22104 Federal Register / Vol. 74, No. 90 / Tuesday, May 12, 2009 / Rules and Regulations 

1This 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. 

2Assessment 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. 

3See 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. 

4Terrestrial 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. 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

(adjusted annually for inflation) in any 

year. This final rule would have no such 

effect on State, local, and tribal 

governments, or on the private sector. 

Catalog of Federal Domestic Assistance 

Numbers and Titles 

The Catalog of Federal Domestic 

Assistance program numbers and titles 

for this rule are 64.101, Burial Expenses 

Allowance for Veterans; 64.201, 

National Cemeteries; 64.203, State 

Cemetery Grants. 

List of Subjects in 38 CFR Part 3 

Administrative practice and 

procedure, Claims, Disability benefits, 

Health care, Pensions, Radioactive 

materials, Veterans, Vietnam. 

Approved: April 9, 2009. 

John R. Gingrich, 

Chief of Staff, Department of Veterans Affairs. 

■ For the reasons set forth in the 

preamble, 38 CFR part 3 is amended as 

follows: 

PART 3—ADJUDICATION 

Subpart B—Burial Benefits 

■ 1. The authority citation for part 3, 

subpart B continues to read as follows: 

Authority: 105 Stat. 386, 38 U.S.C. 501(a), 

2302–2308, unless otherwise noted. 

§ 3.1604 [Amended] 

■ 2. Amend § 3.1604(d)(2) by removing 

the second and third sentences. 

[FR Doc. E9–10982 Filed 5–11–09; 8:45 am] 

BILLING CODE P 

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. 

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. 

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 


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Federal Register / Vol. 74, No. 90 / Tuesday, May 12, 2009 / Rules and Regulations 22105 

5Assessment 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’’). 

6FY 2004 Report and Order, 19 FCC Rcd at 

11672, para. 29. 

7Assessment 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’’). 

8Assessment 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’’). 

9See 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’’). 

10See 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. 

11See ‘‘Proposal of AT&T and Verizon,’’ filed 

Sept. 2, 2008 (‘‘AT&T/Verizon Proposal’’). 

12By ‘‘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. 

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.’’). 

17See 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. Noncommon 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. 

18FY 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. 

20For 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.’’) 

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 noncommon 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. 

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

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

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 


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22106 Federal Register / Vol. 74, No. 90 / Tuesday, May 12, 2009 / Rules and Regulations 

21See 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. 23See Revised Joint Proposal. See also FY 2008 

Report and Order at para. 16 for a discussion of the 

Revised Joint Proposal. 24See AT&T/Verizon Proposal. 25See note 3 for a list of signatories to the 

Consensus Proposal. 26Consensus 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. 

30See, 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.’’ 

31See AT&T/Verizon Proposal at 4–5. 

32Section 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. 

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. 

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. 

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 selfreporting 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

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 


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Federal Register / Vol. 74, No. 90 / Tuesday, May 12, 2009 / Rules and Regulations 22107 

33See 47 CFR 1.767, 1.768. 

34See 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. 

35This apportionment will be determined on an 

annual basis and proposed in our annual regulatory 

fee Notice of Proposed Rulemaking. 

36We 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. 

37See Consensus Proposal. 

38The 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. 

39We anticipate that the subcategories of small 

systems and the definitions of large and small 

systems may change as the submarine cable 

industry changes. 

40A ‘‘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. 

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. 

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. 

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. 

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. 

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 


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41See 47 CFR 1.767(g)(14). 

42See Telsra Incorporated Reply Comments at 2 

(requesting a two-year ramp up period for new 

systems, with reduced regulatory fees). 

43See 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. 

45NREN 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. 

47The 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. 

48This 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. 

49See 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. 

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

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. 

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. 

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 passthrough 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. 

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: 

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, noncommon 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. 

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.’’ 

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). 


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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’’). 

52See 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. 

54See 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’’). 

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. 

59See SBA, Programs and Services, SBA 

Pamphlet No. CO–0028, at page 40 (July 2002). 

60 Independent Sector, The New Nonprofit 

Almanac & Desk Reference (2002). 

61 5 U.S.C. 601(5). 

62U.S. Census Bureau, Statistical Abstract of the 

United States: 2006, Section 8, page 272, Table 415. 

63We 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. 

64 15 U.S.C. 632. 

65Letter 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). 

66 13 CFR 121.201, NAICS codes 517410 and 

517910. 

67U.S. Census Bureau, 2002 NAICS Definitions, 

‘‘517410 Satellite Telecommunications’’; http:// 

www.census.gov/epcd/naics02/def/NDEF517.HTM. 

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

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

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

32. Small Businesses. Nationwide, 

there are a total of 22.4 million small 

businesses, according to SBA data.59

33. Small Organizations. Nationwide, 

there are approximately 1.6 million 

small organizations.60

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. 

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. 

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

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 


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68U.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. 

70U.S. Census Bureau, 2002 NAICS Definitions, 

‘‘517910 Other Telecommunications’’; http:// 

www.census.gov/epcd/naics02/def/NDEF517.HTM. 

71U.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. 

73 5 U.S.C. 603. 

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. 

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. 

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. 

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 

■ For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR, part 1 as 

follows: 

PART 1—PRACTICE AND 

PROCEDURE 

■ 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. 

■ 2. Section 1.1156 is revised to read as 

follows: 

§ 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 Broadcast ........................ FCC, Int’l, P.O. Box 979084, St. Louis, MO 63197–9000. 

2. International Public Fixed ........................ FCC, Int’l, P.O. Box 979084, St. Louis, MO 63197–9000. 

Space Stations (Geostationary Orbit) ........................ FCC, Space Stations, P.O. Box 979084, St. Louis, MO 

63197–9000. 

Space Stations (Non-Geostationary Orbit) ........................ FCC, Space Stations, P.O. Box 979084, St. Louis, MO 

63197–9000. 

Earth Stations: 

Transmit/Receive & Transmit only (per authorization or 

registration) 

........................ FCC, Earth Station, P.O. Box 979084, St. 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, noncommon 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 


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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. 

Submarine Cable Systems 

(capacity as of December 31) 

Fee amount Address 

FCC, Int’l, P.O. Box 979084, 

St. Louis, MO 63197–099000 

< 2.5 Gbps .......................................................... 6.25% of a payment unit .................................. FCC, Int’l, P.O. Box 979084, St. Louis, MO 

63197–9000. 

2.5 Gbps or greater, but less than 5 Gbps ........ 12.5% of a payment unit .................................. FCC, Int’l, P.O. Box 979084, St. Louis, MO 

63197–9000. 

5 Gbps or greater, but less than 10 Gbps ......... 25% of a payment unit ..................................... FCC, Int’l, P.O. Box 979084, St. Louis, MO 

63197–9000. 

10 Gbps or greater, but less than 20 Gbps ....... 50% of a payment unit ..................................... FCC, Int’l, P.O. Box 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 


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