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Assessment and Collection of Regulatory Fees for Fiscal Year 2019

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Start Preamble Start Printed Page 50890

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission revises its Schedule of Regulatory Fees to recover an amount of $339,000,000 that Congress has required the Commission to collect for fiscal year 2019. Section 9 of the Communications Act of 1934, as amended, provides for the annual assessment and collection of regulatory fees under sections 9(b)(2) and 9(b)(3), respectively, for annual “Mandatory Adjustments” and “Permitted Amendments” to the Schedule of Regulatory Fees.

DATES:

Effective September 26, 2019. To avoid penalties and interest, regulatory fees should be paid by the due date of September 27, 2019.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Roland Helvajian, Office of Managing Director at (202) 418-0444.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Report and Order, FCC 19-83, MD Docket No. 19-105, adopted on August 15, 2019 and released on August 27, 2019. The full text of this document is available for public inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW, Washington, DC 20554, or by downloading the text from the Commission's website at http://transition.fcc.gov/​Daily_​Releases/​Daily_​Business/​2017/​db0906/​FCC-17-111A1.pdf.

I. Administrative Matters

A. Final Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act of 1980 (RFA),[1] the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Report and Order. The FRFA is located towards the end of this document.

B. Final Paperwork Reduction Act of 1995 Analysis

2. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

C. Congressional Review Act

3. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs that these rules are non-major under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

II. Introduction

4. Each year, the Commission must adopt a new schedule of regulatory fees for regulatory payors, i.e., those entities required to fund the Commission's activities. In this Report and Order, we adopt a schedule to collect the $339,000,000 in congressionally required regulatory fees for fiscal year (FY) 2019.[2] The regulatory fees are due in September 2019. We also adopt several targeted amendments to our rules to conform with the text of the Communications Act of 1934, as amended by the RAY BAUM'S Act.[3] And in the future we will seek comment on several proposals to amend our schedule of regulatory fees for FY 2020.

III. Background

5. The Commission is required by Congress to assess regulatory fees each year in an amount that can reasonably be expected to equal the amount of its appropriation.[4] Regulatory fees recover direct costs, such as salary and expenses; indirect costs, such as overhead functions; and support costs, such as rent, utilities, and equipment.[5] Regulatory fees also cover the costs incurred in regulating entities that are statutorily exempt from paying regulatory fees (e.g., governmental and nonprofit entities, amateur radio operators, and noncommercial radio and television stations) [6] and entities whose regulatory fees are waived.[7]

6. The Commission's methodology for assessing regulatory fees must “reflect the full-time equivalent number of employees within the bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities.” [8] Since 2012, the Commission has assessed the allocation of full-time equivalents (FTE) [9] by first determining the number of FTEs in each “core” bureau that carries out licensing activities (i.e., the Wireless Telecommunications Bureau, Media Bureau, Wireline Competition Bureau, and International Bureau) and then attributing all other FTEs to payor categories based on these core FTE allocations.[10]

7. As part of its annual regulatory fee rulemaking process, the Commission seeks comment to improve the regulatory fee methodology and has adopted significant regulatory fee reforms. For example, in 2013, the Commission updated FTE allocations to more accurately reflect the number of FTEs working on regulation and oversight of regulatees in the payor categories.[11] In 2014, the Commission adopted a new regulatory fee subcategory for toll free numbers within Start Printed Page 50891the Interstate Telecommunications Service Provider (ITSP) category.[12] In 2015, the Commission adopted a regulatory fee for Direct Broadcast Satellite (DBS), as a subcategory of the cable television and IPTV fee category,[13] and reallocated four additional International Bureau FTEs from direct to indirect.[14] In 2016, the Commission adjusted regulatory fees for radio and television broadcasters, based on the type and class of service and on the population served.[15] In 2017, the Commission reallocated as indirect 38 FTEs in the Wireline Competition Bureau assigned to work on non-high cost programs of the Universal Service Fund.[16] The Commission also reallocated for regulatory fee purposes four FTEs assigned to work on numbering issues from the Wireline Competition Bureau to the Wireless Telecommunications Bureau [17] and added non-common carrier terrestrial international bearer circuits (IBCs) as payors.[18] In 2018, the Commission adopted new tiers for submarine cable regulatory fees,[19] a new methodology for calculating full power broadcast television regulatory fees,[20] and amended the rules regarding the collection of delinquent debt.[21]

8. In 2018, as part of the RAY BAUM'S Act, Congress revised the Commission's regulatory fee authority by modifying section 9 and adding section 9A to the Communications Act.[22] In the FY 2019 NPRM, we sought comment on the RAY BAUM'S Act's modifications to the Commission's regulatory fee authority.[23] We also sought comment on (1) proposals to allocate fees to payor categories and to allocate FTEs consistent with the same methodology used in FY 2018; [24] (2) a proposal to continue phasing in the DBS regulatory fee; [25] (3) proposed fees to implement the methodology adopted in FY 2018 for full service broadcast television regulatory fees; [26] and (4) a proposal to continue to base terrestrial and satellite IBC regulatory fees on a per Gbps methodology.[27] Additionally, we sought comment on whether to adopt a section 9(e)(2) de minimis exemption of $1,000 for annual regulatory fee payors; [28] and on other regulatory fee reforms more generally.[29] We received 15 comments and eight reply comments on the FY 2019 NPRM.[30]

IV. Report and Order

9. Pursuant to section 9 of the Communications Act, in this FY 2019 Report and Order, we adopt the regulatory fee schedule proposed in the FY 2019 NPRM for FY 2019, as modified herein, to collect $339,000,000 in regulatory fees.[31] We also adopt the regulatory fee categories proposed in the FY 2019 NPRM.[32]

A. Assessing and Allocating Fees Under RAY BAUM'S Act

10. In the FY 2019 NPRM, the Commission described in some detail the RAY BAUM'S Act modifications to section 9 and the new section 9A and sought comment on how those modifications should be incorporated into our regulatory fee process.[33] Each year the Commission must collect regulatory fees sufficient to equal the amount appropriated by Congress for the Commission's use for such fiscal year (as before). Each year, the Commission must assess regulatory fees that “reflect the full-time equivalent number of employees within the bureaus and offices of the Commission” (as before).[34] And each year the Commission's assessed regulatory fees must be “adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities” (as before).[35] Accordingly, we find the fee assessment structure dictated by the statute fundamentally remains unchanged. Or in other words, because the new section 9 closely aligns to how the Commission assessed and collected fees under the prior section 9, we will hew closely to our prior methodology in assessing FY 2019 regulatory fees.

11. We reject the arguments of the State Broadcasters that the RAY BAUM'S Act fundamentally changed how the Commission should calculate regulatory fees and that we are no longer required to base regulatory fees on the direct FTEs in core bureaus.[36] Given the Act's requirement that fees must “reflect” FTEs before adjusting fees to take into account other factors, we find FTE counts by far the most Start Printed Page 50892administrable starting point for regulatory fee allocations.

12. Specifically, we will continue to apportion regulatory fees across fee categories based on the number of direct FTEs in each core bureau and the proportionate number of indirect FTEs and to take into account factors that are reasonably related to the payor's benefits. The first step in the fee recovery structure we adopt in this Report and Order is to allocate appropriated amounts to be recovered proportionally based on the number of direct FTEs within each core bureau (with indirect FTEs allocated in proportion to the direct FTEs). Those proportions are then subdivided within each core bureau into fee categories among the regulatees served by the core bureau.[37] Finally, within each fee category, the amount to be collected is divided by a unit that allocates the regulatee's proportionate share based on an objective measure.[38]

13. To apply our methodology, the Commission in the FY 2019 NPRM proposed that non-auctions funded FTEs will be classified as “direct” only if in one of the four core bureaus—the Wireline Competition Bureau, the Wireless Telecommunications Bureau, the Media Bureau, and the International Bureau. The indirect FTEs are non-auctions funded employees from the following bureaus and offices: Enforcement Bureau, Consumer & Governmental Affairs Bureau, Public Safety and Homeland Security Bureau, Chairman and Commissioners' offices, Office of the Managing Director, Office of General Counsel, Office of the Inspector General, Office of Communications Business Opportunities, Office of Engineering and Technology, Office of Legislative Affairs, Office of Workplace Diversity, Office of Media Relations, Office of Economics and Analytics, and Office of Administrative Law Judges, along with some FTEs in the Wireline Competition Bureau and the International Bureau that the Commission has previously classified as indirect.[39] We maintain these classifications, consistent with prior practice.

14. In recognition that the Commission took two actions during FY 2019 that significantly impacted the numbers of FTEs in the core bureaus, the Commission next proposed to base the FY 2019 FTE allocations on the relative time that FTEs remained in core bureaus. Specifically, the Commission reassigned staff to the Office of Economics and Analytics, effective December 11, 2018, resulting in the reassignment of 95 FTEs (of which 64 were not auctions-funded) as indirect FTEs.[40] This reassignment resulted in a reduction in direct FTEs in the Wireline Competition Bureau, Wireless Telecommunications Bureau, and Media Bureau. And the Commission reassigned Equal Employment Opportunity enforcement staff from the Media Bureau to the Enforcement Bureau, effective March 15, 2019, resulting in a reduction of 7 direct FTEs in the Media Bureau.[41] On net, these changes resulted in the Wireless Telecommunications Bureau going from 89 FTEs to 80.5 FTEs, the Wireline Competition Bureau going from 123 FTEs to 100.8 FTEs, and the Media Bureau going from 131 FTEs to 115.1 FTEs. We adopt this method of addressing these reassignments as proposed.

15. In sum, there were 320.4 direct FTEs for FY 2019, distributed among the core bureaus as follows International Bureau (24), Wireless Telecommunications Bureau (80.5), Wireline Competition Bureau (100.8), and the Media Bureau (115.1). This results in 7.49% of the FTE allocation for International Bureau regulatees; 25.12% of the FTE allocation for Wireless Telecommunications Bureau regulatees; 31.46% of the FTE allocation for Wireline Competition Bureau regulatees; and 35.93% of FTE allocation for Media Bureau regulatees. There were in turn 936 indirect FTEs spread across the Commission: Enforcement Bureau (190), Consumer & Governmental Affairs Bureau (110), Public Safety and Homeland Security Bureau (90), part of the International Bureau (60), part of the Wireline Competition Bureau (38), Chairman and Commissioners' offices (20), Office of the Managing Director (138), Office of General Counsel (71), Office of the Inspector General (45), Office of Communications Business Opportunities (10), Office of Engineering and Technology (72), Office of Legislative Affairs (8), Office of Workforce Diversity (4), Office of Media Relations (13), Office of Economics and Analytics (64), and Office of Administrative Law Judges (3).[42] Allocating these indirect FTEs based on the direct FTE allocations yields an additional 70.1 FTEs attributable to International Bureau regulatees, 235.1 FTEs attributable to Wireless Telecommunications Bureau regulatees, 294.5 FTEs attributable to Wireline Competition Bureau regulatees, and 336.3 FTEs attributable to Media Bureau regulatees.

16. Based on these allocations and the requirement to collect $339,000,000 in regulatory fees this year, we project collecting approximately $25.39 million (7.49%) in fees from International Bureau regulatees; $85.15 million (25.12%) in fees from Wireless Telecommunications Bureau regulatees; $106.64 million (31.46%) from Wireline Competition Bureau regulatees; and $121.82 million (35.93%) from Media Bureau regulatees. We set specific regulatory fees in Table 3 so that regulatees within a fee category pay their proportionate share based on an objective measure (e.g., revenues or number of subscribers).

17. We reject the arguments of the State Broadcasters and NAB who ask us to overturn this long-running framework for allocating regulatory fees—and specifically our allocation of indirect FTEs in proportion to direct FTEs.[43] For one, we must allocate indirect FTEs among regulatees somehow (per Congress's direction), and relying on the allocation of direct FTEs gives us an objective, easily administrable measure to do just that. Neither NAB nor the State Broadcasters identify an objective, easily administrable alternative. For another, we have long relied on direct FTE allocations because the Commission has found those allocations best reflect the “benefits provided to the payor of the fee by the Commission's Start Printed Page 50893activities” [44] —in the case of broadcast licensees, the work the Media Bureau does to grant licenses and oversee and regulate their operations. Again, neither NAB nor the State Broadcasters explain how to allocate indirect FTE in a way that better reflects the “benefits provided to the payor.”

18. We also reject the arguments of the Satellite Operators, who assert that the International Bureau's direct FTE count is unfairly high in proportion to the direct FTE count in the other core bureaus, owing to the staff reassignments from other bureaus to indirect FTE status.[45] To the extent these commenters are arguing that we should not reallocate direct FTEs at all as a result of reassignment, we disagree—the Satellite Operators offer no reasons why we should treat these reassigned FTEs any differently from other direct FTE changes as a result of shifting Commission needs and priorities. Further, the Satellite Operators' complaints that FTEs within other core bureaus should not be treated as indirect [46] ring hollow—with 60 indirect FTEs at stake (and a 20.2% FTE allocation were we to treat all core bureau FTEs as direct), International Bureau regulatees are by far the greatest beneficiaries of our past decisions to take a more granular look at direct FTEs within the core bureaus.

19. We recognize that the increase in allocation for International Bureau regulatees—from 6.25% to 7.49%—is non-trivial, but we disagree with the Satellite Operators that we should arbitrarily shift these fees onto other regulatees and keep satellite regulatory fees proportional to changes in our appropriations.[47] Regulatory fees are a zero-sum situation, so any decrease to the fees paid by one category of regulatees necessitates an increase in fees for others, which is precisely why the Commission hews so closely to the statutory command to start with FTE counts and then potentially adjust fees to reflect other factors related to the payor's benefits. Because the International Bureau has a relatively small number of direct FTEs, the increase in its percentage of the whole resulted in a non-trivial increase in fees for International Bureau regulatees. We recognize that this increase is significant; however, it is consistent with the results when FTE counts have previously shifted as a result of the regulatory fee structure.[48]

20. For similar reasons, we reject the claims of INCOMPAS and NASCA that the proposed increase in the regulatory fees for submarine cable in FY 2019 is unreasonable because the Commission failed to demonstrate an increase in “the benefits provided” to submarine cable licensees, as compared to other licensees.[49] The Commission has never followed that standard nor could it since we do not control many of the factors we must account for in setting fees, such as the total annual amount to be collected or the number of payment units in a category. What is more, such a requirement would preclude the Commission from ever reassessing its allocation of direct FTEs (and honing our allocation processes), a stance that neither INCOMPAS nor NASCA attempt to square with the statute.

21. We understand the requests of several commenters that the Commission offer even more granular information about work assignments and FTE allocations within and among bureaus for analysis.[50] But we do not base regulatory fees on a precise allocation of specific employees with certain work assignments each year and instead must take a higher-level approach for several reasons. First, the statute is driven by the number of FTEs, not by the workload of individual employees.[51] Second, as the Commission explained in the FY 2015 Report and Order when this issue was raised previously, FTEs work on a wide range of issues and it is difficult to attribute their work to a specific category.[52] Moreover, the wide variety of issues handled in non-core bureaus may also include services that are not specifically correlated with one core bureau, let alone one category of regulatees.[53] Third, most Commission attorneys, engineers, analysts, and other staff work on a variety of issues even during a single fiscal year. A snapshot of staff assignments in a single division in any bureau, for example, may misrepresent the work being done six months or even six weeks later. Thus, even if we could calculate staff assignments at this granular level with accuracy, such assignments would not be accurate for the entire fiscal year and would result in significant unplanned shifts in regulatory fees as assignments change over time. And fourth, much of the work that could be assigned to a single category of regulatees is likely to be interspersed with the work that our staff does on behalf of many entities that do not pay regulatory fees, e.g., governmental entities, non-profit organizations, and very small regulatees that have an exemption.[54] That is why we take a higher-level approach and consider the work of a larger group such as a division or office or bureau, consistent with the high-level language of the Act that “fees reflect the full-time equivalent number of employees within the bureaus and offices of the Commission . . . .” [55]

22. Thus, we reject the proposal of the State Broadcasters to treat non-feeable Media Bureau regulatees differently from non-feeable regulatees in other bureaus, as an indirect cost.[56] Media Bureau regulatory fee payers are not alone in having to pay for exempt licensees; there are exempt licensees in most of the fee categories. For example, over 150 ITSPs are cooperatives and government entities and do not pay regulatory fees. ITSP licensees who pay regulatory fees are responsible for the costs for these exempt licensees and all Start Printed Page 50894ITSPs benefit from the regulation and oversight of the Wireline Competition Bureau. Similarly, many earth stations in the international services fee category are exempt and their costs are covered by non-exempt earth station licensees. Further, it would be unduly complex to redirect the costs attributable to fee exempt entities as indirect for each fee category and recalculate the regulatory fees with a larger group of indirect FTEs. Accordingly, we find it is consistent with the Act to include those costs that are attributable to the fee paying and exempt regulatees in the revenue requirement because all of the regulatees in that fee category, whether they pay regulatory fees or not, benefit from the oversight and regulation of that bureau.

