[Federal Register Volume 74, Number 90 (Tuesday, May 12, 2009)]
[Rules and Regulations]
[Pages 22104-22111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10987]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[MD Docket No. 08-65; FCC 09-21]


Assessment and Collection of Regulatory Fees for Fiscal Year 2008

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts a new methodology for 
calculating regulatory fees for international submarine cable 
operators. Beginning in FY 2009, the Commission will calculate 
regulatory fees for international submarine cable operators on a per 
cable landing license basis, with higher fees being assessed for larger 
submarine cable systems and lower fees for smaller systems. However, 
this change in methodology does not amend the licensing rules regarding 
submarine cable systems, nor does it change the methodology on how the 
Commission calculates regulatory fees for terrestrial and satellite 
facilities--these facilities will continue to be assessed on a per 64 
kbps circuit basis.

DATES: Effective July 13, 2009, which pursuant to section 9(b)(3) of 
the Communications Act, is 90 days from date of notification to 
Congress.

FOR FURTHER INFORMATION CONTACT: Mark Stone, Office of Managing 
Director at (202) 418-0816.

SUPPLEMENTARY INFORMATION: 
    Adopted: March 17, 2009.
    Released: March 24, 2009.
    By the Commission: Acting Chairman Copps and Commissioners 
Adelstein and McDowell issuing separate statements.

I. Introduction

    1. In this Second Report and Order, the Commission adopts a new 
methodology for calculating regulatory fees from international 
submarine cable operators.\1\ Beginning with Fiscal Year (``FY'') 2009, 
the Commission will calculate these regulatory fees on a per cable 
landing license basis, with higher fees for larger submarine cable 
systems and lower fees for smaller systems. In our FY 2008 regulatory 
fee Report and Order adopted on August 1, 2008 we agreed to evaluate 
further the issue of regulatory fees paid by submarine cable operators, 
which are a sub-set of carriers that pay International Bearer Circuit 
(``IBC'') fees, and release a Second Report and Order with a new 
regulatory fee methodology for submarine cable operators.\2\ The new 
methodology we adopt here is based on a proposal (the ``Consensus 
Proposal'') by a large group of submarine cable operators, representing 
both common carriers and non-common carriers with both large and small 
submarine cable systems.\3\ The new methodology allocates IBC costs 
among service providers in an equitable and competitively neutral 
manner, without distinguishing between common carriers and non-common 
carriers, by assessing a flat per cable landing license fee for all 
submarine cable systems.\4\ In addition to being more equitable, we 
anticipate that the new methodology will encourage compliance with our 
regulatory fee requirements.
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    \1\ This regulatory fee methodology only applies to 
international submarine cable systems that connect the United States 
with international points, and not to submarine cable systems 
connecting points within the United States, such as systems 
connecting the Hawaiian Islands or Alaska to the mainland.
    \2\ Assessment and Collection of Regulatory Fees for Fiscal Year 
2008, MD Docket No. 08-65, RM-11312, Report and Order and Further 
Notice of Proposed Rulemaking, FCC 08-182 (rel. Aug. 8, 2008) (``FY 
2008 Report and Order''). We use the term ``IBC'' in this proceeding 
as a general way of referring to this regulatory fee category; 
however, as we discuss below, our per cable landing license 
methodology we adopt in this order does not apply to terrestrial and 
satellite facilities.
    Comments cited in this Second Report and Order are comments to 
our FY 2008 Notice of Proposed Rulemaking, see Assessment and 
Collection of Regulatory Fees for Fiscal Year 2008, MD Docket No. 
08-65, RM-11312, Notice of Proposed Rulemaking and Order, 23 FCC Rcd 
7987 (2008) (``FY 2008 Notice of Proposed Rulemaking''), and are 
listed in Appendix C to the FY 2008 Report and Order.
    \3\ See Letter from Kent D. Bressie, Harris, Wiltshire, and 
Grannis, to Marlene H. Dortch, Office of the Secretary, FCC, Sept. 
23, 2008 (attachment is the ``Consensus Proposal''). The parties to 
the Consensus Proposal are: AT&T, Verizon, Apollo Submarine Cable 
System, Ltd.; Brasil Telecom of America, Inc.; Columbus Networks 
USA, Inc.; ARCOS-1 USA, Inc.; A.SUR Net, Inc.; Level 3 
Communications, LLC; Hibernia-Atlantic US LLC; Marine Cable Corp.; 
Pacific Crossing Limited and its subsidiary PC Landing Corp.; 
Reliance Globalcom Limited and its indirect subsidiary FLAG Network 
USA Limited; and Tata Communications (US) Inc. Qwest Communications 
International, Inc. (``Qwest'') also supports the Consensus 
Proposal. See Letter from Melissa E. Newman, Qwest, to Marlene H. 
Dortch, Office of the Secretary, FCC, Sept. 29, 2008. GU Holdings, 
Inc., an indirect wholly-owned subsidiary of Google, Inc. also 
supports the Consensus Proposal. See Letter from Richard S. Whitt, 
Google, Inc., to Marlene H. Dortch, Office of the Secretary, FCC, 
Oct. 3, 2008. Pacific Crossing Limited and PC Landing Corp. contend 
that the Commission should adopt the Consensus Proposal and also 
further examine the regulatory fee methodology in this docket or in 
the FY 2009 regulatory fee proceeding to determine if a portion of 
the regulatory fee burden should be directly allocated to 
international common carriers. See Letter from Martin L. Stern, K&L 
Gates LLP, to Marlene H. Dortch, Office of the Secretary, FCC, Sept. 
25, 2008.
    \4\ Terrestrial and satellite facilities do not have cable 
landing licenses and will continue to pay regulatory fees on a per 
circuit basis, under our historic methodology, as clarified herein. 
We have not received comments or ex partes specifically requesting a 
change in the regulatory fee rules for these entities.
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II. Background

    2. For several years, submarine cable operators have asked the 
Commission to revise the historic per circuit regulatory fee 
methodology for submarine cable systems. We discussed this issue in our 
FY 2004 regulatory fee proceeding where Tyco Telecommunications (US), 
Inc. challenged the Commission's regulatory fee methodology, arguing, 
inter alia, that our capacity-based methodology was favoring older 
lower capacity submarine cable systems and that non-common carrier 
submarine cable operators should have their own separate category and 
pay a per-cable

