchange service providers.\36\ Of this 
total, an estimated 1,006 have 1,500 or fewer employees and 301 have 
more than 1,500 employees.\37\ Consequently, the Commission estimates 
that most providers of incumbent local exchange service are small 
businesses that may be affected by the rules and policies proposed in 
the FNPRM.
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    \35\ 13 CFR 121.201, NAICS code 517110.
    \36\ See Trends in Telephone Service, Federal Communications 
Commission, Wireline Competition Bureau, Industry Analysis and 
Technology Division at Table 5.3 (September 2010) (Trends in 
Telephone Service).
    \37\ Id.
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    24. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate size standard under SBA rules is for 
the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\38\ According to Commission data, 1,442 carriers reported 
that they were engaged in the provision of either competitive local 
exchange services or competitive access provider services.\39\ Of these 
1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 
186 have more than 1,500 employees.\40\ In addition, 17 carriers have 
reported that they are Shared-Tenant Service Providers, and all 17 are 
estimated to have 1,500 or fewer employees.\41\ In addition, 72 
carriers have reported that they are Other Local Service Providers.\42\ 
Of this total, 70 have 1,500 or fewer employees and two have more than 
1,500 employees.\43\ Consequently, the Commission estimates that most 
providers of competitive local exchange service, competitive access 
providers, Shared-Tenant Service Providers, and Other Local Service 
Providers are small entities that may be affected by rules adopted 
pursuant to the proposals in this FNPRM.
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    \38\ 13 CFR 121.201, NAICS code 517110.
    \39\ See Trends in Telephone Service, at Table. 5.3.
    \40\ Id.
    \41\ Id.
    \42\ Id.
    \43\ Id.
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    25. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically 
applicable to interexchange services. The applicable size standard 
under SBA rules is for the Wired Telecommunications Carriers. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees.\44\ According to Commission data, 359 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services.\45\ Of this total, an estimated 
317 have 1,500 or fewer employees and 42 have more than 1,500 
employees.\46\ Consequently, the Commission estimates that the majority 
of interexchange service providers are small entities that may be 
affected by rules adopted pursuant to the FNPRM.
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    \44\ 13 CFR 121.201, NAICS code 517110.
    \45\ See Trends in Telephone Service, at Table 5.3.
    \46\ Id.
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    26. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\47\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1000 employees and one operated with more than 1,000.\48\ 
Thus under this category and the associated small business size 
standard, the majority of these prepaid calling card providers can be 
considered small entities. According to Commission

[[Page 63888]]

data, 193 carriers have reported that they are engaged in the provision 
of prepaid calling cards.\49\ All 193 carriers have 1,500 or fewer 
employees and none have more than 1,500 employees.\50\ Consequently, 
the Commission estimates that the majority of prepaid calling card 
providers are small entities that may be affected by rules adopted 
pursuant to the FNPRM.
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    \47\ 13 CFR 121.201, NAICS code 517911.
    \48\ Id.
    \49\ See Trends in Telephone Service, at Table 5.3.
    \50\ Id.
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    27. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\51\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1000 employees and one operated with more than 1,000.\52\ 
Under this category and the associated small business size standard, 
the majority of these local resellers can be considered small entities. 
According to Commission data, 213 carriers have reported that they are 
engaged in the provision of local resale services.\53\ Of this total, 
an estimated 211 have 1,500 or fewer employees and two have more than 
1,500 employees.\54\ Consequently, the Commission estimates that the 
majority of local resellers are small entities that may be affected by 
rules adopted pursuant to the proposals in this FNPRM.
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    \51\ 13 CFR 121.201, NAICS code 517911.
    \52\ Id.
    \53\ See Trends in Telephone Service, at Table 5.3.
    \54\ Id.
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    28. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees.\55\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1,000 employees and one operated with more than 1,000.\56\ 
Thus, under this category and the associated small business size 
standard, the majority of these resellers can be considered small 
entities. According to Commission data, 881 carriers have reported that 
they are engaged in the provision of toll resale services.\57\ Of this 
total, an estimated 857 have 1,500 or fewer employees and 24 have more 
than 1,500 employees.\58\ Consequently, the Commission estimates that 
the majority of toll resellers are small entities that may be affected 
by our proposals in the FNPRM.
---------------------------------------------------------------------------