23. We also reject the arguments of International Bureau regulatees to shift the allocation of fees (and FTEs) within the International Bureau. The International Bureau FTE calculation is unique in that it reflects decisions that the Commission has previously made to account for the fact that much of the work done in the bureau benefits fee payors across the core bureaus. Together, the International Bureau's Satellite Division, Telecommunications and Analysis Division, and Office of the Bureau Chief have more than 24 FTEs, but much of their staff has been determined to be indirect. Currently, we allocate 17.1 direct FTEs to the satellite category and 6.9 direct FTEs to the international bearer circuit (IBC) category. And since 2009, we have allocated regulatory fees between submarine cable and satellite and terrestrial IBCs based on a plan developed by the IBC industry, with 87.6% of IBC fees paid by submarine cable and 12.4% by satellite/terrestrial facilities.[57] We find that these allocations still represent a reasonable division that reflects the direct FTE work for the benefit of these fee payors.

24. We reject the argument of CenturyLink that we should cut the fees paid by satellite and terrestrial IBCs by 86% to reflect CenturyLink's calculation of the relative capacity of IBCs vis-à-vis submarine cable networks [58] and that we should further allocate more fee recovery to satellite IBCs than terrestrial IBC providers, claiming without specifics that satellite providers of IBCs benefit more than terrestrial providers from the Commission's activities.[59] We also reject NASCA's counter argument that we should allocate a smaller portion of fees to submarine cables because of the limited Commission activities—licensing and transaction reviews—that benefit the submarine cable payors and because other fee categories account for a much higher proportion of the FTE's activities in the International Bureau.[60] Intelsat and SES assert that any revision of the International Bureau intra-bureau allocations should not be done piecemeal and instead requires a wholesale examination of all International Bureau FTE activities.[61] As they and other International Bureau regulatees point out, any shifting of intra-bureau allocations necessarily means higher fees for other regulatees.[62] And without significant study and analysis over time and a sufficient record that the benefits of doing such reallocations would yield measurably more accurate results (or a clear path to reallocation given the competing proposals in the record), we maintain the current allocation of regulatory fees between the submarine cable and satellite and terrestrial IBCs with 87.6% paid by submarine cable and 12.4% paid by satellite/terrestrial facilities and instead will seek comment on the issue in furture rulemaking.[63]

B. Video Distribution Provider Regulatory Fees

25. Among other activities, the Media Bureau oversees the regulation of video distribution providers like multichannel video programming distributors (MVPDs), i.e., regulated companies that make available for purchase, by subscribers or customers, multiple channels of video programming. The Media Bureau relies on a common pool of FTEs to carry out its oversight of MVPDs and other video distribution providers. These responsibilities include market modifications, local-into-local, must-carry and retransmission consent disputes, program carriage and program access complaints, over-the-air reception device declaratory rulings and waivers, media rule modernization, media ownership, and proposed transactions.[64]

26. For these activities in FY 2019, the Commission must collect $67.02 million in regulatory fees from three categories of providers: Cable TV systems, IPTV providers, and direct broadcast satellite (DBS) operators. Although the Commission decided to assess cable TV systems and IPTV providers the same for regulatory fee purposes—assessing each provider based on its subscribership—the Commission took a different approach when it began to assess Media Bureau-based regulatory fees on DBS operators. Specifically, the Commission decided to phase in the new Media Bureau-based regulatory fee for DBS, starting at 12 cents per subscriber per year.[65] At the same time, the Commission committed to updating the regulatory fee rate in future years “as necessary for ensuring an appropriate level of regulatory parity and considering the resources dedicated to this new regulatory fee subcategory.” [66] Accordingly, from FY 2016 to FY 2018, the Commission increased the regulatory fee for DBS operators to 24 cents (plus a three cent moving fee) and then 36 cents (plus a two cent moving fee) and then 48 cents per subscriber per year, respectively, with the regulatory fees paid by DBS operators reducing those paid by other MVPDs.[67]

27. For FY 2019, the Commission proposed to continue this transition by increasing the DBS regulatory fee rate to Start Printed Page 5089560 cents per subscriber per year, thereby leaving other MVPDs with a regulatory fee of 86 cents per subscriber per year.[68] Although a common pool of FTEs work on MVPD and related issues for DBS operators, IPTV providers, and cable TV systems, which some commenters (again) argue justifies immediate parity in regulatory fees across these providers,[69] we believe it more prudent to adopt our proposal to increase such rates by one cent per subscriber per month, or 12 cents per subscriber per year.

28. AT&T and DISH—the two DBS operators—reiterate several arguments against any increase in DBS regulatory fees that they have raised, and the Commission has rejected, in previous years. For example, AT&T and DISH claim that there is “no data or analysis that demonstrates DBS providers caused any increase in Media Bureau FTEs over the past year,” [70] even though last year (and the year before), the Commission held that the DBS regulatory fee is based on the significant number of Media Bureau FTEs that work on MVPD issues that include DBS, “not a particular number of FTEs focused solely on DBS” or “specific recent proceedings.” [71] The phase in of the regulatory fee is not based on a change in FTEs working on issues that affect the DBS industry, but was the approach adopted to mitigate the impact of a fee increase should we move to immediate parity [72] while continuing “to bring the DBS fee closer to the cable television/IPTV fee.” [73]

29. For the same reasons, we reject AT&T and DISH's claim that they should not see an increase because there are more broadcast and cable television proceedings and regulations than DBS proceedings and regulations (not to mention that broadcasters are not even in the same payor category as DBS operators).[74] We also note our agreement with NCTA and ACA that Media Bureau employees dedicate substantially similar amounts of time and resources to the regulation of DBS as they do to cable television and IPTV,[75] indeed that AT&T and DISH have apparently submitted 154 filings in 26 separate Media Bureau dockets during the fiscal year,[76] that AT&T itself has “argued for parity in the administration of media rules by requesting that the Commission `ensure that changes made to the cable rules also be made in the DBS rules, as they are identical,' ” [77] and that in their accounting of Media Bureau activities, AT&T and DISH omitted transaction reviews, even though transactions raise significant regulatory issues for all MVPDs, including DBS.[78] We reiterate again that even differently regulated services can warrant placement in the same payor category if they are overseen by a common pool of FTEs; for example, the ITSP category includes a range of carriers that are not regulated similarly.[79] Cable television, IPTV, and DBS all receive oversight and regulation by Media Bureau FTEs working on MVPD issues.[80] For these reasons, we reject these arguments and agree with commenters that the continued participation of DBS operators in Commission proceedings, along with the use of a common pool of FTEs to oversee MVPD matters (including matters related to DBS operators in particular), justifies an increase in the DBS regulatory fee rate.

30. We also note that the amount to be recovered from all video distribution providers has increased as a result of both shifts in FTEs across bureaus and an increase in the Commission's appropriation; as a result, both DBS providers and cable and IPTV providers will see an increase in their fees this year. Thus, the increase to the DBS provider fee is both to account for increased amounts to be recovered through this fee category and to continue with the ongoing phase in.

31. Finally, we reject the claim of AT&T and DISH that the Commission should take into account the fee they pay based on the International Bureau FTEs as a basis for reducing their contribution to payment for Media Bureau FTEs.[81] The different bureaus provide different oversight and regulation; thus, we agree with NTCA and ACA that under the Act, the Commission assesses regulatory fees based on the FTEs in the bureau providing regulation and oversight—in this case both the International Bureau and the Media Bureau provide regulation and oversight—and there is no justification to offset the fee.[82]

C. Broadcast Television Stations Regulatory Fees

32. Historically, regulatory fees for full-power television stations were based on the Nielsen Designated Market Area (DMA) groupings 1-10, 11-25, 26-50, 51-100, and remaining markets (DMAs 101-210).[83] Broadcast television satellite stations [84] historically have paid a much lower regulatory fee than standalone, full-service broadcast television stations. In the FY 2018 NPRM, we sought comment on whether using the population covered by the station's contours [85] instead of using DMAs would more accurately reflect the actual market served by a full-power broadcast television station for purposes of assessing regulatory fees.[86] In the FY 2018 Report and Order, we adopted the proposed methodology using actual population and stated that in order to facilitate the transition to this new fee structure, for FY 2019, we planned to average the historical and newly calculated fees.[87]

33. In the FY 2019 NPRM, we proposed to adopt a fee based on an average of the historical DMA methodology and the population covered by a full-power broadcast station's contour for FY 2019, with a Start Printed Page 50896factor of .72 of one cent ($.007224).[88] However, several payors with broadcast television satellite stations note an error in the Appendix intended to implement this proposal, best illustrated by examining what happened to satellite station KOBF(TV), a station owned by Hubbard: Rather than averaging the historical fee paid by satellite stations ($1,625 for FY 2019) with the contour-based fee ($1,459), the Appendix averaged the non-satellite fee ($27,150) with the contour-based fee ($1,459).[89] In other words, the Appendix suggested to such licensees that the Commission intended as part of its transition to a new fee structure to increase the fee paid by KOBF(TV) from $1,500 in FY 2018 to $14,304 for one year before decreasing it down to $1,459. We agree with commenters that such an increase would have been unjustified and illogical [90] —and as commenters like Ramar argue, the Appendix did not reflect the Commission's intent as expressed in the text of the FY 2019 NPRM.[91] Instead, we adopt the proposal as proposed to transition broadcast stations from the historical DMA fee structure (including lower fees for satellite stations) to the contour-based methodology, using an average of the historical and contour-based fees in this transition year.[92]

34. We reject PCPM's assertion that the population served by a broadcast station is unrelated to the benefits received by television stations because, according to PCPM, advertising revenues are based on the DMA where a station is located and not on the service contour.[93] For decades, the Commission has assessed television broadcasters' regulatory fees based on population served,[94] with the Commission shifting just last year from relying on DMAs to service contours for these purposes. To the extent that PCPM seeks reconsideration of that decision, its request is untimely.[95] But more to the point, PCPM does recognize that a broadcast station's income does vary with market size and thus population served—and it seems readily apparent that two broadcasters within a DMA see vastly different benefits if one only covers a remote corner and the other covers the major metropolitan area (and similarly a broadcaster serving a much larger population is also more likely to be in a larger DMA and receive more advertising revenues). As the Commission decided last year, moving to contour-based assessment will allow us to more accurately assess regulatory fees and end the need (that still exists) to decide what stations should count as “satellite” stations for purposes of reducing their regulatory fees.[96]

D. AM and FM Radio Broadcaster Regulatory Fees

35. In the FY 2019 NPRM, the Commission proposed to revise the table for AM and FM broadcasters to reflect the increased amount to be collected for FY 2019.[97] The proposed fees were an increase from FY 2018 AM and FM broadcaster fees and the increase was a function of an increase to the Commission's appropriation, changes to the FTE allocations across bureaus and a reduction in the number of feeable FM and AM broadcasters (units) since FY 2018.

36. Based on comments of the State Broadcasters that we underestimated the number of feeable licensees,[98] we find that the Commission made a conservative estimate of the number of radio stations in the FY 2019 NPRM. We have updated our data by identifying licensed facilities as of October 1, 2018 from the Media Bureau's CDBS system [99] and adjusted for stations that are exempt and de minimis, and the resulting number of stations increased by 553 to 10,011, thereby decreasing the fee rates from what was proposed in the FY 2019 NPRM.[100] This change should somewhat mitigate concerns of other commenters that the regulatory fees for radio stations are an unexpected increase for certain stations [101] —a result, among other things, of the increased amount of regulatory fees that the Commission must collect from all regulatees this fiscal year. We remind small stations of the Commission's existing processes to seek a waiver, reduction, or deferral of regulatory fees to mitigate the impact of regulatory fees on operators when paying such fees would cause a hardship.[102]

37. Below is the table we adopt, which has lower regulatory fees than proposed in the FY 2019 NPRM, due to the inclusion of updated data:

FY 2019 Radio Station Regulatory Fees

Population servedAM Class AAM Class BAM Class CAM Class DFM Classes A, B1 & C3FM Classes B, C, C0, C1 & C2
<=25,000$950$685$595$655$1,000$1,200
Start Printed Page 50897
25,001-75,0001,4251,0008959851,5751,800
75,001-150,0002,1501,5501,3501,4752,3752,700
150,001-500,0003,2002,3252,0002,2253,5504,050
500,001-1,200,0004,8003,4753,0003,3255,3256,075
1,200,001-3,000,0007,2255,2004,5254,9757,9759,125
3,000,001-6,000,00010,8257,8006,7757,45011,95013,675
>6,000,00016,22511,70010,17511,20017,95020,500

E. International Bearer Circuits

38. The regulatory fees that are currently paid by the submarine cable operators and satellite and terrestrial IBCs cover the work performed by the International Bureau for all international communications services.[103] More specifically, the International Bureau's activities concerning submarine cables and IBCs include maintaining the licensing database [104] and other services such as benchmarks enforcement,[105] coordination with other U.S. government agencies,[106] protection from anticompetitive actions by foreign carriers, foreign ownership rulings (Petitions for Declaratory Rulings), international section 214 authorizations, and bilateral and multilateral negotiations and representation of U.S. interests at international organizations, that are all provided by the International Bureau.[107]

i. Terrestrial and Satellite International Bearer Circuit Regulatory Fees

39. The Commission has historically assessed terrestrial and satellite IBC regulatory fees on a per-unit basis (in which the Commission assesses fees on payors based on the number of units each has directly), rather than on a tiered basis (in which the Commission first categorizes each payor into a “tier” based on the number of units it has and then assesses a single fee for each payor in the tier). In FY 2018, the Commission sought comment on adopting a tiered methodology for assessing terrestrial and satellite IBC regulatory fees and stated that it expected to have sufficient information from payors in September 2018 to consider a tiered rate structure for FY 2019.[108]

40. In the FY 2019 NPRM, we considered the FY 2018 circuit information for terrestrial and satellite IBCs and explained that using the existing per-Gbps methodology on the 13 payors currently in this fee category would result in fees ranging from approximately $121 to $355,000 per payor. We noted that, in contrast, using a two-tiered system would result in large increases in fees for smaller carriers, increases that do not appear to be “reasonably related to the benefits provided to the payor of the fee[ ] by the Commission's activities,” as required by the Act, and that a more reasonable tiering structure would instead require the adoption of at least seven tiers.[109] For the reasons specified in the FY 2019 NPRM, we maintain the per Gbps fee for satellite and terrestrial IBCs, which is $121 per Gbps for FY 2019.