[[Page 22105]]

landing license fee.\5\ We concluded that the complex issues should be 
resolved after we have a more complete record of the issues.\6\ In our 
FY 2005 regulatory fee proceeding we sought further comment on this 
issue,\7\ but concluded not to change our methodology.\8\ More 
recently, VSNL Telecommunications (US) Inc. (``VSNL''), now Tata 
Communications, filed a Petition for Rulemaking urging the Commission 
to revise its regulatory fee methodology for submarine cable 
operators.\9\ Several parties subsequently filed a Revised Joint 
Proposal.\10\ In response, AT&T and Verizon filed a proposal for a flat 
per cable landing license fee for all submarine cable operators.\11\ 
The Consensus Proposal is similar to the AT&T/Verizon Proposal in that 
it is based on a flat \12\ per cable landing license fee and it does 
not differentiate between common carriers and non-common carriers. The 
Consensus Proposal has brought together common carriers and non-common 
carriers with a proposal that was satisfactory to all interested 
parties, as no party has opposed it on the record of this proceeding.
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    \5\ Assessment and Collection of Regulatory Fees for FY 2004, MD 
Docket No. 04-73, Report and Order, 19 FCC Rcd 11662, 11671-73, 
para. 26-30 (2004) (``FY 2004 Report and Order'').
    \6\ FY 2004 Report and Order, 19 FCC Rcd at 11672, para. 29.
    \7\ Assessment and Collection of Regulatory Fees for FY 2005, MD 
Docket No. 05-59, Notice of Proposed Rulemaking, 20 FCC Rcd 3885, 
3890-91, para. 11-17 (2005) (``FY 2005 NPRM'').
    \8\ Assessment and Collection of Regulatory Fees for FY 2005, MD 
Docket No. 05-59, Report and Order and Order on Reconsideration, 20 
FCC Rcd 12259, 12263-64, para. 8-9 (2005) (``FY 2005 Report and 
Order'').
    \9\ See Petition for Rulemaking of VSNL Telecommunications (US) 
Inc., RM-11312 (filed Feb. 6, 2006) (``VSNL Petition''). We released 
a Public Notice designating the proceeding as RM-11312 and seeking 
comment on the Petition. See Consumer and Governmental Affairs 
Bureau, Reference Information Center, Public Notice, Report No. 2759 
(rel. Feb. 15, 2006). In our FY 2006 Report and Order we stated that 
the issues presented in the Petition warranted consideration 
separately from the Commission's annual regulatory fee proceeding. 
See Assessment and Collection of Regulatory Fees for Fiscal Year 
2006, MD Docket No. 06-68, Report and Order, 21 FCC Rcd 8092, 8098-
99, para. 18 (2006) (``FY 2006 Report and Order''). In our FY 2007 
Report and Order we observed that we had received joint comments 
filed by seven submarine cable landing licensees and that we would 
consider the matter separately from the annual regulatory fee 
proceeding. See Assessment and Collection of Regulatory Fees for 
Fiscal Year 2007, MD Docket No. 07-81, Report and Order and Further 
Notice of Proposed Rulemaking, 22 FCC Rcd 15712, 15715-16, para. 10 
(2007) (``FY 2007 Report and Order'').
    \10\ See Letter from Kent D. Bressie, Harris, Wiltshire, and 
Grannis, to Ms. Marlene H. Dortch, Secretary, FCC, July 14, 2008 
(attachment is the ``Revised Joint Proposal''). The July 14, 2008 
Revised Joint Proposal was supported by the following carriers: 
Brasil Telecom of America, Inc.; Columbus Networks USA, Inc.; ARCOS-
1 USA, Inc.; A.SUR Net, Inc.; Global Crossing Ltd.; Level 3 
Communications, LLC; Hibernia-Atlantic US LLC; Marine Cable Corp.; 
Pacific Crossing Limited and its subsidiary PC Landing Corp.; 
Reliance Globalcom Limited and its indirect subsidiary FLAG Network 
USA Limited; and Tata Communications (US) Inc. Marine Cable Corp. 
and Global Crossing Ltd. were new supporters since the filing of the 
earlier Joint Proposal.
    \11\ See ``Proposal of AT&T and Verizon,'' filed Sept. 2, 2008 
(``AT&T/Verizon Proposal'').
    \12\ By ``flat'' we mean that the regulatory fee is no longer 
based on the number of active circuits, but is assessed on a per 
cable system basis. As we explain below, we are permitting carriers 
to pay a lower fee for smaller submarine cable systems.
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    3. Congress requires the Commission each year to collect regulatory 
fees ``to recover the costs of * * * enforcement activities, policy and 
rulemaking activities, user information services, and international 
activities.'' \13\ Section 9 of the Communications Act of 1934, as 
amended (the ``Act'') requires the Commission to make certain changes 
to the regulatory fee schedule ``if the Commission determines that the 
schedule requires amendment to comply with the requirements'' of 
section 9(b)(1)(A). The Commission must add, delete, or reclassify 
services in the fee schedule to reflect additions, deletions, or 
changes in the nature of its services ``as a consequence of Commission 
rulemaking proceedings or changes in law.'' \14\ These ``permitted 
amendments'' require Congressional notification \15\ and resulting 
changes in fees within the Commission's jurisdiction are not subject to 
judicial review.\16\
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    \13\ 47 U.S.C. 159(a)(1).
    \14\ 47 U.S.C. 159(b)(3).
    \15\ 47 U.S.C. 159(b)(4)(B).
    \16\ 47 U.S.C. 159(b)(3). But see Comsat Corp. v. FCC, 114 F.3d 
223, 227 (D.C .Cir. 1997) (``Where, as here, we find that the 
Commission has acted outside the scope of its statutory mandate, we 
also find that we have jurisdiction to review the Commission's 
action.'').
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    4. Historically, regulatory fees for IBCs have been paid by 
facilities-based common carriers based on the number of active 
international bearer circuits they have in a transmission facility used 
to provide service to specified types of entities. Specifically, our 
current rules provide that regulatory fees for IBCs are paid by 
facilities-based common carriers that have active international bearer 
circuits in any transmission facility for the provision of service to 
an end user or resale carrier, which includes active circuits to 
themselves or to their affiliates.\17\ Non-common carrier submarine 
cable operators pay fees for all international bearer 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.\18\ Section 43.82 of the 
Commission's rules requires that each facilities-based common carrier 
engaged in providing international telecommunications services file a 
report by March 31 or each year showing the status of its circuits as 
of December 31 of the preceding calendar year.\19\
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    \17\ See Implementation of Section 9 of the Communications Act, 
Assessment and Collection of Regulatory Fees for Fiscal Year 2006, 
Report and Order, 21 FCC Rcd 8092, 8107, n.62 (2006) (``FY 2006 
Report and Order''); Regulatory Fees Fact Sheet: What You Owe--
International and Satellite Services Licensees for FY 2008 at 3 
(rel. Aug. 2008) (the fact sheet is available on the FCC Web site 
at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-284863A4.pdf).
    The Commission's current guidance on its Web site provides the 
following information regarding international and satellite license 
fees, see http://www.fcc.gov/fees/regfees.html:
    Who Must Pay: Regulatory fees for International Bearer Circuits 
are to be paid by facilities-based common carriers that have active 
international bearer circuits as of December 31, 2007 in any 
transmission facility for the provision of service to an end user or 
resale carrier, which includes active circuits to themselves or to 
their affiliates. In addition, non-common carrier satellite 
operators must pay a fee for each circuit sold or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. Non-common carrier 
submarine cable operators are also to pay fees for any and all 
international bearer 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. If you are required to pay regulatory fees, you should pay 
based on your active 64 KB circuit count as of December 31, 2007.
    \18\ FY 2006 Report and Order, 21 FCC Rcd at 8107, n.62.
    \19\ 47 CFR 43.82. The information included in the circuit 
status report is described in the Circuit Status Manual. All 
facilities-based carriers (including facilities-based resellers) are 
required to file the report regardless of whether or not they have 
activated circuits at the year-end. See http://www.fcc.gov/ib/pd/pf/csmanual.html.
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    5. For several years, submarine cable operators have asked the 
Commission to revise the regulatory fee methodology. Submarine cable 
revenue and capacity have grown significantly in recent years and are 
expected to expand dramatically in the near future, so we agree that 
revisions to the old regulatory fee rule are overdue.\20\ In 2006, VSNL

