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&J\  P6Q&P .2N=.X7&N4  pQ&$5PC2XKEXP*f9 xQXX l%6RC2Xj>BXR9 xyQX &7ZCLXE2XZ\  P@QXP W!6(.XEh6\  P@QhP"5@^..<9DG((.JJ?9999999999DJD3M9?BXR9 xyQX &7ZCLXE2XZ\  P@QXP 'W!6(.XEh6\  P@QhP>(/`C7X֐X`2p NQXlX 1(Xj=h19 xyQhwRSSn[C2*:^5] y.C8*,gC\  P6QP .y.G8*,.G4  pQ7PC2,W XP\  P6QXP .7UC2,PXU4  pQXW!0(,h0\  P6QhPds5ddd,3d6X@Q@ y.K8?,;K\  P@QP I-!&,;,-\  P@Q,P{,C8*,AC*f9 xQXI(!,,(\  P6Q,P5PC2,A.MXP*f9 xQXX s4ddd,`.d6X@DQ@l6RC2,r XR9 xyQX2?`\: Jy.C8*,gC\  P6QP .y.G8*,.G4  pQ7PC2,W XP\  P6QXP .7UC2,PXU4  pQXW!0(,h0\  P6QhPds5ddd,3d6X@Q@ y.K8?,;K\  P@QP I-!&,;,-\  P@Q,P{,C8*,AC*f9 xQXI(!,,(\  P6Q,P5PC2,A.MXP*f9 xQXX s4ddd,`.d6X@DQ@l6RC2,r XR9 xyQX>/`C8,`8X`2p NQXreate a new endnote8CaseToLower;Change selected text to lowercase characteaseToUpper;Change selected text to uppercase characters2? yO- X   )ޚ X-x  #XP\  P6Q DXP#Federal Communications Commission`(# FCC 97218 ă  yxdddy )vK Before the FEDERAL COMMUNICATIONS COMMISSION  yO"Washington, D.C. 20554 ă  XX-#XP\  P6Q DXP#  XA-In the Matter ofi )  X*- j)  X-The Commission's ForfeitureR)hhXppCI Docket No. 956(#p Policy Statement andR) Amendment of Section 1.80R) of the Rules to IncorporateR) the Forfeiture GuidelinesR)  X -$ REPORT AND ORDER ă  X[ - Adopted: June 19, 1997 Released: July 28, 1997  X-- By the Commission:  X-! TABLE OF CONTENTS ă  X-XX` ` X Xhh,Vpp   Paragraph No. (#  X- I. INTRODUCTION ` Xhh,XVXXppXX  Xxx- 1 (#x  X- II. BACKGROUND` Xhh,XVXXppXX  Xxx-2X X (#  X^- III. DISCUSSION XXhh,XVXXppXX  Xxx-5(#x   X0-A. Forfeiture versus the traditional hXppX  xx- 5 (#x  X-X casebycase approach (#  X-B. Proposal Modificationshh,Vpp  xx-9  X-` `  X-` ` (i) Use of the same base forfeiture amount for similarxx-12(#x  X-XX` ` violations indifferent services (#`  Xx- ` ` (ii) Revisions to the proposed base forfeiture amountsxx-18 X(#x   X3"-C. Adjustment Factors Percentage Ranges ppp  Xxx-25 (#x  X$-D. Other Issues ` Xhh,Vpp  Xxx-28(#x  X%-  E. Other Matters` Xhh,XVXXppXX  Xxx- 50 (#x  X'- IV. CONCLUSION` Xhh,XVXXppXX  Xxx-53(#x "(,))ZZB'"Ԍ X- V. ADMINISTRATIVE MATTERS @XhXppXX  Xxx 54(#x  X-xA. Regulatory Flexibility AnalysishhXppXX  Xxx54(#x  X-xB. Ex Parte Rules Permit but Disclose Proceeding  xx55(# x  X_-VI. ORDERING CLAUSES hhX@XhXppXX  Xxx56(#x  X1-APPENDICES  X - XxAppendix A. Amendment to Rules, Forfeiture Guidelines (#  X -Xx Appendix B. List of Commenters (#  X -  X -Xx Appendix C. Final Regulatory Flexibility Analysis (# "y,N(N(ZZ"  X-l I. INTRODUCTION ă  X- ` 2x1. ` ` This Report and Order adopts an amendment to Section 1.80 of the Commission's  xKRules to add a note to this rule that incorporates guidelines for assessing forfeitures. By this rule  X- xmaking proceeding, we adopt, with revisions, the Forfeiture Policy Statement and guidelines that  X- xwere vacated by the court's decision in United States Telephone Association v. FCC, 28 F.3d  Xv-1232 (D.C. Cir. 1994) (USTA). v! {O- xx#d6X@K@##]\  PCP#э#C\  P6QgP# Policy Statement, Standards For Assessing Forfeitures, 6 FCC Rcd 4694 (1991), recon. denied, 7 FCC Rcd  {O- x;5339 (1992), revised, 8 FCC Rcd 6215 (1993), vacated, United States Telephone Association v. FCC, 28 F.3d 1232  {O - x(D.C. Cir. 1994) (Forfeiture Policy Statement). The Forfeiture Policy Statement as ultimately revised did not  xaddress forfeitures assessed against broadcast licensees for violation of the Commission's Equal Employment  xKOpportunity (EEO) rules. Violations of the Commission's EEO rules were addressed in a subsequent Commission  {O - xPolicy Statement. See In the Matter of Implementation of Commission's Equal Employment Opportunity Rules, 9  {O - xFCC Rcd 6276 (1994) (EEO Policy Statement). We note, however, that the guidelines for EEO forfeitures were also  {Oq - xkaffected by the court's decision in USTA, and we subsequently vacated the #C*f9 xQX#EEO Policy Statement#C\  P6QgP#. We are  {O;- xaddressing our EEO guidelines in a separate proceeding.  Streamlining Broadcast EEO Rules and Policies, Vacating  xythe EEO Forfeiture Policy Statement and Amending Section 1.80 of the Commission's Rules To Include EEO  {O-Forfeiture Guidelines, Order and Notice of Proposed Rule Making, 11 FCC Rcd 5154 (1996).   XH- II. BACKGROUND  X1-  X - ` nx2.` ` In 1989, Congress amended the Communications Act of 1934 (the Act) to increase  x\substantially the maximum dollar amounts for forfeitures that the Commission could impose  X - xunder Section 503(b) and under other sections of the Act.$ 8 ! yO- x#]\  PCP#э#C\  P6QgP# Pub. L. No. 239, 101st Cong., 1st Sess., 103 Stat. 2131 (1989) (amending 47 U.S.C.  202(c), 203(e), 205(b), 214(d), 219(b), 220(d), 362, 386, 503(b)). $ Specifically, Section 503 of the Act  xsets forth maximum forfeiture amounts for violations by licensees or regulatees in three  xKcategories: broadcasters and cable operators ("broadcast"), common carriers ("common carrier"),  xLand other licensees, entities and members of the public that do not belong to the previous two  X- xcategories ("other").  ! yO- xx#C\  P6QgP#э Specifically, Section 503(b)(2)(A) provides for forfeitures up to $25,000 for each violation or a maximum  xof $250,000 for each continuing violation by any broadcast station licensee or permittee, cable television operator  xhor applicant for any broadcast or cable television operator license, permit, certificate, or similar instrument; Section  x503(b)(2)(B) provides for forfeitures up to $100,000 for each violation or a maximum of $1,000,000 for each  x continuing violation by common carriers or an applicant for any common carrier license, permit, certificate or similar  x instrument; and Section 503(b)(2)(C) provides for forfeiture penalties up to $10,000 for each violation or a maximum  xJof $75,000 for each continuing violation by any subject violator not covered in subparagraph (A) or (B). 47 U.S.C.  yOI"- x 503(b)(2)(A)(C). We note that the Debt Collection Improvement Act of 1996 (DCIA) , Pub. L. No. 104134,   x31001, 110 Stat. 1321 (1996), requires that civil monetary penalties assessed by the federal government, whether  xset by statutory maxima or specific dollar amounts as provided by federal law, be adjusted for inflation based on  xthe formula outlined in the DCIA. Thus, the statutory maxima pursuant to Section 503(b)(2)(A) increase from  x<$25,000 to $27,000 and from $250,000 to $275,000. The statutory maxima pursuant to Section 503(b)(2)(B)  xincrease from $100,000 and $1,000,000 to $110,000 and $1,100,000 respectively. Lastly, the statutory maxima  xpursuant to Section 503(b)(2)(C) increase from $10,000 and $75,000 to $11,000 and $82,500, respectively. The"&,N(N('" increased statutory maxima became effective on March 5, 1997. On August 1, 1991, the Commission released the Policy Statement,"X,N(N(ZZL"  X- xStandards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991) (Policy Statement), to assist both  xkthe Commission and licensees in adjusting to the statutory increases. Prior to the statutory  xincreases, the Commission determined forfeiture amounts on a casebycase basis using relevant  X- xprecedent. The Policy Statement modified this approach by establishing base forfeiture amounts  x{for a wide range of violations. The base forfeiture amount for each type of violation was  xjcalculated as a percentage of the statutory maximum for the service involved for each violation  xor each day of a continuing violation as set forth in Section 503(b). The guidelines further  xprovided that the base forfeiture amount could be increased or decreased by the adjustment  xcriteria that corresponded to the statutory factors that the Commission is required to consider in  X1- x.assessing a monetary forfeiture penalty. 47 U.S.C.  503(b)(2)(D).X1X! yO: - x#]\  PCP#э#C\  P6QgP# Section 503(b)(2)(D) requires the Commission to "take into account the nature, circumstances, extent, and  xxgravity of the violation, and with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and other such matters as justice may require." 47 U.S.C. 503 (b)(2)(D). To determine the degree of  xLthe upward or downward adjustment, the guidelines recommended percentage ranges for each adjustment criterion.  X - ` x3.` ` On reconsideration, petitioners argued that the Policy Statement was invalid  xbecause it was a substantive rule adopted without notice and comment rule making procedures  X - x required by the Administrative Procedure Act and not a general statement of policy. See 5  X- xU.S.C.  553. The Commission disagreed, noting that the Policy Statement expressly stated that  Xy- xthe Commission retained discretion in individual cases and did not consider the Policy Statement  Xb- xla binding rule. Policy Statement Reconsideration Order, 7 FCC Rcd 5339 (1992), denying  XK- xreconsideration of 6 FCC Rcd 4695 (1991). In 1993, after reviewing how the Policy Statement  X4- xfunctioned in practice, the Commission made several modifications to the Policy Statement to  xensure both consistency and flexibility in applying the forfeiture amounts and adjustment criteria  x[in individual cases. Again the Commission reiterated that it retained discretion to deviate from  X- x\the guidelines in specific cases. 1993 Policy Statement, 8 FCC Rcd 6215 (1993), (1993 Policy  X- x>Statement). In 1994, the United States Court of Appeals for the District of Columbia Circuit  X- xvacated the Policy Statement (including the reconsideration order and 1993 Policy Statement),  xon the ground that it was a rule promulgated without notice and comment and therefore invalid.  X- xUnited States Telephone Association v. FCC, 28 F.3d 1232 (D.C. Cir. 1994). Following the  xcourt's decision, the Commission and its staff returned to determining forfeiture amounts on a casebycase basis, using the statutory factors set forth in Section 503(b) of the Act.  X7- ` x4.` ` In the Notice of Proposed Rule Making (NPRM),.7x! {O`#- xx#C\  P6QgP#э #\*f9 xCX# In the Matter of the Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, 10 FCC Rcd 2945 (1995).. we followed the court's  x-requirement that the Commission's forfeiture policy statement be put out for notice and comment.  X - xWe proposed to adopt the same forfeiture guidelines set out in the original Policy Statement, but  X- xrequested comments on all aspects of that proposal. In addition, we requested specific comment",N(N(ZZ" on the following issues:  xZA. Whether the Commission should use guidelines to assess forfeitures instead of the traditional casebycase approach; B. Whether the guidelines proposed in the notice of proposed rule making should be modified; x C. Whether adjustment factor ranges should be adopted.  X1- xAdditionally, we sought comment on our proposal to apply any newly adopted Forfeiture Policy  X - xStatement and guidelines to all pending forfeiture proceedings which were initiated after the  X - x!effective date of the Forfeiture Policy Statement. We received a total of 17 comments, 1  X -informal comment, and 8 reply comments in response to the NPRM.* ! yOe - x#C\  P6QgP#э Comments were filed by: American Mobile Telecommunications Association, Incorporated (AMTA);  x;American Radio Relay League (ARRL); Bell Atlantic Telephone Companies (including Bell AtlanticDelaware, Inc.;  xBell AtlanticMaryland, Inc.; Bell AtlanticNew Jersey, Inc.; Bell AtlanticPennsylvania, Inc.; Bell AtlanticVirginia,  xInc.; Bell AtlanticWashington, D.C., Inc.; and Bell AtlanticWest Virginia, Inc.)(Bell Atlantic); Brown and  xSchwaninger; Emery Telephone, Harrisonville Telephone Company, and Mobile Phone of Texas, Incorporated  {OM- x(jointly referred to herein as Emery et al); Infinity Broadcasting Corporation (Infinity); MCI Telecommunications  xCorporation (MCI); MobileMedia Communications, Incorporated (MobileMedia); National Association of  xBroadcasters (NAB); Paging Network, Incorporated (PageNet); Personal Communications Industry Association  x(PCIA); San Bernardino Coalition of Low Power FM Broadcasting (San Bernardino); Southwestern Bell Telephone  xCompany (Southwestern Bell); United States Telephone Association (USTA); and WGJMariTEL Corporation  x(MariTEL). A late filed letter was received from William Dougan (Dougan), and we have treated Mr. Dougan's  xviews as an informal comment. Reply comments were filed by: AMTA; MCI; Motorola Incorporated (Motorola); National Telephone Cooperative Association (NTCA); PCIA; San Bernardino; Southwestern Bell; and USTA.   X -  III. DISCUSSION  X-A. Forfeiture versus the traditional casebycase approach  Xb- ` x5.` ` In general, most commenters supported the concept of a guidelinebased forfeiture  xsystem rather than a casebycase approach in assessing forfeitures. Ten commenters and one  xreply commenter explicitly or generally supported the concept of a guidelinebased forfeiture  xsystem: ARRL at 911; Bell Atlantic at 4; MCI at 1; USTA at 1; Infinity at 2; MariTEL at 5;  xPageNet at 710; AMTA at 3; PCIA at 1; Southwestern Bell at 2; Motorola at 1. In particular,  x=MCI Telecommunications Corporation (MCI) noted that a schedule of fines with discretionary  xadjustment ranges should translate into public benefit through fair and prompt resolutions of  xviolations. MCI Comments, 1. The United States Telephone Association (USTA) also indicated  x-that forfeiture guidelines can contain information that may deter violations of important rules and  xassist the Commission in developing priorities among different violations. USTA Comments, 2.  xZOne commenter supported the casebycase approach simply because it believed the Commission  xcould not oversee a procedure that encompassed both flexible guidelines and staff discretion.  xBrown and Schwaninger Comments, 2. Three commenters raised specific concerns about the"N ,N(N(ZZ|"  xpotential adverse effect that the guidelines may have on businesses and their goal to provide  x<universal services, and claimed that forfeiture guidelines would thus be inconsistent with Section  x\303(r) of the Act, 47 U.S.C.  303(r), which provides the Commission with broad rule making  X- xyauthority to further the public interest, convenience and necessity. Emery et al.Z! yO4- xԍ Inasmuch as the text of the comments submitted individually by Emery Telephone, Harrisonville Telephone,  {O- xand Mobile Phone of Texas are identical, we will hereafter refer to these comments as the comments of Emery #W*f9 xr G;X#et  {M-al.#X\  P6G;gP#ђ at 6. Emery et  X- xial. suggest that the Commission not proceed with this rule making because the Republican Party's  x"Contract with America" imposes a moratorium on all rule making. Thus, Emery et al. contend  xthat the issuance of any rules would be invalid and contrary to the express wishes of Congress.  X_- xNSee Emery Comments, 9. An informal commenter, Mr. William L. Dougan, stated that the  xguidelines and forfeitures violate the United States Constitution because he cannot get a license  xMfor low power operation on FM frequencies. Letter from William Dougan to Secretary, FCC,  xApril 4, 1995, at 1 2. San Bernardino Coalition of Low Power FM Broadcasting (San  X - xBernardino), which also favors a registration program. See San Bernardino Reply Comments, para. 14.  X - ` x6.` ` We have considered the specific concerns raised by some of the commenters  xregarding the Commission's exercise of its discretion under a guidelinebased system. We are  xsatisfied that our procedures, as set out in paragraphs 25 and 26, will allow the Commission to  xapply its guidelines in a consistent and fairly uniform manner, while retaining discretion to look  x at the individual facts and circumstances surrounding a particular violation. We have also  XK- xaddressed the concerns raised by Emery et al. regarding the effects of the proposed base forfeiture  xamounts on the provision of universal services. We have devised a forfeiture policy that does  X- xnot make any distinctions among the various common carriers (see discussion in paragraphs 13,  xk14 and 15). Specifically, the procedures set out in paragraph 25 are sufficient to provide the  xysubject of an NAL with consideration of any mitigating factors that should be considered prior  xto imposition of a final forfeiture. We also do not believe our forfeiture guidelines will undercut  xuniversal service objectives of the Act. We also note that the moratorium mentioned by Emery  X- xet  al. was not enacted into law. With respect to the concerns raised by Emery et al. however,  x<we note that Congress enacted legislation that provides an opportunity for Congressional review  xof all major rules promulgated by agencies. The Contract with America Advancement Act of 1996, Pub. L. No. 104121  110 Stat. 847 (1996).  X7- ` }x7.` ` We reject the constitutional objections to the guidelines or to the adoption of any  xpolicy statement as raised by Mr. Dougan or San Bernardino. The Commission may, consistent  x[with the First Amendment, impose forfeiture penalties for violations of its licensing rules, even  X- xwhen its licensing scheme does not provide for certain types of transmissions. See National  X-Broadcasting Co. v. United States, 319 U.S. 190, 209217 (1943).  X!- ` x8.` ` We therefore agree with the commenters that adoption of forfeiture guidelines is  x\warranted. Guidelines will provide the needed measure of predictability to the process and"",N(N(ZZ!"  xuniformity to our administrative sanctions while retaining flexibility for the Commission to act  xappropriately in particular cases. For this purpose, we hereby adopt a base forfeiture amount  xstructure that will serve as a guideline for determining forfeiture liability amounts for specific  X- xviolations of the Act and the Commission's Rules. As was our intent with the prior Policy  X- x[Statement, these guidelines will not be binding on the Commission, the staff or the public. We retain discretion to take action in specific cases as warranted.  X_- B. Proposal Modifications  X1- `  x9.` ` Many commenters concluded that, although guidelines are beneficial to the  X - xforfeiture process, the guidelines as proposed were not rational and equitable.# ! yO - x=#C\  P6QgP#э USTA Comments, 1; San Bernardino Comments, 1; Emery Comments, 2; MobileMedia Comments, 5;  yO[ -PageNet Comments, 23; NTCA Reply Comments, 3.#X\  P6G;gP## The National  xAssociation of Broadcasters (NAB) along with several common carriers, both wireline and  xwireless, including MCI, Southwestern Bell Telephone Company (Southwestern Bell),  xyMobileMedia Communications Incorporated (MobileMedia), USTA, Personal Communications  x Industries Association (PCIA), WJGMariTEL Corporation (MariTEL), and Paging Network  X - xx(PageNet), urged the Commission to consider modification of the vacated schedule of forfeitures.  ! yOx- x#C\  P6QgP#э NAB Comments, 5; MobileMedia Comments, 34; MCI Reply Comments, 1; MariTEL Comments, 4; Southwestern Bell Comments (generally); USTA Comments (generally); PCIA Comments (generally).   xKCommenters further contended that many of the assumptions underlying the forfeiture guidelines  Xy- x are outdated. For example, MobileMedia stated that a Further NPRM was needed because  xCommercial Mobile Radio Service (CMRS) licensees and Personal Communication Service (PCS)  x=licensees were not in existence when Congress increased the statutory forfeiture amounts and  X4-were not mentioned by the Commission in the instant NPRM. MobileMedia Comments, 23.  X- ` @x10.` ` American Mobile Telecommunications Association, Incorporated (AMTA), echoing  xZcomments submitted by Southwestern Bell, noted that as "service offerings merge among various  xclasses of licensees, these widelydiffering base amounts no longer make regulatory sense, nor  X- xdo they reflect the Commission's goal of regulatory parity."} \x! {O- x#C\  P6QgP#э AMTA Reply Comments, 4.  Southwestern Bell argued that the Commission has no reasonable basis for the  {O- xdisparate treatment it proposes "in the face of rapidly converging industries, e.g. cable and telephone." See Southwestern Bell Comments, 3. } In the face of convergence of the  X- x.cable TV and telephone industries,, ! {O!- x#C\  P6QgP#э In support, Bell Atlantic cites Implementation of Sections of the Cable Television Consumer Protection and  {O"-Competition Act of 1992Rate Regulation, 9 FCC Rcd 4119, para. 24 (1994). , Bell Atlantic contended that "[a]s competition among the  xvarious industries accelerates, the legal requirements of providing balanced incentives coincide  xto dictate that the penalties be set based on the nature of the offense, and not the identity of the  Xe- x=transgressor." Bell Atlantic Comments, 34. In addition, commenters urged the Commission to  XN- xconsider new ways to implement a policy rather than merely proposing the same guidelines that  X7- x<the court rejected. In implementing any guidelines, commenters asked the Commission to address"7 ,N(N(ZZ"  x[or clarify how the guidelines affect issues such as the use of different base amounts for similar  X- xviolations in different services, ! {Ob-#C\  P6QgP#э See e.g., Bell Atlantic Comments, 23; Emery Comments, 18; PCIA Comments, 45. the use of different statutory maxima to justify different base  X- xyamounts, Z! {O-#C\  P6QgP#э E.g., Bell Atlantic Comments, 23; USTA Comments, 2; Emery Comments, 1315, 20. the use of upward and downward adjustment factors,! {Oo-#C\  P6QgP#э E.g., NAB Comments, 79; PageNet Comments, 8. the method for ascertaining  x/ability to pay a forfeiture, and the weight to be given to a previous violation in subsequent  X-enforcement or transactional proceedings involving the same licensee. h~! yO -#C\  P6QgP#э Infinity Comments, 28.h  Xv- ` x11.` ` Inasmuch as the NPRM in this proceeding asked for comments on all aspects of  xithe Commission's forfeiture policy, including the "other" category, and given that CMRS and PCS  XH- xare both common carrier services, we believe that a Further NPRM concerning the need to  X1- xinclude new services is unnecessary.j1! {O-ԍ See e.g., Omnipoint Corp. v. FCC, 78 F.3d 620, 631 (1996). j#Xj\  P6G;W XP# Upon review, however, we are persuaded that the  xguidelines should be revised. The following paragraphs discuss the two main revisions that we have made to the proposed guidelines and the reasons for these revisions.  X -  x i. Use of the same base forfeiture amount for similar violations in different  X - services.  X- ` `x12.` ` Most commenters objected to the proposed system of imposing different base  Xy- xforfeiture amounts for similar violations depending upon the service provided by the violator.aZy! {O- x-#C\  P6QgP#э See MobileMedia Comments, 4; MCI Reply Comments, 2; USTA Comments, 2; Bell Atlantic Comments,  x23; Infinity Comments, 2; Emery Comments, 18; PCIA Comments, 1; NTCA Reply Comments, 4; PageNet Comments, 2; Southwestern Bell Comments, 3.a  Xb- xZThey argued this structure was arbitrary because the Forfeiture Policy Statement failed to provide  XK- xZan explanation for the different base forfeiture amounts.oXK ! yO- x#C\  P6QgP#э MCI Reply Comments, 1; USTA Comments, 12; Infinity Comments, 2; Bell Atlantic Comments, 2;  xZMobileMedia Comments, 45; Southwestern Bell Comments, 2; NTCA Reply Comments, 3. Entities such as the PCIA Reply Comments, 3, agreed with Emery Comments, 16. o USTA pointed out that the court found  X4- xthat the Commission did not provide any rationale for this action.d4! yO"-#C\  P6QgP#э USTA Comments at 5.d Other commenters pointed  xout that the availability of mitigating factors did not remedy the Commission's error in not  X- xiproviding a reasoned analysis for the different base forfeiture amounts among services. See, e.g.,  x=Emery Comments, 17; USTA Comments, 4, n. 3. They also argued that neither the language of  xthe 1989 statutory amendment nor its legislative history provided support for the Commission's  x=action establishing different base forfeiture amounts for each service, or higher base forfeiture"r,N(N(ZZ"  xamounts when the violation occurs in a service that has a higher maximum. Commenters argued  x.that in setting different forfeiture amounts based on the identity of the violator rather than the  X- xnature of the violation, the Commission violated basic and fundamental principles of regulatory  X- xparity. See e.g., MCI Comments, 3. Several commenters also pointed out that, with upcoming  x=changes in ownership rules and the technical and legal ability of different licensees to provide  xxthe same type of communication service, implementing different base amounts as proposed would  xresult in dissimilar forfeiture amounts for similar violations based solely on the identity of the  xlicensee providing the service. PageNet Comments, 23; Southwestern Bell Telephone Company  x(Southwestern Bell) Comments, 3; Bell Atlantic Comments, 34. Bell Atlantic argued that,  X1- xcontrary to the Commission's assertions in the NPRM, adoption of the forfeiture schedule as  xproposed would not "allow for comparable treatment of similarly situated offenders," but would  xlevy forfeitures against common carriers that are four times the amount levied against broadcast or cable TV companies for the same or similar violations. Bell Atlantic Comments, 23.  X - ` px13.` ` Some common carriers, including commercial mobile radio service providers  xzargued that the Commission has no basis for imposing higher forfeitures for common carrier  X- xviolations.m! yO -ԍ PCIA Comments, 5, and Reply Comments, 2; Emery Comments, 1315, 20.m Emery et al. argued that the 1989 statutory change only creates a higher statutory  xmaximum for common carriers, and no legislative history or language in the statute supports the  xCommission's proposal that common carriers be treated more severely than broadcasters. They  xKalso contended that adoption of a forfeiture policy which made no distinctions between large and  xLsmall common carriers would also violate the Commission's mandate and fundamental purpose  X-as stated in Section 1 of the Act: to promote communications services and competition."X! {O&- x#C\  P6QgP#э Emery et al. contend that the only logical explanation for approving a higher statutory maximum may have  x-been to deter "those very few common carriers (such as AT&T and MCI) that have such high earnings." These  xLcommenters, however, stated that even the largest carriers should not be fined at the high percentages unless aggravating circumstances exist. Emery Comments, 20.  X- ` x14.