41. We reject a seven-tier system, which would not simplify calculations nor provide any benefits over our more direct assessment methodology. Nor do we accept CenturyLink's argument that a two-tiered system that could significantly increase fees for small payors and reduce fees for the largest payors is preferable to the direct assessment of fees based on relative capacity.[110] Although we agree with CenturyLink that a structure where the largest payors pay most of the fees and the smallest payors pay a smaller fee is equitable,[111] CenturyLink does not explain why a 12,900% increase in fees for the smallest payor in a two-tier system is “equitable” nor why the very largest payor should be able to redistribute its existing regulatory fees to its smaller competitors. Nor do we agree with CenturyLink's bare assertions that a two-tiered approach would improve incentives to deploy services or reduce the likelihood that the Commission would over-collect fees.[112] Instead, we find that maintaining the predictability of our existing fee calculations is more likely to improve incentives for deployment and avoid the creation of a fee “cliff,” which could encourage payors to reduce service levels to just below the delimiter in a two-tiered approach, deterring additional deployment by payors (and hence competition among payors).

ii. Submarine Cable System Regulatory Fees

42. In the Submarine Cable Order, the Commission decided to assess regulatory fees on submarine cable systems based on a tiered framework: Operational submarine cable systems are first defined as “large” submarine cable systems and “small” submarine cable systems based on the capacity of each system and the “small” systems are further subdivided into additional subcategories.[113] The Commission noted that the methodology would be easy to administer and for submarine cable Start Printed Page 50898operators to comply with because submarine cable operators will no longer pay regulatory fees based on how many active circuits they had on the previous December 31; instead they will pay a capacity-based flat fee [114] per cable landing license.[115]

43. In the FY 2019 NPRM, we proposed to maintain this framework for submarine cable systems, as updated in FY 2018, which we have found to be administrable.[116] That is, from FY 2009 to FY 2017, the lowest submarine cable tier was “less than 2.5 Gbps,” and the highest tier was “20 Gbps or greater.” In FY 2018, of the 42 submarine cable providers that the Commission identified, 40 cable systems were at or above 20 Gbps, and only two were less than 20 Gbps. A 20 Gbps capacity cable system would therefore pay the same regulatory fee as a cable system with over 78,000 Gbps capacity. Accordingly, in 2018 the Commission updated the five submarine cable tiers to less than 50 Gbps, from 50 to 250 Gbps, from 250 to 1,000 Gbps, from 1000 to 4000 Gbps, and 4,000 Gbps and above to accommodate the wide range of capacities, ranging from as little as 1.2 Gbps to over 78,000 Gbps capacity.[117] The Commission adopted these updated submarine cable tiers to provide a more equitable distribution of fees so that a small submarine cable system does not pay the same regulatory fee as a very large submarine cable system that is capable of providing substantially more services. Accordingly, in the FY 2019 NPRM we proposed to use the updated tiers [118] and adopt them here.

44. We also clarify at the request of several commenters that “capacity” for regulatory fee purposes continues to be “lit capacity.” [119] We base the regulatory fee recovery on lit capacity because that is the amount of capacity that submarine cable operators are able to provide services over and the regulatory fee is in part recovering the costs related to the regulation and oversight of such services.

45. We reject several arguments designed to decrease the regulatory fees paid by the largest submarine cable operators. First, INCOMPAS argues that we should increase application fees for submarine cable license applications instead of increasing regulatory fees.[120] But by law, application fees and regulatory fees are not interchangeable. Application fees do not offset the Commission's annual appropriations, and the Commission is required to collect the total appropriation for that fiscal year through regulatory fees regardless of the application fees collected.[121] Second, INCOMPAS complains that our fee structure will lead to overcollection of $800,000 if just four of the pending applications for new submarine cable landing licenses are granted.[122] But this argument ignores how fees are calculated annually—with fees decreasing in future years if more landing licenses are granted in future years.

46. Third, INCOMPAS asserts that the current regulatory fee methodology is “inequitable and unreasonable” because of the higher burden on larger capacity cable systems when there is “little or no connection between the capacity” and the costs to the Commission or benefits provided to the licensee,[123] arguing instead for a flat-fee per landing license.[124] NASCA in turn claims that the Commission's updated tiers for submarine cable “backtrack from the purpose behind the 2009 methodology” and give cable operators an incentive to under report capacity.[125] But these arguments ignore a fundamental premise in how the Commission has long assessed regulatory fees—larger licensees receive greater benefits from the license and hence should (and are able to) pay a larger proportion of the costs. That is as true in the context of submarine cables as it is where wireless providers, ITSPs, and broadcasters are concerned. What is more, submarine cable systems currently vary in capacity from 1.2 Gbps to 78,000 Gbps, although systems that will be operational in the near future will have much larger capacity. While there may be situations in which it would be equitable to set aside differences in capacity for the sake of administrability, to say that a system with roughly 65,000 times the capacity of another system should pay not a penny more in regulatory fees hardly seems equitable or reflective of the benefits each system owner receives from its Commission license and Commission oversight.

47. We further disagree with commenters' assertions that in adopting the Consensus Proposal, the Commission adopted a system that was intended to move towards a flat fee based on the number of landing licenses.[126] In the Submarine Cable Order, the Commission explained that under the Consensus Proposal 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 and the “small” systems will be further subdivided into subcategories and may move into a different categories as they get larger.[127] We find that adopting a single regulatory fee for all submarine cable systems regardless of capacity would be contrary to the Consensus Proposal (as it is documented and adopted in the Submarine Cable Order) and would result in an unreasonable fee increase for the smaller systems.[128]

48. Finally, we are not convinced that now—shortly before the introduction of Start Printed Page 50899several very large submarine cable systems—is the appropriate time to revise our methodology in a manner that favors large systems and increases fees on the smaller systems.[129] Once the newer systems are operational, the increase in units should reduce the regulatory fees for the fee category. Unit counts impact the fee rate calculations from one year to the next. The unit count between FY 2018 and FY 2019 in the submarine cable fee category increased only slightly and did not have a dramatic impact on the calculation of the submarine cable fee rate. In the near future, however, there will be several larger submarine cable systems which will be in operation. For example, the Havfrue cable system will connect New Jersey with Denmark, Ireland, and Norway and will have a design capacity of 108 Tbps,[130] and the JGS North cable system will connect Guam with Japan and have a design capacity of 24 Tbps.[131] These new cable systems, and others, will make a significant change in the number of units, and an increase in units tends to reduce rates.

F. De Minimis Regulatory Fees

49. Section 9(e)(2) of the RAY BAUM'S Act permits the Commission to exempt a party from paying regulatory fees if “in the judgment of the Commission, the cost of collecting a regulatory fee established under this section from a party would exceed the amount collected from such party. . . .” [132] In the FY 2019 NPRM, we sought comment on how to implement section 9(e)(2) and on a proposed section 9(e)(2) de minimis fee exemption of $1,000.

50. Consistent with our tentative conclusion in the FY 2019 NPRM, we conclude that section 9(e)(2) codifies our authority to adopt a de minimis exemption. Section 9(e)(2) provides the Commission with discretion to exempt a “party” and to provide relief based on the cost of collection, both of which were factors considered in the existing de minimis exemption. The adoption of a monetary threshold applied against the sum of all annual regulatory fees due in a given fiscal year continues to be, in our estimation, an efficient mechanism for reducing the Commission's costs in assessing and collecting regulatory fees. As described in the FY 2019 NPRM, we have analyzed the average cost of collecting delinquent debt and estimate that the Commission's cost of collecting the debt would exceed $1,000.[133] The Commission's administrative debt collection process involves many steps, including data compilation, preparation and validation; invoicing; debt transfer for third party collection; responding to debtor questions and disputes; and processing payments. We received no comments on our analysis. Accordingly, we adopt a $1,000 section 9(e)(2) exemption.

51. In the FY 2019 NPRM, we also proposed to exclude multi-year regulatory fees from the proposed section 9(e)(2) exemption. We received no comment on this proposal. Including multi-year fees in the threshold would significantly increase the Commission's administrative costs.[134] Section 9(e)(2) provides the Commission with discretion as to whether and how to provide this exemption; specifically, it states that the Commission “may exempt” a party from paying regulatory fees. Because including multi-year fees in the threshold would significantly increase the Commission's administrative costs, we exclude these fees from the calculation of the section 9(e)(2) exemption.

G. Rules Pertaining to Waiver, Reduction, Deferral and Responsibility for Payment of Regulatory Fees

52. As we did in the FY 2019 NPRM, we again take this opportunity to explain and reinforce the importance of certain provisions of the prior section 9 that remain substantively unchanged by the RAY BAUM'S Act, as well as to reiterate our long-standing rule regarding the party responsible for payment of regulatory fees when a transfer of control or an assignment of a license or authorization has occurred. These provisions, pertaining to waiver, enforcement, and collection of regulatory fees, are essential to the Commission's exercise of its statutory authority here and our application of these provisions remains unchanged.

53. The new section 9A of the Communications Act permits the Commission to waive, reduce, or defer payment of a regulatory fee and associated interest charges and penalties for good cause if the waiver, reduction, or deferral (collectively, waiver) would serve the public interest.[135] The Commission interprets this provision narrowly to permit only those waivers “unambiguously articulating `extraordinary circumstances' outweighing the public interest in recouping the cost of the Commission's regulatory services for a particular regulatee.” [136] Within this standard, the Commission recognizes that in exceptional circumstances, financial hardship may justify waiving and/or deferring a party's regulatory fees.[137] Financial inability, however, must be conclusively proven and the burden of proof for doing so lies solely with the regulatee seeking relief. Mere allegations of financial loss will not support a waiver request. Rather, as the Commission has stated, “it is incumbent upon each regulatee to fully document its financial position and show that it lacks sufficient funds to pay the regulatory fees and to maintain its service to the public.” [138] The Commission has suggested that documents that may be relevant to prove financial inability include balance sheets and profit and loss statements (audited if available), twelve month cash flow projections (with an explanation of how calculated), a list of officers and highest paid employees other than officers, and each individual's compensation, or similar information.[139] We emphasize, however, that the foregoing list of documents is not exhaustive and it is up to each regulatee to determine the documentation required to prove financial hardship in its own case.

54. The Commission frequently receives requests to waive regulatory fees owed by regulatees in bankruptcy or receivership, who cite the fact of the bankruptcy or receivership as proof of the regulatee's financial hardship, and thus justifying waiver. Here, we wish to emphasize the standard to which the Commission hews in determining whether to grant relief in such cases. Start Printed Page 50900While the Commission recognizes that a bankruptcy or receivership filing may be sufficient evidence of financial hardship, we consider such cases individually,[140] taking into account a number of other factors that are relevant to the question of whether the regulatee lacks sufficient funds to pay the regulatory fees and to maintain its service to the public. Although the factors we consider are case-specific, they might include, for example, whether the regulatee intends to reorganize or liquidate in bankruptcy, the reason for the bankruptcy or receivership filing, the regulatee's ability or plan to obtain post-petition financing, the number, type and amount of other claims asserted against the regulatee in the bankruptcy or receivership case, and the priority accorded under bankruptcy or receivership law to the Commission's regulatory fee claim.

55. We also remind regulatees that requests to waive their regulatory fees must be properly filed by the date on which such fees are due.[141]

56. The Commission has previously stated that with respect to waiver, reduction, and deferral requests based on financial hardship, the Commission will base its decision on the information submitted with the request as well as “any additional information available in the Commission's records.” [142] In the FY 2019 NPRM, we proposed eliminating any obligation by the Commission to consult its records, and instead, requiring that any party seeking regulatory fee relief on any basis include with its request all documents and information the requestor believes to be relevant to prove its case, regardless of whether or not such documentation or information exists in Commission records. We received no comments on this proposal. Because we believe the burden to prove its case should rest entirely with the requesting party and not with the Commission, and that it is not an efficient use of the Commission's time to search our records for information or documents that might be relevant to a request for regulatory fee relief, we adopt the proposal set forth in the FY 2019 NPRM.

57. License assignments and transfers of control occur regularly throughout the fiscal year, many during the period when the Commission is establishing the regulatory fee schedule for the upcoming fiscal year. Consequently, we continuously update our records to reflect the identity of these new regulatees.[143] We remind all regulatees of our long-standing rule that the entity holding the license or authorization as of the date the regulatory fee is due is responsible for payment of the regulatory fee. Similarly, we determine eligibility for a regulatory fee exemption by the status of the licensee as of the fee due date, regardless of the status of any previous licensee.[144]

H. Effective Date

58. Providing a 30-day period after Federal Register publication before this Report and Order becomes effective as normally required by 5 U.S.C. 553(d) will not allow sufficient time to collect the FY 2019 fees before FY 2019 ends on September 30, 2019. For this reason, pursuant to 5 U.S.C. 553(d)(3), we find there is good cause to waive the requirements of section 553(d), and this Report and Order will become effective upon publication in the Federal Register. Because payments of the regulatory fees will not actually be due until late September, persons affected by this Report and Order will still have a reasonable period in which to make their payments and thereby comply with the rules established herein.

I. Changes to Several Rules To Conform to the Act as Amended

59. We amend §§ 1.1151, 1.1163, 1.1164, and 1.1166 of our rules to conform these to sections 9 and 9A of the Act, as amended by RAY BAUM'S Act. The Administrative Procedure Act provides that notice and public comment procedures do not apply when “impracticable, unnecessary, or contrary to the public interest.” [145] Notice is “unnecessary” when rule amendments involve little or no exercise of agency discretion.[146] The rule changes set forth herein are ministerial in nature and made to conform our regulations to the RAY BAUM'S Act, and we accordingly find good cause to adopt these changes without prior notice and comment. Similarly, under these circumstances, we find that these actions fall under the good cause exemption to the effective date requirements[147] and these amendments to our rules will become effective upon publication in the Federal Register.

60. Section 1.1151 of the Commission's rules describes the basis for the Commission's authority to prescribe and collect regulatory fees. We are updating this regulation to include a citation to the RAY BAUM'S Act and to conform to the changes made by the RAY BAUM'S Act.

61. Section 1.1163 of the Commission's rules describes the requirement to adjust regulatory fees. This section contains outdated references and language that is not in the current version of section 9. We are therefore deleting language, renumbering the paragraphs, and adding language.

62. Section 9A(c)(4) of the RAY BAUM'S Act codifies the Commission's authority to revoke any instrument of authorization held by a regulatee for failure to timely pay its regulatory fees, or any associated interest or penalties. Section 1.1164(c) and (f) of the Commission's rules, governing revocation for failure to pay regulatory fees, will be amended to reflect the changes made to the Commission's authority under the RAY BAUM'S Act.

63. Section 1.1166 of the Commission's rules describes how regulatees may seek waivers, reductions, and deferrals of regulatory fees. Section 9A of the Act now permits regulatees to seek waiver, reduction, or deferral of interest charges and penalties assessed against unpaid regulatory fees. We therefore add conforming language.

V. Procedural Matters

64. Payment of Regulatory Fees.—All regulatory fee payments must be made by online Automated Clearing House (ACH) payment, online credit card, or wire transfer. Any other form of payment (e.g., checks, cashier's checks, or money orders) will be rejected. For payments by wire, a Form 159-E should still be transmitted via fax so that the Commission can associate the wire payment with the correct regulatory fee information.

65. In accordance with U.S. Treasury Financial Manual, the maximum amount that can be charged on a credit card for transactions with federal Start Printed Page 50901agencies is $24,999.99.[148] Transactions greater than $24,999.99 will be rejected. This limit applies to single payments or bundled payments of more than one bill. Multiple transactions to a single agency in one day may be aggregated and treated as a single transaction subject to the $24,999.99 limit. Customers who wish to pay an amount greater than $24,999.99 should consider available electronic alternatives such as Visa or MasterCard debit cards, ACH debits from a bank account, and wire transfers. Each of these payment options is available after filing regulatory fee information in Fee Filer. Further details will be provided regarding payment methods and procedures at the time of FY 2019 regulatory fee collection in Fact Sheets, available at https://www.fcc.gov/​regfees.

66. Payment Methods.During the fee season for collecting FY 2019 regulatory fees, regulatees can pay their fees by credit card through Pay.gov, ACH, debit card,[149] or by wire transfer. Additional filing and payment instructions are posted on the Commission's website at https://www.fcc.gov/​licensing-databases/​fees/​regulatory-fees. The receiving bank for all wire payments is the U.S. Treasury, New York, New York. When making a wire transfer, regulatees must fax a copy of their Fee Filer generated Form 159-E to the Federal Communications Commission at (202) 418-2843 at least one hour before initiating the wire transfer (but on the same business day) so as not to delay crediting their account. Regulatees should discuss arrangements (including bank closing schedules) with their bankers several days before they plan to make the wire transfer to allow sufficient time for the transfer to be initiated and completed before the deadline. Complete instructions for making wire payments are posted at https://www.fcc.gov/​licensing-databases/​fees/​wire-transfer.

67. De Minimis Regulatory Fees.—Under the Commission's de minimis rule for regulatory fee payments, a regulatee is exempt from paying regulatory fees if the sum total of all of its annual regulatory fee liabilities is $1,000 or less for the fiscal year. The de minimis threshold applies only to filers of annual regulatory fees, not regulatory fees paid through multi-year filings, and it is not a permanent exemption. Each regulatee will need to reevaluate the total annual fee liability each fiscal year to determine whether they meet the de minimis exemption.