[[Page 22106]]

proposed \21\ a flat annual fee per cable system for submarine cable 
operators,\22\ and later, several other parties filed a Revised Joint 
Proposal.\23\ The Revised Joint Proposal would assess a flat fee, per 
cable landing license, for both common carrier and non-common carrier 
submarine cable systems and in addition, there would be a new fee based 
on active circuits, for common carriers only. Thus, under the Revised 
Joint Proposal, common carriers would pay the flat per cable landing 
license fee and a per circuit fee and non-common carriers would pay 
only the flat per cable landing license fee. In response to that 
Revised Joint Proposal, AT&T and Verizon filed a proposal assessing a 
flat per cable landing license fee for all submarine cable systems, 
with a lower fee for smaller systems.\24\ The AT&T/Verizon Proposal 
treated common carrier and non-common carrier systems alike.
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    \20\ For example, since January 1, 2007, the Commission received 
applications for 14 new submarine cables, of which eight are for 
submarine cables in the Pacific Ocean representing a combined 
capacity of 19.84 Tbps (terabits per second). See also 
Communications Daily, Oct. 31, 2008, p. 16 (``International 
submarine cable is a growth market after seeming `dead in the water' 
five or six years ago. * * * International Internet capacity grew 60 
percent this year, and growth is expected to continue.'')
    \21\ See VSNL Petition.
    \22\ VSNL Petition at 6. Subsequently, Tata and other carriers 
filed two joint proposals, similar to the VSNL Proposal. For 
additional discussion of the proposal, see FY 2008 Report and Order 
at para. 14-15.
    \23\ See Revised Joint Proposal. See also FY 2008 Report and 
Order at para. 16 for a discussion of the Revised Joint Proposal.
    \24\ See AT&T/Verizon Proposal.
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    6. A broad coalition of common carriers and non-common carriers 
submitted the Consensus Proposal,\25\ on September 23, 2008. The 
Consensus Proposal is similar to the AT&T/Verizon Proposal in that it 
proposes to assess a flat fee on submarine cable systems, graduating 
the fee so that smaller systems pay less, and making no distinction 
between common carriers and non-common carriers.\26\ Specifically, the 
Consensus Proposal divides the existing IBC category into two separate 
categories: one for terrestrial and satellite facilities, and a second 
for submarine cable operators. Using FY 2008 regulatory fees owed, for 
illustrative purposes, the Consensus Proposal would allocate 12.4 
percent of the FY 2008 revenue requirement to terrestrial and satellite 
facilities and 87.6 percent of the FY 2008 revenue requirement to 
submarine cable operators.\27\ Submarine cable operators would pay 
their share through a flat, per cable landing license fee. The 
Consensus Proposal would assess a flat fee per cable landing license 
for the 31 existing large submarine cable systems, with a reduced flat 
fee \28\ for the small cable systems. A submarine cable system owned by 
multiple service providers or licensees would be considered one 
submarine cable system and each cable landing license holder would be 
jointly and severally liable for the fee.\29\ As noted, in early 2009, 
we will propose FY 2009 regulatory fees and will address additional 
reporting requirements and the specific procedures for paying 
regulatory fees.
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    \25\ See note 3 for a list of signatories to the Consensus 
Proposal.
    \26\ Consensus Proposal at 1. The Consensus Proposal uses 
current regulatory fees in its description of the proposed 
methodology. Fees and allocations for FY 2009 and years thereafter 
will probably differ.
    \27\ Id.
    \28\ Id. at 3. The fee for the ``small'' submarine cable systems 
would vary depending on the size.
    \29\ Id. at 2.
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III. Discussion