` ` In light of the problems outlined, most of the commenters suggested that the  xCommission implement a uniform forfeiture system, imposing fines according to the nature of  xythe violation rather than the type of violator. In the alternative, if the guidelines must be based  x=on the type of violator as well as the nature of the violation, several commenters propose that  xthe Commission make distinctions among the types of violators (e.g., large common carriers  xyversus small CMRS) within a group of licensees that provides the same type of communication  Xe- xservice.eB! {OX"-#C\  P6QgP#э See e.g., PCIA Reply Comments, 3; PageNet Comments, 45; and AMTA Comments, 45. Some commenters suggested that the guidelines be based on the degree of injury or  XN- xharm rather than a percentage of the maximum amount. Emery et al., for example, urged the  X7- xCommission to look at the various approaches it took prior to implementing the Forfeiture Policy  X - x>Statement. It argued that the amounts imposed were more reasonable because less serious  x.violations were assessed on a flatrate approach and serious violations involving aggravating  X- xcircumstances were assessed the per diem statutory maximum, which was then no more than" ,N(N(ZZ<"  X- x$2,000. ! yOy-#C\  P6QgP#э Emery Comments, 1011.#d6X@`7 .@#ю Two commenters even suggested that one base amount be used for all violations, as  X-was done with tower lighting and marking violations. X! {O-#C\  P6QgP#э See USTA Comments, 6; MCI Reply Comments, 2.  X-  X- ` x15.` ` While we continue to believe that our prior approach was lawful, we have  xdetermined that it would be a fairer approach for the forfeiture guidelines to adopt uniform base  xforfeiture amounts for similar violations regardless of the nature of the service involved. We  xibelieve that this decision is fully supported by the record established by the commenters, and will result in a generally fairer approach to forfeiture proceedings in most cases.  X1- ` x16.` ` Our decision reflects consideration of the issues of fair treatment raised by several  x.commenters. First, we reviewed the recommendation made by several commenters that CMRS  X - x/and other services not mentioned in the original Policy Statement be treated in the "other"  X - x.category rather than in the "common carrier" category. ! yO-#C\  P6QgP#э MobileMedia Comments, 3; MariTEL Comments, 4; Emery Comments, 20, 24. Although Section 332 provides that  X - xCMRS licensees are common carriers under the Act,t z! yO-#C\  P6QgP#э See 47 U.S.C.  332.t these commenters argued that it is unfair  xto now impose higher base forfeiture amounts when these entities would receive smaller fines  X - xunder the earlier Policy Statement as private carriers that were in the "other" category. MariTEL  xComments, 3. Alternatively, if the Commission does not treat them as belonging to the "other"  x[category, CMRS commenters argued that a new category should be created for these services.  xWe find this argument unpersuasive. Section 332(c)(1) requires that CMRS providers will be  XK- xtreated as common carriers for purposes of the Act.kK ! yO-#C\  P6QgP#э 47 U.S.C.  332(c)(1). k Accordingly, CMRS providers will be  xtreated as common carriers for purposes of Section 503 of the Act and our forfeiture guidelines.  xAs a second issue of fair treatment raised in this proceeding, PageNet contends that the proposed  xforfeitures did not address the discriminatory effect that would result against Radio Common  xCarrier (RCC) paging carriers because they are licensed on a transmitter basis rather than a  x=market basis as are Personal Communications Service (PCS) licensees. PageNet Comments, 2.  xWe believe, however, that this concern relates to licensing procedures that are not within the scope of this rule making proceeding.  X|- ` "x17.` ` We recognize that Congress established different statutory maxima for broadcasters  xjand for common carriers than for other persons who violate our rules. We believe this permits,  xbut does not require, a forfeiture schedule that distinguishes among these categories of entities.  X7- xAs discussed below (see para. 24), however, we believe that there are better ways to achieve  xCongress's explicit intention that forfeitures serve as "a meaningful sanction to the wrongdoers  X - xand an effective deterrent to others." see Omnibus Budget Reconciliation Act of 1989, H.R. Conf."  ,N(N(ZZ" Rep. 386, 101st Cong., 1st Sess., 434 (1989).  X-x ii. Revisions to the proposed base forfeiture amounts.  X- x  X- ` x18.` ` The majority of commenters took issue with the base forfeiture amounts. Some  xxcommenters suggested that the amounts proposed for each violation were unreasonably high, did  xnot deter violations, evidenced a punitive rather than a remedial purpose, and only served to  X_- xhinder entities who were often unaware of the regulatory requirements.yZ_! {O- x#C\  P6QgP#э MCI Comments, 12; Reply Comments, 3 (agreeing with Emery et al that the forfeiture amounts are too high,  xEmery Comments, 1014, 1617); Emery Comments, 10 (should be remedial and not punitive); NAB Comments, 6; USTA Comments, 3, 5; AMTA Reply Comments, 45.y In particular, Emery  XH- xet. al. argued that the proposed base forfeiture amounts of 4080 percent of the statutory maxima  xwere contrary to the Commission's history of assessing reasonable forfeitures to ensure substantial  xcompliance by licensees and therefore, the amounts should be reduced. In support, they noted  xthat common carrier forfeitures issued before the statutory increase were seldom more than 25  xpercent of the maximum, and that forfeitures assessed after the statutory increase but before the  ximplementation of the prior policy statement were no more than 0.5 percent of the new one  xmillion dollar maximum. Emery Comments, 1112. NAB and MCI also agreed that the base  xxamounts suggested in the proposed forfeiture guidelines were too high and should be reduced by  x{50 percent with the exception of tower safety violations. NAB Comments, 5; MCI Reply Comments, 3.  XK- ` x19.` ` The legislative history of Section 503 of the Act demonstrates that, Congress  xrecognized the need to authorize the Commission to impose forfeitures sufficiently high to deter  xviolations and constitute a meaningful sanction when violations occur. Specifically, in 1978, Congress increased the Commission's forfeiture authority, stating:  oXxThe maximum amount of forfeitures permitted for single and multiple violations  Eis unrealistically low to be an effective deterrent for highly profitable  communications entities or to provide sufficient penalty to warrant the Attorney  General's or the various U.S. district attorneys' attention for prosecuting forfeitures within the Federal district courts.   XN- xSen. Rep. No. 580, 95th Cong. 1st Sess. 3 (1978), reprinted in 1978 U.S.C.C.A.N. 109, 111.  X7- xSimilarly, in 1989, Congress further increased the Commission's forfeiture authority stating its  xintent that forfeitures "serve as both a meaningful sanction to the wrongdoers and a deterrent to  X - x[others." See H.R. Conf. Rep. 386, at 434 (1989). We believe that the increases in our forfeiture  xauthority as well as the accompanying legislative history of our forfeiture authority support our  xdetermination that forfeiture amounts should be set high enough to serve as a deterrent and foster compliance with our rules.  X"- ` x20.` ` As noted before, however, we have also determined that the guidelines for base"" ,N(N(ZZ!"  xforfeitures adopted here will not reflect distinctions based on the traditional classification of  xzbroadcast, common carrier, and other services. Consistent with our policy of protecting the  xlpublic and ensuring the availability of reliable, affordable communications, we based the  x=guidelines on the degree of harm or potential for harm that may arise from the violation. Thus,  xthe dollar amount for the violation, regardless of service, generally starts at the same amount.  xOur experience in assessing forfeitures, however, has shown that although the type of violation  xis the same, each case will present its own unique facts. In particular, the identity of the licensee  xor the nature of the service are not wholly irrelevant to a determination of the seriousness of the  xharm. We cannot, for example, say that the degree of harm resulting from a violation of  x[operating power limits committed by a full power broadcast station is identical to the degree of  xharm resulting from the same violation by an amateur radio operator. Nor can we conclude that  xthe prospect of a $10,000 forfeiture for a particular offense will have the same deterrent effect  xon a small computer vendor, a moderatelysized radio common carrier, and a $10 billion per year  xlocal telephone company or interexchange carrier. Accordingly, as discussed below, we will use the adjustment factors to assess the forfeiture amount in light of all relevant facts.  X- ` x21.` ` In order to develop base amounts that could apply to all services, we concluded  xthat the uniform base amounts could not be higher than the statutory maxima for any service.  xInasmuch as the statutory maxima for broadcast, cable and common carrier are higher than for  xithe remaining services, the statutory maxima for services other than broadcast, cable and common  x{carrier was used as the common denominator. Thus, the uniform base forfeiture amounts  xgenerally adhere to the higher end of the statutory maximum of $10,000, which is the maximum  xforfeiture amount per violation that may be assessed against entities that are not classified as  X- xMbroadcasters, cable operators, or common carriers.! yOh-  #C\  P6QgP#эxWe note that the statutory maxima for monetary forfeiture penalties were upwardly adjusted for inflation,  {O0-effective March 5, 1997. See note 3, infra. Consistent with these parameters, the  xuniform base forfeiture amounts adopted here and set forth in Appendix A reflect reductions in  X- xmost of the forfeiture amounts that were proposed in the NPRM. We have made, however, two  xexceptions to our determination to use the $10,000 statutory maximum as a basis for establishing  x_uniform base forfeiture amounts. First, we have set the base forfeiture amount for  xmisrepresentation at the statutory maximum for the particular type of service provided by the  x?violator. Regardless of the factual circumstances of each case, misrepresentation to the  xCommission always is an egregious violation. Any entity or individual that engages in this type  x-of behavior should expect to pay the highest forfeiture applicable to the service at issue. Indeed,  xjthe revocation of the license may well also result from misrepresentation. 47 U.S.C.  312(a)(1).  xkSecond, we have made an exception for violations that are unique to a particular service. In  x>establishing guidelines for base forfeiture amounts for these violations, we have used case  X- xiprecedent developed by the Commission since the Court vacated the Policy Statement and, where  x.no precedent exists, we have determined base amounts that reflect the level of egregiousness, based on the degree of harm, that we attach to the particular violation.  X#- ` x22.` ` We believe it is important to make the following general observations about the"# ",N(N(ZZe""  xbase forfeiture amounts adopted here. First, any omission of a specific rule violation from the  x list set forth in Appendix A should not signal that the Commission considers any unlisted  x violation as nonexistent or unimportant. The Commission expects, and it is each licensee's  xLobligation, to know and comply with all of the Commission's rules. Indeed, we believe that the  xrigorous enforcement of the minimum regulatory requirements resulting from the recent  xamendments to the Communications Act will become critical to the preservation of the open  Xv- xxcompetitive markets that the recent amendments seek to create. Zv! {O- xx#C\  P6QgP#э See generally, Alfred E. Kahn, Deregulation: Looking Backward and Looking Forward, 7 Yale J. on Reg.  xh325, 32930 (1990) (explaining that, as direct economic regulation is abolished, the government's role in preserving competition will necessarily increase).  Although we have adopted the  xzbase forfeiture amounts as guidelines to provide a measure of predictability to the forfeiture  x<process, we retain our discretion to depart from the guidelines and issue forfeitures on a caseby X1- xcase basis, under our general forfeiture authority contained in Section 503 of the Act. See para.  X -24 infra.  X - ` Qx23.` ` Second, we note that the base forfeiture amounts set forth in Appendix A may  x appear high for entities that fall within the statutory classification of "other," for whom the  x[statutory maximum is $10,000 per violation. In other words, base forfeiture amounts are indeed  xvery close to the maximum forfeiture that may be assessed against these entities. We believe,  xNhowever, that the system of uniform base forfeiture amounts can be applied in a fair and  xequitable manner, with respect to all licensees, permittees, regulatees, and members of the public.  Xb- xUnder the Act, many of the services in the "other" category, e.g., citizen band (CB) radio,  XK- x{domestic ship radios and aircraft radios are licensed by rule. See Section 307(e)(1) of the  X4- xoCommunications Act of 1934, 47 U.S.C.  307(e)(1). See also Section 403 of the  x@Telecommunications Act of 1996, Pub. L. No. 104 104, 110 Stat. 56 (1996). Except for  xegregious violations, it has been our general practice to issue warnings to first time violators  x<who are not licensed on an individual basis. Thus, this type of violator would receive a forfeiture  x]only after it has violated the Act or rules despite the prior warning. We believe that the  x[continuation of this practice of warnings to entities licensed by rule, except in egregious cases  xinvolving harm to others or safety of life issues, decreases any adverse impact that the adopted base forfeiture amounts may have on these entities.  Xe- ` x24.` ` Third, on the other end of the spectrum of potential violators, we recognize that  xfor large or highly profitable communications entities, the base forfeiture amounts set forth in  xAppendix A are generally low. In this regard, we are mindful that, as Congress has stated, for  xLa forfeiture to be an effective deterrent against these entities, the forfeiture must be issued at a  X - x>high level. See para. 19, supra. For this reason, we caution all entities and individuals that,  xindependent from the uniform base forfeiture amounts set forth in Appendix A, and pursuant to  x>Section 503(b)(2)(D) of the Act, 47 U.S.C.  503(b)(2)(D), we intend to take into account the  xsubject violator's ability to pay in determining the amount of a forfeiture to guarantee that  x]forfeitures issued against large or highly profitable entities are not considered merely an  xaffordable cost of doing business. Such large or highly profitable entities should expect in this"" ,N(N(ZZ!"  xregard that the forfeiture amount set out in a Notice of Apparent Liability against them may in many cases be above, or even well above, the relevant base amount.  X- C. Adjustment Factors Percentage Ranges  X- ` %x25.` ` Several commenters! yO-#C\  P6QgP#э Emery Comments, 1718; NAB Comments, 68; PageNet Comments, 8; MCI Reply Comments, 34. also took issue with the Commission's guidelines for  xapplying upward and downward adjustment factors in determining a reasonable forfeiture amount.  x.They contended that under the vacated guidelines, violations were seldom considered "minor  xviolations" that would require reductions of 50 percent to 90 percent of the base amount and  xreductions were, therefore, illusory. For example, NAB indicated that a downward adjustment  xfor a minor violation should apply when a rule encompasses multiple requirements, for example,  xzmaintaining all necessary records in the "public files", 47 C.F.R.  73.1212. NAB Comments,  xx67. Additionally, some commenters contended that forfeitures should be upwardly adjusted only  X - xwhen the violator knows that it has deliberately violated the Commission's rules. See e.g., PageNet Comments, 8.  X- ` x26.` ` We agree with the commenters that there were difficulties associated with applying  xthe adjustment factor ranges. Although the percentage ranges were designed as guidelines for  xadjusting the forfeiture based on the statutory criteria, the ranges still afforded the Commission  xjand its Bureaus and Offices wide discretion to apply a specific percentage within the particular  xrange at issue. To reflect more clearly the Commission's discretion to increase or reduce a  xforfeiture penalty as much as warranted based on the unique facts of each case, we have  xdetermined that the percentage ranges for the upward and downward adjustment factors should  X- xzbe eliminated. Thus, the Forfeiture Policy Statement and forfeiture guidelines that we adopt  xherein no longer provide percentage ranges for the adjustment factors outlined in Section 503 of  xthe Act. (We are also eliminating the percentage ranges for the statutory forfeitures that are not  X- x/assessed pursuant to Section 503 of the Act, see 47 U.S.C.  202(c), 203(e), 205(b), 214(d),  x219(b), 220(d), 223, 364, 386, 506, 554. This means that the Commission will initially assess  xthese violations at the statutory amount, but can adjust downward based on the adjustment factors set out in Section 503 and the facts of the case.)  X7- ` #x27.` ` Although we are eliminating the percentage ranges, we are required by statute to  xconsider various adjustment criteria before determining a forfeiture amount in each case. The  xadjustment criteria listed in Appendix A of the guidelines reflect the factors outlined in the  x-statute. For example, the statute requires that we consider the "nature, circumstances, extent and  xZgravity of the violation". Thus, the adjustment factors regarding the severity of the violation that  xmay increase or decrease the forfeiture are: substantial harm, repeated or continuous violation,  xor substantial or economic gain derived from the violation, and the minor nature of the violation.  xThe statute also requires that "with respect to the violator," we consider factors such as "the  xzdegree of culpability, any history of prior offenses, ability to pay, and such other matters as  xjustice may require." Accordingly, the adjustment factors we evaluate in considering the actions"h$X,N(N(ZZF#"  xZof the violator include egregious misconduct, ability or inability to pay, intentional violation, prior  x<violation of same or other requirements, good faith or voluntary disclosure, and history of overall  xcompliance. 47 U.S.C.  503(b)(2)(D). In sum, although the base amount is the starting point  xin assessing a forfeiture, the forfeiture may be decreased below the base amount or increased to  xithe statutory maximum when the adjustment criteria are considered based on the facts of the case.  X_- D. Other Issues  X1- ` x28.` ` Discretion to depart from forfeiture guidelines. We sought comment on whether  x1the Commission should retain discretion to depart from the guidelines in appropriate  xzcircumstances or, in the alternative, adopt the guidelines as a binding rule. Both USTA and  xBrown and Schwaninger indicated that guidelines could not provide effective notice to licensees  X - xor result in administrative efficiency as stated in the NPRM if the Commission is free to exercise  xyits discretion and deviate from those guidelines. USTA Comments, 6; Brown and Schwaninger  xComments, 2. Brown and Schwaninger contended that the guideline system would, in effect,  x[become a casebycase system, by prompting violators to seek exemptions from the guidelines  x0for lesser forfeiture penalties and would invite litigation in forfeitures assessed by staff  Xb-discretion. Brown and Schwaninger Comments, 2.  X4- ` x29.` ` We agree that the predictability in the forfeiture process D4! yO- x<#C\  P6QgP#э In accord with its discretion, the Commission may initiate a forfeiture action by either issuing a Notice of  xApparent Liability or a Notice of an Opportunity for Hearing, 47 C.F.R.  1.80 (e). The Notice of Apparent  {O=- xhLiability commences a hearing on the record in which the Commission's final order may be subject to a trial de novo  xin District Court, and handled by the Department of Justice. If a forfeiture, however, is initiated by a Notice of an  x;Opportunity for Hearing, the decision of the administrative law judge (ALJ) or any Commission order affirming the  xALJ decision that is not challenged by the appellate court constitutes a final Commission order enforced by the  xDepartment of Justice in an action in which the validity and appropriateness of the forfeiture is not subject to review.  {O'-47 C.F.R.  1.80 (g)(2); #W*f9 xr G;X#see 47 U.S.C.  503(b)(3)(B).  is an important objective  xZand adherence to the guidelines is a method to achieve this goal. Because this is only a guideline  x{and not a binding rule, however, the Commission retains its discretion to depart from the  xguidelines where appropriate. As for the concerns expressed by the Commenters that the  xCommission's exercise of discretion will invite litigation, we note that regardless of which method  xxis used to assess the forfeiture, parties who are dissatisfied with the process have always had the  xright to seek reconsideration of a forfeiture penalty before the Commission. Moreover, in a case  X- xinitiated by a Notice of Apparent Liability, the party ultimately may be heard in a trial de novo in a district court of appropriate jurisdiction.  XN- ` x30.` ` Use of warnings for first time violations. Some commenters suggested that the  x.Commission adopt new enforcement methods, including an increased use of warnings for first  X - xtime or minor violations prior to issuance of forfeitures.}! ! yO&-#C\  P6QgP#э NAB Comments, 911; MCI Reply Comments, 3 4.} NAB, in particular, suggested that the" d !,N(N(ZZ>"  xlCommission's rule making proceeding should look into more effective methods to obtain  xcompliance rather than "better ways to accomplish the goals of developing guidelines for determining forfeiture amounts." NAB Comments, 9.  X- ` $x31.` ` As the NPRM noted, it was never our intention that the guidelines be read to  X- xrequire that a forfeiture be issued in every case or in any particular case. NPRM, at 2945. We  xagree that warnings can be an effective compliance tool in some cases involving minor or first  x.time violations. The Commission has broad discretion to issue warnings in lieu of forfeitures.  XH- xSee 47 C.F.R.  1.89. Nonetheless, an approach whereby, except in cases of harm to others or  x.safety of life, we would always issue a warning to firsttime violators would greatly undermine  xMthe credibility and effectiveness of our overall compliance efforts. Licensees must strive to  xcomply with rules. Such an approach could invite some licensees to commit firsttime violations  xwith impunity. Thus, we will continue to determine whether to issue a warning or assess a forfeiture based on the nature and circumstances of the specific violation.  X - ` px32.` ` Use of the issuance of an unpaid NAL in subsequent proceedings. Several  xcommenters stated that the Commission's proposed forfeiture guidelines did not indicate the  xpurpose for which the Commission uses pending forfeitures against a violator in subsequent  xproceedings. Infinity Broadcasting Inc. (Infinity) argued that the use of a Notice of Apparent  xLiability (NAL) or an unpaid Notice of Forfeiture in a subsequent proceeding appeared to  xcontravene Section 504(c), which prohibits the use of a nonfinal, nonadjudicated forfeiture  xproceeding in any other proceeding before the Commission, and also prohibits the use of the  xunderlying facts of the violations to increase the amount of subsequent forfeitures. Infinity  X-Comments, 57.""! yOh- xK#C\  P6QgP#э Specifically, Infinity says that, "[o]n its face, Section 504(c) precludes any Commission purported finding  {O0- xof, and reliance on, 'patterns' of #W*f9 xr G;X#unadjudicated misconduct in the forfeiture context." Infinity Comments, 4  x(quotations and emphasis in original). The plain statutory language, however, does not contain the words "patterns" or "misconduct."  Comments from NAB and ARRL also raised this issue.  X-x33.` ` Section 504 of the Act provides, inter alia that: XxX` ` (#`  ` ~XxX` ` In any case where the Commission issues a notice of apparent liability looking  ` Atoward the imposition of a forfeiture under this Act, that fact shall not be used, in  ` `any other proceeding before the Commission, to the prejudice of the person to  ` whom such notice was issued, unless (i) the forfeiture has been paid, or (ii) a  ` Pcourt of competent jurisdiction has ordered payment of such forfeiture, and such order becomes final. (#` 47 U.S.C.  504 (c).  xThe legislative history of Section 504(c), however, indicates that the Commission may use the  xfacts underlying a violation in a subsequent proceeding. Although the Senate Commerce  xCommittee Report noted that the Commission could not use the pendency of a forfeiture action""",N(N(ZZ!" prior to final adjudication against a licensee, the report went on to say:  ` p5XxX` ` [S]ubsection (c) . . . is not intended to mean that the facts upon which a  ` pnotice of forfeiture liability against a licensee is based cannot be  ` p6considered by the Commission in connection with an application for  ` p6renewal of a license, for example, or with respect to the imposition of  ` p other sanctions authorized by the Communications Act of 1934 . . . .  ` pR[F]acts going to the fitness of the licensee could be introduced in evidence  ` pagainst such licensee notwithstanding that such facts are the basis of an order of forfeiture. ` S. Rep. No. 1857, 86th Cong., 2d Sess. 11 (1960).  X - ` x34.` ` We believe that we have faithfully implemented congressional intent in this area.  x<Consistent with Section 504 of the Act, the Commission does not use the mere issuance or failure  xto pay an NAL to the prejudice of the subject. We reiterate here that we will not do so in the  xZfuture unless the forfeiture penalty constitutes a final action: in other words, unless the forfeiture  x[has been paid or finally adjudicated as stated in Section 504 of the Act. What the Commission  Xb- x>has done in the past, and what we will continue to do where appropriate, is to use the facts  xxunderlying the prior violations that may have been the subject of an NAL. We are persuaded that  xusing the underlying facts of a prior violation that shows a pattern of noncompliant behavior  xagainst a licensee in a subsequent renewal, forfeiture, transfer, or other proceeding does not cause the prejudice that Congress sought to avoid in Section 504(c).  