68. Standard Fee Calculations and Payment Dates.—The Commission will accept fee payments made in advance of the window for the payment of regulatory fees. The responsibility for payment of fees by service category is as follows:

  • Media Services: Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2018 for AM/FM radio stations, VHF/UHF full service television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2018. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date.
  • Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2018. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date. Audio bridging service providers are included in this category.[150] For Responsible Organizations (RespOrgs) that manage Toll Free Numbers (TFN), regulatory fees should be paid on all working, assigned, and reserved toll free numbers as well as toll free numbers in any other status as defined in § 52.103 of the Commission's rules.[151] The unit count should be based on toll free numbers managed by RespOrgs on or about December 31, 2018.
  • Wireless Services: CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2018. The number of subscribers, units, or telephone numbers on December 31, 2018 will be used as the basis from which to calculate the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date.
  • Wireless Services, Multi-year fees: The first eight regulatory fee categories in our Schedule of Regulatory Fees pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire amount period covered by the five-year or ten-year terms of their initial licenses and pay regulatory fees again only when the license is renewed, or a new license is obtained. We include these fee categories in our rulemaking to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2019.
  • Multichannel Video Programming Distributor Services (cable television operators, CARS licensees, DBS, and IPTV): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2018.[152] Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2018. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date. For providers of Direct Broadcast Satellite (DBS) service and IPTV-based MVPDs, regulatory fees should be paid based on a subscriber count on or about December 31, 2018. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date.
  • International Services: Regulatory fees must be paid for (1) earth stations and (2) geostationary orbit space stations and non-geostationary orbit satellite systems that were licensed and operational on or before October 1, 2018. In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date.
  • International Services (Submarine Cable Systems): Regulatory fees for Start Printed Page 50902submarine cable systems are to be paid on a per cable landing license basis for all systems that are licensed and operational as of October 1, 2018. The fee is based on circuit capacity as of December 31, 2018. In instances where a license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the license as of the fee due date. For regulatory fee purposes, the allocation in FY 2019 will remain at 87.6% for submarine cable and 12.4% for satellite/terrestrial facilities.
  • International Services (Terrestrial and Satellite Services): Regulatory fees for Terrestrial and Satellite IBCs are to be paid based on active (used or leased) international bearer circuits as of December 31, 2018 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier. When calculating the number of such active circuits, entities must include circuits used by themselves or their affiliates. For these purposes, “active circuits” include backup and redundant circuits as of December 31, 2018 and include both common carrier and non-common carrier circuits for both terrestrial and satellite services. Whether circuits are used specifically for voice or data is not relevant for purposes of determining that they are active circuits.[153] In instances where a permit or license is transferred or assigned after October 1, 2018, responsibility for payment rests with the holder of the permit or license as of the fee due date based on circuit counts as of December 31, 2018. For regulatory fee purposes, the allocation in FY 2019 will remain at 87.6% for submarine cable and 12.4% for satellite/terrestrial facilities.

69. Commercial Mobile Radio Service (CMRS) and Mobile Services Assessments.—The Commission will compile data from the Numbering Resource Utilization Forecast (NRUF) report that is based on “assigned” telephone number (subscriber) counts that have been adjusted for porting to net Type 0 ports (“in” and “out”).[154] This information of telephone numbers (subscriber count) will be posted on the Commission's electronic filing and payment system (Fee Filer) along with the carrier's Operating Company Numbers (OCNs).

70. A carrier wishing to revise its telephone number (subscriber) count can do so by accessing Fee Filer and follow the prompts to revise their telephone number counts. Any revisions to the telephone number counts should be accompanied by an explanation or supporting documentation.[155] The Commission will then review the revised count and supporting documentation and either approve or disapprove the submission in Fee Filer. If the submission is disapproved, the Commission will contact the provider to afford the provider an opportunity to discuss its revised subscriber count and/or provide additional supporting documentation. If we receive no response from the provider, or we do not reverse our initial disapproval of the provider's revised count submission, the fee payment must be based on the number of subscribers listed initially in Fee Filer. Once the timeframe for revision has passed, the telephone number counts are final and are the basis upon which CMRS regulatory fees are to be paid. Providers can view their final telephone counts online in Fee Filer. A final CMRS assessment letter will not be mailed out.

71. Because some carriers do not file the NRUF report, they may not see their telephone number counts in Fee Filer. In these instances, the carriers should compute their fee payment using the standard methodology that is currently in place for CMRS Wireless services (i.e., compute their telephone number counts as of December 31, 2018), and submit their fee payment accordingly. Whether a carrier reviews its telephone number counts in Fee Filer or not, the Commission reserves the right to audit the number of telephone numbers for which regulatory fees are paid. In the event that the Commission determines that the number of telephone numbers that are paid is inaccurate, the Commission will bill the carrier for the difference between what was paid and what should have been paid.

72. Enforcement.—Regulatory fee payments must be paid by their due date. Section 9A(c)(1) of the Act requires the Commission to impose a late payment penalty of 25% of unpaid regulatory fee debt, to be assessed on the first day following the deadline for payment of the fees. Section 9A(c)(2) of the Act requires the Commission to assess interest at the rate set forth in 31 U.S.C. 3717 on all unpaid regulatory fees, including the 25% penalty, until the debt is paid in full.[156] The RAY BAUM'S Act, however, prohibits the Commission from assessing the administrative costs of collecting delinquent regulatory fee debt.[157] Thus, while section 9A(c) of the Act leaves intact those parts of section 1.1940 of the Commission's rules pertaining to penalty and interest charges, the Commission will no longer assess administrative costs on delinquent regulatory fee debts.[158]

73. The Commission will pursue collection of all past due regulatory fees, including penalties and accrued interest, using collection remedies available to it under the Debt Collection Improvement Act of 1996, its implementing regulations and federal common law. These remedies include offsetting regulatory fee debt against monies owed to the debtor by the Commission, and referral of the debt to the United States Treasury for further collection efforts, including centralized offset against monies other federal agencies may owe the debtor.[159]

74. Failure to timely pay regulatory fees, penalties or accrued interest will also subject regulatees to the Commission's “red light” rule, which generally requires the Commission to withhold action on and subsequently dismiss applications and other requests for benefits by any entity owing debt, including regulatory fee debt, to the Commission.[160]

75. In addition to financial penalties, section 9(c)(3) of the Act, and § 1.1164(f) of the Commission's rules grant the Commission the authority to revoke authorizations for failure to pay regulatory fees in a timely fashion.[161] Should a fee delinquency not be rectified in a timely manner the Commission may require the licensee to file with documented evidence within sixty (60) calendar days that full payment of all outstanding regulatory fees has been made, plus any associated penalties as calculated by the Secretary of Treasury in accordance with § 1.1164(a) of the Commission's rules,[162] or show cause why the payment is inapplicable or should be waived or Start Printed Page 50903deferred. Failure to provide such evidence of payment or to show cause within the time specified may result in revocation of the station license.[163]

VI. List of Tables

TABLE 1—List of Commenters

CommenterAbbreviated name
50 State Broadcasters AssociationsState Broadcasters.
AT&T Services, Inc. and Dish Network, L.L.CDBS Providers.
CenturyLink, IncCenturyLink.
EchoStar Satellite Operating Corporation, Hughes Network Systems, LLC, Intelsat License LLC, Inmarsat Inc., SES Americom, Inc., Space Exploration Technologies Corp., and World Satellites, LTDSatellite Operators.
INCOMPASINCOMPAS.
Brian LynottLynott.
Mentor Partners, IncMentor.
Multicultural Media, Telecom, and Internet Council and the National Association of Black Owned BroadcastersMMTC.
National Association of BroadcastersNAB.
NCTA—The Internet & Television Association and ACA Connects—America's Communications AssociationNCTA.
Nexstar Broadcasting, Inc. and Gray Television, IncNexstar.
North American Submarine Cable Association and the SEA-US LicenseesNASCA.
PMCM TV, LLCPMCM.
Ramar Communications, IncRamar.
T.Z. Sawyer Technical ConsultantsTZS.
List of Reply Commenters
CenturyLink, IncCenturyLink.
Hubbard Broadcasting, IncHubbard.
Intelsat License LLCIntelsat.
Intelsat License LLC and SES Americom, IncIntelsat/SES.
National Association of BroadcastersNAB.
NCTA—The Internet & Television Association and ACA Connects—America's Communications AssociationNCTA.
North American Submarine Cable Association and Southeast Asia—US Licensees (GTI Corporation d/b/a GTI Telecom, Hawaiian Telecom Services Company, Inc., RAM Telecom International, Inc., TeleGuam Holdings, LLC d/b/a GTA, PT Telekomunikasi Indonesia International, and Telekomunikasi Indonesia International (USA))NASCA.
Satellite Industry AssociationSIA.
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Notes on Table 2

1 The fee amounts listed in the column entitled “Rounded New FY 2019 Regulatory Fee” constitute a weighted average broadcast regulatory fee by class of service. The actual FY 2019 regulatory fees for AM/FM radio station are listed on a grid located at the end of Table 3.

2 The AM and FM Construction Permit revenues and the Digital (VHF/UHF) Construction Permit revenues were adjusted, respectively, to set the regulatory fee to an amount no higher than the lowest licensed fee for that class of service. Reductions in the Digital (VHF/UHF) Construction Permit revenues, and in the AM and FM Construction Permit revenues, were offset by increases in the revenue totals for Digital television stations by market size, and in the AM and FM radio stations by class size and population served, respectively.

3 The MDS/MMDS category was renamed Broadband Radio Service (BRS). See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Report & Order and Further Notice of Proposed Rulemaking, 69 FR 72020 (Dec. 10, 2004) and 69 FR 72048 (Dec. 10, 2004), 19 FCC Rcd 14165, 14169, para. 6 (2004).

4 The chart at the end of Table 3 lists the submarine cable bearer circuit regulatory fees (common and non-common carrier basis) that resulted from the adoption of the Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Report and Order and Further Notice of Proposed Rulemaking, 73 FR 50201 (Aug. 26, 2008) and 73 FR 50285 (Aug. 26, 2008), 24 FCC Rcd 6388 (2008) and Assessment and Collection of Regulatory Fees for Fiscal Year 2008, Second Report and Order, 74 FR 22104 (May 12, 2009), 24 FCC Rcd 4208 (2009).

5 The actual regulatory fees to be paid are identified in Table 7. The fee amounts listed in Rule Changes section are for the purpose of calculating the fees listed in Table 7.

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TABLE 4—Sources of Payment Unit Estimates for FY 2019

In order to calculate individual service fees for FY 2019, we adjusted FY 2018 payment units for each service to more accurately reflect expected FY 2019 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee data bases, actual prior year payment records and industry and trade association projections when available. The databases we consulted include our Universal Licensing System (ULS), International Bureau Filing System (IBFS), Consolidated Database System (CDBS) and Cable Operations and Licensing System (COALS), as well as reports generated within the Commission such as the Wireless Telecommunications Bureau's Numbering Resource Utilization Forecast.

We sought verification for these estimates from multiple sources and, in all cases, we compared FY 2019 estimates with actual FY 2018 payment units to ensure that our revised estimates were reasonable. Where appropriate, we adjusted and/or rounded our final estimates to take into consideration the fact that certain variables that impact on the number of payment units cannot yet be estimated with sufficient accuracy. These include an unknown number of waivers and/or exemptions that may occur in FY 2019 and the fact that, in many services, the number of actual licensees or station operators fluctuates from time to time due to economic, technical, or other reasons. When we note, for example, that our estimated FY 2019 payment units are based on FY 2018 actual payment units, it does not necessarily mean that our FY 2019 projection is exactly the same number as in FY 2018. We have either rounded the FY 2019 number or adjusted it slightly to account for these variables.

Fee categorySources of payment unit estimates
Land Mobile (All), Microwave, Marine (Ship & Coast), Aviation (Aircraft & Ground), Domestic Public FixedBased on Wireless Telecommunications Bureau (WTB) projections of new applications and renewals taking into consideration existing Commission licensee data bases. Aviation (Aircraft) and Marine (Ship) estimates have been adjusted to take into consideration the licensing of portions of these services on a voluntary basis.
CMRS Cellular/Mobile ServicesBased on WTB projection reports, and FY 2018 payment data.
CMRS Messaging ServicesBased on WTB reports, and FY 2018 payment data.
AM/FM Radio StationsBased on CDBS data, adjusted for exemptions, and actual FY 2018 payment units.
Digital TV Stations (Combined VHF/UHF units)Based on CDBS data, adjusted for exemptions, and actual FY 2018 payment units.
AM/FM/TV Construction PermitsBased on CDBS data, adjusted for exemptions, and actual FY 2018 payment units.
LPTV, Translators and Boosters, Class A TelevisionBased on CDBS data, adjusted for exemptions, and actual FY 2018 payment units.
BRS (formerly MDS/MMDS)LMDSBased on WTB reports and actual FY 2018 payment units. Based on WTB reports and actual FY 2018 payment units.
Cable Television Relay Service (CARS) StationsBased on data from Media Bureau's COALS database and actual FY 2018 payment units.
Cable Television System Subscribers, Including IPTV SubscribersBased on publicly available data sources for estimated subscriber counts and actual FY 2018 payment units.
Interstate Telecommunication Service ProvidersBased on FCC Form 499-Q data for the four quarters of calendar year 2018, the Wireline Competition Bureau projected the amount of calendar year 2018 revenue that will be reported on 2019 FCC Form 499-A worksheets due in April 2019.
Earth StationsBased on International Bureau licensing data and actual FY 2018 payment units.
Space Stations (GSOs & NGSOs)Based on International Bureau data reports and actual FY 2018 payment units.
International Bearer CircuitsBased on International Bureau reports and submissions by licensees, adjusted as necessary.
Submarine Cable LicensesBased on International Bureau license information.
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Table 5—Factors, Measurements, and Calculations That Determine Station Signal Contours and Associated Population Coverages

AM Stations
For stations with nondirectional daytime antennas, the theoretical radiation was used at all azimuths. For stations with directional daytime antennas, specific information on each day tower, including field ratio, phase, spacing, and orientation was retrieved, as well as the theoretical pattern root-mean-square of the radiation in all directions in the horizontal plane (RMS) figure (milliVolt per meter (mV/m) @1 km) for the antenna system. The standard, or augmented standard if pertinent, horizontal plane radiation pattern was calculated using techniques and methods specified in §§ 73.150 and 73.152 of the Commission's rules. Radiation values were calculated for each of 360 radials around the transmitter site. Next, estimated soil conductivity data was retrieved from a database representing the information in FCC Figure R3. Using the calculated horizontal radiation values, and the retrieved soil conductivity data, the distance to the principal community (5 mV/m) contour was predicted for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2010 block centroids were contained in the polygon. (A block centroid is the center point of a small area containing population as computed by the U.S. Census Bureau.) The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.
FM Stations
The greater of the horizontal or vertical effective radiated power (ERP) (kW) and respective height above average terrain (HAAT) (m) combination was used. Where the antenna height above mean sea level (HAMSL) was available, it was used in lieu of the average HAAT figure to calculate specific HAAT figures for each of 360 radials under study. Any available directional pattern information was applied as well, to produce a radial-specific ERP figure. The HAAT and ERP figures were used in conjunction with the Field Strength (50-50) propagation curves specified in 47 CFR 73.313 of the Commission's rules to predict the distance to the principal community (70 dBu (decibel above 1 microVolt per meter) or 3.17 mV/m) contour for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2010 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.
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VII. Final Regulatory Flexibility Analysis

76. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),[164] an Initial Regulatory Flexibility Analysis (IRFA) was included in the FY 2019 NPRM.[165] The Commission sought written public comment on these proposals including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the IRFA.[166]

A. Need for, and Objectives of, the Report and Order

77. In this Report and Order we adopt our proposal in the FY 2019 NPRM on collecting $339,000,000 in regulatory fees for FY 2019, pursuant to section 9 of the Communications Act of 1934, as amended (Communications Act or Act).[167] These regulatory fees will be due in September 2019. Under section 9 of the Communications Act, regulatory fees are mandated by Congress and collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities in an amount that can be reasonably expected to equal the amount of the Commission's annual appropriation.[168] This Report and Order adopts the regulatory fees proposed in the FY 2019 NPRM.

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

78. None.

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

79. 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.[169] The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” [170] In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.[171] 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.[172] Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.[173]

80. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities Start Printed Page 50994that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” [174] The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.[175] Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.[176] Thus, under this size standard, most firms in this industry can be considered small.

81. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.[177] According to Commission data, census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.[178] The Commission therefore estimates that most providers of local exchange carrier service are small entities that may be affected by the rules adopted.

82. Incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.[179] According to Commission data, 3,117 firms operated in that year. Of this total, 3,083 operated with fewer than 1,000 employees.[180] Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies adopted. Three hundred and seven (307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers.[181] Of this total, an estimated 1,006 have 1,500 or fewer employees.[182]

83. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate NAICS code category is Wired Telecommunications Carriers, as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.[183] U.S. Census data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.[184] Based on this data, the Commission concludes that most Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers, are small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services.[185] Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees.[186] In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees.[187] Also, 72 carriers have reported that they are Other Local Service Providers.[188] Of this total, 70 have 1,500 or fewer employees.[189] Consequently, based on internally researched FCC data, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities.

84. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition for Interexchange Carriers. The closest NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.[190] U.S. Census data for 2012 indicates that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.[191] According to internally developed Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services.[192] Of this total, an estimated 317 have 1,500 or fewer employees.[193] Consequently, the Commission estimates that most interexchange service providers are small entities that may be affected by the rules adopted.

85. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business definition specifically for prepaid calling card providers. The most appropriate NAICS code-based category for defining prepaid calling card providers is Telecommunications Resellers. This industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual networks operators (MVNOs) are included in this industry.[194] Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.[195] U.S. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 Start Printed Page 50995employees.[196] Thus, under this category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards.[197] All 193 carriers have 1,500 or fewer employees.[198] Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by the rules adopted.

86. Local Resellers. Neither the Commission nor the SBA has developed a small business size standard specifically for Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.[199] Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.[200] Under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services.[201] Of this total, an estimated 211 have 1,500 or fewer employees.[202] Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by the rules adopted.

87. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS code Category is Telecommunications Resellers, and the SBA has developed a small business size standard for the category of Telecommunications Resellers.[203] Under that size standard, such a business is small if it has 1,500 or fewer employees.[204] Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.[205] Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services.[206] Of this total, an estimated 857 have 1,500 or fewer employees.[207] Consequently, the Commission estimates that the majority of toll resellers are small entities.

88. Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable NAICS code category is for Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.[208] Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.[209] Thus, under this category and the associated small business size standard, most Other Toll Carriers can be considered small. According to internally developed Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage.[210] Of these, an estimated 279 have 1,500 or fewer employees.[211] Consequently, the Commission estimates that most Other Toll Carriers are small entities.

89. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services.[212] The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, Census data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees. Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) services.[213] Of this total, an estimated 261 have 1,500 or fewer employees.[214] Thus, using available data, we estimate that the majority of wireless firms can be considered small.

90. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” [215] These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA has created the following small business size standard for Television Broadcasting firms: Those having $38.5 million or less in annual receipts.[216] The 2012 Economic Census reports that 751 television broadcasting firms operated during that year. Of that number, 656 had annual receipts of less than $25 million per year. Based on that Census data we conclude that most firms that operate television stations are small. The Commission has estimated the number of licensed commercial television stations to be 1,387.[217] In addition, according to Commission staff review of the BIA Advisory Services, LLC's Media Access Pro Television Database, on March 28, 2012, about 950 of an estimated 1,300 commercial television stations (or approximately 73%) had revenues of $14 million or Start Printed Page 50996less.[218] We therefore estimate that the majority of commercial television broadcasters are small entities.

91. In assessing whether a business concern qualifies as small under the above definition, business (control) affiliations [219] must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent.

92. In addition, the Commission has estimated the number of licensed noncommercial educational television stations to be 396.[220] These stations are non-profit, and therefore considered to be small entities.[221] There are also 2,528 low power television stations, including Class A stations (LPTV).[222] Given the nature of these services, we will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.

93. Radio Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources.” [223] The SBA has established a small business size standard for this category, which is: Such firms having $38.5 million or less in annual receipts.[224] Census data for 2012 show that 2,849 radio station firms operated during that year. Of that number, 2,806 operated with annual receipts of less than $25 million per year.[225] According to Commission staff review of BIA Advisory Services, LLC's Media Access Pro Radio Database, on March 28, 2012, about 10,759 (97%) of 11,102 commercial radio stations had revenues of $38.5 million or less. Therefore, most such entities are small entities.

94. In assessing whether a business concern qualifies as small under the above size standard, business affiliations must be included.[226] In addition, to be determined to be a “small business,” the entity may not be dominant in its field of operation.[227] We note that it is difficult at times to assess these criteria in the context of media entities, and our estimate of small businesses may therefore be over-inclusive.

95. Cable Television and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.[228] The SBA has established a size standard for this industry of $38.5 million or less. Census data for 2012 shows that there were 367 firms that operated that year. Of this total, 319 operated with annual receipts of less than $25 million.[229] Thus under this size standard, most firms offering cable and other program distribution services can be considered small and may be affected by rules adopted.

96. Cable Companies and Systems. The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide.[230] The Commission's industry data indicate that there are currently 4,160 active cable systems in the United States.[231] Of this total, all but ten cable operators nationwide are small under the 400,000-subscriber size standard.[232] In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers.[233] Current Commission records show 4,160 cable systems nationwide.[234] Thus, under this standard as well, we estimate that most cable systems are small entities.

97. Cable System Operators (Telecom Act Standard). The Communications Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1% of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” [235] There are approximately 53 million cable video subscribers in the United States today.[236] Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate.[237] Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard.[238] We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million.[239] Although it seems certain that some of these cable Start Printed Page 50997system operators are affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

98. Direct Broadcast Satellite (DBS) Service. DBS Service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic dish antenna at the subscriber's location. DBS is now included in SBA's economic census category “Wired Telecommunications Carriers.” The Wired Telecommunications Carriers industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution; and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.[240] The SBA determines that a wireline business is small if it has fewer than 1,500 employees.[241] Census data for 2012 indicate that 3,117 wireline companies were operational during that year. Of that number, 3,083 operated with fewer than 1,000 employees.[242] Based on that data, we conclude that most wireline firms are small under the applicable standard. However, currently only two entities provide DBS service, AT&T and DISH Network. AT&T and DISH Network each report annual revenues that are in excess of the threshold for a small business. Accordingly, we conclude that DBS service is provided only by large firms.

99. All Other Telecommunications. “All Other Telecommunications” is defined as follows: This U.S. industry is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.[243] The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or less.[244] For this category, census data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million.[245] Thus, most “All Other Telecommunications” firms potentially affected by the rules adopted can be considered small.

100. RespOrgs. RespOrgs, i.e., Responsible Organizations, are entities chosen by toll-free subscribers to manage and administer the appropriate records in the toll-free Service Management System for the toll-free subscriber.[246] Although RespOrgs are often wireline carriers, they can also include non-carrier entities. Therefore, in the definition herein of RespOrgs, two categories are presented, i.e., Carrier RespOrgs and Non-Carrier RespOrgs.

101. Carrier RespOrgs. Neither the Commission, the U.S. Census, nor the SBA have developed a definition for Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Carrier RespOrgs are Wired Telecommunications Carriers [247] and Wireless Telecommunications Carriers (except satellite).[248]

102. The U.S. Census Bureau defines Wired Telecommunications Carriers as establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.[249] The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.[250] Census data for 2012 show that there were 3,117 Wired Telecommunications Carrier firms that operated for that entire year. Of that number, 3,083 operated with less than 1,000 employees.[251] Based on that data, we conclude that most Carrier RespOrgs that operated with wireline-based technology are small.

103. The U.S. Census Bureau defines Wireless Telecommunications Carriers (except satellite) as establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves, such as cellular services, paging services, wireless internet access, and wireless video services.[252] The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.[253] Census data for 2012 show that 967 Wireless Telecommunications Carriers operated in that year. Of that number, 955 operated with less than 1,000 employees.[254] Based on that data, we conclude that most Carrier RespOrgs that operated with wireless-based technology are small.

104. Non-Carrier RespOrgs. Neither the Commission, the Census, nor the SBA have developed a definition of Non-Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Non-Carrier RespOrgs are Start Printed Page 50998“Other Services Related To Advertising” [255] and “Other Management Consulting Services.” [256]

105. The U.S. Census defines Other Services Related to Advertising as comprising establishments primarily engaged in providing advertising services (except advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services, advertising material distribution services, and marketing consulting services.[257] The SBA has established a size standard for this industry as annual receipts of $15 million dollars or less.[258] Census data for 2012 show that 5,804 firms operated in this industry for the entire year. Of that number, 5,249 operated with annual receipts of less than $10 million.[259] Based on that data we conclude that most Non-Carrier RespOrgs who provide TFN-related advertising services are small.

106. The U.S. Census defines Other Management Consulting Services as establishments primarily engaged in providing management consulting services (except administrative and general management consulting; human resources consulting; marketing consulting; or process, physical distribution, and logistics consulting). Establishments providing telecommunications or utilities management consulting services are included in this industry.[260] The SBA has established a size standard for this industry of $15 million dollars or less.[261] Census data for 2012 show that 3,683 firms operated in this industry for that entire year. Of that number, 3,632 operated with less than $10 million in annual receipts.[262] Based on this data, we conclude that most non-carrier RespOrgs who provide TFN-related management consulting services are small.[263]

107. In addition to the data contained in the four (see above) U.S. Census NAICS code categories that provide definitions of what services and functions the Carrier and Non-Carrier RespOrgs provide, Somos, the trade association that monitors RespOrg activities, compiled data showing that as of July 1, 2016, there were 23 RespOrgs operational in Canada and 436 RespOrgs operational in the United States, for a total of 459 RespOrgs currently registered with Somos.[264]

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

108. This Report and Order does not adopt any new reporting, recordkeeping, or other compliance requirements.

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

109. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives, among others: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.[265]

110. This Report and Order adopts the proposals in the FY 2019 NPRM to collect $339,000,000 in regulatory fees for FY 2019, as detailed in the fee schedules in Table 3, including (1) an increase in the DBS fee rate to 60 cents per subscriber so that the DBS fee would approach the cable television/IPTV fee, based on the Media Bureau FTEs devoted to issues that include DBS; and (2) a new methodology for calculating the full power broadcast television regulatory fees that is based on an average of the actual population and the Designated Market Groupings, which the Commission adopted in FY 2018. For satellite TV, the fee is the average computed using the flat satellite fee and the actual population. The Commission adopted the new methodology for FY 2019 as a means of transitioning the affected regulatees, which may include small entities, from the previous methodology (based on Designated Market Groupings) to a population based methodology, to be utilized starting in FY 2020.

111. In keeping with the requirements of the Regulatory Flexibility Act, we have considered certain alternative means of mitigating the effects of fee increases to a particular industry segment. For example, the de minimis threshold is $1,000, which will impact many small entities that pay regulatory fees. This de minimis threshold will relieve regulatees both financially and administratively. Regulatees may also seek waivers or other relief on the basis of financial hardship. See 47 CFR 1.1166.

F. Federal Rules That May Duplicate, Overlap, or Conflict

112. None.

VIII. Ordering Clauses

113. Accordingly, it is ordered that, pursuant to Section 9(a), (b), (e), (f), and (g) of the Communications Act of 1934, as amended, 47 U.S.C. 159(a), (b), (e), (f), and (g), this Report and Order is hereby adopted.

114. It is further ordered that the Report and Order shall be effective upon publication in the Federal Register.

115. It is further ordered that the FY 2019 section 9 regulatory fees assessment requirements and the rules set forth in the Final Rules section of the document are adopted as specified herein.

116. It is further ordered that the Commission's Consumer & Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Report and Order, including the Final Regulatory Flexibility Analysis in this Report and Order, to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

Start List of Subjects

List of Subjects in 47 CFR Part 1

  • Administrative practice and procedure
  • Broadband
  • Reporting and recordkeeping requirements
  • Telecommunications
End List of Subjects Start Signature

Federal Communications Commission.

Katura Jackson,

Federal Register Liaison Officer, Office of the Secretary.

End Signature

Final Rules

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

Start Part Start Printed Page 50999

PART 1—PRACTICE AND PROCEDURE

End Part Start Amendment Part

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

End Amendment Part Start Authority

Authority: 47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note, unless otherwise noted.

End Authority Start Amendment Part

2. Revise § 1.1151 to read as follows:

End Amendment Part
Authority to prescribe and collect regulatory fees.

Authority to impose and collect regulatory fees is contained in section 9 of the Communications Act, as amended by sections 101-103 of title I of the Consolidated Appropriations Act of 2018 (Pub. L. 115-141, 132 Stat. 1084), 47 U.S.C. 159, which directs the Commission to prescribe and collect annual regulatory fees to recover the cost of carrying out the functions of the Commission.

Start Amendment Part

3. Revise § 1.1152 to read as follows:

End Amendment Part
Schedule of annual regulatory fees for wireless radio services.
Exclusive use services (per license)Fee amount 1 ($)
1. Land Mobile (Above 470 MHz and 220 MHz Local, Base Station & SMRS) (47 CFR part 90):
(a) New, Renew/Mod (FCC 601 & 159)25.00
(b) New, Renew/Mod (Electronic Filing) (FCC 601 & 159)25.00
(c) Renewal Only (FCC 601 & 159)25.00
(d) Renewal Only (Electronic Filing) (FCC 601 & 159)25.00
220 MHz Nationwide:
(a) New, Renew/Mod (FCC 601 & 159)25.00
(b) New, Renew/Mod (Electronic Filing) (FCC 601 & 159)25.00
(c) Renewal Only (FCC 601 & 159)25.00
(d) Renewal Only (Electronic Filing) (FCC 601 & 159)25.00
2. Microwave (Private) (47 CFR part 101):
(a) New, Renew/Mod (FCC 601 & 159)25.00
(b) New, Renew/Mod (Electronic Filing) (FCC 601 & 159)25.00
(c) Renewal Only (FCC 601 & 159)25.00
(d) Renewal Only (Electronic Filing) (FCC 601 & 159)25.00
3. Shared Use Services:
Land Mobile (Frequencies Below 470 MHz—except 220 MHz):
(a) New, Renew/Mod (FCC 601 & 159)10.00
(b) New, Renew/Mod (Electronic Filing) (FCC 601 & 159)10.00
(c) Renewal Only (FCC 601 & 159)10.00
(d) Renewal Only (Electronic Filing) (FCC 601 & 159)10.00
Rural Radio (Part 22):
(a) New, Additional Facility, Major Renew/Mod (Electronic Filing) (FCC 601 & 159)10.00
(b) Renewal, Minor Renew/Mod (Electronic Filing) (FCC 601 & 159) Marine Coast10.00
Marine Coast:
(a) New Renewal/Mod (FCC 601 & 159)40.00
(b) New, Renewal/Mod (Electronic Filing) (FCC 601 & 159)40.00
(c) Renewal Only (FCC 601 & 159)40.00
(d) Renewal Only (Electronic Filing) (FCC 601 & 159)40.00
Aviation Ground:
(a) New, Renewal/Mod (FCC 601 & 159)20.00
(b) New, Renewal/Mod (Electronic Filing) (FCC 601 & 159)20.00
(c) Renewal Only (FCC 601 & 159)20.00
(d) Renewal Only (Electronic Only) (FCC 601 & 159)20.00
Marine Ship:
(a) New, Renewal/Mod (FCC 605 & 159)15.00
(b) New, Renewal/Mod (Electronic Filing) (FCC 605 & 159)15.00
(c) Renewal Only (FCC 605 & 159)15.00
(d) Renewal Only (Electronic Filing) (FCC 605 & 159)15.00
Aviation Aircraft:
(a) New, Renew/Mod (FCC 605 & 159)10.00
(b) New, Renew/Mod (Electronic Filing) (FCC 605 & 159)10.00
(c) Renewal Only (FCC 605 & 159)10.00
(d) Renewal Only (Electronic Filing) (FCC 605 & 159)10.00
4. CMRS Cellular/Mobile Services (per unit) (FCC 159)2 0.19
5. CMRS Messaging Services (per unit) (FCC 159)3 0.08
6. Broadband Radio Service (formerly MMDS and MDS)690
7. Local Multipoint Distribution Service690
1 Note that “small fees” are collected in advance for the entire license term. Therefore, the annual fee amount shown in this table that is a small fee (categories 1 through 5) must be multiplied by the 5- or 10-year license term to arrive at the total amount of regulatory fees owed. Also, application fees may apply as detailed in § 1.1102.
2 These are standard fees that are to be paid in accordance with § 1.1157(b).
3 These are standard fees that are to be paid in accordance with § 1.1157(b).
Start Amendment Part