    7. As described above, we adopt the general methodology of the 
Consensus Proposal. We find that the Consensus Proposal is an 
improvement over our current submarine cable fee methodology, is 
responsive to the concerns expressed by the submarine cable operators, 
and is in the public interest. The methodology we adopt today will 
increase compliance with our regulatory fee requirements, is 
competitively neutral, is easy to administer, and is supported by a 
majority of the submarine cable community.
    8. We find that the Consensus Proposal is in the public interest 
because it will increase compliance with our regulatory fee 
requirements. Under the existing framework, the Commission relies on 
carrier self-reporting of regulatory fee obligations, based on section 
43.82 reports of active circuits. Non-common carriers do not file these 
reports, but are required to pay regulatory fees. Thus, the Commission 
does not have an independent check on whether non-common carriers are 
paying their share of regulatory fees. Parties have stated to the 
Commission that there are non-common carriers who should pay, but do 
not.\30\ If our rules permit certain entities to avoid complying with 
our regulatory fee requirements because we do not have sufficient 
reporting requirements for part of the industry, the remaining carriers 
must pay a higher amount to compensate for those who avoid payment.\31\ 
Today's action addresses this concern because the Commission has a 
record of the cable landing licenses issued to licensees (including 
those licensees who have avoided paying their share of regulatory fees) 
and will now assess the fee for each license.\32\
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    \30\ See, e.g., Level 3 Communications, LLC Comments at 16 
(``the Commission has no means of monitoring active submarine cable 
capacity and thus no real way of enforcing submarine cable 
operator's payment of regulatory fees''); Pacific Crossing Limited 
and PC Landing Corp. Comments at 3 (``the current methodology has 
been plagued by rampant undercounting of total activated capacity 
that has been institutionalized into the methodology over its 
fourteen year history''); Tata Communications (US) Inc. Comments at 
2 (``one way to interpret the * * * fee calculation * * * based on 
64 Kb circuits or equivalent (the size of a voice circuit) [is] that 
this fee only applies to voice circuits.''
    \31\ See AT&T/Verizon Proposal at 4-5.
    \32\ Section 1 of the Cable Landing License Act prohibits any 
person from landing or operating in the United States ``any 
submarine cable directly or indirectly connecting the United States 
with any foreign country, or connecting one portion of the United 
States with any other portion thereof, unless a written license to 
land or operate such cable has been issued by the President of the 
United States.'' 47 U.S.C. 34. This function was delegated to the 
Commission in Executive Order No. 10530, May 11, 1954.
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    9. Further, we find that the Consensus Proposal is competitively 
neutral. Unlike several previous proposals submitted by submarine cable 
operators, the approach we adopt today treats common carriers and non-
common carriers identically. Both common carrier and non-common carrier 
submarine cable operators support the Consensus Proposal.
    10. In addition, the new methodology will be easier for the 
Commission to administer and submarine cable operators to comply with. 
Under the existing methodology, submarine cable operators must 
calculate their fee obligations based on the number of 64 kilobits per 
second (``kbps'') ``active'' circuits at the end of the year. Some 
entities chose to underreport the number of active circuits and thus 
underpay regulatory fees. Under the rule we adopt today, submarine 
cable operators will no longer pay regulatory fees based on how many 
active circuits they had on the previous December 31. Under our new 
rule they will pay a flat fee per cable landing license. Submarine 
cable operators will still need to advise the Commission of the number 
of circuits to identify whether they qualify as a small system for fee 
payment purposes, or certify to the category that they fit into, but 
this should be a relatively small burden, and is supported by the 
members of the consensus group who themselves would qualify as small 
system service providers.
    11. Finally, we note that the Consensus Proposal is the product of 
broad agreement among the submarine cable operators. The 15 parties to 
the Consensus Proposal represent 35 of the 42 international submarine 
cable systems currently in operation, as well as three planned 
submarine cable systems. In 2008, these submarine cable systems 
accounted for over 95 percent of the international circuits carried on

[[Page 22107]]

submarine cables. These represent both common carriers and non-common 
carriers that provide service through both large and small submarine 
cable systems. There is no opposition to the Consensus Proposal on the 
record. We recognize as well that parties have submitted a number of 
proposals prior to the Consensus Proposal, and that the methodology we 
adopt today is the product of considered discussions within the 
industry and with the Commission.
    12. While today we adopt a new methodology for calculating 
regulatory fees for international submarine cable systems, this Second 
Report and Order does not amend our licensing rules with respect to 
submarine cable systems.\33\ Nor does this Second Report and Order 
determine the amount of regulatory fees that should be assessed on 
submarine cable operators; we are not assessing the FY 2009 revenue 
requirement or the regulatory fees for submarine cable systems, 
terrestrial, or satellite facilities in this proceeding. The revenue 
requirement for this category will vary each year, as it has in the 
past. The Commission has an ongoing proceeding seeking comment on 
whether regulatory fee categories bear their fair share of the total 
cost to the Commission.\34\ After the Commission has reviewed the 
record in that proceeding, it may find that submarine cable systems, 
along with other categories, may have been allocated too small a 
revenue requirement in the past or that submarine cable systems have 
been allocated too a large revenue requirement and that other 
categories should pay more. In a separate docket, we will continue our 
usual practice of releasing a Notice of Proposed Rulemaking seeking 
comment on proposed FY 2009 regulatory fees. At that time, we will seek 
comment on regulatory fee rates calculated using the methodology 
adopted herein to recoup the amount set by Congress for FY 2009.
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    \33\ See 47 CFR 1.767, 1.768.
    \34\ See FY 2008 Report and Order at para. 25-58; ``Office of 
Managing Director Releases Data to Assist Commenters on Issues 
Presented in Further Notice of Proposed Rulemaking Adopted on August 
1, 2008,'' MD Docket No. 08-65, Public Notice, DA 08-2033, rel. 
Sept. 3, 2008.
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A. New Methodology for Calculating Submarine Cable Regulatory Fees