X- ` Ax35.` ` The following example should provide guidance as to our use of facts underlying  x.the issuance of an NAL. Assume that the Commission determined that a licensee violated the  xCommission's rules regarding permissible power on March 1, 1996, again on June 1, 1996, and  xkagain on October 1, 1996. Assume further that we then issue a $5,000 NAL for the March 1  xviolation and a second $5,000 NAL for the June 1 violation. In issuing an NAL for the October  x1 violation, the Commission may well view the October 1 violation as repeated or part of a  xpattern of violations, in light of the earlier March 1 and June 1 violations. Thus, we may issue  xan NAL for $7,500 for the October 1 violation, citing the apparent March 1 and June 1 violations  x[as a basis for a higher forfeiture. The NAL for the October 1 violation is not higher because of  xthe two prior NALs or because the licensee has not paid the prior forfeitures, but rather because  xthe underlying facts of the two prior apparent violations suggest egregious misbehavior by the  x{licensee. The licensee will not be required to pay the $7,500 forfeiture without having an  xopportunity to present evidence before the Commission or in court that it did not commit the  xearlier violations. Obviously, if it were to convince the Commission or a court that it had not  x=committed violations on March 1 and June 1, the licensee's forfeiture would be reduced by the  xCommission or the court for the October 1 violation (assuming it was proven to be a first time  xviolation) to reflect the fact that it was not a repeated violation or part of a pattern of violations.  xThe Commission would have complied with Section 504(c) because it would have used only the  x=underlying facts, not the existence of prior NALs, against the licensee, and the licensee would have had the full opportunity to present appropriate evidence before having to pay any forfeiture."#'",N(N(ZZ%"Ԍ X- ` ԙx36.` ` Under this approach, the licensee is not being hurt in any way for its failure to pay  xthe NAL. Moreover, the licensee will always have the opportunity to present evidence that the  x<underlying facts relied on by the Commission did not constitute a violation, either by introducing  xevidence to that effect in a Commission hearing (e.g., renewal or transfer hearing) or in a court  xaction to collect a subsequent forfeiture that is for a higher amount because of the earlier  X- x|violations. See S. Rep. No. 1857. ("The licensee could not, therefore, complain of the  xintroduction of such evidence so long as he has the right to crossexamine the witnesses introducing it and the further right to offer evidence to rebut it").  X1- ` x37.` ` Specific rule violations. Several commenters raised concerns about the amounts  xproposed for specific violations. MCI, for example, urged that the amount of forfeitures charged  xfor unauthorized conversions, known as "slamming" violations, should be reduced from the  X - x$75,000 proposed in the NPRM. MCI suggested that because these violations can easily result  x=from human error, there should be a separate category of violations for "Failure to verify order  xMto change long distance carrier." MCI argued that, although it is critical to deter fraudulent  xconversions, "it is important that the Commission not deter telemarketing invitations altogether."  X- xSee MCI Comments, 12. NAB urged reductions in the amounts assessed for violations that  Xy- xinvolve multiple compliance factors (e.g., broadcast files where only a few documents may be  Xb- x\missing). NAB proposed a provision that if a licensee violates only a portion of a rule, e.g.,  x[omits one document from the public file, the Commission will assess only a portion of the base  xjforfeiture amount. NAB also sought "amnesty" from complying with the operator on duty and  xylottery broadcast requirements inasmuch as the Commission has initiated rule makings or made  xrecommendations to Congress to eliminate these requirements. NAB also requested amnesty for  xlEmergency Broadcast System/Emergency Alert System (EBS/EAS) violations during the  xtransition period until all equipment has been converted. NAB Comments, 1315. In addition,  xNAB urged that amnesty be offered for violations such as exceeding authorized antenna height,  xoperation at an unauthorized location, and other tower related violations that do not pose safety  X- xthreats. See NAB Comments, 1112. Motorola agreed with NAB's amnesty proposal, and urged  x{that the ultimate or primary burden for tower rules violations be placed on tower owners. Motorola Reply Comments, 23.  X7- ` Ax38.` ` We agree with MCI that the forfeiture penalty amount proposed for unauthorized  xconversion of a consumer's primary interexchange carrier should be reduced. A review of the  X - xiforfeitures issued for slamming violations since the USTA decision indicates that the Commission  xhas generally assessed forfeitures at $40,000 for violations such as those in which fraud is an  xLissue, or in cases where the carrier's deliberate failure to ensure that letters of authorization are  X - xAvalid and properly authorized rise to the level of gross negligence. See e.g., Excel  X!- xTelecommunications, Inc., 11 FCC Rcd 19765 (1996), Long Distance Services, Inc.,   FCC Rcd   X"- x  (1997) DA 97956 (released May 8, 1997). Accordingly, we are reducing the base amount for  X#-slamming to $40,000 rather than the $75,000 originally proposed in the NPRM.  XQ%- ` #x39.` ` Regarding NAB's contention that a violation should be reduced as minor when it  xis a partial violation of the rule, we note that the forfeiture guidelines we adopt today provide  xlsufficient flexibility to allow for a forfeiture less than the base amount. In this regard, we"#'",N(N(ZZ%"  xdisagree with NAB's characterization that omission of the issue/program list from the public file  xlis a minor violation; such a violation is serious in that it diminishes the public's ability to  X- xdetermine and comment at renewal time on whether the station is serving its community.#Z! yOK- xY#C\  P6QgP#э In fact, in recent changes to the Telecommunications Act, Congress increased the maximum permissible term  {O- xof broadcast licenses and expedited license renewal procedures by limiting comparative renewal challenges.  See Section 204, Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996).   x[Nonetheless, even in these circumstances, we would always look to the facts surrounding any  xpartial violation to determine if it warranted the base forfeiture amount or less. We reject NAB's  xproposal that we decline to issue forfeitures for violations of our operator on duty and lottery  xbroadcast requirements. Unless Congress amends the Communications Act to deregulate the  xaction in question, we will continue to issue forfeitures for this violation, as warranted in each  XH- xcase.$ZH! yO - x#C\  P6QgP#э As part of the Commission's 1995 legislative package submitted to Congress in May 1995, the Commission  {O - xrecommended, inter alia, that Congress eliminate the prohibition against broadcasting lottery information. Congress took no action on this recommendation and no legislation on this issue is currently pending. We note that NAB's arguments with respect to antenna tower violations have been largely  X1- xrendered moot by the Commission's adoption of the Report and Order, Streamlining the Antenna  xStructure Clearance Procedure and Revision of the Rules Concerning Construction, Marking and  X - x\Lighting of Antenna Structures, 11 FCC Rcd 4272 (1995). Under the new tower registration  xprocedures adopted by the Commission, it is tower owners rather than licensees who will be  xprimarily responsible for registering towers requiring marking and lighting under the Federal  xLAviation Administration guidelines. Further, in the antenna proceeding, the Commission also  xgranted an amnesty period during which no forfeitures will be issued to licensees seeking to correct existing tower records.  Xb- ` _x40.` ` With respect to violations for technical and equipment deficiencies resulting from  XK- xchanges from the EBS to the EAS, the request for amnesty is moot for broadcasters.%K ! yO- x#C\  P6QgP#э NAB filed its comments on March 28, 1995, and the EBS/EAS deadline for broadcasters was July 1, 1995.  xThe deadline for modification of all EBS decoding gear for broadcasters was extended by the Commission to  {O- xJanuary 1, 1997. See Report and Order and Further Notice of Proposed Rule Making, Amendment of Part 73  {Ob- xSubpart G of the Commission's Rules Regarding the Emergency Broadcast System, 10 FCC Rcd 1786 (1994), aff'd  {O,-Memorandum Opinion and Order, 10 FCC Rcd 11494 (1995). ľ The issue  xof violation of the operator on duty rule is moot because the rule was eliminated by order  X- x=released October 23, 1995. Amendment of Parts 73 and 74 of the Commission's Rules to Permit  xUnattended Operation of Broadcast Stations and to Update Broadcast Station Transmitter Control  X- xand Monitoring Requirements, 10 FCC Rcd 11479 (1995). As to other violations for which NAB  x=seeks amnesty for licensees (e.g. operation at unauthorized location) we see no public interest basis for such action.  X- ` `x41.` ` Clarification of certain terms. A few commenters urged clarification of the term  x["ability to pay" as an adjustment factor. Some commenters, echoing small carriers who argued  xxthat they should be guided by a different forfeiture scheme, noted that the Commission's apparent  xidefinition of "ability to pay" is limited to "gross revenues" and does not adequately consider that"N %,N(N(ZZ"  xmany carriers provide highcost, highmaintenance, lowprofit services to rural communities as  x"an adjunct" to other operations. For this reason, they note, the revenues from more profitable  X-operations should not be considered when evaluating the carrier's ability to pay.&! yOK-#C\  P6QgP#э See Brown and Schwaninger Comments, 3; AMTA Comments, 46.  X- ` x42.` ` These commenters also argued that the large forfeitures in some cases could be  xthe equivalent of a license revocation. They argue that "ability to pay" is based on gross  x-revenues and no consideration is given to operating or maintenance expenses. A company, they  xargue, may be considered profitable when in fact it is operating on the margin. The commenters  xycontend that this approach to determining "ability to pay" contravenes the "universal service"  x=mandate of Section 1 of the Act because it disproportionately injures businesses who provide  xyservice to rural or less profitable areas, and discourages diversity. In addition, the commenters  x\argue that this approach to "ability to pay" erodes the protections otherwise given to small  x<businesses in the Paperwork Reduction Act and the Regulatory Flexibility Act. They argued that  xsmaller carriers that now provide highcost, highmaintenance, lowprofit services to rural  X - xAcommunities, e.g., improved mobile telephone services (IMTS) or Basic Exchange  xTelecommunications Radio Service (BETRS), will be driven out of business if they must pay  X- x/higher forfeitures than other licensees for similar violations. 'X! yO-#C\  P6QgP#э PCIA Comments, 35; Emery Comments, 46, 1213. Because these services are  xprovided by carriers as "an adjunct" to its other operations, they argue that the Commission  xwould consider the higher profits from their other operations and the forfeitures would not be reduced based on the subsidiary's ability to pay.  X- ` ^x43.` ` As the commenters noted, Commission cases point to gross revenues as the starting  X- xpoint for determining a party's ability to pay. In PJB Communications of Virginia, Inc., 7 FCC  X-Rcd 2088 (1992) (PJB Communications), we stated: Xx[i]n general, a licensee's gross revenues are the best indicator of its ability(#  PXxto pay a forfeiture. Nevertheless, we recognize that in some cases, other financial indicators, such as net losses, may also be relevant. If gross  Xxrevenues are sufficiently great, however, the mere fact that a business (# Xxis operating at a loss does not itself mean that it cannot afford to pay a   XN-Xxforfeiture. X   X - xPJB Communications, At 2089. Thus, PJB Communications indicates that factors other than  xLgross revenues may also be considered. Indeed, the Commission does not use a strict "gross  xrevenues" standard. For example, the Commission has reduced a forfeiture to an amount  xxadequate to deter future misconduct after consideration of the violators' unprofitable history, and  X - xthe relative lower value of the licensed operation at issue. See e.g., First Greenville Corporation,  X!- x11 FCC Rcd 7399 (1996); Benito Rish, 10 FCC Rcd 2861 (1995) (profit and loss statement  X"- xsubmitted to reflect inability to pay a forfeiture); see also Pinnacle Communications, Inc., 11 FCC""',N(N(ZZ!"  x[Rcd 15496 (1996) (analysis of the balance sheet and the profit and loss statement accompanied  xby the licensee's certification focused on net liabilities in light of default of loan payment).  x1Although forfeiture amounts will be initially assessed according to the violation, the  xCommission's staff reviews all responses to NALs that claim inability to pay a forfeiture on a  xcasebycase basis in accordance with Section 503(b)(2)(D) of the Act. In this respect, we do  xnot believe that focusing on the payment of forfeiture will deter service to rural or less profitable  xareas, discourage diversity or otherwise operate inconsistently with the universal service goals of the Communications Act.   x44. We are cognizant of the concerns raised by small entities as to the burden and  xexpense of documenting inability to pay a forfeiture by means of audited financial statements.  xIn this regard, we note that the Commission has the flexibility to consider any documentation,  xnot just audited financial statements, that it considers probative, objective evidence of the  X - xviolator's ability to pay a forfeiture. See 47 C.F.R.  1.80 (f)(3)N(X ! yON- xԍ Section 1.80 of the Commission's rules states "[a]ny showing as to why the forfeiture should not be imposed  xor should be reduced shall include a detailed factual statement and such documentation and affidavits as may be pertinent. 47 C.F.R.  1.80(f)(3). N. The Commission intends to  xcontinue its policy of being sensitive to concerns of small entities who may not have the ability  x[to pay a particular forfeiture amount or the ability to submit the same kind of documentation to  xcorroborate the inability to pay. This is consistent with section 503(b)(2)(D) of the  xCommunications Act and section 1.80(b)(4) of our rules, which provides that the Commission  xwill take into account ability to pay in assessing forfeitures, and with our longstanding case law.  X4- ` 2x45.` ` American Mobile Telecommunications Association (AMTA) sought clarification  X- xof various violations listed in the proposed Forfeiture Policy Statement. AMTA contended that  xseveral of the listed violations overlap or are duplicative such as construction or operation without  xa license, using an unauthorized frequency, and construction or operation at an unauthorized  x location, and recommended that the Commission simplify the proposed types of violations  xkrelating to the actual operation of a station. In addition, AMTA indicated that, because the  xCommission's overall regulatory scheme is generally designed to prevent interference among  xentities, the Commission has failed to explain why operating without any license would be  xyconsidered four times as egregious as operating at a location not covered by the authorization.  xSimilarly, AMTA questioned why forfeitures for using unauthorized frequencies are lower than  xforfeitures for operating without a license, but higher than forfeitures for operating at the wrong  x.location. AMTA noted that it is unclear which violations would be applicable to a specialized  xmobile radio (SMR) licensee authorized to operate in the Washington, D.C. area that initiated  xyservice in Annapolis, MD on different frequencies prior to the grant of an FCC authorization to  x do so. AMTA asserted that the severity of the forfeiture should be based on likelihood or  xactuality of causing interference to another licensee. AMTA believed that the Commission needs  xto distinguish clearly between essentially ministerial/administrative violations and those with the  xpotential for disturbing or disabling the operations of other facilities (interference potential). AMTA Comments, 78.""(,N(N(ZZ!"Ԍ X- ` $ԙx46.` ` As AMTA noted, one of the principal reasons for requiring an FCC license to  xbroadcast is to prevent interference with broadcast signals so that such signals can be received  xby the public. In the absence of a scheme requiring a license before transmitting can commence,  X- xit is not clear how interference conflicts would be resolved. Such an approach would be costly,  X- x{disruptive, inefficient, and directly contrary to the express will of Congress. See Turner  X- xBroadcasting System Inc. v. FCC, 114 S. Ct. 2445, 245657 (1994). Thus, ensuring that parties  xoperate in accord with the license authorization is fundamental to successful implementation of  xour spectrum management objectives. Failure to receive authorization to transmit prior to  xtransmission is not a mere ministerial oversight; it is an intentional disregard of the Commission's  xefforts to prevent interference. Thus, in AMTA's example about the SMR licensee, the party has  xkengaged in unlicensed operation because, regardless of where it may properly transmit, it is transmitting from a location on a frequency prior to any Commission approval for that operation.  X - ` x47.` ` With respect to operating on an unauthorized frequency or unauthorized location,  xwe note that frequency and location are very important to our spectrum management and  x>interference prevention functions. These types of violations arise when a party seeks and  x-receives an FCC license, but does not operate in full compliance with the authorization of license.  xBoth scenarios involve operation under color of a license that creates a potential for interference  xKor disruption of communications between licensed entities. Therefore, we agree with AMTA that  xZthe base forfeiture amount for each of these types of violations should be the same. We reiterate,  xhowever, that although we are using the same base forfeiture amount for these violations, the  x<forfeiture amount may be affected by the severity of the interference and intentional nature of the violation, as well as all other adjustment factors.  X- ` x48.` ` Treatment of pending cases. NAB stated that the Commission should rescind any  X- x=forfeiture imposed under the 1991 Policy Statement or 1993 Policy Statement that has not been  xpaid. NAB Comments, 8. Infinity argued that forfeitures for violations prior to the effective date  xof any new policy statement should be based on case law decided under the statutory maximum  X|-in effect prior to changes in the statute in 1989.)X|! yO- xh#C\  P6QgP#э Infinity cites to the now abolished Section 503(b)(E) of the Act for the proposition that the Communications  xAct limited indecency forfeitures to $1,000 per day. The $1,000 per day limit on forfeitures was raised to $2,000 in 1978 and, for broadcasters, to $25,000 in 1989. Infinity Comments, 9 n. 8.  XN- ` } x49.` ` We reject these suggestions. Pursuant to Section 503 of the Act, the Commission  xhas full authority to apply the increased statutory maximum in effect since 1989 and to adjust its  xpolicies and decisions in specific cases on an ongoing basis to take account of increased statutory  xamounts or changes in Commission enforcement priorities, regardless of the existence or non x/existence of a forfeiture policy statement. All forfeitures assessed under the 1991 and 1993  X- x=Policy Statements conformed to the standards set out in Section 503 of the Act and, therefore,  xconstitute the Commission's findings of liability for those violations. For these reasons, we will  x{include recent case law in our analysis of pending cases. With respect to these pending  xproceedings, we will evaluate them under the casebycase approach in effect when the violation""),N(N(ZZ!"  x>occurred. We will also use the casebycase approach for violations arising from facts that  xoccurred before the effective date of this order but where the Commission will commence forfeiture action after the effective date.  X-  X-xE. Other Matters  X_- ` x50.` ` In cases where the Commission designates forfeiture matters for hearing (e.g., as  xpart of a license application, license revocation or license renewal proceeding), the Commission's  xxtypically indicates that the forfeiture liability amount may be assessed up to the relevant statutory  X - xmaximum. See Ellwood Beach Broadcasting, Ltd., 8 FCC Rcd 453, 454 n. 5 (1993). In light  xMof recent amendments to the Equal Access to Justice Act made as part of the Contract with  xAmerica Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996), we will  xdiscontinue this practice. Instead, we will indicate an appropriate maximum forfeiture amount in light of the specific facts at issue when initiating such hearing cases effective immediately.  X- ` x51.` ` We note that Section 223 of the recently enacted Small Business Regulatory  xEnforcement Fairness Act of 1996 (SBREFA), enacted as part of the Contract with American  x]Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996), requires agencies to  xestablish a policy providing for the reduction and, under appropriate circumstances, the waiver  x1of civil penalties imposed on small entities. As part of this policy, under appropriate  x.circumstances, the agency may consider ability to pay in determining penalty assessments on  xZsmall entities. Such circumstances may include, among others, violations discovered because the  x\small entity participated in a compliance assistance or audit program, and good faith efforts  x=demonstrated by the entity to comply with the law. Circumstances that may be excluded from  X- xzthe policy's applicability cover small entities that have been subject to multiple enforcement  xactions, willful or criminal violations, and violations that pose serious health, safety or  X-environmental threats.  Xe- ` x52.` ` Our existing policies, as reflected in our precedent, and as retained here, comply  xwith Section 223 of SBREFA. Warnings, rather than forfeitures, may continue to be appropriate  X7- x/in particular cases involving small businesses or others. See par. 31, supra. Under Section  x503(b)(2)(D) of the Communications Act and section 1.80(b)(4) of our rules, we will continue  X - xto consider inability to pay a relevant factor in assessing forfeitures. See par. 44, supra. See also  xAppendix A, Section II, downward adjustment criterion (4). Our other upward and downward  xKadjustment factors, which are reflective of existing policy, encompass many of the conditions and  X - x.exclusions listed and Section 223 of SBREFA. See Appendix A, Section II. These factors will  xcontinue to be applied in cases of violations involving small entities (as well as others) to determine whether a waiver or reduction of a forfeiture is warranted.  XQ%-} IV. CONCLUSION ă  X#'- ` x53.` ` The forfeiture guidelines are intended as a guide for frequently recurring violations. "#'),N(N(ZZ%"  xThey are not intended to be a complete or exhaustive list of violations. Moreover, the guidelines  X- xdo not apply to violations for which the forfeiture amounts are statutorily established. See para.  X- xN23, supra. The mitigating factors of Section 503(b)(2) (D) will, however, be used to make  xadjustments in all appropriate cases, as warranted. In addition, the fact that a particular violation  xMis not listed on the forfeiture guidelines schedule should also not be taken to mean that the  xviolation is unimportant or nonexistent. The Commission retains the discretion to impose  xforfeitures for other violations, including new violations of existing laws or regulations, or violations that arise from the use of new technologies or services.  X -  V. ADMINISTRATIVE MATTERS ă  X -  X - xA. Final Regulatory Flexibility Analysis  X - ` Dx54.` ` Final Regulatory Flexibility Analysis: As required by Section 604 of the  xRegulatory Flexibility Act (RFA), the Commission prepared an Initial Regulatory Flexibility  X- x.Analysis (IRFA) that was incorporated in the Notice of Proposed Rulemaking (NPRM).*! {O - xԍ #\*f9 xCX#In the Matter of the Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to incorporate the Forfeiture Guidelines, 10 FCC Rcd 2945 (1995). The  Xy- xCommission sought written public comments on all the proposals in the NPRM, including the  x IRFA. Based on the analysis of the public comments, the Commission has prepared a final  x Regulatory Flexibility Analysis of the expected impact on small entities of the rule changes  X4- xadopted in this Report and Order. The Final Regulatory Flexibility Analysis is discussed fully  X-in Appendix C of this Report and Order.  X- xB. Ex Parte Rules PermitButDisclose Proceeding  X-  X- ` x55.` ` This is a permitbutdisclose notice and comment rule making proceeding.  Ex  X- xparte presentations are permitted except during the Sunshine Agenda period, provided, they are  X-disclosed as outlined in the Commission's rules. See generally 47 C.F.R.  1.1202, 1.1203, and 1.1206(a).  XN-   VI. ORDERING CLAUSES ă  X - ` `x56. ` ` ACCORDINGLY, IT IS ORDERED that, pursuant to the authority contained in  xSections 4(i), 303(r) and 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.   x/151, 154(i), 303(r), 503(b), Part 1, Subpart A, Section 1.80(b), 47 C.F.R.  1.80(b), is amended  X- xto incorporate as a note the Commission's Forfeiture Policy Statement, and the Guidelines for Assessing Forfeitures set forth in Appendix A.  X"- ` x57. ` ` IT IS FURTHER ORDERED, that this Report and Order will be effective sixty (60) days after publication of a summary thereof in the Federal Register."