4. Revise § 1.1153 to read as follows:

End Amendment Part
Schedule of annual regulatory fees and filing locations for mass media services.Start Printed Page 51000
Fee amount ($)
Radio (AM and FM) (47 CFR part 73)
1. AM Class A:
<=25,000 population950
25,001-75,000 population1,425
75,001-150,000 population2,150
150,001-500,000 population3,200
500,001-1,200,000 population4,800
1,200,001-3,000,000 population7,225
3,000,001-6,000,000 population10,825
>6,000,000 population16,225
2. AM Class B:
<=25,000 population685
25,001-75,000 population1,000
75,001-150,000 population1,550
150,001-500,000 population2,325
500,001-1,200,000 population3,475
1,200,001-3,000,000 population5,200
3,000,001-6,000,000 population7,800
>6,000,000 population11,700
3. AM Class C:
<=25,000 population595
25,001-75,000 population895
75,001-150,000 population1,350
150,001-500,000 population2,000
500,001-1,200,000 population3,000
1,200,001-3,000,000 population4,525
3,000,001-6,000,000 population6,775
>6,000,000 population10,175
4. AM Class D:
<=25,000 population655
25,001-75,000 population985
75,001-150,000 population1,475
150,001-500,000 population2,225
500,001-1,200,000 population3,325
1,200,001-3,000,000 population4,975
3,000,001-6,000,000 population7,450
>6,000,000 population11,200
5. AM Construction Permit595
6. FM Classes A, B1 and C3:
<=25,000 population1,000
25,001-75,000 population1,575
75,001-150,000 population2,375
150,001-500,000 population3,550
500,001-1,200,000 population5,325
1,200,001-3,000,000 population7,975
3,000,001-6,000,000 population11,950
>6,000,000 population17,950
7. FM Classes B, C, C0, C1 and C2:
<=25,000 population1,200
25,001-75,000 population1,800
75,001-150,000 population2,700
150,001-500,000 population4,050
500,001-1,200,000 population6,075
1,200,001-3,000,000 population9,125
3,000,001-6,000,000 population13,675
>6,000,000 population20,500
8. FM Construction Permits1,000
TV (47 CFR part 73)
Digital TV (UHF and VHF Commercial Stations) The fees below are for calculation purposes only; they are not to be used for fee payment:
1. Markets 1 thru 1054,000
2. Markets 11 thru 2540,675
3. Markets 26 thru 5027,150
4. Markets 51 thru 10013,550
5. Remaining Markets4,450
6. Construction Permits4,450
Television Fee Factor.007224
Satellite UHF/VHF Commercial (The satellite fee below is for calculation purposes only; it is not to be used for the payment of fees.):
1. All Markets1,625
Start Printed Page 51001
Low Power TV, Class A TV, TV/FMTranslator, & TV/FM Booster (47 CFR part 74)345
Start Amendment Part

5. Revise § 1.1154 to read as follows:

End Amendment Part
Schedule of annual regulatory charges for common carrier services.
Radio facilitiesFee amount ($)
1. Microwave (Domestic Public Fixed) (Electronic Filing) (FCC Form 601 & 159)25.00.
Carriers:
1. Interstate Telephone Service Providers (per interstate and international end-user revenues) (see FCC Form 499-A).00317.
2. Toll Free Number Fee0.12 per Toll Free Number.
Start Amendment Part

6. Revise § 1.1155 to read as follows:

End Amendment Part
Schedule of regulatory fees for cable television services.
1. Cable Television Relay Service1,225.
2. Cable TV System, Including IPTV (per subscriber)0.86.
3. Direct Broadcast Satellite (DBS)0.60 per subscriber.
Start Amendment Part

7. Revise § 1.1156 to read as follows:

End Amendment Part
Schedule of regulatory fees for international services.

(a) Geostationary Orbit (GSO) and Non-Geostationary Orbit (NGSO) Space Stations. The following schedule applies for the listed services:

Table 1 to Paragraph (a)

Fee categoryFee amount ($)
Space Stations (Geostationary Orbit)159,625
Space Stations (Non-Geostationary Orbit)154,875
Earth Stations (Transmit/Receive & Transmit only) (per authorization or registration)425

(b) International terrestrial and satellite. (1) Regulatory fees for International Bearer Circuits are to be paid by facilities-based common carriers and non-common carrier basis 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 terrestrial and 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 the purposes of this paragraph (b) include backup and redundant circuits. In addition, whether circuits are used specifically for voice or data is not relevant in determining that they are active circuits.

(2) The fee amount on a per active Gbps basis will be determined for each fiscal year.

Table 2 to Paragraph (b)(2)

International terrestrial and satellite (capacity as of December 31, 2018)Fee amount
Terrestrial Common Carrier and Non-Common Carrier121 per Gbps Circuit.
Satellite Common Carrier and Non-Common Carrier.

(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 by the Commission for each fiscal year.Start Printed Page 51002

Table 3 to Paragraph (c)

Submarine cable systems (capacity as of Dec. 31, 2018)Fee amount
<50 Gbps12,575
50 Gbps or greater, but less than 250 Gbps25,150
250 Gbps or greater, but less than 1,000 Gbps50,300
1,000 Gbps or greater, but less than 4,000 Gbps100,600
4,000 Gbps or greater201,225
Start Amendment Part

8. Revise § 1.1163 to read as follows:

End Amendment Part
Adjustments to regulatory fees.

(a) For Fiscal Year 2019 and thereafter, the Schedule of Regulatory Fees, contained in §§ 1.1152 through 1.1156, may be adjusted annually by the Commission pursuant to section 9 of the Communications Act. 47 U.S.C. 159, as amended. Adjustments to the fees established for any category of regulatory fee payment shall include projected cost increases or decreases and an estimate of the volume of units upon which the regulatory fee is calculated.

(b) The fees assessed shall:

(1) Be derived by determining the full-time equivalent number of employees, bureaus and offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities; and

(2) Be established at amounts that will result in collection, during each fiscal year, of an amount that can reasonably be expected to equal the amount appropriated for such fiscal year for the performance of the activities described in paragraph (b)(1) of this section.

(c) The Commission shall by rule amend the Schedule of Regulatory Fees by increases or decreases that reflect, in accordance with paragraph (b)(2) of this section, changes in the amount appropriated for the performance of the activities described in paragraph (b)(1) of this section, for such fiscal year. Such increases or decreases shall be adjusted to reflect unexpected increases or decreases in the number of units subject to payment of such fees and result in collection of an aggregate amount of fees that will approximately equal the amount appropriated for the subject regulatory activities.

(d) The Commission shall, by rule, amend the Schedule of Regulatory Fees if the Commission determines that the Schedule requires amendment to comply with the requirements of paragraph (b)(1) of this section.

(e) In adjusting regulatory fees, the Commission will round such fees to the nearest $5.00 in the case of fees under $1,000.00, or to the nearest $25.00 in the case of fees of $1,000.00 or more.

Start Amendment Part

9. Revise § 1.1164 to read as follows:

End Amendment Part
Penalties for late or insufficient regulatory fee payments.

Electronic payments are considered timely when a wire transfer was received by the Commission's bank no later than 6:00 p.m. on the due date; confirmation to pay.gov that a credit card payment was successful no later than 11:59 p.m. (EST) on the due date; or confirmation an ACH was credited no later than 11:59 p.m. (EST) on the due date. In instances where a non-annual regulatory payment (i.e., delinquent payment) is made by check, cashier's check, or money order, a timely fee payment or installment payment is one received at the Commission's lockbox bank by the due date specified by the Commission or by the Managing Director. Where a non-annual regulatory fee payment is made by check, cashier's check, or money order, a timely fee payment or installment payment is one received at the Commission's lockbox bank by the due date specified by the Commission or the Managing Director. Any late payment or insufficient payment of a regulatory fee, not excused by bank error, shall subject the regulatee to a 25 percent penalty of the amount of the fee or installment payment which was not paid in a timely manner.

(a) The Commission may, in its discretion, following one or more late filed installment payments, require a regulatee to pay the entire balance of its regulatory fee by a date certain, in addition to assessing a 25 percent penalty.

(b) In cases where a fee payment fails due to error by the payor's bank, as evidenced by an affidavit of an officer of the bank, the date of the original submission will be considered the date of filing.

(c) If a regulatory fee is not paid in a timely manner, the regulatee will be notified of its deficiency. This notice will automatically assess a 25 percent penalty, subject the delinquent payor's pending applications to dismissal, and may require a delinquent payor to show cause why its existing instruments of authorization should not be subject to revocation.

(d)(1) Where a regulatee's new, renewal or reinstatement application is required to be filed with a regulatory fee (as is the case with wireless radio services), the application will be dismissed if the regulatory fee is not included with the application package. In the case of a renewal or reinstatement application, the application may not be refiled unless the appropriate regulatory fee plus the 25 percent penalty charge accompanies the refiled application.

(2) If the application that must be accompanied by a regulatory fee is a mutually exclusive application with a filing deadline, or any other application that must be filed by a date certain, the application will be dismissed if not accompanied by the proper regulatory fee and will be treated as late filed if resubmitted after the original date for filing application.

(e) Any pending or subsequently filed application submitted by a party will be dismissed if that party is determined to be delinquent in paying a standard regulatory fee or an installment payment. The application may be resubmitted only if accompanied by the required regulatory fee and by any assessed penalty payment.

(f) In instances where the Commission may revoke an existing instrument of authorization for failure to timely pay a regulatory fee, or any associated interest or penalty, the Commission will provide prior notice of its intent to revoke the licensee's instruments of authorization by registered mail, return receipt requested to the licensee at its last known address. The notice shall provide the licensee no less than 60 days to either pay the fee, penalty and interest in full or show cause why the fee, interest or penalty is inapplicable or should otherwise be waived or deferred.

(1) An adjudicatory hearing will not be designated unless the response by the regulatee to the Order to Show Cause presents a substantial and material question of fact.

(2) Disposition of the proceeding shall be based upon written evidence only and the burden of proceeding with the introduction of the evidence and the burden of proof shall be on the respondent regulatee.Start Printed Page 51003

(3) Unless the regulatee substantially prevails in the hearing, the Commission may assess costs for the conduct of the proceeding against the respondent regulatee. See 47 U.S.C. 402(b)(5).

(4) Any Commission order adopted under the regulation in paragraph (f) of this section shall determine the amount due, if any, and provide the licensee with at least 60 days to pay that amount or have its authorization revoked.

(5) No order of revocation under this section shall become final until the licensee has exhausted its right to judicial review of such order under 47 U.S.C. 402(b)(5).

(6) Any regulatee failing to submit a regulatory fee, following notice to the regulatee of failure to submit the required fee, is subject to collection of the required fee, including interest thereon, any associated penalties, and the full cost of collection to the Federal Government pursuant to section 3702A of the Internal Revenue Code, 31 U.S.C. 3717, and the provisions of the Debt Collection Improvement Act. See §§ 1.1901 through 1.1952. The debt collection processes described in paragraphs (a) through (f)(5) of this section may proceed concurrently with any other sanction in this paragraph (f)(6).

(7) An application or filing by a regulatee that is delinquent in its debt to the Commission is also subject to dismissal under § 1.1910.

Start Amendment Part

10. Revise § 1.1166 to read as follow:

End Amendment Part
Waivers, reductions and deferrals of regulatory fees.

The fees established by §§ 1.1152 through 1.1156 and associated interest charges and penalties may be waived, reduced or deferred in specific instances, on a case-by-case basis, where good cause is shown and where waiver, reduction or deferral of such fees, interest charges and penalties would promote the public interest. Requests for waivers, reductions or deferrals of regulatory fees for entire categories of payors will not be considered.

(a) Requests for waivers, reductions or deferrals should be filed with the Commission's Secretary and will be acted upon by the Managing Director with the concurrence of the General Counsel. All such filings within the scope of the fee rules shall be filed as a separate pleading and clearly marked to the attention of the Managing Director. Any such request that is not filed as a separate pleading will not be considered by the Commission.

(b) Deferrals of fees, interest, or penalties if granted, will be for a designated period of time not to exceed six months.

(c) Petitions for waiver of a regulatory fee, interest, or penalties must be accompanied by the required fee, interest, or penalties and FCC Form 159. Submitted fees, interest, or penalties will be returned if a waiver is granted. Waiver requests that do not include the required fees, interest, or penalties or forms will be dismissed unless accompanied by a petition to defer payment due to financial hardship, supported by documentation of the financial hardship.

(d) Petitions for reduction of a fee, interest, or penalty must be accompanied by the full fee, interest, or penalty payment and Form 159. Petitions for reduction that do not include the required fees, interest, or penalties or forms will be dismissed unless accompanied by a petition to defer payment due to financial hardship, supported by documentation of the financial hardship.

(e) Petitions for waiver of a fee, interest, or penalty based on financial hardship, including bankruptcy, will not be granted, even if otherwise consistent with Commission policy, to the extent that the total regulatory and application fees, interest, or penalties for which waiver is sought exceeds $500,000 in any fiscal year, including regulatory fees due in any fiscal year, but paid prior to the due date. In computing this amount, the amounts owed by an entity and its subsidiaries and other affiliated entities will be aggregated. In cases where the claim of financial hardship is not based on bankruptcy, waiver, partial waiver, or deferral of fees, interest, or penalties above the $500,000 cap may be considered on a case-by-case basis.

End Supplemental Information

Footnotes

1.  See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996). The SBREFA was enacted as Title II of the Contract with America Advancement Act of 1996 (CWAAA).

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2.  Consolidated Appropriations Act, 2019, Public Law 116-6, Division D—Financial Services and General Government Appropriations Act, 2019, Title V—Independent Agencies (2019) (FY 2019 Appropriation).

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3.  The Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018, or the RAY BAUM'S Act of 2018, amended sections 8 and 9 and added section 9A to the Communications Act, effective October 1, 2018. See Consolidated Appropriations Act, 2018, Public Law 115-141, 132 Stat. 1084, Division P—RAY BAUM'S Act of 2018, Title I, section 103 (2018); 47 U.S.C. 159, 159A.

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5.  Assessment and Collection of Regulatory Fees for Fiscal Year 2004, Report and Order, 69 FR 41028 (July 7, 2004), 19 FCC Rcd 11662, 11666, para. 11 (2004) (FY 2004 Report and Order).

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8.  47 U.S.C. 159(d); see prior section 9(b) (fees “derived by determining the full-time equivalent number of employees performing the activities described in subsection (a) within the Private Radio Bureau, Mass Media Bureau, Common Carrier Bureau, and other offices of the Commission, adjusted to take into account factors that are reasonably related to the benefits provided to the payor of the fee by the Commission's activities. . .”)

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9.  One FTE, a “Full Time Equivalent” or “Full Time Employee,” is a unit of measure equal to the work performed annually by a full time person (working a 40-hour workweek for a full year) assigned to the particular job, and subject to agency personnel staffing limitations established by the U.S. Office of Management and Budget.

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10.  Procedures for Assessment and Collection of Regulatory Fees, Notice of Proposed Rulemaking, 77 FR 29275 (May 17, 2012), 27 FCC Rcd 8458, 8460, para. 5 & n.5 (2012) (FY 2012 NPRM).

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11.  Assessment and Collection of Regulatory Fees for Fiscal Year 2013, Report and Order, 78 FR 52433 (Aug. 23, 2013), 28 FCC Rcd 12351, 12354-58, paras. 10-20 (2013) (FY 2013 Report and Order).

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12.  Assessment and Collection of Regulatory Fees for Fiscal Year 2014, Report and Order and Further Notice of Proposed Rulemaking, 79 FR 54190 (Sept. 11, 2014) and 79 FR 63883 (Oct. 27, 2014), 29 FCC Rcd 10767, 10774-77, paras. 18-21 (2014) (FY 2014 Report and Order).

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13.  Assessment and Collection of Regulatory Fees for Fiscal Year 2015, Report and Order and Further Notice of Proposed Rulemaking, 80 FR 43019 (July 21, 2015) and 80 FR 60825 (Oct. 8, 2015), 30 FCC Rcd 10268, 10276-77, paras. 19-20 (2015) (FY 2015 Report and Order).