    \55\ 13 CFR 121.201, NAICS code 517911.
    \56\ Id.
    \57\ Trends in Telephone Service, at Table 5.3.
    \58\ Id.
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    29. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard for small businesses specifically applicable 
to Other Toll Carriers. This category includes toll carriers that do 
not fall within the categories of interexchange carriers, operator 
service providers, prepaid calling card providers, satellite service 
carriers, or toll resellers. The closest applicable size standard under 
SBA rules is for Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\59\ Census data for 2007 shows that there were 31,996 
establishments that operated that year. Of this total, 1,818 operated 
with more than 100 employees, and 30,178 operated with fewer than 100 
employees.\60\ Thus, under this category and the associated small 
business size standard, the majority of Other Toll Carriers can be 
considered small. According to Commission data, 284 companies reported 
that their primary telecommunications service activity was the 
provision of other toll carriage.\61\ Of these, an estimated 279 have 
1,500 or fewer employees and five have more than 1,500 employees.\62\ 
Consequently, the Commission estimates that most Other Toll Carriers 
are small entities that may be affected by the rules and policies 
adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \59\ 13 CFR 121.201, NAICS code 517110.
    \60\ Id.
    \61\ Trends in Telephone Service, at Table 5.3.
    \62\ Id.
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    30. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the SBA has recognized wireless firms within this new, broad, 
economic census category.\63\ Prior to that time, such firms were 
within the now-superseded categories of Paging and Cellular and Other 
Wireless Telecommunications.\64\ Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees.\65\ For this category, census data for 
2007 show that there were 11,163 establishments that operated for the 
entire year.\66\ Of this total, 10,791 establishments had employment of 
999 or fewer employees and 372 had employment of 1000 employees or 
more.\67\ Thus, under this category and the associated small business 
size standard, the Commission estimates that the majority of wireless 
telecommunications carriers (except satellite) are small entities that 
may be affected by our proposed action. Similarly, according to 
Commission data, 413 carriers reported that they were engaged in the 
provision of wireless telephony, including cellular service, Personal 
Communications Service (PCS), and Specialized Mobile Radio (SMR) 
Telephony services.\68\ Of this total, an estimated 261 have 1,500 or 
fewer employees and 152 have more than 1,500 employees.\69\ 
Consequently, the Commission estimates that approximately half or more 
of these firms can be considered small. Thus, using available data, we 
estimate that the majority of wireless firms can be considered small.
---------------------------------------------------------------------------

    \63\ 13 CFR 121.201, NAICS code 517210.
    \64\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211 
Paging,'' available at http://www.census.gov/cgibin/sssd/naics/naicsrch?code=517211&search=2002%20NAICS%20Search; U.S. Census 
Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other Wireless 
Telecommunications,'' available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517212&search=2002%20NAICS%20Search.
    \65\ 13 CFR 121.201, NAICS code 517210. The now-superseded, pre-
2007 C.F.R. citations were 13 CFR 121.201, NAICS codes 517211 and 
517212 (referring to the 2002 NAICS).
    \66\ U.S. Census Bureau, Subject Series: Information, Table 5, 
``Establishment and Firm Size: Employment Size of Firms for the 
United States: 2007 NAICS Code 517210'' (issued Nov. 2010).
    \67\ Id. Available census data do not provide a more precise 
estimate of the number of firms that have employment of 1,500 or 
fewer employees; the largest category provided is for firms with 
``100 employees or more.''
    \68\ Trends in Telephone Service, at Table 5.3.
    \69\ Id.
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    31. Cable Television and other Program Distribution. Since 2007, 
these services have been defined within the broad economic census 
category of Wired Telecommunications Carriers; that category is defined 
as follows: ``This industry comprises establishments primarily engaged 
in operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies.'' \70\ The SBA has developed a small 
business size standard for this category, which is: all such firms 
having 1,500 or fewer employees.\71\ Census data for 2007 shows that 
there were 31,996 establishments that operated that year. Of this 
total, 1,818 had more than 100 employees, and 30,178 operated with 
fewer than 100 employees. Thus under

[[Page 63889]]

this size standard, the majority of firms offering cable and other 
program distribution services can be considered small and may be 
affected by rules adopted pursuant to the FNPRM.
---------------------------------------------------------------------------