#"*,N(N(ZZe""  X-  x58. IT IS FURTHER ORDERED, that a copy of the Report and Order shall be sent to the Chief Counsel for Advocacy of the Small Business Administration. x  X-x` `  hhFEDERAL COMMUNICATIONS COMMISSION(#(#X x` `  hhWilliam F. Caton x` `  hhActing Secretary" *,N(N(ZZ"  X- 0Appendix A  x Chapter I of Title 47 of the Code of Federal Regulations is amended by adding a footnote to Part 1, Subpart APractice and Procedure, as follows: XxI. Part 1PRACTICE AND PROCEDURE(# x1. The authority citation for Part 1 continues to read as follows:  X1-xAuthority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise noted. x2. Section 1.80 is amended by revising subsection (b) to read as follows:  X -x  1.80 Forfeiture Proceedings. Xx(b) * * * * *(# x` ` (4) * * * (#`  yOb-#C\  P6QgP#NOTE: ) GUIDELINES FOR ASSESSING FORFEITURES  yO- xThe Comm ission and its staff may use these guidelines in particular cases. The Commission and its staff retain the  xdiscretion to issue a higher or lower forfeiture than provided in the guidelines, to issue no forfeiture at all, or to  x;apply alternative or additional sanctions as permitted by the statute. The forfeiture ceiling per violation or per day  xfor a continuing violation stated in Section 503 of the Communications Act and the Commission's Rules are $25,000  xYfor broadcasters and cable operators or applicants, $100,000 for common carriers or applicants, and $10,000 for all  xothers. These base amounts listed are for a single violation or single day of a continuing violation. 47 U.S.C.  x 503(b)(2); 47 C.F.R.  1.80. For continuing violations involving a single act or failure to act, the statute limits  xthe forfeiture to $250,000 for broadcasters and cable operators or applicants, $1,000,000 for common carriers or  yO- xapplicants, and $75,000 for all others. Id. Pursuant to the Debt Collection Improvement Act of 1996 (DCIA), Pub.  xL. No. 104134,  31001, 110 Stat. 1321 (1996), civil monetary penalties assessed by the federal government,  xYwhether set by statutory maxima or specific dollar amounts as provided by federal law, must be adjusted for inflation  xat least every four years based on the formula outlined in the DCIA. Thus, the statutory maxima increased to  x$27,000 for broadcasters and cable operators or applicants; $110,000 for common carriers or applicants, and  x$11,000 for others. For continuing violations, the statutory maxima increased to $275,000 for broadcasters, cable  xKoperators, or applicants; $1,100,000 for common carriers or applicants; and $82,500 for others. The increased  xstatutory maxima became effective March 5, 1997. There is an upward adjustment factor for repeated or continuous  yO - xiviolations, see Section II, infra. That upward adjustment is not necessarily applied on a per violation or per day  yO - xbasis. Id. Unless Commission authorization is required for the behavior involved, a Section 503 forfeiture  xproceeding against a nonlicensee or nonapplicant who is not a cable operator or common carrier can only be  xinitiated for a second violation, after issuance of a citation in connection with a first violation. 47 U.S.C.  503(b)  x(5). A citation is not required, however, for nonlicensee tower owners who have previously received notice of the  yO#- xkobligations imposed by Section 303(q) and Part 17 of the Commission's rules from the Commission. See  yO$- xhStreamlining the Commission's Antenna Structure Clearance Procedure and Revision of Part 17 of the Commission's  yOz%- xZRules concerning Construction, Marking, and lighting of Antenna Structures, 61 Fed. Reg. 04359 (Feb. 2, 1995).  yOB&-Forfeitures issued under other sections of the Act are dealt with separately in Section III below. " '*,N(N(ZZ'"Ԍ yO-ԙ ]  Section I. BASE AMOUNTS FOR SECTION 503 FORFEITURES ă  yOX VIOLATION` ` X XXhhX@XhppAMOUNT (#  yO -X` hp x (#%'0*,.8135@8:x b. ` ` Summary of Significant Issues Raised by the Public Comments in Response  X-to the Initial Regulatory Flexibility Analysis  X- ` x3.` ` In responding to the IRFA in the NPRM, several commenters, such as improved  xmobile telephone services (IMTS) or basic exchange telecommunications radio services (BETRS)  xcontend that the Commission's determination of an entity's inability to pay a forfeiture based on  xits gross revenues erodes the protections otherwise given to small businesses in the Paperwork  xReduction Act and the Regulatory Flexibility Act. They contend that these rural services will  x-pay higher forfeitures than other licensees for similar violations because they are run by common  xcarriers as an adjunct to the main operations whose gross revenue would be considered in  X - xdetermining the issue of inability to pay. ! {O -#C\  P6QgP#э See paragraphs 4041 in the text of the instant Policy Statement.Ĥ These arguments were considered and rejected as discussed below.  X - ` #x4.` ` At the outset, we note that forfeitures are imposed only against those who fail to  x=comply with our rules. Thus, the issue of inability to pay a forfeiture or maintaining additional  x<paperwork is moot as to small businesses that comply with the rules. As to those that violate the  xAct and rules, Commission precedent states that gross revenues is a starting point for determining  xa party's ability to pay. Commission cases, however, also indicate that factors other than gross  xrevenues may be considered. Under Section 503 of the Act, the Commission must look at the  xinability to pay in light of the totality of the circumstances affecting the particular entity's ability  X4- xyto pay.4Z! yO?-#C\  P6QgP#э 47 U.S.C.  503(b)(2)(D). #]\  PCP#і This includes whether the company is a small business as defined by the Commission  x-and/or the Small Business Administration (SBA) or whether the business is an adjunct of a larger  xcorporation from which it can draw resources. Moreover, although the Commission has accepted  xaudited financial statements as a method to assess a company's inability to pay a forfeiture, the  xCommission has flexibility to consider any documentation (e.g. balance sheet, profit and loss  x\statement accompanied by licensee's certification) that it considers probative and objective  x>evidence of the violator's ability or inability to pay a forfeiture. This also comports with the  X-requirements of SBREFA.?! yO.-ԍ 5 U.S.C.  601(5).?  Xe- ` }x 5.` ` In the general comments to the NPRM, a number of commenters raised issues that  XN- xmight affect small entities. Many commenters oppose the system proposed in the NPRM that  x=would impose differing base amounts based on the service rather than the violation involved.  xLIn particular, the commenters, including small commercial mobile radio services (CMRS), noted  x.that the system proposed in the NPRM imposed larger forfeitures on common carriers without  xany regard for the common carrier's business size. Comments from CMRS entities also contend  xthat, if the proposed fines are adopted, they should be treated in the "other" category as they were  xin the previous guidelines rather than the "common carrier" category which has higher base" "z,N(N(ZZ"  X- xamounts and a higher statutory maximum.z! {Oy- x.ԍ #C\  P6QgP##C*f9 xQX#See#C\  P6QgP# paragraphs 13 and 14 in the text of the instant Policy Statement.  #C*f9 xQX##C\  P6QgP#Section 503 of the Act sets out  xstatutory forfeiture maxima based on three categories: "broadcast" (which includes cable), "common carrier", and  x,"other" (which includes any individual or entity that is not included in the broadcast or common carrier categories).  x47 U.S.C.  503(b). We note that the recently enacted Debt Collection Improvement Act of 1996, Pub. L. No. 104 xK134,  31001, 110 Stat. 1321 (1996), requires that civil monetary penalties assessed by the federal government,  xwhether set by statutory maxima or specific dollar amounts as provided by federal law, be adjusted for inflation.  As adopted, this Policy Statement would impose  x>forfeitures based on the violation and not the service as originally proposed. Thus, CMRS  xproviders who are small businesses will not be treated to higher forfeiture amounts simply  xbecause of their "common carrier" status. Moreover, the base forfeiture amount, i.e., the amount  x\at which the Commission may initially assess a forfeiture, is calculated in light of the lowest  xstatutory maximum imposed under Section 503 of the Act, rather than the higher statutory  xmaxima for broadcasters and common carriers. Thus, small broadcast and common carrier  xbusinesses are not subject to base amounts higher than those imposed on small businesses in the  xMremaining category, i.e., the "other " category. As to those small businesses in the "other"  x=category, the Commission generally gives warnings to first time violators, who are licensed by  xrule rather than on an individual basis, based on the facts of each case unless the violation is  X - x]egregious or a serious safety of life issue. ! {O-#C\  P6QgP#э See paragraphs 15 through 23 in the text of the instant Policy Statement.Ĭ The adopted forfeiture policy statement also  xeliminated the proposed adjustment factor ranges, thus allowing the Commission to reduce a  xforfeiture to a minimum amount against a violator such as a small business if warranted by the  X - xfacts of the case in light of the factors outlined in Section 503 of the Act. ! {O -#C\  P6QgP#э  See paragraphs 24 through 26 in the text of the instant Policy Statement. ĭ Lastly, we note that,  x[in light of recent changes to the Equal Access to Justice Act made as part of the Contract with  xAmerica Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996), we will indicate  xan appropriate maximum forfeiture amount in cases where the Commission designates forfeiture  xmatters for hearing. Because this maximum forfeiture amount will be based on the specific facts  xat issue rather than the statutory maximum for that service, small businesses in the "broadcast",  x["common carrier", and "other" services will not be subject to the statutory maxima in a hearing  X-unless warranted by the facts in that case. . ! {O-#C\  P6QgP#э See paragraph 50 in the text of the instant Policy Statement. ě  X- ` x c. ` ` Description and Estimate of Number of Small Businesses to Which Rules Will  X-Apply:  X- ` x6.` ` The RFA generally defines "small entity" as having the same meaning as the terms  x"small business", "small organization", and "small governmental jurisdiction" and "the same  xmeaning as the term small business concern under the Small Business Act unless the  xCommission has developed one or more definitions that are appropriate for its activities. 15"e# ,N(N(ZZ"  X- xlU.S.C.  632. ! yOy- x#C\  P6QgP#э Regulatory Flexibility Act (RFA), 5 U.S.C.  601(3)(1980) (incorporating by reference the definition of  x"small business concern" in 5 U.S.C.  632). Pursuant to 5 U.S.C.  601(3), the statutory definition of a small  xbusiness applies "unless an agency after consultation with the Office of Advocacy of the Small Business  xAdministration 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." A small business concern is one which: (1) is independently owned and  xzoperated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria  X- xestablished by the Small Business Administration (SBA).  x! yO-#C\  P6QgP#э Small Business Act, 15 U.S.C.  632 (1996). The Small Business Enforcement  xFairness Act of 1996 (SBREFA) provision of the RFA also applies to nonprofit organizations and  xto governmental organizations such as governments of cities, counties, towns, townships, villages,  X- xkschool districts, or special districts with populations of less than 50,000. Z! yOF - x#C\  P6QgP#э Small Business Enforcement Fairness Act (SBREFA), 15 U.S.C.  601(5). For example, there are 85,006  xZgovernmental entities in the United States of which 37,566 have populations of less than 50,000. United States  {O-Dept. of Commerce, Bureau of the Census, 1992 Census of Governments (1992 Census).  There are 85,006  Xv- xgovernmental entities in the United States. The forfeiture guidelines contained in the note  X_- x=adopted here today applies to Commission licensees and regulatees that are small businesses,  xKsmall organizations, and small governmental jurisdictions as well as nonlicensees that violate the Communications Act and the Commission's rules subsequent to receiving a warning.  X - ` x7.` ` It is difficult at this time to quantify precisely how many small business entities  xwould be affected based on the radiotelephone data provided by the SBA. Inasmuch as we may  xZassess forfeitures against companies and entities that are not radiotelephone companies, we must  xlook beyond this category in order to develop our estimate. In addition to regulating the  xlicensing of the electromagnetic spectrum, the Commission also authorizes and regulates the  xmanufacturing and importation of radio transmitters and electronic equipment. Therefore, we  xwill provide reasonable estimates by the services regulated by each Bureau or Office and  xancillary entities affected by those services in light of the SBA and/or Commission definition of  xa small entity and other relevant defining factors. Where possible, we have also attempted to  xestimate the number of small businesses that may be assessed a forfeiture even though they are  xnot regulatees but are subject to compliance with our rules, e.g., hotels that must comply with  X- xour regulations implementing the Hearing Aid Compatibility Act. * ! {O- x#C\  P6QgP#э #C*f9 xQX#See Report and Order in CC Docket No.87124, #C\  P6QgP#11 FCC Rcd 8249 (1996). #C*f9 xQX#See also Erratum in CC Docket  {O -No. 97124,#C\  P6QgP# 11 FCC Rcd 9257 (1996). In our effort to discuss all  xzservices and small businesses that could be impacted, we note that our discussion of some services may overlap or our discussion of some small businesses may be duplicative.  X-  X-CABLE SERVICES OR SYSTEMS  X|- ` x 8.` ` The SBA has developed a definition of small entities for cable and other pay  xZtelevision services, which includes all such companies generating less than $11 million in revenue"e$ ,N(N(ZZ"  xannually. This definition includes cable systems operators, closed circuit television services,  xdirect broadcast satellite services, multipoint distribution systems, satellite master antenna systems  xand subscription television services. According to the Census Bureau, there were 1,423 such  x[cable and other pay television services generating less than $11 million in revenue that were in  X-operation for at least one year at the end of 1992.! {O-#C\  P6QgP#э 1992 Census, supra, at Firm Size1-123.  Xv- ` x9.` ` The Commission has developed its own definition of a small cable system operator  x[for the purposes of rate regulation. Under the Commission's rules, a "small cable company," is  XH- xone serving fewer than 400,000 subscribers nationwide.$HZ! yOS - x-#C\  P6QgP#э 47 C.F.R.  76.901(e). The Commission developed this definition based on its determination that a small  {O - xcable system operator is one with annual revenues of $100 million or less. Implementation of Sections of the 1992  {O - xiCable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995).  Based on our most recent information,  xywe estimate that there were 1,439 cable operators that qualified as small cable system operators  X - xat the end of 1995. F! {O-#C\  P6QgP#э Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since then, some of those companies may have grown to serve over  x400,000 subscribers, and others may have been involved in transactions that caused them to be  xcombined with other cable operators. Consequently, we estimate that there are fewer than 1,439  X - x.small entity cable system operators that may be affected by the forfeiture guidelines explained  X -in the Report and Order adopted today.   X- ` Rx10.` ` The Communications Act also contains a definition of a small cable system  xoperator, which is "a cable operator that, directly or through an affiliate, serves in the aggregate  x.fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity  XM- xor entities whose gross annual revenues in the aggregate exceed $250,000,000."jM! yO-#C\  P6QgP#э 47 U.S.C. 543(m)(2).j The  xCommission has determined that there are 61,700,000 subscribers in the United States.  xjTherefore, we found that an operator serving fewer than 617,000 subscribers shall be deemed a  xsmall operator, if its annual revenues, when combined with the total annual revenues of all of its  X- xaffiliates, do not exceed $250 million in the aggregate.kh ! yO -#C\  P6QgP#э 47 C.F.R.  76.1403(b).k Based on available data, we find that  X- xzthe number of cable operators serving 617,000 subscribers or less totals 1,450. ! {O"-#C\  P6QgP#э Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Although it  xseems certain that some of these cable system operators are affiliated with entities whose gross  x!annual revenues exceed $250,000,000, we are unable at this time to estimate with greater  x<precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act. "g% ,N(N(ZZ1"Ԍ X- ` x11.` ` The forfeiture guidelines in the Report and Order  adopted today also applies to  X- xcable and MDS related entities.! yOb- x#C\  P6QgP#э Small Multipoint Distribution Services (MDS) businesses are discussed in depth with the mass media services  {O*-at para. 53 infra. See Appendix C, para. 52.  The SBA has developed a definition of small entities for cable  xand other pay television services under Standard Industrial Classification 4841 (SIC 4841), which  xcovers subscription television services, which includes all such companies with annual gross  X- xrevenues of $11 million or less.f"! yOw-#C\  P6QgP#э 13 C.F.R. 121.201.f This definition includes cable systems operators, closed circuit  xtelevision services, direct broadcast satellite services (DBS), multipoint distribution systems  x(MDS), satellite master antenna systems (SMATV), and subscription television services.  xAccording to the Census Bureau, there were 1,323 such cable and other pay television services  xgenerating less than $11 million in revenue that were in operation for at least one year at the end  X1- x.of 1992.81! {O- x#C\  P6QgP#э 1992 Census, supra, at Firm Size 1-123. See Memorandum Opinion and Order and Notice of Proposed Rule  {O^-Making in MM Docket No. 92266 and CS Docket No. 96157, 11 FCC Rcd 9517, 9531 (1996).8 This figure is overinclusive since it includes other pay television services, not only  X -cable and MDS.   X - x COMMON CARRIER SERVICES AND RELATED ENTITIES  X - ` x 12.` ` According to the Telecommunications Industry Revenue: Telecommunications  X - xRelay Service Fund Worksheet Data (TRS Worksheet), there are 2,847 interstate carriers. These  xcarriers are regulated in some form by the FCC, and are, therefore, subject to its forfeiture  Xy- xprovisions. These carriers include, inter alia, local exchange carriers, wireline carriers and service  Xb- xproviders, interexchange carriers, competitive access providers, operator service providers, pay  XK- xitelephone operators , providers of telephone toll service, providers of telephone exchange service,  xand resellers. To the extent that we can ascertain businesses that, due to their relationship to  X- xthese common carriers, may receive forfeitures, e.g., hotels and motels that fail to provide service  X-in compliance with the Hearing Aid Compatibility Act, these businesses are discussed herein.  X- ` P x 13.` ` The SBA has defined a small business for Standard Industrial Classification (SIC)  x<categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except  X- xRadiotelephone) to be small entities when they have fewer than 1,500 employees.h! yOi -#C\  P6QgP#э 13 C.F.R. 121.201.h We first  xdiscuss generally the total number of small telephone companies falling within both of those SIC  xcategories. Then, we discuss the number of small businesses within the two subcategories, and  xattempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  X - ` x 14.` ` Consistent with our prior practice, we shall continue to exclude small incumbent  xLECs from the definition of a small entity for the purpose of this FRFA. Nevertheless, as" &,N(N(ZZy"  xmentioned above, we include small incumbent LECs in our analysis. Accordingly, our use of  xthe terms "small entities" and "small businesses" does not encompass "small incumbent LECs."  xWe use the term "small incumbent LECs" to refer to any incumbent LECs that arguably might  X-be defined by the SBA as "small business concerns."! {O4-#C\  P6QgP#э  See 13 C.F.R.  121.210, SIC Code 4813.   X< ` x15.` ` Total Number of Telephone Companies Affected. The forfeiture guidelines  in  Xw- xythe Report and Order adopted herein may apply to the small telephone companies identified by  x<the SBA. The United States Bureau of the Census ("the Census Bureau") reports that, at the end  xLof 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for  X2- xjat least one year.<2Z! {O= - x{#C\  P6QgP#э United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {O -Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census).< This number contains a variety of different categories of carriers, including  xlocal exchange carriers, interexchange carriers, competitive access providers, cellular carriers,  x|mobile service carriers, operator service providers, pay telephone operators, personal  x=communications services providers, covered specialized mobile radio providers, and resellers.  xIt seems certain that some of those 3,497 telephone service firms may not qualify as small  X - xentities or small incumbent LECs because they are not "independently owned and operated."i ! yO&-#C\  P6QgP#э 15 U.S.C.  632(a)(1).i  x\For example, a PCS provider that is affiliated with an interexchange carrier having more than  x1,500 employees would not meet the definition of a small business. It seems reasonable to  x\conclude, therefore, that fewer than 3,497 telephone service firms are small entity telephone  xservice firms or small incumbent local exchange carriers that may be affected by the forfeiture  XL-guidelines adopted today.   X< ` x16. ` ` Wireline Carriers and Service Providers. The SBA has developed a definition  xjof small entities for telephone communications companies other than radiotelephone (wireless)  xkcompanies. The Census Bureau reports that, there were 2,321 such telephone companies in  X- xoperation for at least one year at the end of 1992.#X\  P6G;gP##Xj\  P6G;W XP#F! {O-#C\  P6QgP#э 1992 Census, supra, at Firm Size1-123. According to the SBA's definition, a small  x.business telephone company other than a radiotelephone company is one employing no more  X- x-than 1,500 persons.x! yO5!-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. x All but 26 of the 2,321 nonradiotelephone companies listed by the Census  xBureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those  xcompanies had more than 1,500 employees, there would still be 2,295 nonradiotelephone  x>companies that might qualify as small entities or small incumbent LECs. Although it seems  xycertain that some of these carriers are not independently owned and operated, we are unable at  xthis time to estimate with greater precision the number of wireline carriers and service providers  xthat would qualify as small business concerns under the SBA's definition. Consequently, we""'h ,N(N(ZZ"  xestimate that there are fewer than 2,295 small entity telephone communications companies other  X-than radiotelephone companies that may be affected by the adopted forfeiture guidelines.   X< ` x17. ` ` Local Exchange Carriers. Neither the Commission nor the SBA has developed  xa definition for small providers of local exchange services (LECs). The closest applicable  xdefinition under the SBA rules is for telephone communications companies other than  Xw- xradiotelephone (wireless) companies.ww! yO-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4813.w The most reliable source of information regarding the  xlnumber of LECs nationwide of which we are aware appears to be the data that we collect  XI- x/annually in connection with the TRS Worksheet. According to our most recent data, 1,347  X2- xcompanies reported that they were engaged in the provision of local exchange services.^2X! {O; - x[#C\  P6QgP#э Federal Communications Commission, CCB, Industry Analysis Division, Telecommunications Industry  {O - xiRevenue: TRS Fund Worksheet Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by Class of  {O -Carrier) (Dec.1996) (TRS Worksheet).   x-Although it seems certain that some of these carriers are not independently owned and operated,  xor have more than 1,500 employees, we are unable at this time to estimate with greater precision  x the number of LECs that would qualify as small business concerns under SBA's definition.  xConsequently, we estimate that there are fewer than 1,347 small incumbent LECs that may be  X -affected by the forfeiture guidelines.  X< ` "x18. ` ` Interexchange Carriers . Neither the Commission nor the SBA has developed a  xdefinition of small entities specifically applicable to providers of interexchange services (IXCs).  xxThe closest applicable definition under the SBA rules is for telephone communications companies  x{other than radiotelephone (wireless) companies. The most reliable source of information  xyregarding the number of IXCs nationwide of which we are aware appears to be the data that we  X - xcollect annually in connection with the TRS Worksheet. According to our most recent data, 130  X - x{companies reported that they were engaged in the provision of interexchange services.Y ~! {O8-#C\  P6QgP#э Id.Y  x-Although it seems certain that some of these carriers are not independently owned and operated,  xnor have more than 1,500 employees, we are unable at this time to estimate with greater precision  x=the number of IXCs that would qualify as small business concerns under the SBA's definition.  x[Consequently, we estimate that there are fewer than 130 small entity IXCs that may be affected  X-by the forfeiture guidelines.   Xh< ` x19. ` ` Competitive Access Providers. Neither the Commission nor the SBA has  xdeveloped a definition of small entities specifically applicable to providers of competitive access  x?services (CAPs). The closest applicable definition under the SBA rules is for telephone  xjcommunications companies other than radiotelephone (wireless) companies. The most reliable  xsource of information regarding the number of CAPs nationwide of which we are aware appears  X- xto be the data that we collect annually in connection with the TRS Worksheet. According to our  xmost recent data, 57 companies reported that they were engaged in the provision of competitive"(,N(N(ZZJ"  X- xjaccess services.Y ! {Oy-#C\  P6QgP#э Id.Y Although it seems certain that some of these carriers are not independently  xowned and operated, nor have more than 1,500 employees, we are unable at this time to estimate  xwith greater precision the number of CAPs that would qualify as small business concerns under  xthe SBA's definition. Consequently, we estimate that there are fewer than 57 small entity CAPs  X-that may be affected by the forfeiture guidelines.  