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14.  FY 2015 Report and Order, 30 FCC Rcd at 10278, para. 24.

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15.  Assessment and Collection of Regulatory Fees for Fiscal Year 2016, Report and Order, 81 FR 65926 (Sept. 26, 2016), 31 FCC Rcd 10339, 10350-51, paras. 31-33 (2016) (FY 2016 Report and Order).

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16.  Assessment and Collection of Regulatory Fees for Fiscal Year 2017, Report and Order and Further Notice of Proposed Rulemaking, 82 FR 44322 (Sept. 22, 2017) and 82 FR 50598 (Nov. 1, 2017), 32 FCC Rcd 7057, 7061-7064, paras. 9-15 (2017) (FY 2017 Report and Order).

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17.  FY 2017 Report and Order, 32 FCC Rcd at 7064-65, paras. 16-17.

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18.  FY 2017 Report and Order, 32 FCC Rcd at 7071-72, paras. 34-35.

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19.  Assessment and Collection of Regulatory Fees for Fiscal Year 2018, Report and Order and Notice of Proposed Rulemaking, 83 FR 36460 (July 30, 2018), 33 FCC Rcd 5091, 5095, paras. 8-9 (2018) (FY 2018 NPRM) (adopting new tiers for submarine cable so that, among other things, the highest tier would be 4,000 Gbps or greater; previously, the highest tier was 20 Gbps or greater).

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20.  Assessment and Collection of Regulatory Fees for Fiscal Year 2018, Report and Order and Order, 83 FR 47079 (Sept. 18, 2018), 33 FCC Rcd 8497, 8501-8502, paras. 13-15 (2018) (FY 2018 Report and Order).

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21.  FY 2018 Report and Order, 33 FCC Rcd at 8502-8503, paras. 16-17.

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22.  Consolidated Appropriations Act, 2018, Division P—RAY BAUM'S Act of 2018, Title I, FCC Reauthorization, Public Law 115-141, section 102, 132 Stat. 348, 1082-86 (2018) (codified at 47 U.S.C. 159, 159A). Congress provided an effective date of October 1, 2018 for such changes.

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23.  Assessment and Collection of Regulatory Fees for Fiscal Year 2019, Notice of Proposed Rulemaking, 83 FR 26234 (June 5, 2019), 34 FCC Rcd 3272, 3275-77, paras. 6-10 (2019) (FY 2019 NPRM).

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24.  FY 2019 NPRM, 34 FCC Rcd at 3277-79, paras. 11-15.

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25.  Id., 34 FCC Rcd at 3279-3280, paras. 16-19.

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26.  Id., 34 FCC Rcd at 3280-81, paras. 20-21.

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27.  Id., 34 FCC Rcd at 3281-82, paras. 22-25.

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28.  Id., 34 FCC Rcd 3282-84, paras. 26-30.

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29.  Id., 34 FCC Rcd 3284, para. 31.

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30.  Commenters to the FY 2019 NPRM are listed in Table 1.

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31.  FY 2019 regulatory fees are listed in Appendices C and J of the FY 2019 Report and Order. New small satellite regulatory fees are not adopted here because there are no fees that would be due for FY 2019. See Streamlining Licensing Procedures for Small Satellites, Report and Order, FCC 19-81, paras. 104-106 (released August 2, 2019) (noting that the earliest such fees would be due would be for FY 2021).

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32.  FY 2019 NPRM, 34 FCC Rcd at 3279, para. 15 & Appendix F.

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33.  Specifically, (i) three bureaus listed in the prior version of section 9 that have since been renamed are not listed in the new section 9; (ii) the prior statute included examples of factors relevant to the Commission's inquiry into benefits provided the payor of the fee, to wit, “service area coverage, shared use versus exclusive use, and other factors that the Commission determines are necessary in the public interest,” that are not in the new section 9, see prior section 9(b)(1)(A); (iii) the current version of section 9 requires the Commission to consider increases and decreases in the “number of units” subject to payment of regulatory fees, but does not state “licensees,” compare prior section 9(b)(2) with new section 9(c)(1)(A); (iv) the new section 9 does not explicitly permit the Commission to consider “additions, deletions, or changes in the nature of its services as a consequence of Commission rulemaking proceedings or changes in law,” see prior section 9(b)(3); and (v) the old version of the statute described the annual changes as either mandatory amendments, see prior section 9(b)(2), or permitted amendments, see prior section 9(b)(3); under the RAY BAUM'S Act, such changes are described as adjustments, see new section 9(c), or amendments, see new section 9(d).

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36.  State Broadcasters Comments at 17.

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37.  For example, within the International Bureau, the FTEs that work on space stations and earth stations in the Satellite Division are separate from the FTEs that work on submarine cable systems and terrestrial and satellite IBCs in the Policy Division.

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38.  For example, earth station fees are calculated per earth station and terrestrial and satellite IBCs fees are calculated per Gbps circuit, each such earth station and per Gbps circuit constituting a unit. See FY 2012 NPRM, 27 FCC Rcd at 8461-62, paras. 8-11.

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39.  In 2013, the Commission allocated all FTEs except for 28 in the International Bureau as indirect. FY 2013 Report and Order, 28 FCC Rcd at 12355-356, para. 14. Subsequently, the Commission allocated an additional four FTEs, the number of FTEs working on market access requests for non-U.S.-licensed space stations, as indirect, leaving a total of 24 direct FTEs in that bureau. FY 2015 Report and Order, 30 FCC Rcd at 10278, para. 24. In 2017, the Commission allocated 38 FTEs in the Wireline Competition Bureau who work on non-high cost programs of the Universal Service Fund as indirect. FY 2017 Report and Order, 32 FCC Rcd at 7061-64, paras. 10-15.

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40.  See Establishment of the Office of Economics and Analytics, Order, 33 FCC Rcd 1539 (2018); FCC Opens Office of Economics And Analytics, Federal Communications Commission News Release, December 11, 2018, https://www.fcc.gov/​document/​fcc-opens-office-economics-and-analytics.

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41.  See Transfer of EEO Audit and Enforcement Responsibilities to Enforcement Bureau, Public Notice, 34 FCC Rcd 1370 (EB 2019).

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42.  The FTE numbers allocated to the core bureaus for FY 2019 are weighted for the changes throughout the year. For the sake of simplicity, these numbers are the final indirect FTE counts as they do not directly impact regulatory fee allocations.

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43.  State Broadcasters Comments at 8-9; NAB Reply Comments at 4, 7.

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45.  Satellite Operators Comments at 1-4; SIA Reply Comments at 1-2; Intelsat/SES Reply Comments at 1-2.

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46.  FY 2013 Report and Order, 28 FCC Rcd at 12355-56, para. 14.

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47.  Satellite Operators Comments at 2. See also Letter from Karis A. Hastings, Counsel, SatCom Law LLC, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, Attachment, at 2 (filed Aug. 8, 2019) (SatCom August 8 Ex Parte Letter) (arguing that the “Commission should freeze GSO fees at FY2018 levels” pending a review and “necessary analysis to reset the allocations among satellite service categories for future years”); Letter from Jennifer A. Manner, Senior Vice President, EchoStar Satellite Operating Corporation and Hughes Network Systems, LLC, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, Attachment, at 1 (filed August 8, 2019) (EchoStar August 8 Ex Parte Letter) (arguing that “the FCC should freeze GSO regulatory fees at the 2018 level, or phase in any GSO fee increase”). While we do not have sufficient record information in this proceeding to consider changes to the apportionment of regulatory fees among International Bureau regulatees, we will seek comment on this issue for future years in future rulemaking.

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48.  For example, in the FY 2013 Report and Order, the Commission concluded that most of the FTEs in the International Bureau should be indirect, with the exception of 27 FTEs in the Policy and Satellite Divisions and one FTE from the Office of the Bureau Chief, a total of 28 direct FTEs. FY 2013 Report and Order, 28 FCC Rcd at 12355-56, para. 14.

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49.  INCOMPAS Comments at 3; NASCA Reply Comments at 3; see also Letter from Yaron Dori, Counsel, INCOMPAS, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, at 1 (filed July 24, 2019) (INCOMPAS July 24 Ex Parte Letter).

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50.  State Broadcasters Comments at 10; NAB Comments at 6.

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52.  FY 2015 Report and Order, 30 FCC Rcd at 10275, para. 17.

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53.  FY 2015 Report and Order, 30 FCC Rcd at 10275, para. 17.

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54.  See, e.g., 47 U.S.C. 159(e).

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55.  47 U.S.C. 159(d). For example, in FY 2019, Media Bureau FTEs constitute 35.93% of all direct Media Bureau FTEs, and 16.17% of the 35.93% represent FTEs associated with radio and television issues. The 16.17% of direct Media Bureau FTEs can be further broken down to 8.82% radio (of the 8.82%, 6.08% represent FM radio and 2.74% represent AM radio) and 7.35% television. FTEs working on cable television and DBS issues comprise 19.76% of the 35.93% of direct FTEs working on Media Bureau issues.

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56.  State Broadcasters Comments at 13.

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57.  Assessment and Collection of Regulatory Fees for Fiscal Year 2009, Report and Order, 74 FR 40089 (Aug. 11, 2009), 24 FCC Rcd 10301, 10304, para. 8 (2009) (FY 2009 Report and Order). Notably, we reduced the total regulatory fee apportionment for submarine cable/terrestrial and satellite bearer circuits by 5% in FY 2014 and 7.5% in FY 2015 but did not do so in prior nor subsequent years. FY 2014 Report and Order, 29 FCC Rcd at 10772, para. 11; FY 2015 Report and Order, 30 FCC Rcd at 10273, para 12.

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58.  CenturyLink Comments at 3-6; CenturyLink Reply Comments at 3-4.

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59.  CenturyLink Comments at 5-6.

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60.  NASCA Comments at 6, 12; NASCA Reply Comments at 4.

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61.  Intelsat/SES Reply Comments at 3-4. We note that despite making this claim, Intelsat and SES also ask for potential revisions to the allocations within the space station and earth station categories. Id.

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62.  CenturyLink Reply Comments at 2; SIA Reply Comments at 3; Intelsat/SES Reply Comments at 3.

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63.  For these reasons, we reject CenturyLink's alternative proposal that the Commission “take an interim, transitional step to reduce fees substantially but not as much as CenturyLink proposes.” Letter from Joseph C. Cavender, Vice President and Assistant General Counsel, CenturyLink, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, at 2 (filed August 7, 2019) (CenturyLink August 7 Ex Parte Letter). See also Letter from James J.R. Talbot, Assistant Vice President-Senior Legal Counsel, AT&T, to Marlene H. Dortch, Secretary, FCC, at 3 (filed August 5, 2019) (AT&T August 5 Ex Parte Letter) (explaining that “[d]ue to the zero-sum nature of the regulatory fee process, under which any changes in the fees for one Bureau automatically affect the fees to be recovered from other Bureau services, any consideration of proposals to reallocate the Bureau fees relating to submarine cables and international bearer circuits should require a comprehensive review”).

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64.  FY 2018 Report and Order, 33 FCC Rcd at 8944-8500, para. 8.

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65.  FY 2015 Report and Order, 30 FCC Rcd at 10277, para. 20.

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67.  FY 2018 Report and Order, 33 FCC Rcd at 8500, para. 10; FY 2017 Report and Order, 32 FCC Rcd at 7067, para. 20; FY 2016 Report and Order, 31 FCC Rcd at 10350, para. 30.

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68.  FY 2019 NPRM, 34 FCC Rcd at 3280, para. 19.

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69.  NCTA and ACA Reply Comments at 3 (“Because DBS providers, like other MVPDs, are subject to the Media Bureau's `oversight and regulation,' the Commission must require DBS operators to pay the fee it assesses other MVPDs.”).

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70.  DBS Providers Comments at 9.

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71.  FY 2018 Report and Order, 33 FCC Rcd at 8501, para. 11; FY 2017 Report and Order, 32 FCC Rcd at 7067-68, paras. 22-23; see also Assessment and Collection of Regulatory Fees for Fiscal Year 2015, Notice of Proposed Rulemaking, Report and Order, and Order, 80 FR 37206 (June 30, 2015), 30 FCC Rcd 5354, 5369, para. 33 (2015) (FY 2015 NPRM).

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72.  FY 2018 Report and Order, 33 FCC Rcd at 8500, para. 10.

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73.  FY 2017 Report and Order, 32 FCC Rcd at 7066-67, para. 20.

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74.  DBS Providers Comments at 1-4; see also AT&T August 5 Ex Parte Letter at 3-4.

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75.  NCTA and ACA Comments at 3-4; NCTA and ACA Reply Comments at 4-5.

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76.  NTCA and ACA Comments at 5. By way of comparison, Comcast and Charter Communications have made a total of 137 ECFS filings from October 1, 2018 to August 2, 2019 in Media Bureau and other Commission dockets.

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77.  NTCA and ACA Comments at 5.

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78.  NTCA and ACA Reply Comments at 4-5.

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79.  ITSPs, regulated by the Wireline Competition Bureau, include interexchange carriers (IXCs), incumbent local exchange carriers (LECs), toll resellers, Voice over internet Providers (VoIP), and other service providers, all of which involve different degrees of regulatory oversight. FY 2018 Report and Order, 32 FCC Rcd at 7068, para. 24.

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80.  FY 2018 Report and Order, 33 FCC Rcd at 8500, para. 10. The Commission has consistently observed that the Media Bureau FTEs work on the regulation and oversight of MVPDs, that includes DBS, cable television, and IPTV. See FY 2017 Report and Order, 32 FCC Rcd at 7065, para 19; FY 2016 Report and Order, 31 FCC Rcd at 10350, para. 30.

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81.  DBS Providers Comments at 3; AT&T August 5 Ex Parte Letter at 4.

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82.  NTCA and ACA Comments at 9 & Reply Comments at 5-6.

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83.  47 CFR 76.55(e)(2); Assessment and Collection of Regulatory Fees for Fiscal Year 2000, Report and Order, 65 FR 44575 (July 18, 2000),15 FCC Rcd 14478, 14492, para. 34 (2000) (FY 2000 Report and Order).

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84.  Designated as such pursuant to note 5 to § 73.3555 of the Commission's rules.

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85.  The population data for broadcasters' service areas is extracted from the TVStudy database, based on a station's projected noise-limited service contour. 47 CFR 73.622(e).

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86.  FY 2018 NPRM, 33 FCC Rcd at 5102, para. 28.

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87.  FY 2018 Report and Order, 33 FCC Rcd at para.14.

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88.  FY 2019 NPRM, 34 FCC Rcd at 3281, para 21. The factor of .72 of one cent was derived by taking the revenue amount required from all television fee categories and dividing it by the total population count of all feeable call signs. Id. at n.64.

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89.  Hubbard Reply Comments at 3. In its analysis, Hubbard used the FY 2018 historical fee for broadcast television satellite stations, which was $1,500. Id.

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90.  Nexstar Comments at 2-8.

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91.  Ramar Comments at 3.

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92.  See Table 7. For each full-power broadcast television station, Table 7 lists (1) the historical fee (calculated using either the satellite station methodology for stations that have historically paid the satellite station fee or the DMA methodology for stations that have historically paid the DMA-based fee); (2) the contour-based fee (population multiplied by ($.007224); and (3) the resulting regulatory fee for FY 2019 (i.e., the average of the historical fee and contour-based fee).

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93.  PMCM Comments at 3, 5.

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94.  FY 2000 Report and Order, 15 FCC Rcd at 14492, para. 34.

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96.  FY 2019 NPRM, 34 FCC Rcd at 3281, para. 21.

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97.  FY 2019 NPRM, 34 FCC Rcd at 3297, Appendix B.

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98.  The State Broadcasters contend that the Commission underestimated the number of stations by 17% and that this drop resulted in a dramatic increase in regulatory fees for each station. State Broadcasters Comments at 4, 6. NAB Ex Parte at 2; NAB Comments at 2. NAB contends that the Commission did not explain the proposed fee increase. Id.

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99.  The Media Bureau's Consolidated Database System (CDBS) is a database of all licensed audio and video facilities. This database only flags non-commercial educational facilities as exempt entities, and so the download from this database must be reviewed and the units adjusted downward every year to account for non-profit entities, entities that re-broadcast a signal from exempt entities, and stations that are de minimis, all of which do not pay annual regulatory fees.