    13. The per cable landing license fee methodology we adopt herein 
assesses a flat, per cable landing license fee on international 
submarine cable systems, with a reduced amount for the smaller systems. 
Specifically, we will first apportion the revenue requirement between 
(1) terrestrial and satellite facilities and (2) submarine cable.\35\ 
The terrestrial and satellite facilities will be assessed regulatory 
fees on a per circuit basis, as discussed below.\36\ The remaining 
portion of the revenue requirement will be allocated among the 
submarine cable systems.
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    \35\ This apportionment will be determined on an annual basis 
and proposed in our annual regulatory fee Notice of Proposed 
Rulemaking.
    \36\ We are not changing the methodology for assessing 
regulatory fees for terrestrial and satellite facilities, although 
we are clarifying our rule to some degree, as we discuss below.
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    14. Our methodology differs from the Consensus Proposal in one 
respect. Instead of using kbps,\37\ we use gigabits per second 
(``Gbps''). We find that using Gbps rather than 64 kbps is preferable 
because 64 kbps is the unit of measurement for voice grade circuits; 
whereas submarine cables are now largely used for data. In addition, 
carriers file their applications using Gbps or terabits per second 
(``Tbps'') and the industry standard is to use Gbps or Tbps. For these 
reasons, it is administratively easier to use Gbps instead of 64 kbps. 
Converting from 64 kbps to Gbps does not change the particular fee 
allocations for FY 2009 that would apply with respect to each 
individual cable system, as set forth in the Consensus Proposal.
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    \37\ See Consensus Proposal.
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    15. The operational submarine cable systems will first be defined 
as ``large'' submarine cable systems and ``small'' submarine cable 
systems based on the capacity of each system used for the Commission's 
annual Circuit Status report.\38\ The ``small'' systems will be further 
subdivided into subcategories, as discussed below. A ``small'' system 
may, however, move into a different category as it gets larger.\39\ 
Carriers will be required to advise the Commission of a change in 
category or subcategory for regulatory fee purposes. Based on the 
number and size of operational submarine cable systems today, there are 
currently 31 ``large'' cable systems, defined as systems with capacity 
of 20 Gbps or greater. These large systems will pay one ``payment 
unit'' each. We emphasize that this calculation is not the regulatory 
fee assessment for FY 2009, but is an example based on the regulatory 
fees for FY 2008.
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    \38\ The Commission annually prepares and releases a report on 
Section 43.82 Circuit Status Data (``Circuit Status Report''). The 
Circuit Status Report includes a table which lists all of the 
operational and planned trans-oceanic fiber optic cables, both 
common carrier and non-common carrier cables, and their capacity. 
The capacity figures are derived from the cable landing license 
applications, updated capacity information from the cable operators 
and other sources.
    \39\ We anticipate that the subcategories of small systems and 
the definitions of large and small systems may change as the 
submarine cable industry changes.
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    16. There are 11 small submarine cable systems (i.e., smaller than 
20 Gbps) operational today using this methodology proposed in the 
Consensus Proposal. The methodology we adopt assesses different 
percentages of a ``payment unit'' depending on the size of the 
submarine cable system. The submarine cable systems with a capacity 
equal to or greater than 10 Gbps but less than 20 Gbps will pay 50 
percent of a payment unit; the systems with a capacity equal to or 
greater than 5 Gbps but less than 10 Gbps will pay 25 percent of a 
payment unit; the systems with a capacity equal to or greater than 2.5 
Gbps but less 5 Gbps will pay 12.5 percent of a payment unit; and 
submarine cable systems with a capacity below 2.5 Gbps will pay 6.25 
percent of a payment unit. This allocation may change from year to 
year, depending on the revenue requirement, the submarine cable 
industry, and other factors. The per system fee for FY 2009 will be 
determined, if this allocation is not changed, by dividing the revenue 
requirement for submarine cable systems among the large and small 
operators in these proportions. We anticipate, however, that each year 
we will have a different revenue requirement and there will be changes 
in the submarine cable industry, requiring revision of these 
allocations in our annual regulatory fee Notice of Proposed Rulemaking.
    17. In addition to the benefits discussed above, the new 
methodology will allow carriers to add incremental capacity to already 
existing submarine cable systems without paying a higher regulatory fee 
for each additional ``active'' circuit.\40\ The new regulatory fee 
methodology will effectively eliminate concerns that the regulatory 
fees discouraged submarine cable operators from increasing capacity on 
their systems. On the contrary, the regulatory fee would become smaller 
on a per circuit basis as a cable's capacity is increased. We also 
anticipate a lower administrative burden on the industry and the 
Commission. Our rules already require one cable landing license for 
each submarine cable system. A company seeking to build a submarine 
cable system is required to obtain a cable landing license; under the 
rule we adopt today the regulatory fee would

[[Page 22108]]

not be assessed until the system is operational.\41\ A consortium would 
be considered to have one cable landing license for regulatory fee 
purposes. The regulatory fee would apply to submarine cable systems in 
service as of December 31 of each year.
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    \40\ A ``large'' submarine cable system will continue to be 
assessed one payment unit even as it gets larger. A ``small'' system 
may, however, move into a different category as it gets larger. 
Carriers will be required to advise the Commission of a change in 
category or subcategory for regulatory fee purposes.
    \41\ See 47 CFR 1.767(g)(14).
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    18. We also agree that a lower fee for the smaller cable landing 
licensees would mitigate concerns that a flat fee may create a barrier 
to entry for new entrants.\42\ We anticipate that over time the 
categories of small and large systems will change as the smaller 
systems grow in capacity and new larger systems are built and licensed. 
The growth of smaller systems may move them into a higher category. The 
addition of new larger submarine cable systems may require us to move 
the smaller of the large systems into the small category.
---------------------------------------------------------------------------

    \42\ See Telsra Incorporated Reply Comments at 2 (requesting a 
two-year ramp up period for new systems, with reduced regulatory 
fees).
---------------------------------------------------------------------------

    19. Next we address a concern raised by several nonprofit 
educational end users.\43\ Internet2, a National Research and Education 
Network (``NREN''), that has now settled its differences with the 
supporters of the Consensus Proposal,\44\ contends that IBCs used for 
the purpose of interconnecting NRENs, which are critical components of 
the infrastructure that supports scientific research throughout the 
world, should be exempt from regulatory fees in order to remain 
competitive.\45\ Internet2 argues that carriers should not be permitted 
to pass-through regulatory fees to NREN end users in order to permit 
the United States to remain competitive in physics, medicine, computer 
science, bioinformatics, biodiversity and ecological research, 
geoscience, astronomy, and space exploration.\46\ While we agree that 
advancement in these scientific fields is an admirable goal, our rules 
currently exempt certain entities, such as educational institutions, 
from regulatory fees when the entity itself is the licensee. There is 
no exemption when the entity is the end-user.\47\ Carriers are, of 
course, not required to pass regulatory fees onto these special end-
users. We strongly urge the IBC industry to make competitive rates 
available to NRENs, in order to support the furtherance of science and 
education in general.
---------------------------------------------------------------------------