Xv< ` x20. ` ` Operator Service Providers. Neither the Commission nor the SBA has developed  xa definition of small entities specifically applicable to providers of operator services. The closest  xapplicable definition under the SBA rules is for telephone communications companies other than  xkradiotelephone (wireless) companies. The most reliable source of information regarding the  xLnumber of operator service providers nationwide of which we are aware appears to be the data  X - xjthat we collect annually in connection with the TRS Worksheet. According to our most recent  X - xzdata, 25 companies reported that they were engaged in the provision of operator services.Y! Z! {O-#C\  P6QgP#э Id.Y  x Although it seems certain that some of these companies are not independently owned and  xoperated, nor have more than 1,500 employees, we are unable at this time to estimate with greater  xKprecision the number of operator service providers that would qualify as small business concerns  xunder the SBA's definition. Consequently, we estimate that there are fewer than 25 small entity  Xz-operator service providers that may be affected by the forfeiture guidelines.   XL< ` mx21. ` ` Pay Telephone Operators. Neither the Commission nor the SBA has developed  x\a definition of small entities specifically applicable to pay telephone operators. The closest  xapplicable definition under SBA rules is for telephone communications companies other than  xkradiotelephone (wireless) companies. The most reliable source of information regarding the  xnumber of pay telephone operators nationwide of which we are aware appears to be the data that  X- xwe collect annually in connection with the TRS Worksheet. According to our most recent data,  X- x271 companies reported that they were engaged in the provision of pay telephone services.Y"! {O`-#C\  P6QgP#э Id.Y  x-Although it seems certain that some of these carriers are not independently owned and operated,  xnor have more than 1,500 employees, we are unable at this time to estimate with greater precision  xthe number of pay telephone operators that would qualify as small business concerns under SBA's  x=definition. Consequently, we estimate that there are fewer than 271 small entity pay telephone  XP-operators that may be affected by the forfeiture guidelines.  X"< ` <x22.` `  Providers of Telephone Toll Service, Providers of Telephone Exchange Service .  xNeither the Commission nor the SBA has developed a definition of small entities applicable to  x>providers of telephone toll service and telephone exchange service. According to the 1992  xZCensus, there were approximately 3,497 firms engaged in providing telephone services, as defined  xtherein, for at least a year. This number contains a variety of different categories of carriers,  xLincluding local exchange carriers, interexchange carriers, competitive access providers, cellular"!)~",N(N(ZZ !"  xcarriers, mobile service carriers, operator service providers, pay telephone operators, PCS  x=providers, covered SMR providers, providers of telephone toll service, providers of telephone  xexchange service, and resellers. It seems certain that some of those 3,497 telephone service firms  xmay not qualify as small businesses because they are not "independently owned and operated."  xzIt seems reasonable to conclude, therefore, that fewer than 3,497 telephone service firms are  xzproviders of telephone toll service or providers of telephone exchange service and are small  Xv-entities that may be affected by the forfeiture guidelines.   XH< ` \x23. ` ` Independent Operator Service Providers, Independent Directory Assistance  x!Providers, Independent Directory Listing Providers, and Independent Directory Database  X < xiManagers.  We were unable to obtain reliable data regarding the number of entities that provide  xthese telecommunications services or how many of these are small entities. The Commission has  xnot developed a definition of small entities applicable to telecommunications service providers.  xTherefore, the closest applicable definition of a small entity providing telecommunications  xservices is the definition under the SBA rules applicable to business services companies, SIC  x7389, which defines a small entity to be a business services company with annual receipts of  xless than five million dollars. U.S. Census data provides that 46,289 firms providing business  xservices had annual receipts of 5 million dollars or less. Because it seems unlikely that all of the  xbusiness services firms would meet the other criteria, it seems reasonable to conclude that fewer than 46,289 firms may be small entities that might be affected by our forfeiture guidelines.  X< ` x24.  ` ` Resellers (including debit card providers).  Neither the Commission nor the SBA  xhas developed a definition of small entities specifically applicable to resellers. The closest  x[applicable SBA definition for a reseller is a telephone communications company, SIC category  x{4813. However, the most reliable source of information regarding the number of resellers  xnationwide of which we are aware appears to be the data that the Commission collects annually  X- x in connection with the TRS Worksheet. According to our most recent data, 260 companies  X- xreported that they were engaged in the resale of telephone service.Z#! {O-#C\  P6QgP#э  Id.Z Although it seems certain  xthat some of these companies are not independently owned and operated, or have more than  xM1,500 employees, we are unable at this time to estimate with greater precision the number of  x[resellers that would qualify as small entities or small incumbent LEC concerns under the SBA's  xdefinition. Consequently, we estimate that there are fewer than 260 small entity resellers that  X#-may be affected by the forfeiture policy contained in the Report and Order .  X< ` x25. ` ` 800 Subscribers.  Neither the Commission nor the SBA has developed a definition  xof small entities specifically applicable to 800 subscribers. The most reliable source of  xinformation regarding the number of 800subscribers of which we are aware appears to be the  X!- xdata we collect on the number of 800numbers in use.$!Z! {O%- x#C\  P6QgP#э Federal Communications Commission, CCB, Industry Analysis Division, FCC Releases, Study on Telephone  {O&-Trends, Tbl. 20 (May 16, 1996). According to our most recent data, at  xthe end of 1995, the number of 800numbers in use was 6,987,063. Although it seems certain""*$,N(N(ZZ!"  xthat some of these subscribers are not independently owned and operated businesses, or have  x>more than 1,500 employees, we are unable at this time to estimate with greater precision the  xnumber of 800subscribers that would qualify as small business concerns under the SBA's  xdefinition. Consequently, we estimate that there are fewer than 6,987,063 small entity 800subscribers that may be affected by the forfeiture guidelines adopted today.  Xv< ` x26. ` ` Location Providers.  Neither the Commission nor the SBA has developed a  xdefinition of small entities specifically applicable to location providers. A location provider is  xZthe entity that is responsible for maintaining the premises upon which the payphone is physically  xylocated. Because location providers do not fall into any specific category of business entity, it  xis impossible to estimate with any accuracy the number of location providers. Using several  X - xysources, however, we have derived a figure of 1,850,000 payphones in existence.d% ! yO} - x#C\  P6QgP#э There are approximately 1.5 million LEC payphones. Statistics of Communications Common Carrier,  x1994/1995 edition, Common Carrier Bureau, FCC at 159, Table 2.10 (1995). There are approximately 350,000  {O - x>competitively provided payphones. See also Implementation of the Pay Telephone Reclassification and  {O- xCompensation Provisions of the Telecommunications Act of 1996, FCC 96388 (released September 20, 1996), at note 996. d Although it  xzseems certain that some of these payphones are not located on property owned by location  xproviders that are small business entities, nor does the figure take into account the possibility of  xmultiple payphones at a single location, we are unable at this time to estimate with greater  xprecision the number of location providers that would qualify as small business concerns under  xthe SBA's definition. Consequently, we estimate that there are fewer than 1,850,000 small entity  Xz- xLlocation providers that may be affected by the forfeiture guidelines adopted in this Report and  Xc-Order.  X5- ` ~ x27.` ` In addition to these common carrier licensees, those who may be held liable for  xforfeitures include nonlicensees who provide telephone services as a result of the Hearing Aid  xCompatibility (HAC) Act or who are operator service providers : (a) workplaces; (b) confined  xzsettings, such as hospitals and nursing homes; (c) hotels and motels; and (d) importers and  xmanufacturers of telephones for use in the United States. There is little overlap among these  xcategories because the Commission's workplace rules affect workplace noncommon areas, while  xthe rules that apply to confined settings and hotels and motels affect other than the workplaces  xof those establishments. Telephone manufacturers would be affected as workplaces, but separately  xjaffected by the requirement to affix the letters "HAC" to telephones and by the volume control  xmanufacturing requirement. The determination of whether or not an entity within these industry  xkgroups is small is made by the SBA. These standards also apply in determining whether an  X8-entity is a small business for purposes of the RFA. pp  X < ` x28. ` ` Workplaces.  Workplaces encompass establishments for profit and nonprofit, plus  xlocal, state and federal governmental entities. Establishments with fewer than fifteen employees  xgenerally would be excluded, because they are exempt from the Commission's new rules, except  x/for the work station requirement. The SBA guidelines to the SBREFA state that about 99.7  xkpercent of all firms are small and have fewer than 500 employees and less than $25 million in"!+|%,N(N(ZZ "  xsales or assets. There are approximately 6.3 million establishments in the SBA database. We  xkestimate that our rules would affect fewer than 6.3 million establishments, because our rules  x[exclude establishments with fewer than fifteen employees. However, we have not been able to  xdetermine what portion of the 6.3 million establishments have fewer than fifteen employees. The  xSBA data base does include nonprofit establishments, but it does not include governmental  xentities. SBREFA requires us to estimate the number of such entities with populations of less  Xv- xthan 50,000 that would be affected by our forfeiture guidelines.f&v! yO-#C\  P6QgP#э 5 U.S.C.  601(5).f There are 85,006 governmental  xentities in the nation. This number includes such entities as states, counties, cities, utility districts  xand school districts. Of the 85,006 governmental entities, 38,978 are counties, cities, and towns,  X1- xand of those, 37,566, or 96 percent, have populations of fewer than 50,000.z'1X! {O: -#C\  P6QgP#э 1992 Census of Governments, infra. z The Census Bureau  xMestimates that this ratio is approximately accurate for all governmental entities. Thus, of the  x85,006 governmental entities, we estimate that 96 percent, or 81,600, are small entities that may be subject to a potential forfeiture.  X < ` x29.` ` Confined Settings. According to the SBA's regulations, nursing homes and  x/hospitals must have annual gross receipts of $5 million or less in order to qualify as a small  xkbusiness concern. 13 C.F.R. 121.201. There are approximately 11,471 nursing care firms in  Xz- xthe nation, of which 7,953 have annual gross receipts of $5 million or less.`(Zz! {O- xy#C\  P6QgP#э See Small Business Administration Tabulation File, SBA Size Standards Tbl 2C, January 23, 1996, SBA,  xKStandard Industrial Code (SIC) categories 8050 (Nursing and Personal Care Facilities) and 8060 (Hospitals) (SBA Tabulation File). ` There are  xapproximately 3,856 hospital firms in the nation, of which 294 have gross receipts of $5 million  x^or less. Thus, the approximate number of small confined setting entities to which the Commission's forfeiture guidelines may apply is 8,247.  X< ` mx30.` ` Hotels and Motels.  According to the SBA's regulations, hotels and motels must  xLhave annual gross receipts of $5 million or less in order to qualify as a small business concern.  X- x13 C.F.R. 121.201. There are approximately 34,671 hotel and motel firms in the United States.  X- xOf those, approximately 31,382 have gross receipts of $5 million or less.x) ! yO-#C\  P6QgP#э SBA Tabulation File, SIC category 7010.x Thus, the approximate  xnumber of hotels and motels to which the Commission's forfeiture guidelines may apply is 31,382.  Xg< ` ]x31. ` ` Telephone Manufacturers and Importers  . According to the SBA's regulations,  x\telephone apparatus firms must have 1,000 or fewer employees in order to qualify as a small"Q,),N(N(ZZ"  X- xbusiness concern. 13 C.F.R. 121.201.6*$! {Oy- x#C\  P6QgP#э#C*f9 xQX# See Report and Order in CC Docket 87124 ,#C\  P6QgP# 11 FCC Rcd 8249 (1996), at note 266 (explaining that no  {OC- x-foreign entity submitted comments on the NPRM implementing access, nor have we been able to obtain data on  xforeign telephone equipment manufacturers from other sources. The SBA does not compile data on foreign manufacturers).6 There are approximately 456 telephone apparatus firms  X- xin the nation.+! {ON- x#C\  P6QgP#э U.S. Dept. of Commerce, 1992 Census of Transportation, Communications and Utilities (issued May 1995), SIC Code 3661. Figures are not available on how many of these firms have 1,000 or fewer  X- xemployees, but 401 of the firms have 500 or fewer employees._,! {O -#C\  P6QgP#э Id._ It is probable that the great bulk  x\of the 456 firms have 1,000 or fewer employees, and would be classified as small entities. In  xaddition to telephone apparatus firms, there are approximately 12,654 wholesale electronic parts  X- xkand equipment firms in the nation. Many of these firms serve as importers of telephones.-! {O- x#C\  P6QgP#э U.S. Dept. of Commerce, 1992 Census of Transportation, Communications and Utilities (issued May 1995), SIC Code 5065.  xyAccording to the SBA's regulations, wholesale electronic parts and equipment firms must have  x100 or fewer employees in order to qualify as a small business entity. 13 C.F.R. 121.201. Of  xNthe 12,654 firms, 12,161 have fewer than 100 employees, and would be classified as small  X1-entities._.1 ! {O-#C\  P6QgP#э Id._ ` `   X -  X - INTERNATIONAL SERVICES  X - ` x32.` ` The Commission has not developed a definition of small entities applicable to  xlicensees in the international services. Therefore, the applicable definition of small entity is the  xdefinition under the SBA rules applicable to Communications Services, Not Elsewhere Classified.  xThis definition provides that a small entity is expressed as one with $11.0 million or less in  Xy-annual receipts. x/y ! yO-#C\  P6QgP#э 13 C.F.R.  120.121, SIC Code 4899. x   XK- ` nx33.` ` Because the RFA amendments were not in effect until the comment period for this  xproceeding was closed, the Commission was unable to request information regarding the number  xof licensees in the international services discussed below that meet this definition of a small business. Thus, we are providing an estimate of licensees that constitute a small business.  X-    X< ` x34.` `  International Broadcast Stations . An international broadcast station employs  xmfrequencies allocated to the broadcasting service between 5,950 and 26,100 kHz. The  xtransmissions of an international broadcast station, which are licensed to nongovernmental  x\entities only, are intended to be received directly by the general public in foreign countries. "-/,N(N(ZZ~"  X- xCommission records show that there are 20 international broadcast station licensees. Although  xwe were unable to request the revenue information, we estimate that most of the international broadcast licensees would constitute a small business under the SBA definition.  X-    X<x35.` `  International Fixed Public Radio (Public and Control Stations) .  xInternational fixed public radio is a fixed service in which the stations are intended to provide  xradio communications between any one of the 50 states or any U. S. possession and any foreign  xpoint. In addition, radio communications within the contiguous 48 states in connection with the  xirelaying of international traffic between stations which provide the above service are also deemed  X2- xinternational fixed public radio. There are 15 licensees in this service. Although we were unable  xito request the revenue information, we estimate that some of the international broadcast licensees would constitute a small business under the SBA definition.  W <  X` hp x (#%'0*,.8135@8:signals transmitted or retransmitted by space stations to be directly received by the public.  xjBecause DBS provides subscription services, DBS falls within the SBA definition of Cable and  xOther Pay Television Services. This definition provides that a small entity is expressed as one  X - xwith $11.0 million in annual receipts. ^0  yOg -#C\  P6QgP#э SIC Code 4841.^ There are eight DBS licensees as of December 1996.  xAt this time, we are unable to estimate of the number of small business licensees that are DBS licensees that could be impacted by the forfeiture guidelines.  X -   X- MASS MEDIA SERVICES  X{-  Xd< ` /x47.` `  Commercial Radio and Television Services.  The proposed rules and policies will  x<apply to television broadcasting licensees, radio broadcasting licensees, permittees and potential  X7- x<licensees of either service. 1t7X yO@- xi#C\  P6QgP#э We tentatively believe that the SBA's definition of "small business" greatly overstates the number of radio  x,and television broadcast stations that are small businesses and is not suitable for purposes of determining the impact  {O- xof the proposals on small television and radio stations. However, for purposes of this Policy Statement, we utilize  xthe SBA's definition in determining the number of small businesses to which the proposed rules would apply, but  xwe reserve the right to adopt a more suitable definition of "small business" as applied to radio and television  {O*- xybroadcast stations or other entities subject to the forfeiture guidelines adopted in this Policy Statement and to  xiconsider further the issue of the number of small entities that are radio and television broadcasters or other small  {O- xYmedia entities in the future. See Report and Order in MM Docket No. 93-48 (Children's Television Programming),  {O- x11 FCC Rcd 10660, 1073738 (1996), citing 5 U.S.C.  601(3). We have pending proceedings seeking comment  {OP- xLon the definition of and data relating to small businesses. In our Notice of Inquiry in GN Docket No. 96113  x(Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small Businesses), FCC 96216,  xJreleased May 21, 1996, we requested commenters to provide profile data about small telecommunications businesses  xin particular services, including television, and the market entry barriers they encounter, and we also sought  xcomment as to how to define small businesses for purposes of implementing Section 257 of the Telecommunications  xAct of 1996, which requires us to identify market entry barriers and to prescribe regulations to eliminate those  {O"- xbarriers. Additionally, in our Order and Notice of Proposed Rule Making in MM Docket No. 9616 (In the Matter  x-of Streamlining Broadcast EEO Rule and Policies, Vacating the EEO Forfeiture Policy Statement and Amending  xJSection 1.80 of the Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd 5154 (1996), we invited  xKcomment as to whether relief should be afforded to stations: (1) based on small staff and what size staff would be  x,considered sufficient for relief, 10 or fewer fulltime employees; (2) based on operation in a small market; (3) based on operation in a market with a small minority work force; or (4) based on a combination of these factors. The SBA defines a television broadcasting station that has no more"701,N(N(ZZ"  X- xthan $10.5 million in annual receipts as a small business.U2 yOy-ԍ 13 C.F.R.  121.201, SIC Code 4833 (1996)U Television broadcasting stations consist of establishments primarily  xengaged in broadcasting visual programs by television to the public, except cable and other pay  X- xtelevision services.M3X {O- x#C\  P6QgP#э Economics and Statistics Administration, Bureau of Census, U.S. Department of Commerce, 1992 Census of  {O-Transportation, Communications and Utilities, Establishment and Firm Size, Series UC92S1, Appendix A9 (1995).M Included in this industry are commercial, religious, educational, and other  X- xtelevision stations.4z {O - xԍ Id. See Executive Office of the President, Office of Management and Budget, Standard Industrial Classification Manual (1987), at 283, which describes "Television Broadcasting Stations" (SIC Code 4833) as:    Establishments primarily engaged in broadcasting visual programs by television to the public,  mexcept cable and other pay television services. Included in this industry are commercial, religious,  meducational and other television stations. Also included here are establishments primarily engaged in television broadcasting and which produce taped television program materials. Also included are establishments primarily engaged in television broadcasting  X- xMand which produce taped television program materials.Y5\  {O4- x#C\  P6QgP#э Economics and Statistics Administration, Bureau of Census, U.S. Department of Commerce, 1992 Census of  {O- xTransportation, Communications And Utilities, Establishment and Firm Size, Series UC92S1, Appendix A9 (1995).Y Separate establishments primarily  xengaged in producing taped television program materials are classified under another SIC  X_- xnumber.6_ {O*- xw#C\  P6QgP#э Id. SIC 7812 (Motion Picture and Video Tape Production); SIC 7922 (Theatrical Producers and Miscellaneous Theatrical Services) (producers of live radio and television programs).  There were 1,509 television stations operating in the nation in 1992.7_t yO- x#C\  P6QgP#э FCC News Release No. 31327, Jan. 13, 1993; Economics and Statistics Administration, Bureau of Census, U.S. Department of Commerce. That number  xhas remained fairly constant as indicated by the approximately 1,550 operating television  X1- xbroadcasting stations in the nation as of August, 1996.z81 yO-#C\  P6QgP#э FCC News Release No. 64958, Sept. 6, 1996.z For 1992,;91\ {O>- x#C\  P6QgP#э Census for Communications' establishments are performed every five years ending with a "2" or "7". See  yO-Economics and Statistics Administration, Bureau of Census, U.S. Department of Commerce.; the number of television  X -stations that produced less than $10.0 million in revenue was 1,155 establishments.:X  yO!- x#C\  P6QgP#э The amount of $10 million was used to estimate the number of small business establishments because the  xrelevant Census categories stopped at $9,999,999 and began at $10,000,000. No category for $10.5 million existed. Thus, the number is as accurate as it is possible to calculate with the available information.  X - ` x48.` ` Additionally, the Small Business Administration defines a radio broadcasting  X - x{station that has no more than $5 million in annual receipts as a small business.q;  yO\'-#C\  P6QgP#э 13 C.F.R.  121.201, SIC 4832.q A radio" 1f;,N(N(ZZ? "  x.broadcasting station is an establishment primarily engaged in broadcasting aural programs by  X- xradio to the public.< yOb-#C\  P6QgP#э Economics and Statistics Administration, Bureau of Census, U.S. Department of Commerce. Included in this industry are commercial, religious, educational, and other  X- xradio stations.Y=X {O-#C\  P6QgP#э Id.Y Radio broadcasting stations which primarily are engaged in radio broadcasting  X- xand which produce radio program materials are similarly included.Y> {OV-#C\  P6QgP#э Id.Y However, radio stations  xwhich are separate establishments and are primarily engaged in producing radio program material  X- xyare classified under another SIC number.Y?| {O -#C\  P6QgP#э Id.Y The 1992 Census indicates that 96 percent of (5,861  Xv- xlof 6,127) radio station establishments produced less than $5 million in revenue in 1992.@v yO5- x#C\  P6QgP#э The Census Bureau counts radio stations located at the same facility as one establishment. Therefore, each colocated AM/FM combination counts as one establishment.   x/Official Commission records indicate that 11,334 individual radio stations were operating in  XH- x1992.zAHf  yO_-#C\  P6QgP#э FCC News Release No. 31327, Jan. 13, 1993.z As of August 1996, official Commission records indicate that 12,088 radio stations were  X1-operating.{B1  yO-#C\  P6QgP#э FCC News Release No. 64958, Sept. 6, 1996.{  X - ` x49.` ` Thus, the Report and Order adopted today will affect approximately 1,550  X - xtelevision stations; approximately 1,194 of those stations are considered small businesses.$C  yO#- x#C\  P6QgP#э We use the 77 percent figure of TV stations operating at less than $10 million for 1992 and apply it to the 1996 total of 1,550 TV stations to arrive at 1,194 stations categorized as small businesses.$  X - x/Additionally, the Policy Statement will affect 12,088 radio stations, approximately 11,605 of  X - xwhich are small businesses.;D  yOM- x#C\  P6QgP#э We use the 96% figure of radio station establishments with less than $5 million revenue from the Census data and apply it to the 12,088 individual station count to arrive at 11,605 individual stations as small businesses. ; These estimates may overstate the number of small entities since  xthe revenue figures on which they are based do not include or aggregate revenues from non xtelevision or nonradio affiliated companies. In addition to owners of operating radio and  xtelevision stations, any entity who seeks or desires to obtain a television or radio broadcast  Xb- xlicense such as a permittee may be affected by the forfeiture guidelines in the Report and Order.  XK- xiThe number of entities that may seek to obtain a television or radio broadcast license is unknown.  