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100.  The unit data for assessing regulatory fees includes prior year payment data, data downloaded from CDBS as of October 1st of each year, and information that is gathered throughout the year identifying ownership changes and non-profit entities. In addition, the Commission analyzes this data to determine which entities are de minimis based on the owner's TIN (Taxpayer Identification Number) number. Broadcast and video facilities that are non-commercial educational, non-profit, re-broadcast an exempt signal, or de minimis do not pay regulatory fees.

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101.  Letter from Larry Walke, Associate General Counsel Legal and Regulatory Affairs, NAB, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, at 1 (filed May 17, 2019); Letter from Larry Walke, Associate General Counsel Legal and Regulatory Affairs, NAB, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, at 1 (filed July 30, 2019); NAB Reply Comments at 2-4; Mentor Comments at 2; State Broadcasters Comments at 6-7.

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102.  Section 9A(d) permits the Commission to waive, reduce, or defer payment of a regulatory fee and associated interest charges and penalties for good cause. 47 U.S.C. 159A(d); 47 CFR 1.1166. See infra paras. 49-53 for a discussion of our standard and the information that should be submitted with the request.

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103.  FY 2017 Report and Order, 32 FCC Rcd at 7070-71, para. 31.

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104.  The International Bureau reviews, processes, analyzes, and grants applications for submarine cable landing licenses, transfers, assignments, and modifications. The bureau also coordinates processing of submarine cable landing license applications with the relevant Executive Branch agencies.

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105.  See, e.g., International Settlement Rates, IB Docket No. 96-261, Report and Order, 12 FCC Rcd 19806 (1997) (Benchmarks Order); Report and Order on Reconsideration and Order Lifting Stay, 14 FCC Rcd 9256 (1999) (Benchmarks Reconsideration Order); aff'd sub nom. Cable & Wireless, 166 F.3d 1224.

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106.  For example, the International Bureau coordinates with the Executive Branch agencies regarding national security, law enforcement, foreign policy and trade policy issues related to international services. See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market; Market Entry and Regulation of Foreign-Affiliated Entities, IB Docket Nos. 97-142 and 95-22, Report and Order and Order on Reconsideration, 12 FCC Rcd 23891 (1997) (Foreign Participation Order), reconsideration denied, 15 FCC Rcd 18158 (2000).

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107.  FY 2017 Report and Order, 32 FCC Rcd at 7070-71, para 31.

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108.  FY 2018 NPRM, 33 FCC Rcd at 5100-5101, paras. 22-26.

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109.  FY 2019 NPRM at paras 22-23.

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110.  CenturyLink Comments at 8. See also AT&T August 5 Ex Parte Letter at 2 (agreeing that a two-tier system would require a substantial fee increase for smaller providers of IBCs; that a seven-tier system that would be required to avoid large fee increases for smaller providers would be unduly complex; and that the per-Gbps fee for IBCs therefore should continue).

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111.  CenturyLink Comments at 8.

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112.  CenturyLink Comments at 6.

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113.  Assessment and Collection of Regulatory Fees for Fiscal Year 2008, 74 FR 22104 (May 12, 2009), 24 FCC Rcd 4208, 4214, para. 15, (2009) (Submarine Cable Order). The Commission stated it would be based on the capacity of each system used for the Commission's annual Circuit Status report. Id. n. 38.

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114.  The Commission explained: “[b]y `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. . . . [W]e are permitting carriers to pay a lower fee for smaller submarine cable systems.” Submarine Cable Order, 24 FCC Rcd at 4210, para. 2 & n.12.

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115.  Submarine Cable Order, 24 FCC Rcd at 4213, para. 10. The Commission noted at the time that the submarine cable operators would still need to advise the Commission of the number of circuits 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. Id.

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116.  FY 2019 NPRM at Appendix B.

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117.  FY 2018 Report and Order, 33 FCC Rcd at 8516, Appendix C.

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118.  FY 2019 NPRM at Appendix B.

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119.  The Commission changed the reporting requirements for submarine cables in 2017 and now requires submarine cable operators to report design capacity, a combination of lit and unlit capacity. See Section 43.62 Reporting Requirements for U.S. Providers of International Services; 2016 Biennial Review of Telecommunications Regulations, Report and Order, 32 FCC Rcd 8115 (2017); International Bureau Releases Revised Filing Manual for Section 43.82 Circuit Capacity Reports, Public Notice, 33 FCC Rcd 12517, 12518 (IB 2018). Commenters expressed concern that changes to the International Bureau's section 43.82 filing manual changed the definition of capacity for regulatory fee purposes to design capacity, contrary to the historical use of available capacity. NASCA Comments at 15-18.

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120.  INCOMPAS Comments at 4. NASCA also argues that the Commission activities for the submarine cable industry should be covered by application fees. NASCA Comments at 7. Intelsat explains that the application fees do not reduce regulatory fees but go directly to the U.S. Treasury. Intelsat/SES Reply Comments at 3 & n. 6.

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122.  INCOMPAS Comments at 8.

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123.  INCOMPAS Comments at 5-6.

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124.  INCOMPAS Comments at 9; NASCA Reply Comments at 5; INCOMPAS July 24 Ex Parte Letter at 1.

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125.  NASCA Comments at 14-15.

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126.  NASCA Comments at 14-15; Letter from Susannah Larson, Harris, Wiltshire & Grannis LLP, Counsel for Southeast Asia-US, to Marlene H. Dortch, Secretary, FCC, MD Docket No. 19-105, at 3 (filed May 1, 2019) (SEA-US May 1 Ex Parte Letter).

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127.  Submarine Cable Order, 24 FCC Rcd at 4214, para. 15. The Commission also noted that “We anticipate that the subcategories of small systems and the definitions of large and small systems may change as the submarine cable industry changes.” Id. at n.39.

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128.  Submarine Cable Order, 24 FCC Rcd at 4215, para. 18 (observing that a lower fee for smaller licensees would mitigate concerns that the tiered system would be a barrier to entry for new entrants). See also AT&T August 5 Ex Parte Letter at 1-2 (observing that a single flat fee would shift costs from large systems to smaller systems).

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129.  There are ten pending applications for new international submarine cable systems. See the International Bureau Filing System (IBFS), http://licensing.fcc.gov/​myibfs/​.

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130.  SCL-LIC-20180511-00010.

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131.  SCL-LIC-20181106-00035.

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133.  The Commission increased the de minimis threshold to $1,000 in 2017, observing that the cost of collection had increased since FY 2014, when the Commission last visited the de minimis threshold, and that the prior estimate did not include the Commission's overhead costs. FY 2017 Report and Order, 32 FCC Rcd at 7073, para. 40.

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134.  For example, all annual regulatory fees are due and payable in September of each fiscal year allowing for tracking by fee category and FRN within a single database (Fee Filer). The multi-year regulatory fees due dates are spread throughout each year and these fee categories are not included in the annual regulatory fee database.

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136.  Implementation of Section 9 of the Communications Act, Assessment and Collection of Regulatory Fees for the 1994 Fiscal Year, Report and Order, 59 FR 30984 (June 16, 1994), 9 FCC Rcd 5333, 5344, para. 29 (1994) (FY 1994 Report and Order).

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137.  Implementation of Section 9 of the Communications Act, Assessment and Collection of Regulatory Fees for the 1994 Fiscal Year, Memorandum Opinion and Order, 62 FR 39450 (July 23, 1997),10 FCC Rcd 12759, 12761-12762, paras 12-14 (1995) (FY 1994 MO&O).

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138.  FY 1994 MO&O, 10 FCC Rcd at 12762, para. 13.

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139.  Id.

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140.  Assessment and Collection of Regulatory Fees for Fiscal Year 2003, Report and Order, 69 FR 41028 (July 7, 2004), 18 FCC Rcd 15985, 15990, para. 13 (2003).

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141.  FY 1994 Report and Order, 9 FCC Rcd at 5345, para. 34.

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142.  FY 1994 Report and Order, 9 FCC Rcd at 5346.

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143.  For example, Table 7 of this Order lists two call signs that did not appear in the previous table of television listings (Appendix C) of the FY 2019 NPRM, reflecting a transfer of license in one case (WEVV-TV) and a change in exempt status (WSFJ-TV) in the other. FY 2019 NPRM, Appendix C. Table 7 in this Report and Order lists every call sign and its associated fee. Licensees that are exempt on the due date of the FY 2019 regulatory fee will not pay the listed fee.

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144.  Assessment and Collection of Regulatory Fees for Fiscal Year 2004, Report and Order and Order on Reconsideration, 70 FR 41967 (July 21, 2005), 20 FCC Rcd 12259, 12266, para. 22 (2004).

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146.  See, e.g., Amendment of Parts 0, 1, 73, and 74 of the Commission's Rules, Order, 76 FR 70904 (Nov. 16, 2011), 26 FCC Rcd 13538, 13544, 13539-41, 13543, 13545, paras. 4-5, 10, 15 (OMD 2011) (deleting or amending obsolete rule provisions, including those superseded by an Act of Congress).

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148.  U.S. Treasury Financial Manual, Volume 1, Part 5, Chapter 7000, Section 7045.10—Transaction Maximums. Customers who owe an amount on a bill, debt, or other obligation due to the federal government are prohibited from splitting the total amount due into multiple payments. Splitting an amount owed into several payment transactions violates the credit card network and Fiscal Service rules. An amount owed that exceeds the Fiscal Service maximum dollar amount, $24,999.99, may not be split into two or more payment transactions in the same day by using one or multiple cards. Also, an amount owed that exceeds the Fiscal Service maximum dollar amount may not be split into two or more transactions over multiple days by using one or more cards. U.S. Treasury Financial Manual, Volume 1, Part 5, Chapter 7000, Section 7045.20—Prohibitions on Splitting Transactions.

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149.  Only Visa and MasterCard branded debit cards are accepted by Pay.gov.

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150.  Audio bridging services are toll teleconferencing services.

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152.  Cable television system operators should compute their number of basic subscribers as follows: Number of single-family dwellings + number of individual households in multiple dwelling unit (apartments, condominiums, mobile home parks, etc.) paying at the basic subscriber rate + bulk rate customers + courtesy and free service. Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by basic annual subscription rate for individual households. Operators may base their count on “a typical day in the last full week” of December 2018, rather than on a count as of December 31, 2018.

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153.  We encourage terrestrial and satellite service providers to seek guidance from the International Bureau's Telecommunications and Analysis Division to verify their particular IBC reporting processes to ensure that their calculation methods comply with our rules.

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154.  See Assessment and Collection of Regulatory Fees for Fiscal Year 2005, Report and Order and Order on Reconsideration, 70 FR 41967 (July 21, 2005), 20 FCC Rcd 12259, 12264, paras. 38-44 (2005).

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155.  In the supporting documentation, the provider will need to state a reason for the change, such as a purchase or sale of a subsidiary, the date of the transaction, and any other pertinent information that will help to justify a reason for the change.

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157.  Section 9A(c)(2) provides that “section 3717 shall not otherwise apply to such a fee or penalty.”

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158.  See FY 2018 Report and Order, 33 FCC Rcd at 8502-8503, paras. 16-17 (adopting this amendment to section 1.1940 of our rules to conform to the RAY BAUM'S Act).

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159.  31 U.S.C. 3701 et seq.; 31 CFR parts 901 through 904; 47 CFR 1.1901 through 1.1953.

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163.  See, e.g., Cortaro Broadcasting Corp., Order to Pay or Show Cause, 32 FCC Rcd 9336 (MB 2017).

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164.  5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).

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165.  Assessment and Collection of Regulatory Fees for Fiscal Year 2019, Notice of Proposed Rulemaking, 34 FCC Rcd 3272 (2019).

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171.  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.”

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173.  See SBA, Office of Advocacy, “Frequently Asked Questions,” https://www.sba.gov/​sites/​default/​files/​advocacy/​SB-FAQ-2016_​WEB.pdf.

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175.  See 13 CFR 120.201, NAICS code 517110.

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177.  13 CFR 121.201, NAICS code 517110.

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179.  13 CFR 121.201, NAICS code 517110.

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181.  See Trends in Telephone Service, Federal Communications Commission, Wireline Competition Bureau, Industry Analysis and Technology Division at Table 5.3 (September 2010) (Trends in Telephone Service).

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182.  Id.

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183.  13 CFR 121.201, NAICS code 517110.

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185.  See Trends in Telephone Service, at Table 5.3.

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186.  Id.

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187.  Id.

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188.  Id.

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189.  Id.

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190.  13 CFR 121.201, NAICS code 517110.

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192.  See Trends in Telephone Service, at Table 5.3.

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193.  Id.

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195.  13 CFR 121.201, NAICS code 517911.

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197.  See Trends in Telephone Service, at Table 5.3.

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198.  Id.

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199.  13 CFR 121.201, NAICS code 517911.

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201.  See Trends in Telephone Service, at Table 5.3.

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202.  Id.

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203.  13 CFR 121.201, NAICS code 517911.

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205.  Id.

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206.  See Trends in Telephone Service, at Table 5.3.

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207.  Id.

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208.  13 CFR 121.201, NAICS code 517110.

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210.  See Trends in Telephone Service, at Table 5.3.

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211.  Id.

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213.  See Trends in Telephone Service, at Table 5.3.

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214.  Id.

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215.  U.S. Census Bureau, 2012 NAICS code Economic Census Definitions, http://www.census.gov.cgi-bin/​sssd/​naics/​naicsrch.

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216.  13 CFR 121.201, NAICS code 515120.

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217.  See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/​edocs_​public/​attachmatch/​DOC-344256A1.pdf.

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218.  We recognize that BIA's estimate differs slightly from the FCC total.

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219.  “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other or a third party or parties controls or has the power to control both.” 13 CFR 21.103(a)(1).

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220.  See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/​edocs_​public/​attachmatch/​DOC-344256A1.pdf.

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221.  See generally 5 U.S.C. 601(4), (6).

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222.  See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/​edocs_​public/​attachmatch/​DOC-344256A1.pdf.

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224.  13 CFR 121.201, NAICS code 515112.

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226.  “Concerns and entities are affiliates of each other when one controls or has the power to control the other, or a third party or parties controls or has the power to control both. It does not matter whether control is exercised, so long as the power to control exists.” 13 CFR 121.103(a)(1) (an SBA regulation).

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227.  13 CFR 121.102(b) (an SBA regulation).

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231.  As of July 5, 2018, there were 4,160 active cable systems in the Commission's Cable Operations and Licensing Systems (COALS) database.

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234.  See footnote 2, supra.

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235.  47 CFR 76.901(f) and notes ff. 1, 2, and 3.

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236.  See NCTA Industry Data, Cable's Customer Base, available at https://www.ncta.com/​industry-data (last visited July 6, 2017).

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237.  47 CFR 76.901(f) and notes ff. 1, 2, and 3.

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239.  The Commission does receive such information on a case-by-case basis if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to section 76.901(f) of the Commission's rules. See 47 CFR 76.901(f).

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241.  NAICS code 517110; 13 CFR 121.201.

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244.  13 CFR 121.201; NAICS code 517919.

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247.  13 CFR 121.201, NAICS code 517110

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248.  13 CFR 121.201, NAICS code 517210.

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250.  13 CFR 120.201, NAICS code 517110.

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253.  13 CFR 120.201, NAICS code 517120.

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255.  13 CFR 120.201, NAICS code 541890.

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256.  13 CFR 120.201, NAICS code 541618.

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258.  13 CFR 120.201, NAICS code 541890.

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261.  13 CFR 120.201, NAICS code 514618.

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263.  The four NAICS code-based categories selected above to provide definitions for Carrier and Non-Carrier RespOrgs were selected because as a group they refer generically and comprehensively to all RespOrgs. Therefore, all RespOrgs, including those not identified specifically or individually, must comply with the rules adopted in the Regulatory Fees Report and Order associated with this Final Regulatory Flexibility Analysis.

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264.  Email from Jennifer Blanchard, Somos, July 1, 2016.

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265.  5 U.S.C. 603(c)(1)-(c)(4).

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BILLING CODE 6712-01-P

BILLING CODE 6712-01-C

BILLING CODE 6712-01-P

BILLING CODE 6712-01-C

[FR Doc. 2019-20058 Filed 9-25-19; 8:45 am]

BILLING CODE 6712-01-P