    \43\ See Letter from Alan G. Fishel, Arent Fox, to Marlene H. 
Dortch, Office of the Secretary, FCC, Sept. 23, 2008 (``NREN 
Letter''). See also Letter from Harvey B. Newman, Professor of 
Physics, California Institute of Technology, to Marlene H. Dortch, 
Office of the Secretary, FCC, Sept. 24, 2008.
    \44\ Internet2 and the supporters of the Consensus Proposal 
reached an agreement that (1) they do not object to the Commission 
seeking further comment on this issue and (2) Internet2 supports the 
Consensus Proposal. See Letter from Kent D. Bressie, Harris, 
Wiltshire, and Grannis, et al. to Marlene H. Dortch, Office of the 
Secretary, FCC, Oct. 17, 2008.
    \45\ NREN Letter at 1.
    \46\ Id. at 1-2. Further, Internet2 has noted that its submarine 
cable carrier only recently began assessing regulatory fees on the 
NREN end-users, as a result of this carrier's failure to pay 
regulatory fees in the past.
    \47\ The rule change adopted here is a result of a long process, 
including a Petition for Rulemaking, to change the methodology for 
assessing regulatory fees for international submarine cable systems. 
We have not sought comment on the issue of exempting certain end 
users from regulatory fees; this issue is outside of the scope of 
this proceeding.
---------------------------------------------------------------------------

B. Per Circuit Regulatory Fees

    20. We are retaining, with some clarification, our current per 
circuit regulatory fee for terrestrial and satellite facilities, which 
do not have cable landing licenses.\48\ We clarify the rule as follows:
---------------------------------------------------------------------------

    \48\ This decision does not change the methodology for 
calculating IBC regulatory fees for satellite and terrestrial IBCs. 
The Notice of Proposed Rulemaking in this proceeding was limited to 
submarine cable IBCs. Further, no satellite or terrestrial 
international service provider has responded to the Joint Proposal, 
the Revised Joint Proposal, or the Consensus Proposal. Finally, 
because satellite and terrestrial IBCs are not licensed in the same 
manner as submarine cable IBCs, this decision cannot be applied to 
satellite and terrestrial IBCs. The Commission encourages satellite 
and terrestrial IBC providers to propose any changes to the 
regulatory fee methodology that would better serve their interests 
and the public interest.
---------------------------------------------------------------------------

    International Terrestrial and Satellite. Regulatory fees for 
International Bearer Circuits are to be paid by facilities-based common 
carriers that have active (used or leased) international bearer 
circuits as of December 31, of the prior year in any terrestrial or 
satellite transmission facility for the provision of service to an end 
user or resale carrier, which includes active circuits to themselves or 
to their affiliates. In addition, non-common carrier satellite 
operators must pay a fee for each circuit sold or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. ``Active circuits'' for 
these purposes include backup and redundant circuits. In addition, for 
these purposes, whether circuits are used specifically for voice or 
data is not relevant in determining that they are active circuits.
    21. In this Second Report and Order we are not addressing or 
deciding the appropriate amount of regulatory fees that should be 
assessed on submarine cable operators; we are adopting the framework 
for assessing fees on IBC providers. The revenue requirement for this 
category will vary each year, as it has in the past. The Commission has 
an ongoing proceeding seeking comment on whether regulatory fee 
categories bear their fair share of the total cost to the 
Commission.\49\ After the Commission has reviewed the record in that 
proceeding, it may find that submarine cable systems, along with other 
categories, may have been allocated too small a revenue requirement in 
the past or that submarine cable systems have been allocated a too 
large revenue requirement and that other categories should pay more.
---------------------------------------------------------------------------

    \49\ See FY 2008 Report and Order at para. 25-58; ``Office of 
Managing Director Releases Data to Assist Commenters on Issues 
Presented in Further Notice of Proposed Rulemaking Adopted on August 
1, 2008,'' MD Docket No. 08-65, Public Notice, DA 08-2033, rel. 
Sept. 3, 2008.
---------------------------------------------------------------------------

    22. Today we divide the existing IBC regulatory fee category into 
two new categories, one for terrestrial and satellite facilities and a 
second for submarine cable operators. This represents a permitted 
amendment to the regulatory fee schedule under section 9(b)(3) of the 
Act. Section 9(b)(4)(B) of the Act requires us to notify Congress 90 
days before the change may take effect. We will provide Congress 
notification upon release of this Second Report and Order.

IV. Procedural Matters

A. Final Paperwork Reduction Act of 1995 Analysis

    23. This Report and Order contains modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (``PRA''), 
Public Law 104-13. It will be submitted to the Office of Management and 
Budget (``OMB'') for review under section 3507(d) of the PRA.\50\ OMB, 
the general public, and other Federal agencies are invited to comment 
on the new or modified information collection requirements contained in 
this proceeding. In addition, we note that pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we previously sought specific comment on how the 
Commission might ``further reduce the information collection burden for 
small business concerns with fewer than 25 employees.''
---------------------------------------------------------------------------

    \50\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

B. Congressional Review Act Analysis

    24. The Commission will send a copy of this Second Report and Order 
in a report to be sent to Congress and the General Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).