X-  X-Alternative Classification of Small Stations  X- ` x50.` ` An alternative way to classify small radio and television stations is the number"26D,N(N(ZZ&"  xof employees. The Commission currently applies a standard based on the number of employees  X- xin administering its Equal Employment Opportunity Rule (EEO) for broadcasting.E| yOb- x#C\  P6QgP#э The Commission's definition of a small broadcast station for purposes of applying its EEO rules was adopted  x<prior to the requirement of approval by the SBA pursuant to Section 3(a) of the Small Business Act, 15 U.S.C.   x<632 (a), as amended by Section 222 of the Small Business Credit and Business Opportunity Enhancement Act of  xM1992, Pub. L. No. 102366,  222(b)(1), 106 Stat. 999 (1992), as further amended by the Small Business  xwAdministration Reauthorization and Amendments Act of 1994, Pub. L. No. 103403,  301, 108 Stat. 4187 (1994).  {OJ- x-However, this definition was adopted after the public notice and the opportunity for comment. See Report and  {O-Order in Docket No. 18244, 23 FCC 2d 430 (1970).  Thus, radio  xor television stations with fewer than five fulltime employees are exempted from certain EEO  X- xreporting and record keeping requirements.F  {Ox - x#C\  P6QgP#э  See, e.g., 47 C.F.R.  73.3612 (Requirement to file annual employment reports on Form 395 applies to  {OB - xlicensees with five or more fulltime employees); First Report and 0rder in Docket No.21474 (Amendment of  {O - xBroadcast Equal Employment Opportunity Rules and FCC Form 395), 70 FCC 2d 1466 (1979). The Commission  x;is currently considering how to decrease the administrative burdens imposed by the EEO rule on small stations while  xxmaintaining the effectiveness of our broadcast EEO enforcement. Order and Notice of Proposed Rule Making in  {Of- xMM Docket No. 9616 (Streamlining Broadcast EEO Rule and Policies, Vacating the EEO Forfeiture Policy  {O0- xStatement and Amending Section 1.80 of the Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC  xRcd 5154 (1996). One option under consideration is whether to define a small station for purposes of affording such relief as one with ten or fewer fulltime employees.  We estimate that the total number of broadcast  X-stations with 4 or fewer employees is approximately 4,239.G yO;- x#C\  P6QgP#э Compilation of 1994 Broadcast Station Annual Employment Reports (FCC Form 395B), Equal Opportunity Employment Branch, Mass Media Bureau, FCC.  Wv< Experimental, auxiliary, and special broadcast and other program distribution services   XH- ` x51.` ` This service involves a variety of transmitters, generally used to relay broadcast  xprogramming to the public (through translator and booster stations) or within the program  xdistribution chain (from a remote news gathering unit back to the station). The Commission has  xnot developed a definition of small entities applicable to broadcast auxiliary licensees. Therefore,  xthe applicable definition of small entity is the definition under the Small Business Administration  x(SBA) rules applicable to radiotelephone companies. This definition provides that a small entity is a radiotelephone company employing no more than 1,500 persons.  X- ` x52.` ` There are currently 2,785 FM translators and boosters, 4,979 TV translators, and  Xy- xM1,951 Low Power TV stations which will be affected by the new forfeiture guidelines.Hy> {Oh"-#C\  P6QgP#э #C*f9 xQX#See#C\  P6QgP# News Release, "Broadcast Stations Totals as of May 31, 1997", released June 6, 1997. The  x FCC does not collect financial information on any broadcast facility and the Department of  x>Commerce does not collect financial information on these auxiliary broadcast facilities. We  xbelieve, however, that most, if not all, of these auxiliary facilities, including Low Power TV  xstations, could be classified as small businesses by themselves. We also recognize that most  xtranslators and boosters are owned by a parent station which, in some cases, would be covered"3H,N(N(ZZ"  xby the revenue definition of small business entity discussed above. These stations would likely  xhave annual revenues that exceed the SBA maximum to be designated as a small business (either $5 million for a radio station or $10.5 million for a TV station).  X< Multipoint Distribution Service (MDS)   Xw- ` x53.` ` This service involves a variety of transmitters, which are used to relay  X`- xprogramming to the home or office, similar to that provided by cable television systems.I` yO- xj#C\  P6QgP#э For purposes of this item, MDS also includes single channel Multipoint Distribution Service (MDS) and Multipoint Distribution Service (MMDS) application and authorizations collectively.  In  XI- xLconnection with the 1996 MDS auction the Commission defined small businesses yJI  {O -#C\  P6QgP#э  See 47 C.F.R.  1.2110 (a)(1).y as entities  xwho had annual average gross revenues for the three preceding years not in excess of $40  xLmillion. This definition of a small entity in the context of MDS auctions has been approved by  X - x=the SBA. See Amendment of Parts 21 and 74 of the Commission's Rules With Regard to Filing  xProcedures in the Multipoint Distribution Service and in the Instructional Television Fixed  X - xService and Implementation of Section 309(j) of the Communications Act Competitive Bidding,  X - xM10 FCC Rcd 9589 (1995). There are 1,573 previously authorized and proposed MDS stations  xcurrently licensed. These stations were licensed prior to implementation of Section 309(j) of the  x>Act. Licenses for new MDS facilities are now awarded to auction winners in Basic Trading  Xz- xAreas (BTAs) and BTAlike areas.Kz {O- x#C\  P6QgP#э  Amendment of Parts 21 and 74 of the Commission's Rules with Regard to Filing Procedures in the  x-Multipoint Distribution Service and in the Instructional Television Fixed Service and Implementation of Section  {Oo- x309(j) of the Communications Act Competitive Bidding, 10 FCC Rcd 9589 (1995). A Basic Trading Area (BTA)  {O9- xis the geographic area by which the Multipoint Distribution Service is licensed.  See Rand McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition, pp. 3639.  The MDS auctions resulted in 67 successful bidders  xobtaining licensing opportunities for 493 BTAs. Of the 67 auction winners, 61 meet the  xdefinition of a small business. Thus, we conclude that there are 1,634 MDS providers that are small businesses as deemed by the SBA and the Commission's auction rules.  W< Instructional Television Fixed Services (ITFS)   X- ` x54.` ` Instructional Television Fixed Service stations (ITFS) are used to relay educational  xand instructional programming to the home or office. There are presently 2,032 ITFS licensees.  xAll but one hundred of these licenses are held by educational institutions. As stated earlier,  X- xeducational institutions are included in the definition of a small business. See Appendix C, para.  X}-6, supra. Thus, 1,932 licensees are small businesses.  XO- OFFICE OF ENGINEERING AND TECHNOLOGY AUTHORIZATIONS  X!- ` px55.` ` Inasmuch as the RFA amendments were not in effect until the record in this"!4h K,N(N(ZZ"  xproceeding was closed, the Commission was unable to request information regarding the number  xof small businesses within each of the services or the number of small businesses seeking  xCommission authorization from our technical office that could be affected by the forfeiture  xguidelines. We have, however, made estimates based on our knowledge about the applications  xythat have been submitted in the past. To the extent that a government entity may be a licensee  xor an applicant, the impact on those entities is included in the estimates for small businesses below.  WH<#XR9 xyQ X#Experimental Radio Service# XP\  P6QW XP#  X - ` x56.` ` The Experimental Radio Service (ERS) provides for experimental uses of radio  xfrequencies and for development of techniques and systems that are not otherwise permitted under  x@existing service rules. The ERS provides opportunities for manufacturers, inventors,  xentrepreneurs, and students to experiment with new radio technologies, new equipment designs,  xcharacteristics of radio wave propagation, or new service concepts related to the use of the radio  xspectrum. The Commission has not developed a definition of small entities applicable to the  xERS. Therefore, the applicable definition of small entity is the definition under SBA rules  xNapplicable to radiotelephone companies. This definition provides that a small entity is a  Xb- xradiotelephone company employing no more than 1,500 persons.vLb yO-#C\  P6QgP#э 13 C.F.R.  120.121, SIC Code 4812.v Since the RFA amendments  xwere not in effect until the record in this proceeding was closed, the Commission was unable to  xNrequest information regarding the number of small businesses involved in the ERS. The  xCommission processes approximately 1,000 applications a year for experimental radio operations.  xlAbout half of these are renewals and the other half are for new licenses. The majority of  xexperimental licenses, about 70%, are issued to large companies such as Motorola and to  x<Department of Defense contractors such as Northrop and LockheedMartin. Thus, the remaining  x=30%, or as many as 300 applications, we assume, for purposes of evaluations and conclusions in this FRFA, will be awarded to small entities, as that term is defined by the SBA.  W|< Equipment Authorization Program   XN- ` }x57.` ` The FCC's equipment authorization requirements are intended to ensure that radio  xzand other electronic equipment comply with technical requirements in the FCC rules. These  xLrequirements generally are designed to minimize the potential for interference to television and  x=radio communications. Certain equipment must be authorized by the FCC while others may be  X- xxselfauthorized by the manufacturer. The FCC equipment authorization procedures are calle d type  x-acceptance, certification and notification. The selfauthorization processes are called verification and manufacturer declaration of conformity.  X!-x  X"< ` x58.` `  Type acceptance.  Type acceptance generally applies to radio transmitters used in""5XL,N(N(ZZ!"  X- xthe licensed radio services, such as land, aeronautical and maritime mobile transmitters.rM yOy-#C\  P6QgP#э 47 C.F.R.  2.905, 2.1001.r Type  xiacceptance requires submittal of a written application to the Commission, including an application  xform, test report showing compliance with the standards, and complete technical description of  X- xjthe device. The Commission has not developed a definition of small entities applicable to type  xaccepted devices. Therefore, the applicable definition of small entity is the definition under the  xjSBA rules applicable to radiotelephone companies. This definition provides that a small entity  Xv- xis a radiotelephone company employing no more than 1,500 persons.xNvX yO -#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. x Since the RFA  x.amendments were not in effect until the record in this proceeding was closed, the Commission  xZwas unable to request information regarding the number of small businesses that make equipment  xsubject to type acceptance. We are unable at this time to make a precise estimate of the number of type acceptance grantees and applicants that are small businesses.  X - ` x59.` ` The Commission received approximately 730 requests for type acceptance in  xcalendar year 1996. Most equipment subject to type acceptance is produced by large companies  xsuch as Motorola, Lucent Technologies, Ericsson, etc. The majority of type acceptance grants,  xapproximately 80%, are issued to large companies. Given this fact, the remaining 20%, or as  x-many as 146 applications, we assume, for purposes of evaluations and conclusions in this FRFA, will be awarded to small entities, as that term is defined by the SBA.  XK< ` x60.` `  Certification . Certification applies to low power radio transmitters and electronic  xequipment governed by Parts 15 and 18 of the rules. The certification process is similar to Type  xLAcceptance, since it also requires submittal of a written application similar to type acceptance.  xThe Commission has not developed a definition of small entities applicable to certified devices.  xTherefore, the applicable definition of a small entity is the definition under the SBA rules  xNapplicable to radiotelephone companies. This definition provides that a small entity is a  X- xradiotelephone company employing no more than 1,500 persons.xO yO[-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. x Because the RFA amendments  xwere not in effect until the record in this proceeding was closed, the Commission was unable to  xrequest information regarding the number of small businesses that manufacture equipment subject  xto certification. We are unable at this time to make a precise estimate of the number of certification grantees and applicants that are small businesses.  X8- ` x61.` ` The Commission received approximately 5,100 requests for certification in calendar  x|year 1996. The majority of certification grants, approximately 60%, are issued to large  xcompanies such as Motorola, Lucent Technologies, Ericsson, IBM, Compaq, Apple Computers,  xetc. Given this fact, the remaining 40%, or as many as 2,000 applications, we assume, for  xpurposes of evaluations and conclusions in this FRFA, will be awarded to small entities, as that term is defined by the SBA. "!6xO,N(N(ZZ "Ԍ X< ` Ox62.` `  Notification . Notification is a streamlined equipment authorization procedure that  x[requires submittal of an application form and photographs of the equipment, but no test report  xzor technical data. This procedure has been applied to equipment manufactured with a good  x[record of technical compliance, but the Commission believes it prudent to continue monitoring  X- xthe introduction of new products. fP yO-#C\  P6QgP#э 47 C.F.R.  2.904.f The Commission has not developed a definition of small  xyentities applicable to notified devices. Therefore, the applicable definition of small entity is the  xdefinition under the SBA rules applicable to radiotelephone companies. This definition provides  X`- xthat a small entity is a radiotelephone company employing no more than 1,500 persons. xQ`X yOi -#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. x  xBecause the RFA amendments were not in effect until the record in this proceeding was closed,  xKthe Commission was unable to request information regarding the number of small businesses that  xmanufacture devices subject to notification. We are unable at this time to make a precise estimate of the number of certification grantees and applicants that are small businesses.  X - ` x63.` ` The Commission received approximately 470 requests for notification in calendar  x|year 1996. The majority of certification grants, approximately 80%, are issued to large  xzcompanies such as Motorola, Lucent Technologies, Ericsson, IBM, etc. Given this fact, the  x remaining 20%, or as many as 95 applications, we assume, for purposes of evaluations and  x[conclusions in this FRFA, will be awarded to small entities, as that term is defined by the SBA.  XL< ` x64.` `  Verification. Verification is a manufacturer selfapproval procedure. This  xiprocedure has been reserved for equipment that has a good record of compliance by the industry,  x?and the Commission considers it likely that good compliance will continue with reduced  X< x-oversight.fR yO-#C\  P6QgP#э 47 C.F.R.  2.902.f Additionally,  Declaration of Conformity (DoC)  is a new procedure that gives  xmanufacturers of personal computer equipment the option to selfdeclare conformity with the  X- xCommission's radio noise standards.ESx {O- x#C\  P6QgP#э 47 C.F.R.  2.906. See also Amendment of Parts 2 and 15 of the Commission's Rules to Deregulate the  {O-Equipment Authorization Requirements for Digital Devices in ET Docket No. 9519, released May 14, 1996.E The DoC procedure is similar to the verification  xjprocedure, however, the compliance tests must be performed by an accredited laboratory. The  xyequipment labelling and certain other requirements were simplified to provide incentives to use  X- xthis new procedure. The Commission has not developed a definition of small entities applicable  xto experimental licensees. Therefore, the applicable definition of small entity is the definition  xunder the SBA rules applicable to radiotelephone companies. This definition provides that a  XQ- xsmall entity is a radiotelephone company employing no more than 1,500 persons. xTQ yO$-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. x Because the  xRFA amendments were not in effect until the record in this proceeding was closed, the  xCommission was unable to request information regarding the number of small businesses that"#7d T,N(N(ZZ"  x=manufacture equipment subject to verification or declaration of conformity. We are, therefore,  xunable at this time to make a precise estimate of the number of manufacturers of devices subject  xto verification of DoC that are small businesses. The Commission has no statistics on how many  xentities use the verification or DoC procedures because the Commission receives no information from the users of verification or DoC processes.  Xv-  WIRELESS AND COMMERCIAL MOBILE SERVICES   X_-x    XH< ` Qx65.` `  Cellular Licensees . Neither the Commission nor the SBA has developed a  xLdefinition of small entities applicable to cellular licensees. The closest applicable definition of  X - xNsmall entity is the definition under the SBA rules #X~ps7 `8X## Xj\  P6G;W XP#applicable to radiotelephone (wireless)  xcompanies. The most reliable source of information regarding the number of cellular services  x.carriers nationwide of which we are aware appears to be the data that the Commission collects  X - x annually in connection with the TRS Worksheet.U^  {OO- x#C\  P6QgP#э Federal Communications Commission. CCB industry Analysis Division, Telecommunication Industry  {O- xRevenue: TRS Worksheet Data, Tbl. 1 (Average Total Telecommunication Revenue Reported by Class of Carrier)  {O-(Dec. 1996) (TRS Worksheet). According to the most recent data, 792  X - xycompanies reported that they were engaged in the provision of cellular services.YV  {O^-#C\  P6QgP#э Id.Y Although it  xseems certain that some of these carriers are not independently owned and operated, or have more  xthan 1,500 employees, we are unable at this time to estimate with greater precision the number  x>of cellular services carriers that would qualify as small business concerns under the SBA's  xjdefinition. Consequently, we estimate that there are fewer than 792 small entity cellular service  XL-carriers that may be affected by the Report and Order adopted today.  X5-  X<  {x66. 220 MHz Radio Services . For 220 MHz service licenses that will be awarded by  xzauction, the Commission has adopted a twotiered definition for purposes of bidding on the  xnationwide, Regional and EA licenses. Specifically, a "very small business" is an entity that,  xtogether with its affiliates and controlling principals, has average gross revenues that are not more  xthan $3 million for the three preceeding years. A "small business" is an entity that, together with  xZaffiliates and controlling principals, has average gross revenues that are not more than $15 million  X- xfor the three preceeding years.[WZ yO- xԍ Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220222 MHz Band by the  {O - x,Private Land Mobile Radio Service, Third Report and Order; Fifth Notice of Proposed Rulemaking, PR Docket No. 89552, FCC 9757 (released March 12, 1997).[ Because there have been no auctions for this service as of yet  xand the parameters of the industry have not been fully defined, any estimate of the number of  xsmall businesses who will seek to bid in the future auctions is not yet determined. With respect  xto existing 220 MHz licensees, there are approximately 3,800 nonnationwide Phase I licensees  xand 4 nationwide licensees currently authorized to operate in the 220 MHz band. The  xCommission does not have sufficient information to determine how many of these existing  X - x.licensees would qualify as small businesses under the SBA definition of small business, i.e., a" 8W,N(N(ZZy" radiotelephone company with fewer than 1,500 employees.  X< ` ]    x67.` `  Private and Common Carrier Paging. The Commission has proposed a twotier  xdefinition of small businesses in the context of auctioning licenses in the Common Carrier Paging  x>and exclusive Private Carrier Paging services. Under the proposal, a small business will be  x\defined as either (1) an entity that, together with its affiliates and controlling principals, has  xaverage gross revenues for the three preceding years of not more than $3 million, or (2) an entity  xthat, together with affiliates and controlling principals, has average gross revenues for the three  xpreceding years of not more than $15 million. Since the SBA has not yet approved this  xdefinition for paging services, we will utilize the SBA's definition applicable to radiotelephone  X - xlcompanies, i.e., an entity employing no more than 1,500 persons.wX  yO} -#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812.w At present, there are  x\approximately 24,000 Private Paging licensees and 74,000 Common Carrier Paging licensees.  xjWe estimate that the majority of private and common carrier paging providers would qualify as small businesses under the SBA definition.  X- ` ~x68.` ` With respect to the paging auctions, the Commission anticipates that a total of  x.15,531 nonnationwide geographic area licenses will be granted or auctioned. The geographic  Xe- x.area licenses will consist of 3,050 Major Trading Area ( MTA)Y|eX yOn-  k#C\  P6QgP#эxRand McNally organizes the 50 states and the District of Columbia into 47 Major Trading Areas (MTAs)  xand 487 Basic Trading Areas (BTAs). Rand McNally is the copyright owner of the MTA/BTA Listings, which list  x.the counties contained in each BTA/MTA, as embodied in Rand McNally's Trading Area System BTA/MTA  {O- xxDiskette and geographically represented in the map contained in Rand McNally's Commercial Atlas & Marketing  {O- xGuide. A paging authorization grantee who does not obtain a copyright license from Rand McNally for use of the  xcopyrighted material may not rely on grant of a Commission authorization as a defense to any claim of copyright infringement brought by Rand McNally against such grantee. licenses and 12,481 Economic  XN- xArea (EA)ZN yO-  #C\  P6QgP#эxThe Bureau of Economic Analysis of the Department of Commerce has divided the U.S. into 172 EAs,  xeffective April 10, 1995, to facilitate regional economic analysis. Each EA consists of one or more economic nodes  xYԩ metropolitan areas or similar areas that serve as centers of economic activity and the surrounding counties that  xare economically related to the nodes. Final Redefinition of the BEA Economic Areas, Department of Commerce, Docket No. 950302064506401, 60 Fed. Reg. 13,114 (March 10, 1995).  licenses. In addition to the 47 Rand McNally MTAs, the Commission is adding  xthree MTAs for the U.S. territories of (1) Guam and the Northern Mariana Islands, (2) Puerto  xRico and the U.S. Virgin Islands, and (3) American Samoa. The Commission is also licensing  xAlaska as a single MTA separate from the Seattle MTA. There will be a total of 51 MTA  xlicenses auctioned for each nonnationwide 931 MHz and exclusive 929 MHz channel. No  xauctions of paging licenses has been held yet, and there is no basis to determine the number of  xlicenses that will be awarded to small entities. Given the fact that nearly all radiotelephone"9L Z,N(N(ZZb"  X- xcompanies have fewer than 1,000 employees,[ yOy-  =#C\  P6QgP#эxThe 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the Census,  xshows that only 12 radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000  xxor more employees. U.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of Transportation,  xCommunications, and Utilities, UC92S1, Subject Series, Establishment and Firm Size, Table 5, Employment Size of Firms: 1992, SIC Code 4812 (issued May 1995). and that no reliable estimate of the number of  xprospective paging licensees can be made, the Commission assumes, for purposes of the  xKevaluations and conclusions in this FRFA, that all the 15,531 geographic area paging licenses will be awarded to small entities, as that term is defined by the SBA.  X-    X< ` x69.` `  Interconnected Business Services. Since the Commission did not define a small  xbusiness with respect to forprofit interconnected business services, we will utilize the SBA's  xdefinition applicable to radiotelephone companies i.e. an entity employing no more than 1,500  XI- xKpersons. x\Ix yOr-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812.x The size data provided by the SBA does not enable us to make a meaningful estimate  xof the number of forprofit interconnected business service providers which are small entities  X - xbecause it combines all radiotelephone companies with 500 or more employees.Z]X  yO- x#C\  P6QgP#э U.S. Small Business Administration 1992 Economic Census Employment Report, Bureau of the Census, U.S.  xDepartment of Commerce, SIC Code 4812 Tbl. 3 (radiotelephone communications industry data adopted by the SBA Office of Advocacy). Z We therefore  xiused the 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau  x>of the Census, which is the most recent information available. Data from the Bureau of the  x>Census' 1992 study indicates that only 12 out of a total of 1,178 radiotelephone firms which  X - xyoperated during 1992 had 1,000 or more employees.^\ (  {O- x#C\  P6QgP#э See U.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of Transportation,  {Ob- xCommunications, and Utilities, UC92S1, Subject Series, Establishment and Firm Size, Table 5, Employment Size of Firms; 1992, SIC Code 4812 (issued May 1995). We do not know, however, how many of  xthe 1,178 firms were forprofit interconnected business service companies. Given this fact, we  x>assume, for purposes of this FRFA, that all of the current interconnected business service  xylicensees are small entities, as that term is defined by the SBA. Although there are in excess of  x<13,000 forprofit interconnected business service licenses, we are unable to determine the number  xZof forprofit interconnected business service licensees because a single licensee may own several licenses.  X-   X< ` @x70.