    \70\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition), available at 
http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517110&search=2007%20NAICS%20Search.
    \71\ 13 CFR 121.201, NAICS code 517110.
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    32. Cable Companies and Systems. The Commission has developed its 
own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide.\72\ Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard.\73\ In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers.\74\ Industry data indicate that, of 6,635 systems 
nationwide, 5,802 systems have fewer than 10,000 subscribers, and an 
additional 302 systems have 10,000-19,999 subscribers.\75\ Thus, under 
this second size standard, most cable systems are small and may be 
affected by rules adopted pursuant to the FNPRM.
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    \72\ See 47 CFR 76.901(e). The Commission determined that this 
size standard equates approximately to a size standard of $100 
million or less in annual revenues. See Implementation of Sections 
of the 1992 Cable Television Consumer Protection and Competition 
Act: Rate Regulation, MM Docket Nos. 92-266, 93-215, Sixth Report 
and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 
7408, para. 28 (1995).
    \73\ These data are derived from R.R. BOWKER, BROADCASTING & 
CABLE YEARBOOK 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); WARREN COMMUNICATIONS 
NEWS, TELEVISION & CABLE FACTBOOK 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \74\ See 47 CFR 76.901(c).
    \75\ WARREN COMMUNICATIONS NEWS, TELEVISION & CABLE FACTBOOK 
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data 
current as of Oct. 2007). The data do not include 851 systems for 
which classifying data were not available.
---------------------------------------------------------------------------

    33. All Other Telecommunications. The Census Bureau defines this 
industry as including ``establishments primarily engaged in providing 
specialized telecommunications services, such as satellite tracking, 
communications telemetry, and radar station operation. This industry 
also includes establishments primarily engaged in providing satellite 
terminal stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing Internet services or Voice over Internet 
Protocol (VoIP) services via client-supplied telecommunications 
connections are also included in this industry.'' \76\ The SBA has 
developed a small business size standard for this category; that size 
standard is $30.0 million or less in average annual receipts.\77\ 
According to Census Bureau data for 2007, there were 2,623 firms in 
this category that operated for the entire year.\78\ Of this total, 
2478 establishments had annual receipts of under $10 million and 145 
establishments had annual receipts of $10 million or more.\79\ 
Consequently, we estimate that the majority of these firms are small 
entities that may be affected by our action in this FNPRM.
---------------------------------------------------------------------------

    \76\ U.S. Census Bureau, ``2007 NAICS Definitions: 517919 All 
Other Telecommunications,'' available at http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517919&search=2007%20NAICS%20Search.
    \77\ 13 CFR 121.201, NAICS code 517919.
    \78\ U.S. Census Bureau, 2007 Economic Census, Subject Series: 
Information, Table 4, ``Establishment and Firm Size: Receipts Size 
of Firms for the United States: 2007 NAICS Code 517919'' (issued 
Nov. 2010).
    \79\ Id.
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D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    34. While this FNPRM seeks comment on changes to the Commission's 
current regulatory fee methodology and schedule, any changes to the 
regulatory fee methodology will not impact the information collection, 
reporting, and recordkeeping requirements. If a new fee is ultimately 
adopted, the Commission's current online procedures for payment of 
regulatory fees will apply for the collection and reporting of these 
fees.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant

1. Alternatives Considered
    35. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its approach, which may 
include the following four alternatives, among others: (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.\80\
---------------------------------------------------------------------------

    \80\ 5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

    36. Toll free numbers allow callers to reach the called party 
without being charged for the call; instead the charge for the call is 
paid by the called party (the toll free subscriber).\81\ A Responsible 
Organization (RespOrg) is a company that manages toll free telephone 
numbers for subscribers. They use the SMS/800 data base to verify the 
availability of specific numbers and to reserve the numbers for 
subscribers. See 47 CFR 52.101(b). It is possible that our proposal, if 
adopted, would result in increasing or imposing a regulatory fee burden 
on small entities such as RespOrgs. The actual fee amount or financial 
burden, however, will be determined after comments are received and 
evaluated. Our proposal exempts entities that are already paying 
regulatory fees, such as Interexchange Carriers, but would assess fees 
on other Responsible Organizations that do not currently pay any 
regulatory fees. In addition, it is possible that many of the RespOrgs 
may also qualify for de minimis status if their total regulatory fee 
obligation is $500 or less, beginning in FY 2015. The Commission seeks 
comment on the abovementioned proposal, including methods on how to 
minimize significant economic impact on small entities.
---------------------------------------------------------------------------

    \81\ 47 U.S.C. 52.101(e), (f).
---------------------------------------------------------------------------

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    37. None.

IV. Ordering Clauses

    38. Accordingly, it is ordered that, pursuant to Sections 4(i) and 
(j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 159, and 303(r), this Further Notice of Proposed 
Rulemaking is hereby adopted.
    39. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the U.S. Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2014-24939 Filed 10-24-14; 8:45 am]
BILLING CODE 6712-01-P


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