[[Page 22109]]

V. Ordering Clauses

    25. Accordingly, it is ordered 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) that this Second Report and Order is 
adopted.
    26. It is further ordered that part 1 of the Commission's rules are 
amended as set forth herein, and these rules shall become effective 90 
days after Congressional notification.
    27. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Report and Order, including the Final Regulatory 
Flexibility Analysis in Appendix B, to the Chief Counsel for Advocacy 
of the U.S. Small Business Administration.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Appendix A

Final Regulatory Flexibility Analysis

    28. As required by the Regulatory Flexibility Act (``RFA''),\51\ 
the Commission prepared an Initial Regulatory Flexibility Analysis 
(``IRFA'') of the possible significant economic impact on small 
entities by the policies and rules proposed in the Notice of Proposed 
Rulemaking.\52\ Written public comments were requested on the IRFA. 
This Final Regulatory Flexibility Analysis (``FRFA'') conforms to the 
RFA.\53\
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612, has been amended 
by the Contract With America Advancement Act of 1996, Public Law No. 
104-121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the CWAAA is 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(``SBREFA'').
    \52\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2008, MD Docket No. 08-65, RM-11312, Notice of Proposed 
Rulemaking and Order, 23 FCC Rcd 7987 (2008) (``FY 2008 NPRM'').
    \53\ 5 U.S.C. 604.
---------------------------------------------------------------------------

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

    29. We agreed to revise our methodology for calculating regulatory 
fees for international bearer circuits (``IBCs'') within 60 days of 
adoption of our FY 2008 Report and Order.\54\
---------------------------------------------------------------------------

    \54\ See Assessment and Collection of Regulatory Fees for Fiscal 
Year 2008, MD Docket No. 08-65, RM-11312, Report and Order and 
Further Notice of Proposed Rulemaking, ---- FCC Rcd ------, para. 24 
(2008) (``FY 2008 Report and Order'').
---------------------------------------------------------------------------

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

    30. No parties have raised significant issues in response to the 
IRFA.

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

    31. 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.\55\ The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \56\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\57\ 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.\58\
---------------------------------------------------------------------------

    \55\ 5 U.S.C. 603(b)(3).
    \56\ 5 U.S.C. 601(6).
    \57\ 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.''
    \58\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    32. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.\59\
---------------------------------------------------------------------------

    \59\ See SBA, Programs and Services, SBA Pamphlet No. CO-0028, 
at page 40 (July 2002).
---------------------------------------------------------------------------

    33. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.\60\
---------------------------------------------------------------------------

    \60\ Independent Sector, The New Nonprofit Almanac & Desk 
Reference (2002).
---------------------------------------------------------------------------

    34. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' \61\ Census Bureau data for 
2002 indicate that there were 87,525 local governmental jurisdictions 
in the United States.\62\ We estimate that, of this total, 84,377 
entities were ``small governmental jurisdictions.'' \63\ Thus, we 
estimate that most governmental jurisdictions are small.
---------------------------------------------------------------------------

    \61\ 5 U.S.C. 601(5).
    \62\ U.S. Census Bureau, Statistical Abstract of the United 
States: 2006, Section 8, page 272, Table 415.
    \63\ We assume that the villages, school districts, and special 
districts are small and total 48,558. See U.S. Census Bureau, 
Statistical Abstract of the United States: 2006, section 8, page 
273, Table 417. For 2002, Census Bureau data indicate that the total 
number of county, municipal, and township governments nationwide was 
38,967, of which 35,819 were small. Id.
---------------------------------------------------------------------------

    35. We have included small incumbent local exchange carriers in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
\64\ The SBA's Office of Advocacy contends that, for RFA purposes, 
small incumbent local exchange carriers are not dominant in their field 
of operation because any such dominance is not ``national'' in 
scope.\65\ We have therefore included small incumbent local exchange 
carriers in this RFA analysis, although we emphasize that this RFA 
action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
---------------------------------------------------------------------------

    \64\ 15 U.S.C. 632.
    \65\ Letter from Jere W. Glover, Chief Counsel for Advocacy, 
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small 
Business Act contains a definition of ``small-business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 
601(3) (RFA). SBA regulations interpret ``small business concern'' 
to include the concept of dominance on a national basis. See 13 CFR 
121.102(b).
---------------------------------------------------------------------------

    36. International Service Providers. There is no small business 
size standard developed specifically for providers of international 
service. The appropriate size standards under SBA rules are for the two 
broad census categories of ``Satellite Telecommunications'' and ``Other 
Telecommunications.'' Under both categories, such a business is small 
if it has $13.5 million or less in average annual receipts.\66\
---------------------------------------------------------------------------

    \66\ 13 CFR 121.201, NAICS codes 517410 and 517910.
---------------------------------------------------------------------------

    37. The first category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing point-to-point 
telecommunications services to other establishments in the 
telecommunications and broadcasting industries by forwarding and 
receiving communications signals via a system of satellites or 
reselling satellite telecommunications.'' \67\ For this category, 
Census Bureau data for 2002 show that there were a total of 371 firms

[[Page 22110]]

that operated for the entire year.\68\ Of this total, 307 firms had 
annual receipts of under $10 million, and 26 firms had receipts of $10 
million to $24,999,999.\69\ Consequently, we estimate that the majority 
of Satellite Telecommunications firms are small entities that might be 
affected by our action.
---------------------------------------------------------------------------

    \67\ U.S. Census Bureau, 2002 NAICS Definitions, ``517410 
Satellite Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \68\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 517410.
    \69\ Id. An additional 38 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

    38. The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications telemetry, and radar station operations; or (2) 
providing satellite terminal stations and associated facilities 
operationally connected with one or more terrestrial communications 
systems and capable of transmitting telecommunications to or receiving 
telecommunications from satellite systems.'' \70\ For this category, 
Census Bureau data for 2002 show that there were a total of 332 firms 
that operated for the entire year.\71\ Of this total, 259 firms had 
annual receipts of under $10 million and 15 firms had annual receipts 
of $10 million to $24,999,999.\72\ Consequently, we estimate that the 
majority of Other Telecommunications firms are small entities that 
might be affected by our action.
---------------------------------------------------------------------------

    \70\ U.S. Census Bureau, 2002 NAICS Definitions, ``517910 Other 
Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \71\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 517910.
    \72\ Id. An additional 14 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

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

    39. With certain exceptions, the Commission's Schedule of 
Regulatory Fees applies to all Commission licensees and regulatees. IBC 
fees apply to circuits: (1) Used by a facilities-based common carrier 
to provide service to an end user or resale carrier; (2) used by a non-
common carrier submarine cable operator; and (3) sold or leased by a 
non-common carrier satellite operator, other than an international 
common carrier.
    40. In this Second Report and Order we adopt a flat annual per 
cable landing license fee for IBCs. We keep a per circuit regulatory 
fee for terrestrial and satellite facilities. The reporting 
requirements for terrestrial and satellite facilities would not be 
changed. We anticipate that the reporting requirements for carriers 
with IBCs may decrease as a result of the rule adopted herein.