` `  Mobile Service Carriers. Neither the Commission nor the SBA has developed  xa definition of small entities specifically applicable to mobile service carriers, such as paging  xKcompanies. The closest applicable definition under the SBA rules is for radiotelephone (wireless)  x/companies. The most reliable source of information regarding the number of mobile service  x.carriers nationwide of which we are aware appears to be the data that the Commission collects  X- xlannually in connection with the TRS Worksheet. According to the most recent data, 117":L ^,N(N(ZZQ"  X- xjcompanies reported that they were engaged in the provision of mobile services. Z_ {Oy-#C\  P6QgP#э Id.Z Although it  xseems certain that some of these carriers are not independently owned and operated, or have more  xthan 1,500 employees, we are unable at this time to estimate with greater precision the number  x\of mobile service carriers that would qualify under the SBA's definition. Consequently, we  xestimate that there are fewer than 117 small entity mobile service carriers that may be affected  X-by the forfeiture guidelines in the Report and Order adopted here today.  Xv-     X_< ` x71.` `  PCS Licensees: Broadband and Narrowband. The Commission, with respect to  xnarrowband and broadband PCS, defines small businesses to mean firms who have gross revenues  xof not more than $40 million in each of the preceding three calendar years. This definition of  X -"small entity" in the context of the PCS services has been approved by the SBA.`^ Z {O& - x#C\  P6QgP#э  See Implementation of Section 309(j) of the Communications Act Competitive Bidding, Third Memorandum  {O - xyOpinion and Order and Further Notice of Proposed Rule Making, 10 FCC Rcd 175,196 (1995); Competitive  {O-Bidding, Fifth Report and Order, 9 FCC Rcd 55815584 (1995); 47 C.F.R.  24.320(b) and 24.720(b).   X - ` x72.` ` Broadband PCS . The broadband PCS spectrum is divided into six frequency  x>blocks designated A through F and the Commission has held auctions for each block. The  xCommission has defined "small entity" in the auctions for Blocks C and F as a entity that has  X - xaverage gross revenues of less than $40 million in the three previous calendar years.a  {O- xԍ See Amendment of Parts 20 and 24 of the Commission's Rules -- Broadband PCS Competitive Bidding and  {O-the Commercial Mobile Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824 (1996).  For Block  xF, an additional classification for "very small business" was added and is defined as an entity  xthat, together with their affiliates, has average gross revenue of not more than $15 million for the  Xc- xpreceding three calendar years.bc {O- xiԍ See Amendment of Parts 20 and 24 of the Commission's Rules -- Broadband PCS Competitive Bidding and  {O-the Commercial Mobile Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824 (1996).  These regulations defining "small entity" in the context of  xMbroadband PCS auctions have been approved by the SBA. No small businesses within the  xSBA-approved definition bid successfully for licenses in Blocks A and B. There were 90  xLwinning bidders that qualified as small entities in the Block C auctions. A total of 93 small and  xvery small business bidders won approximately 40% of the 1,479 licenses for Blocks D, E, and  xF. However, licenses for Blocks C through F have not been awarded fully, therefore there are  xfew, if any, small businesses currently providing PCS services. Based on this information, we  xconclude that the number of small broadband PCS licensees will include the 90 winning bidders  xand the 93 qualifying bidders in the D, E, and F Blocks, for a total of 183 small PCS providers  X-as defined by the SBA and the Commission's auction rules.  Xf- ` x73.` ` Narrowband PCS. The Commission has auctioned nationwide and regional  xlicenses for narrowband PCS. There are 11 nationwide and 30 regional licensees for narrowband  xLPCS. The Commission does not have sufficient information to determine whether any of these  xylicensees are small businesses within the SBAapproved definition. Based on this information,"!;8 b,N(N(ZZ"  X- xwe conclude that all 41 of the narrowband PCS licensees may be affected by the Policy  X- xZStatement adopted in this proceeding. At present, there have been no auctions held for the major  xtrading area (MTA) and basic trading area (BTA) narrowband PCS licenses. The Commission  xanticipates a total of 561 MTA licenses and 2,958 BTA licenses will be awarded in the auctions.  xThose auctions, however, have not yet been scheduled. Given the facts that nearly all  xradiotelephone companies have fewer than 1,000 employees and that no reliable estimate of the  xnumber of prospective MTA and BTA narrowband licensees can be made, we assume, for  xpurposes of our evaluations and conclusion in this FRFA, that all of the licenses will be awarded to small entities, as that term is defined by the SBA.  W1<  X < ` @x 74.` `  Resellers . We were unable to obtain reliable data regarding the number of entities  xthat resell services or how many of these are small entities. Since the Regulatory Flexibility Act  x.amendments were not in effect until the record in this proceeding was closed, the Commission  xiwas unable to request information regarding the number of small businesses in this category. We  xnote, however, that resellers are included among the 1,178 radiotelephone firms described in the  x.1992 Census data discussed above, 12 of which had 1,000 or more employees. Given the facts  x.that nearly all radiotelephone companies have fewer than 1,000 employees and that no reliable  xestimate of the number of resellers can be made, we assume, for purposes of our evaluations and conclusions in this FRFA, that all resellers are small entities, as that term is defined by the SBA.  WL<  X5< `  x75.` `  Location and Monitoring Service/Automatic Vehicle Monitoring  (LMS/AVM).  X- x The Commission has not adopted a definition of a small business specific to location and  xmonitoring/automatic vehicle monitoring ( LMS/AVM) systems, which are defined in Section  X- x90.7 of the Commission's Rules. fc yOj-#C\  P6QgP#э 47 C.F.R.  90.7. f Accordingly, we will use the SBA's definition applicable to  X- xradiotelephone companies, i.e., an entity employing no more than 1,500 persons.zdX yO-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. z No auctions  xhave been held for the LMS service. The Commission has not yet determined whether it will  xxaward licenses based on Rand McNally's MTAs and BTAs, EAs, or some other geographic basis,  xlso it cannot yet be predicted how many licenses will be awarded for this service. We do anticipate that most LMS licensees will fit the definition of small business provided by the SBA.  Xi-    XR< ` x76.` `  Rural Radiotelephone Service. The Commission has not adopted a definition of  xsmall business specific to the Rural Radiotelephone Service, which is defined in Section 22.99  X%- xof the Commission's Rules.ee% yO"-#C\  P6QgP#э 47 F.C.R.  22.9.e A significant subset of the Rural Radiotelephone Service is  xBETRS, or Basic Exchange Telephone Radio Systems (the parameters of which are defined in  x\Sections 22.757 and 22.759 of the Commission's Rules). Accordingly, we will use the SBA's  X- xjdefinition applicable to radiotelephone companies, i.e., an entity employing no more than 1,500  x.persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and we" <xe,N(N(ZZI "  X-estimate that almost all of them fit within the SBA's definition of a small business.yf yOy-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812. y     X< ` Ax77.` `  AirGround Radiotelephone Service. The Commission has not adopted a  xdefinition of small business specific to the AirGround Radiotelephone Service, which is defined  X- xin Section 22.99 of the Commission's Rules.ZgX {O-#C\  P6QgP#э Id.Z Accordingly, we will use the SBA's definition  X- xapplicable to radiotelephone companies, i.e., an entity employing no more than 1,500 persons.^h {O) -#C\  P6QgP#э Id. ^  xThere are approximately 100 licensees in the AirGround Radiotelephone Service, and we estimate that almost all of them fit within the SBA's definition.  XK-    X4< ` |x78.` `  Antenna Structures. Antenna structure owners include Commission licensees as  X - xwell as nonlicensees.>i$ | {OL- x#C\  P6QgP#э See Streamlining the Commission's Antenna Structure Clearance Procedure and Revision of Part 17 of the  {O- xCommission's Rules Concerning Construction, Marking, and Lighting of Antenna Structures, 11 FCC Rcd 4272  xZ(1995) (Commission amended 303(q) of the Communications Act to provide that nonlicensee tower owners, in addition to the licensees on the tower, would be held liable for tower painting and lighting requirements). > The term "antenna structure" includes any structure used to support a  X - xcommunications antenna, e.g., a tower built specifically for communications, a water tower with  xan antenna, an observation tower with an antenna. These structures are owned by a vast array  xof companies of all sizes operating in all U.S. business categories. For the purposes of  xdetermining whether an owner is a small business as defined by the Small Business  xAdministration, however, each owner would need to be evaluated within its own business area.  xZBecause of the vast array of owners, the Commission has not developed, nor would it be possible to develop, a definition of "small entities" specifically applicable to antenna structure owners.  XR- ` Bx79.` ` Because the RFA amendments were not in effect until comment period for this  xproceeding was closed, the Commission was unable to request information regarding the number  xof small entities that are antenna structure owners. Therefore, the Commission is unable at this  xtime to estimate the number of small businesses which could be impacted by the forfeiture  xguidelines. Furthermore, until recently, the Commission did not request or retain information  xspecifically from antenna structure owners. The Commission's records, however, indicate that  xthere are approximately 500,000 antenna structures in the U.S., many of which may be owned  x]by the same entity. Because there are no limitations on which entities may own antenna structures, these rules could potentially impact many small businesses in the U.S.  Xl- ` Ax80.` ` Lastly, we note that licensees other than the tower owner may also be licensed to  xan antenna structure. For purposes of this analysis, licensees that are not tower owners are  X>-included in the discussion for the service for which they are licensed.    "'=h i,N(N(ZZ"Ԍ X< `   x81.` `  Low Power Radio Service (LPRS) Manufacturers/Importers. The Commission  xhas not developed a definition of small entities specifically applicable to Low Power Radio  xService (LPRS) manufacturers and importers. Therefore, the applicable definition of small entity  xis the definition under the Small Business Administration rules applicable to radio and television  X- x[broadcasting and communications equipment manufacturers.wj yO-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 3663.w This definition provides that a  X- xsmall entity is any entity employing less than 750 persons.kX {O-#C\  P6QgP#э See 13 C.F.R. 121.201, SIC Code 3663. Additionally, the SBA rules state  xjthat wholesale electronic parts and equipment firms must have 100 or fewer employees in order  X`- xto qualify as a small business entity.l` {O -#C\  P6QgP#э  See 13 C.F.R. 121.20, SIC Code 5065. Since the RFA amendments were not in effect until the  xrecord in this proceeding was closed, the Commission was unable to request information  xlregarding the number of small entities that may choose to manufacture LPRS equipment.  xFurthermore, 12,161 of the 12,654 wholesale electronic parts and equipment firms have fewer  xthan 100 employees, and would be classified as small entities. Therefore, for purposes of our  xevaluations and conclusions in this FRFA, we estimate that there are at least 13,086 potential  xmanufacturers or importers of LPRS equipment which are small businesses, as that term is defined by the SBA.  X -    X< ` .x82.` `  Automatic Maritime Telecommunications Systems (AMTS).  The Commission has  x<not developed a definition of small entities specifically applicable to AMTS licensees. Therefore,  xthe applicable definition of small entity is the definition under the Small Business Administration  xrules applicable to radiotelephone service providers. This definition provides that a small entity  X6- xis any entity employing no more than 1,500 persons.m6| {Oc-#C\  P6QgP#э See 13 C.F.R. 121.201, SIC Code 4812. Since the RFA amendments were not  x=in effect until the record in this proceeding was closed, the Commission was unable to request  xinformation regarding the number of small AMTS businesses and is unable at this time to determine the precise number of AMTS firms which are small businesses.  X- ` x83.` ` The size data provided by the SBA does not enable us to make a meaningful  xestimate of the number of AMTS firms which are small businesses. Therefore, we used the 1992  xCensus of Transportation, Communications, and Utilities, conducted by the Bureau of the Census,  xiwhich is the most recent information available. This document shows that only 12 radiotelephone  xfirms out of a total of 1,178 such firms which operated during 1992 had 1,000 or more  xLemployees. There are three AMTS licensees which are authorized on an exclusive basis along  xthe Mississippi River, portions of the West Coast, and nearly the entire East Coast. Because  xmost of the nation's coastline has been or will be covered by the present licensees, it is unlikely  x0that a large number of additional licenses will be authorized in the future. Therefore, for  xpurposes of our evaluations and conclusions in this FRFA, we estimate that there are three AMTS licensees which are small businesses, as it is defined by the SBA.">m,N(N(ZZY"Ԍ X-    X< `  x84.` `  Specialized Mobile Radio Licensees (SMR). Pursuant to 47 C.F.R.  90.814(b)(1),  xLthe Commission awards bidding credits in auctions for geographic area 800 MHz and 900 MHz  xSpecialized Mobile Radio (SMR) licenses to firms that had revenues of less than $15 million in  X- xeach of the three previous calendar years. This regulation defining "small entity" in the context  X-of 800 MHz and 900 MHz SMR has been approved by the SBA.in {O- x#C\  P6QgP#э See Amendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels  xOutside the Designated Filing Areas in the 896901 MHz and the 935940 MHz Bands Allotted to the Specialized  {O- xMobile Radio Pool, PR Docket No. 89583, Second Order on Reconsideration and Seventh Report and Order, 11  {Oc - x>FCC Rcd 2639, 2693702 (1995); Amendment of Part 90 of the Commission's Rules to Facilitate Future  {O- - xxDevelopment of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93144, First Report and Order,  {O -Eighth Report and Order, and Second Further Notice of Proposed Rule Making, 11 FCC Rcd 1463 (1995).i  X`- ` x85.` ` The forfeiture guidelines adopted in this Policy Statement applies to SMR  xproviders in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have  xobtained extended implementation authorizations. We do not know how many firms provide 800  xOMHz or 900 MHz geographic area SMR service pursuant to extended implementation  xauthorizations, nor how many of these providers have annual revenues of less than $15 million.  xSince the RFA amendments were not in effect until the record in this proceeding was closed, the  xCommission was unable to request information regarding the number of small businesses in this  xcategory. We do know that one of these firms has over $15 million in revenues. We assume,  xfor purposes of our evaluations and conclusions in this FRFA, that all of the remaining existing  xextended implementation authorizations are held by small entities, as that term is defined by the SBA.  XL- ` `x86.` ` The Commission recently held auctions for geographic area licenses in the 900  X5- xyMHz SMR band. There were 60 winning bidders who qualified as small entities in the 900 MHz  X- xauction. Based on this information, we conclude that the number of geographic area SMR  X-licensees affected by the forfeiture guidelines includes these 60 small entities.     X- ` #Xj\  P6G;W XP#x87.` ` No auctions have been held for 800 MHz geographic area SMR licenses.  xTherefore, no small entities currently hold these licenses. A total of 525 licenses will be awarded  x?for the upper 200 channels in the 800 MHz geographic area SMR auction. However, the  xCommission has not yet determined how many licenses will be awarded for the lower 230  xchannels in the 800 MHz geographic area SMR auction. There is no basis to estimate, moreover,  xhow many small entities within the SBA's definition will win these licenses. Given the facts that  xnearly all radiotelephone companies have fewer than 1,000 employees and that no reliable  xestimate of the number of prospective 800 MHz licensees can be made, we assume, for purposes  xof our evaluations and conclusions in this FRFA, that all of the licenses will be awarded to small entities, as that term is defined by the SBA.  X-  X- ` x88.` ` Private Land Mobile Radio Services (PLMR) . The forfeiture guidelines  X - xadopted in this Report and Order will apply to small businesses that choose to use, manufacture," ?Jn,N(N(ZZ"  xLor design radios that operate in the Private Land Mobile Radio (PLMR) bands below 512 MHz.  xThere are no Commission imposed requirements, however, for any entity to use or produce these products.  X< ` ^x89.` `  PLMR Manufacturers . The Commission has not developed a definition of small  xentities specifically applicable to Private Land Mobile Radio (PLMR) manufacturers. Therefore,  xfor the purposes of this analysis, the applicable definition of small entity is the definition under  x.the SBA rules applicable to radio and television broadcasting and communications equipment  xmanufacturers. The SBA defines a small entity in this category as one in which less than 750  X2-persons are employed.vo2 yO -#C\  P6QgP#э 13 C.F.R.  120.121, SIC Code 3663.v  X - ` x90.` ` Because the RFA amendments were not in effect until the record in this proceeding  xwas closed, the Commission was unable to request information regarding the number of small  xentities that manufacture PLMR equipment and is unable at this time to make a precise estimate  xof the number of manufacturers which are small businesses. However, the 1992 Census of  xiManufacturers, conducted by the Bureau of Census, which is the most comprehensive and recent  xjinformation available, shows that approximately 925 out of the 948 entities manufacturing radio  Xz- xand television transmitting equipment in 1992 employed less than 750 persons.pzX {O-#C\  P6QgP#э 1992 Census of Manufacturers (1995). We are unable  x<to discern from the Census data precisely how many of these manufacturers produce private land  xmobile radios. Further, any entity may choose to manufacture such radio equipment. Therefore,  xfor purposes of our evaluations and conclusions in this FRFA, we stipulate that there are at least  x925 manufacturers and potential manufacturers of PLMR equipment which are small businesses, as that term is defined by the SBA.  X-   X< ` Ax 91.` `  PLMR Licensees . Private land mobile radio systems serve an essential role in  xa vast range of industrial, business, land transportation, and public safety activities. These radios  xare used by companies of all sizes operating in all U.S. business categories. Because of the vast  xyarray of PLMR users, the Commission has not developed nor would it be possible to develop a  xdefinition of small entities specifically applicable to PLMR users. For the purpose of determining  xwhether a licensee is a small business as defined by the SBA, each licensee would need to be evaluated within its own business area.  X"- ` x 92.` ` Because the RFA amendments were not in effect until the record in this proceeding  xwas closed, the Commission was unable to request information regarding the number of small  xentities that are private land mobile radio licensees. Therefore, the Commission is unable at this  x=time to make a precise estimate of the number of small businesses which could be impacted by  X - xthe rules. However, the Commission's 1994 Annual Report on PLMRsq  {Oa&-#C\  P6QgP#э Federal Communications Commission, 60th Annual Report, Fiscal Year 1994 at 116. indicates that at the end  xyof fiscal year 1994 there were 1,087,267 licensees operating 12,481,989 transmitters in the PLMR"!@|q,N(N(ZZ "  xjbands below 512 MHz. Further, because any entity engaged in a commercial activity is eligible to hold a PLMR license, these rules could potentially impact every small business in the U.S.  X- ` x 93.` ` Estimates for Local Multipoint Distribution Service (LMDS) . The rules  X- xiadopted in this Report and Order will apply to any company which chooses to apply for a license  xin the new services. In addition, the new rules impact fixed microwave licensees, some of whom  x[requested that the Commission institute a channeling plan in the 28 GHz band to set standards  xZfor pointtopoint microwave equipment manufacturers. With regard to both the traditional point xtopoint entities and the Local Multipoint Distribution Service (LMDS), the Commission has not  xdeveloped a definition of small entities applicable to such licensees. The SBA definitions of  xsmall entity for LMDS are the definitions applicable to radiotelephone companies and to pay  x=television services. The definition of radiotelephone companies provides that a small entity is  X - xa radiotelephone company employing no more than 1,500 persons.r  yOg -#C\  P6QgP#э x13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. The definition of a pay  X - xtelevision service is one which has annual receipts of less than $11 million.ys X {O-#C\  P6QgP#эXxId., SIC Code 4841.(#y Since the  xRegulatory Flexibility Act amendments were not in effect until the record in this proceeding was  xclosed, the Commission was unable to request information regarding the potential number of  xsmall businesses interested in LMDS and is unable at this time to determine the precise number of potential applicants which are small businesses.  XM- ` x 94.` ` The size data provided by the SBA does not enable us to make a meaningful  x/estimate of the number of telecommunications providers which are small entities because it  X- x.combines all radiotelephone companies with 500 or more employees.atX yO-  #C\  P6QgP#эXxU.S. Small Business Administration 1992 Economic Census Employment Report, Bureau of the Census,   U.S. Department of Commerce, SIC Code 4812 (radiotelephone communications industry data adopted by the SBA Office of Advocacy). (#a We therefore used the  x1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the  x>Census, which is the most recent information available. This document shows that only 12  x=radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or  X- xmore employees.uy  yO~-  #C\  P6QgP#эXxU.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of Transportation,   Communications, and Utilities, UC92S1, Subject Series, Establishment and Firm Size, Table 5,  P!-Employment Size of Firms: 1992, SIC Code 4812 (issued May 1995).#X~ps7 `8X# (#Ʋ #Xj\  P6G;W XP#Therefore, a majority of LMDS entities providing radiotelephone services  X- x=could be small businesses under the SBA's definition#Xj\  P6G;W XP##X~ps7 `8X#.# Xj\  P6G;W XP# Likewise, the size data provided by the  xSBA does not enable us to make a meaningful estimate of the number of cable and pay television  xjproviders which are small entities because it combines all such providers with revenues of less  Xo- xthan $11 million.tvoK  {Ok&-#C\  P6QgP#эXxId., SIC 4841.(#t We therefore used the 1992 Census of Transportation, Communications, and  xUtilities, (Table 2D), conducted by the Bureau of the Census, which is the most recent"XA v,N(N(ZZ"  xinformation available. This document shows that only 36 of 1,788 firms providing cable and pay  xtelevision service have a revenue of greater than $10 million. Therefore, the vast majority of  X- xiLMDS entities providing video distribution could be small businesses under the SBA's definition#Xj\  P6G;W XP#.  X- xHowever, in the Third NPRM,Jw$ {O4- xx#C\  P6QgP#эIn the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the  x;27.529.5 GHz Frequency Band, to Reallocate the 29.530.0 GHz Frequency Band, to Establish Rules and Policies  xfor Local Multipoint Distribution Service and for Fixed Satellite Services and Suite 12 Group Petition for Pioneer's  {O-Preference, CC Docket No. 92297, 11 F.C.C. Rcd. 53 (1995) ("Third NPRM"), para. 188.J we proposed to define a small business as an entity that,  x>together with affiliates and attributable investors, has average gross revenues for the three  xpreceding years of less than $40 million. We have not yet received approval by the SBA for this  xdefinition because the service rules for LMDS have not been finalized. A definition of small  xZpointtopoint entities have not yet received approval by the SBA because such entities have not as yet been subject to competitive bidding procedures.  X - ` x 95.` ` We assume, for purposes of our evaluations and conclusions in this FRFA, that  xnearly all of the LMDS licensees will be small entities, as that term is defined by the SBA. We  xnote that in the accompanying Fourth Notice of Proposed Rulemaking, we ask whether eligibility  xof LECs and cable companies, who enjoy a monopoly or nearmonopoly in their service areas,  xbe restricted with regard to the LMDS license in their area, in order to encourage competition.  xMany of the competitors using LMDS to compete with LECs or cable companies could be small businesses.  Xd- ` _x 96.` ` With regard to traditional pointtopoint microwave entities, the same analysis for  XM- xsmall radiotelephone entities as made above applies to these entities. In the Report and Order,  X8- xkthe Commission declines to specify a channeling plan for pointtopoint entities.|x8 {O-#C\  P6QgP#эXxSection III(H), supra.(#| It is the  x/Commission's opinion that retaining maximum system design flexibility for LMDS licensees  xwithin their service areas precludes our specifying a pointtopoint channeling plan. Entities  xinterested in providing pointtopoint service may seek other spectrum or may become LMDS  x licensees and configure their systems as they choose. In addition, such entities may lease  xspectrum, or seek partitioning or disaggregation opportunities from LMDS licensees. Moreover,  xthe traditional pointtopoint microwave equipment manufacturing industry could seek to establish  xjstandards for its members to use in the 28 GHz band. Accordingly, this Report and Order does  X- xnot provide direct relief requested by, e.g., the Telecommunications Industry Association, which represents fixed microwave entities, the majority of whom may be small businesses.  X=- ` Bx 97.` ` Another category of small entities affected by this Report and Order are those  xoperating in the 17.519.5 GHz frequency band. These entities are fixed pointtopoint  xzmicrowave entities of many subcategories. The same analysis for these entities as made for  xtraditional fixed microwave entities made above applies to these entities (a definition of small  xpointtopoint entities has not been submitted for approval by the SBA because such entities have  xnot as yet been subject to competitive bidding procedures). The Report and Order does not" BFx,N(N(ZZ"  xchange the Commission's treatment of these entities, but it adds potential additional satellite  xoperators in the band with which the entities will have to coordinate in the future. The  xCommission has coordination procedures in effect; should they prove inadequate in the future, we will reconsider the issue at that time.  X-  X< ` l #Xj\  P6G;W XP# x 98.` `  Interactive Video and Data Services (IVDS) . IVDS is a communicationsbased  xservice subject to regulation as a wireless provider of pay television services under Standard  xIndustrial Classification 4841 (SIC 4841), which covers subscription television services. The  xLSmall Business Administration (SBA) defines small businesses in SIC 4841 as businesses with  x.annual gross revenues of $11 million or less. 13 C.F.R.  121.201. In a separate proceeding, we  xproposed to extend special provisions to small businesses with average gross revenues for each  xof the preceding three (3) years that do not exceed $15 million, and additional benefits to very  xsmall businesses who have less than an average of $3 million in gross revenues in each of the  X - xlast three years.y\  {OO- x#C\  P6QgP#э Sixth Memorandum Opinion and Order and Further Notice of Proposed Rule making in the Matter of  {O- x,Implementation of Section 309(j) of the Communications Act Competitive Bidding, 61 FCC Rcd 49103 ( FCC 96330, adopted: August 6,1996, released: October 10, 1996).  We observed that this proposal was consistent with our approach in other  X - xwireless services, see e.g., the 900 MHz specialized mobile radio service, and is narrowly tailored  X - xto address the capital requirements for IVDS.z  {OE-#C\  P6QgP#э  Second Order on Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639 (1995). The Commission is soliciting SBA approval for the small business definitions for this and other auctionable services.  Xc- ` nx99.` ` The Commission's estimate of the number of small business entities subject to the  xrules begins with the Bureau of Census report on businesses listed under SIC 4841, subscription  xtelevision services. The total number of entities under this category is 1,788. There are 1,463  xKcompanies in the 1992 Census Bureau report which are categorized as small businesses providing  xcable and pay TV services. We know that many of these businesses are cable and television  xservice businesses, rather than IVDS licensees. Therefore, the number of small entities currently in this business which will be subject to the rules will be less than 1,463.  X- ` x100.` ` The first IVDS auction resulted in 170 entities winning licenses for 594 MSA  xjlicenses. Of the 594 licenses, 557 were won by entities qualifying as a small business. For that  xauction, we defined a small business as an entity with a net worth not in excess of $6 million and  xaverage net income after Federal income taxes for the two preceding years not in excess of $2  XO- xmillion.{O~ {O~"- x-#C\  P6QgP#э  Fourth Report and Order In the Matter of Implementation of Section 309(j) of the Communications Act  {OH#-Competitive Bidding, 9 FCC Rcd 2330 (1994). In the upcoming IVDS reauction of approximately 100 licenses in metropolitan  xservice area (MSA) markets and auction of 856 licenses in rural service area (RSA) markets (two  xlicenses per market), we have proposed bidding credits and installment payments to encourage  xparticipation by small and very small businesses. We cannot estimate, however, the number of  x licenses that will be won by entities qualifying as small or very small businesses under our"C{,N(N(ZZK"  xproposed rules. Given the success of small businesses in past IVDS auctions, and that small  xbusinesses make up over 80 percent of firms in the subscription television services industry, we assume for purposes of this FRFA that all of the licenses may be awarded to small businesses.  X- ` x 101.` ` It is impossible to accurately predict how many small businesses will apply to  xparticipate in future auctions. In the last IVDS auction, there were 289 qualified applicants. We  xdo not anticipate that there will be significantly more participants in the subsequent IVDS auction.  XH-   X1< ` x 102.` `  Amateur Radio Service. Rules for the amateur service regulate a  xLradiocommunication service for the purpose of self-training, intercommunication and technical  xyinvestigations carried out by individual amateurs, that is, duly authorized persons interested in  X - x>radio technique solely with a personal aim and without pecuniary interest.||  {Of -#C\  P6QgP#э  See 47 C.F.R.  97.1 et seq.| However, the  X - xCommission also grants amateur licenses to organizations or clubs, e.g., the American Radio  X - xzRelay League, military clubs, and Radio Amateur Civil Emergency Services (RACES). y} Z yO-#C\  P6QgP#э 47 C.F.R.  97.5 (b)(1),(2), (3),(4).y As  xof November 1996, Commission records indicate that amateur licenses have been issued to 4,767  xkclubs and RACES. These clubs are generally nonprofit organizations and, therefore, fit the  Xz-definition of a small business as defined by the SBA. See 15 U.S.C.  632.  XL< `  x 103.` `  Aviation and Marine Radio Service. Small businesses in the aviation and marine  xradio services use a marine very high frequency (VHF) radio, any type of emergency position  xindicating radio beacon (EPIRB), and/or radar, a VHF aircraft radio, and/or any type of  x.emergency locator transmitter (ELT). The Commission has not developed a definition of small  xentities specifically applicable to these small businesses. Therefore, the applicable definition of  x=small entity is the definition under the Small Business Administration rules applicable to water  xtransportation and transportation by air. This definition provides that a small entity is any entity  xemploying no more than 500 persons for water transportation, and 1,500 for transportation by  X- xair.~ {O0- xJ#C\  P6QgP#э See 13 C.F.R.  121.201, SIC Major Group Code 44 Water Transportation (4491, 4492, 4493, 4499) and 45 Transportation by Air (4522, 4581). Inasmuch as the RFA amendments were not in effect until the record in this proceeding  xwas closed, the Commission was unable to request information regarding the number of small  xentities and is unable at this time to make a meaningful estimate of the number of potential small businesses.  X"- ` x104.` ` Most applicants for individual recreational licenses are individuals. Approximately  x581,000 ship station licensees and 131,000 aircraft station licensees operate domestically and are  x[not subject to the radio carriage requirements of any statute or treaty. Therefore, for purposes  xof our evaluations and conclusions in this FRFA, we estimate that there may be at least 712,000 potential licensees which are small businesses, as that term is defined by the SBA." DD~,N(N(ZZ "Ԍ X< ` ԙx105.` `  Microwave Video Services. Microwave services includes common carrier, {Oy-#C\  P6QgP#э 47 C.F.R.  101 et seq (formerly part 21 of the Commission's rules).  X- x/private operational fixed,`"Z yO- xz#C\  P6QgP#э Persons eligible under Parts 80 and 90 of the Commission's rules can use private Operational Fixed  {O- xMicrowave services.  See 47 C.F.R.  80 et seq, 90 et seq. Stations in this service are called operationalfixed  xto distinguish them from common carrier and public fixed stations. Only the licensee may use an operationalfixed station, and only for communications related to the licensee's commercial, industrial, or safety operations.` and broadcast auxiliary radio services.D {O- xx#C\  P6QgP#э Broadcast Auxiliary Microwave Service is governed by Part 74 of Title 47 of the Commission's rules. See  {O - x47 C.F.R.  74 et seq. Available to licensees of broadcast stations and to broadcast and cable network entities,  xbroadcast auxiliary microwave stations are used for relaying broadcast television signals from the studio to the  xktransmitter, or between two points, such as a main studio and an auxiliary studio. The broadcast auxiliary  xmicrowave services also include mobile TV pickups which relay signals from a remote location back to the studio.  At present, there are  x22,015 common carrier licensees, approximately 61,670 private operational fixed licensees and  xbroadcast auxiliary radio licensees in the microwave services. Inasmuch as the Commission has  xnot yet defined a small business with respect to microwave services, we will utilize the SBA's  X- x<definition applicable to radiotelephone companies i.e., an entity with less than 1,500 persons.w  yO-#C\  P6QgP#э 13 C.F.R.  121.201, SIC Code 4812.w  xBecause the RFA amendments were not in effect until after the record in this proceeding was  xclosed, the Commission was unable to request information from the microwave service providers  xregarding the number of small businesses within the three microwave services listed above. As  xfor estimates regarding small businesses within the broadcast service, we rely on our estimates  X - xas discussed under mass media services in paragraphs 47 through 49, supra, in this Appendix C.  xAlthough some of these companies may have more than 1,500 employees, we are unable at this  xtime to estimate with greater precision the number of microwave service providers other than broadcast licensees that would qualify under the SBA's definition.  X -   X < ` |x106.` `  Public Safety Radio Services. Public Safety radio services include police, fire,  x?local government, forestry conservation, highway maintenance, and emergency medical  X{- x^services.` {P  yO|- xK#C\  P6QgP#э With the exception of the special emergency service, these services are governed by subpart B of Part 90  xwof the Commission's rules. 47 C.F.R.  90.15 90.27. The police service includes 26,608 licensees that serve state,  xcounty, and municipal enforcement through telephony (voice), telegraphy (code) and teletype and facsimile (printed  xmaterial). The fire radio service includes 22,677 licensees comprised of private volunteer or professional fire  xcompanies as well as units under governmental control. The local government service that is presently comprised  xof 40,512 licensees that are state, county, or municipal entities that use the radio for official purposes not covered  xwby other public safety services. There are 7,325 licensees within the forestry service which is comprised of licensees  xfrom state departments of conservation and private forest organizations who set up communications networks among  xfire lookout towers and ground crews. The 9,480 state and local governments are licensed to highway maintenance  xservice provide emergency and routine communications to aid other public safety services to keep main roads safe  xfor vehicular traffic. The 1,460 licensees in the Emergency Medical Radio Service (EMRS) use the 39 channels  xallocated to this service for emergency medical service communication related to the actual delivery of emergency"',N(N('"  xmedical treatment. 47 C.F.R.   90.1590.27. The 19,478 licensees in the special emergency service include  xwmedical services, rescue organizations, veterinarians, handicapped persons, disaster relief organizations, school buses,  xxbeach patrols, establishments in isolated areas, communications standby facilities, and emergency repair of public  yO-communications facilities. 47 C.F.R.  90.33 90.55. There are a total of approximately 127,540 licensees within these services. "{E,N(N(ZZi"  xZGovernmental entities as well as private businesses comprise the licensees for these services. As  xwe indicated previously, all governmental entities with populations of less than 50,000 fall within  X- xthe definition of a small business. As stated in paragraph 6, supra, of this Appendix C, there  X- x{are 37,566 governmental entities with populations of less than 50,000.  Because the RFA  xamendments were not in effect until after the record in this proceeding was closed, the  x[Commission was unable to request information regarding the number of governmental entities  xwith populations of less than 50,000 that are public safety radio service licensees. For purposes  xyof this analysis, we will assume that all of the 37,566 governmental entities with populations of  xless than 50,000 would be licensees that could be affected by the forfeiture policy adopted here  X1- xtoday.1 {O-#C\  P6QgP#э  See note 9, supra in the instant Appendix C. Đ As for the licensees within these services other than governmental entities, we are  x unable at this time to estimate the number of licensees that would qualify under the SBA's definition.  X -   X < ` x107.` `  Personal Radio Services. Personal radio services provide shortrange, low power  xradio for personal communications, radio signalling and business communications not provided  xkfor in other services. These services include citizen band (CB) radio service, general mobile  X- x[radio service (GMRS), radio control radio service, and family radio service (FRS). + B yO- x#C\  P6QgP#э Licensees in the Citizens Band (CB) Radio Service, General Mobile Radio Service (GMRS), Radio  xControl(R/C) Radio Service and Family Radio Service (FRS) are governed by subpart D, subpart A, subpart C , and  xxsubpart B, respectively, of Part 95 of the Commission's rules. 47 C.F.R.  95.401 95.428;  95.1 95.181;  yO- 95.201 95.225; 47 C.F.R.  95.191 95.194. + Inasmuch  xas the CB, GMRS, and FRS licensees are individuals, no small business definition applies for  xthese services. As for any business licensed within these services, we note that the RFA  x]amendments were not in effect until the record in this proceeding was closed. Thus, the  xCommission was unable to request information regarding the number of any businesses that are  xlicensed within the personal radio services. Therefore, we are unable at this time to estimate the number of licensees that would qualify under the SBA's definition.  X-   X< ` x108.` `  Offshore Radiotelephone Service.  The offshore radiotelephone service allows  xcommon carriers to use conventional duplex analog technology to provide telephone service to  xNpersons located on offshore structures or (in helicopters en route to) oil exploration and  xproduction platforms in the Gulf of Mexico. The service operates on several UHF TV broadcast  xichannels that are not used for TV broadcasting in the coastal area of the states bordering the Gulf  Xg- x?of Mexico.g*  yOB&- x[#C\  P6QgP#э These licensees are governed by subpart I of Part 22 of the Commission's rules. 47 C.F.R.  22.1001 yO '-22.1037. At present, there are approximately 55 licensees in this service. Offshore"gF ,N(N(ZZ"  xyradiotelephone service is a radio service in which wireless commercial carriers are authorized to  xoffer and provide radiotelecommunications service for hire to subscribers on structures in the  xoffshore coastal waters of the Gulf of Mexico. As for any business licensed within these  xservices, we note that the RFA amendments were not in effect until the record in this proceeding  xjwas closed. Thus, the Commission was unable to request information regarding the number of  xsmall businesses that are licensed within this service. Therefore, we are unable at this time to  x/estimate with greater precision the number of licensees that would qualify under the SBA's definition.  X1- OTHER SMALL BUSINESSES THAT RECEIVE CITATIONS  X - ` 4 x109.` ` Section 503 of the Act provides that even persons and entities that are not  x\licensees may receive a forfeiture if engaged in an action for which a Commission license or  xother authorization is required. Parties or entities who are engaged in an action that does not  xZrequire Commission authorization but violates the Communications Act or the Commission's rules  xmay receive a forfeiture if they violate the Act or rules subsequent to receiving a citation from  xxthe Commission that explains that their actions constitute a violation and provides an opportunity  Xy- xto discuss the violative action.ky yO-#C\  P6QgP#э 47 U.S.C.  503 (b)(5).k Thus, any small business not previously discussed, including  xgovernmental and not for profit entities, that engage in an action that does not require  x>Commission authorization but violates the Act or rules could potentially be affected by the  X4-forfeiture guidelines adopted here today. h pp  X- x d. Steps Taken to Minimize the Economic Impact on Small Entities and Significant  X- xAlternatives Considered and Rejected. This section analyzes the impact on small businesses  X-in the context of the Policy Statement adopted today. Minimizing Economic Impact on Small Entities  X-  X|- ` x110.` ` In developing the Policy Statement adopted today, we made efforts to minimize  x[the economic impact on small entities. Although the comments supported the implementation  xLof uniform forfeiture amounts based on the violation rather than the service, the comments did  xlnot elaborate on how this uniform amount should be developed. In developing uniform  xjforfeiture amounts, we chose to use the forfeiture category with the lowest statutory maxima in  xorder to establish the base forfeiture amounts. We noted that, while the base forfeiture amounts  x are indeed close to the statutory maxima in the "other" category, most of the entities in the  xL"other" category would not be disadvantaged because, except in egregious cases, they would generally receive a forfeiture only after receipt of a warning.  X"- ` x111.` ` The forfeiture guidelines adopted today establish several base amounts that are  X#- xlower than that proposed in the NPRM. For example, the base forfeiture amount for slamming  x<violations was reduced to better reflect the concerns raised by common carriers and the forfeiture"h$GX,N(N(ZZF#"  xamounts assessed during the interim period. We also reconciled the base forfeiture amount for  xother violations that seemed duplicative or overlapping. For example, we agreed with the  x=concern that the base forfeiture amount for violations such as using unauthorized frequencies  xshould not be higher than forfeitures for operating at an unauthorized location. Thus, we use the same base forfeiture amounts for these violations.  Xv- ` #x112.` ` Documenting one's inability to pay a forfeiture was one of the greatest concerns  xraised in the comments. Licensees that are now subject to a higher statutory maxima due to their  xcommon carrier status as well as licensees that own and operate ancillary communications  xbusinesses fear that high forfeitures will put them out of business. We reiterate here that  xforfeitures are not assessed against those licensees that comply with the Act and rules. Only  x-when a licensee's noncompliant actions warrant a sanction do we assess a forfeiture. Moreover,  xwe only assess high forfeitures against a licensee when it flagrantly disregards the Act or our rules and the violations warrant action short of license revocation.  X - ` $x 113.` ` As for forfeitures that a licensee believes it cannot afford to pay relative to its  xfinancial situation, we must look to the totality of the circumstances surrounding the individual  xcase. The parent company's ability to pay, therefore, is relevant in evaluating the subsidiary  xcompany's ability to pay the forfeiture. We are, however, cognizant of the concerns raised by  xysmall businesses as to the burden and expense of documenting inability to pay by means of an  xaudited financial statement. We reiterate that the Commission has the flexibility to consider any  xdocumentation (e.g., balance sheets, profit/loss statement certified by the licensee) that it  X- x=considers probative, objective evidence of the violator's inability to pay a forfeiture. See para.  x4, supra. Moreover, our evaluation of a violator's ability to pay a forfeiture comports with the  X-SBREFA requirements. {OQ- xԍ See Section 223 of the Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. 104121, 110 Stat. 857. x  X- Significant Alternatives Considered and Rejected  X|- ` x 114.` ` The forfeiture guidelines adopted here today in the instant Report and Order  xkreflects careful analysis of comments submitted by both large and small licensees as well as  XN- x{communication associations and members of the general public regarding an NPRM that  xirequested information on all aspects of the proposed forfeiture policy. Although CMRS and PCS  xlicensees contended that a further NPRM was necessary because they were not in existence when  xkthe forfeiture amounts were statutorily increased, we note that the NPRM in the instant rule  xLmaking requested comments on all aspects of the forfeiture policy and that these licensees did  xjtake the opportunity to comment on the proposed forfeiture guidelines. Thus, a further NPRM  X - xwas not warranted.  Likewise, we rejected the suggestions from the "new" common carriers, i.e.,  xMlicensees previously classified in the "other" category but now defined as common carriers  xpursuant to Section 332(c)(1) of the Act, 47 U.S.C.  332(c)(1), that a further NPRM was  xwarranted because these licensees are now evaluated under a different forfeiture statutory"#H",N(N(ZZe""  x=maxima. Inasmuch as the Act classified these licensees as common carriers, they must also be  X- xclassified as common carriers for purposes of assessing forfeitures. We also rejected their  xalternative recommendation that they be assessed forfeitures based on their previous classification  xin the "other" category for the same reason. Lastly, we did not address the impact of forfeitures  xxassessed against those licensed by transmitter versus those licensed by marketplace because this concern relates to licensing procedures and, thus, is not within the scope of this proceeding.  X_- ` x 115.` ` We continue to believe that, while the Policy Statement serves as a guideline or  xstarting point for most of the violations for which we assess forfeitures, we retain our discretion  xto depart from the guidelines in appropriate circumstances. We found unpersuasive the concern  xthat using discretion would result in increased litigation. Regardless of the method used to assess  xa forfeiture, dissatisfied parties can seek reconsideration before the Commission or voice their  X - xobjections in a trial de novo in district court.  We also continue to believe that we may properly  xLuse the existence of underlying facts of prior violations in the issuance of a subsequent NAL.  xNotwithstanding the concerns raised in the comments, we believe that this approach is faithful  X -to the legislative history and congressional intent.   Xy- ` $x 116.` ` The Policy Statement adopted in the instant Report and Order today provides  xsufficient flexibility to allow for forfeitures to be assessed at less than the base amount; thus we  xLdecline to address specifically when a violation would constitute a partial violation of a rule as  xwas suggested by one of the commenters. We did reject the suggestions that we use this forum  xas an opportunity to provide amnesty for licensees for violations such as EBS; such a request is  x=moot. Likewise we rejected the suggestions of amnesty for other violations where the issue is  xNeither moot (e.g., the broadcast operator on duty obligation) or suggestions that require  xCongressional action (e.g., eliminating the statutory prohibition against broadcasting lottery  xzinformation). We also rejected the suggestions that we cancel any pending cases that were  X- xxassessed under the prior Policy Statement or that we assess forfeitures in the interim period based  x=on the pre1989 statutory maxima. We reiterate that the Commission has full authority to apply  xthe increased statutory maxima in effect since 1989 and to adjust its policies and decisions in  x-specific cases on an ongoing basis to take account of increased statutory amounts or changes in  xCommission enforcement priorities, regardless of the existence or nonexistence of a forfeiture policy statement.  X - Reporting, Recordkeeping, and Other Compliance Requirements:  X- ` x 117.` ` The adopted forfeiture guidelines seek to clarify how the Commission assesses  xfines when a party has violated the Act or rules, including what forfeiture amount a small  xbusiness could reasonably expect to be assessed by the Commission if it fails to comply with the  xrules. Thus, the adopted forfeiture policy statement does not require that violators provide any  x.reports or impose any other compliance requirements. Forfeitures will be levied for violations  xof rules which have already been adopted and subjected to the RFA and SBREFA requirements.  xAs to the record keeping concerns raised by some commenters in establishing inability to pay a  X:&- xforfeiture, the forfeiture policy statement does not impose new requirements. The Policy  X#'- x\Statement makes clear that the Commission will consider objective documented evidence in"#'I,N(N(ZZ%"  xsupport of an argument of inability to pay a forfeiture. Such objective evidence would logically  xinclude business financial records generally maintained on a routine basis by any type of business  X- xentity regardless of size. Thus, the Policy Statement adopted in the instant Report and Order  xhas been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose no new or modified reporting and recordkeeping requirements or burdens on the public.  Xv- x Report to Congress : The Commission shall include a copy of this Final Regulatory Flexibility  X_- xAnalysis, along with this Report and Order, in a report to be sent to Congress pursuant to the  x.Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A). A copy of this FRFA (or summary thereof) will also be published in the Federal Register.