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

    41. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives: (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.\73\ In the rule we adopt for IBCs, we are creating a separate 
category for smaller submarine cable systems, with a lower regulatory 
fee.
---------------------------------------------------------------------------

    \73\ 5 U.S.C. 603.
---------------------------------------------------------------------------

    42. Report to Small Business Administration: The Commission will 
send a copy of this Second Report and Order, including a copy of the 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. The Second Report and Order and FRFA (or summaries 
thereof) will also be published in the Federal Register.
    43. Report to Congress: The Commission will send a copy of this 
FRFA, along with this Second Report and Order, in a report to Congress 
pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

Appendix B

Final Rule

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR, part 1 as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for Part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303, 309.


0
2. Section 1.1156 is revised to read as follows:


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

    (a) The following schedule applies for the listed services:

------------------------------------------------------------------------
                                   Fee amount            Address
------------------------------------------------------------------------
Radio facilities:
    1. International HF          ..............  FCC, Int'l, P.O. Box
     Broadcast                                    979084, St. Louis, MO
                                                  63197-9000.
    2. International Public      ..............  FCC, Int'l, P.O. Box
     Fixed                                        979084, St. Louis, MO
                                                  63197-9000.
Space Stations (Geostationary    ..............  FCC, Space Stations,
 Orbit)                                           P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
Space Stations (Non-             ..............  FCC, Space Stations,
 Geostationary Orbit)                             P.O. Box 979084, St.
                                                  Louis, MO 63197-9000.
Earth Stations:
    Transmit/Receive & Transmit  ..............  FCC, Earth Station,
     only (per authorization or                   P.O. Box 979084, St.
     registration)                                Louis, MO 63197-9000.
------------------------------------------------------------------------

     (b) International Terrestrial and Satellite. Regulatory fees for 
International Bearer Circuits are to be paid by facilities-based common 
carriers that have active (used or leased) international bearer 
circuits as of December 31, of the prior year in any terrestrial or 
satellite transmission facility for the provision of service to an end 
user or resale carrier, which includes active circuits to themselves or 
to their affiliates. In addition, non-common carrier satellite 
operators must pay a fee for each circuit sold or leased to any 
customer, including themselves or their affiliates, other than an 
international common carrier authorized by the Commission to provide 
U.S. international common carrier services. ``Active circuits'' for 
these purposes include backup and

[[Page 22111]]

redundant circuits. In addition, whether circuits are used specifically 
for voice or data is not relevant in determining that they are active 
circuits.

    Note to paragraph (b). The fee amount, per active 64 KB circuit 
or equivalent will be determined for each fiscal year. Payment, if 
mailed, shall be sent to: FCC, International, P.O. Box 979084, St. 
Louis, MO 63197-9000.

    (c) Submarine cable: Regulatory fees for submarine cable systems 
will be paid annually, per cable landing license, for all submarine 
cable systems operating as of December 31 of the prior year. The fee 
amount will be determined according to following table by the 
Commission for each fiscal year.
    Payment, if mailed, shall be sent to: FCC, International, P.O. Box 
979084, St. Louis, MO 63197-9000.

------------------------------------------------------------------------
                                                     Address FCC, Int'l,
   Submarine Cable Systems                          P.O. Box 979084, St.
(capacity as of December 31)      Fee amount          Louis, MO 63197-
                                                           099000
------------------------------------------------------------------------
< 2.5 Gbps..................  6.25% of a payment    FCC, Int'l, P.O. Box
                               unit.                 979084, St. Louis,
                                                     MO 63197-9000.
2.5 Gbps or greater, but      12.5% of a payment    FCC, Int'l, P.O. Box
 less than 5 Gbps.             unit.                 979084, St. Louis,
                                                     MO 63197-9000.
5 Gbps or greater, but less   25% of a payment      FCC, Int'l, P.O. Box
 than 10 Gbps.                 unit.                 979084, St. Louis,
                                                     MO 63197-9000.
10 Gbps or greater, but less  50% of a payment      FCC, Int'l, P.O. Box
 than 20 Gbps.                 unit.                 979084, St. Louis,
                                                     MO 63197-9000.
20 Gbps or greater..........  One payment unit....  FCC, Int'l, P.O. Box
                                                     979084, St. Louis,
                                                     MO 63197-9000.
------------------------------------------------------------------------


    Note: The following statements will not be incorporated into the 
Code of Federal Regulations.

Statement of Acting Chairman Michael J. Copps

Re: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, 
MD Docket No. 08-65

    I am pleased that the Commission is finally taking action to adopt 
a new methodology for assessing regulatory fees applicable to submarine 
cable systems, one that better reflects today's marketplace. Such a 
revision is well past due. I have long emphasized the importance and 
desirability of bringing our regulatory fee systems into the modern 
era.
    Great thanks are owed to the many affected stakeholders who joined 
together, and worked assiduously, to develop an equitable consensus 
proposal that has assisted the Commission in its work.

Statement of Commissioner Jonathan S. Adelstein

Re: Assessment and Collection of Regulatory Fees for Fiscal Year 2008, 
MD Docket No. 08-65

    I enthusiastically approve this item which addresses the concerns 
raised by international submarine cable operators. They have long 
argued, with good cause, that the current regulatory fee structure does 
not allocate costs among service providers in an equitable and neutral 
manner. I have encouraged the Commission to continue to improve its 
regulatory fee assessment processes so that in the future we are more 
able to make adjustments as appropriate. I am happy that today we make 
long overdue adjustments needed to international bearer circuit fees 
for submarine cable operators. I also commend the operators who worked 
diligently over the past several months to put forth a consensus 
proposal which forms the basis of the new methodology we adopt here.

Statement of Commissioner Robert M. McDowell

    Re: Assessment and Collection of Regulatory Fees for Fiscal Year 
2008, MD Docket No. 08-65

    I am pleased to support this order, which the Commission had 
pledged to complete last fall. In that regard, I thank Acting Chairman 
Copps for bringing this forward promptly. I also thank the coalition of 
service providers who worked diligently to develop a thoughtful, 
equitable proposal. Your efforts have greatly assisted us in crafting a 
sensible decision that properly reflects and accounts for the 
incredible expansion of capacity on international submarine cables.

[FR Doc. E9-10987 Filed 5-11-09; 8:45 am]
BILLING CODE 6712-01-P