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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FCC 98 - 40 FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Assessment and Collection ) MD Docket No. 98 - 36 of Regulatory Fees for ) Fiscal Year 1998 ) NOTICE OF PROPOSED RULEMAKING Adopted: March 13, 1998 ; Released: March 25, 1998 Comment Date: [insert date 20 days after publication in the FEDERAL REGISTER] Reply Date: [Insert date 30 days after publication in the FEDERAL REGISTER] By the Commission: Table of Contents Topic Paragraph Numbers I. Introduction 1-3 II. Background 4-7 III. Discussion 8-42 A. Summary of FY 1998 Fee Methodology 8-12 B. Development of FY 1998 Fees 13-29 1. Adjustment of Payment Units 13 2. Calculation of Revenue Requirements 14 3. Calculation of Regulatory Costs 15-16 4. Establishment of 25% Revenue Ceilings 17-18 5. Recalculation of Fees 19 6. Proposed Changes to Fee Schedule 20-28 a. Commercial AM/FM Radio 21-25 b. Alternative Proposed Schedule for AM and FM Radio Stations26 7. Effect of Revenue Redistributions on Major Constituencies27 C. Other Issues 28-33 1. Distinguishing between CMRS Fee Categories 28-31 2. Clarification of Operational LEO System 32 3. Renaming of LEO Fee Category 33 D. Procedures for Payment of Regulatory Fees 34-40 1. Annual Payments of Standard Fees 35 2. Installment Payments for Large Fees 36 3. Advance Payments of Small Fees 37 4. Minimum Fee Payment Liability 38 5. Standard Fee Calculations and Payments 39-40 E. Schedule of FY 1998 Regulatory Fees 41 IV. Procedural Matters 42-46 A. Comment Period and Procedures 42 B. Ex Parte Rules 43 C. Initial Regulatory Flexibility Analysis 44 D. Authority and Further Information 45-46 Attachment A - Initial Regulatory Flexibility Analysis Attachment B - Sources of Payment Unit Estimates Attachment C - Calculation of Revenue Requirements Attachment D - Calculation of Regulatory Costs Attachment E - Calculation of FY 1997 Regulatory Fees Attachment F - Schedule of Regulatory Fees Attachment G - Comparison Between FY 1997 and FY 1998 Fees Attachment H - Detailed Guidance on Who Must Pay Regulatory Fees Attachment I - Description of FCC Activities Attachment J - Factors, measurements and calculations that go into determining station signal contours and associated population coverages I. Introduction 1. By this Notice of Proposed Rulemaking, the Commission commences a proceeding to revise its Schedule of Regulatory Fees in order to collect the amount of regulatory fees that Congress, pursuant to section 9(a) of the Communications Act, as amended, has required it to collect for Fiscal Year (FY) 1998. See 47 U.S.C.  159 (a). 2. Congress has required that we collect $162,523,000 through regulatory fees in order to recover the costs of our enforcement, policy and rulemaking, international and user information activities for FY 1998. See Public Law 105-119 and 47 U.S.C.  159(a)(2). This amount is $10,000,000 or nearly 7% more than the amount that Congress designated for recovery through regulatory fees for FY 1997. See Assessment and Collection of Regulatory Fees for Fiscal Year 1997, FCC 97-215, released June 26, 1997, 62 FR 37408 (July 11, 1997). Thus, we are proposing to revise our fees in order to collect the increased amount that Congress has required that we collect. Additionally, we propose to amend the Schedule in order to simplify and streamline the Fee Schedule. See 47 U.S.C.  159(b)(3). 3. In proposing to revise our fees, we adjusted the payment units and revenue requirement for each service subject to a fee, consistent with sections 159(b)(2) and (3). In addition, we are proposing changes to the fees pursuant to public interest considerations. The current Schedule of Regulatory Fees is set forth in sections 1.1152 through 1.1156 of the Commission's rules. See 47 CFR  1.1152 through 1.1156. II. Background 4. Section 9(a) of the Communications Act of 1934, as amended, authorizes the Commission to assess and collect annual regulatory fees to recover the costs, as determined annually by Congress, that it incurs in carrying out enforcement, policy and rulemaking, international, and user information activities. See 47 U.S.C. 159(a). See Attachment I for a description of these activities. In our FY 1994 Fee Report and Order, 59 FR 30984 (June 16, 1994), we adopted the Schedule of Regulatory Fees that Congress established, and we prescribed rules to govern payment of the fees, as required by Congress. See 47 U.S.C.  159(b), (f)(1). Subsequently, in our FY 1995, FY 1996, and FY 1997 Fee Reports and Orders, 60 FR 34004 (June 29, 1995), 61 FR 36629 (July 12, 1996), and 62 FR 37408 (July 11, 1997), we modified the Schedule to increase by approximately 93 percent, 9 percent and 21 percent, respectively, the revenue generated by these fees in accordance with the amounts Congress required us to collect in FY 1995, FY 1996 and FY 1997. Also, in our FY 1995, FY 1996, and FY 1997 Fee Reports and Orders, we amended certain rules governing our regulatory fee program based upon our experience administering the program in prior years. See 47 CFR  1.1151 et seq. 5. As noted above, for FY 1994 we adopted the Schedule of Regulatory Fees established in section 9(g) of the Act. For fiscal years after FY 1994, however, sections 9(b)(2) and (3), respectively, provide for "Mandatory Adjustments" and "Permitted Amendments" to the Schedule of Regulatory Fees. See 47 U.S.C.  159(b)(2), (b)(3). Section 9(b)(2), entitled "Mandatory Adjustments," requires that we revise the Schedule of Regulatory Fees whenever Congress changes the amount that we are to recover through regulatory fees. See 47 U.S.C.  159(b)(2). 6. Section 9(b)(3), entitled "Permitted Amendments," requires that we determine annually whether additional adjustments to the fees are warranted, taking into account factors that are reasonably related to the payer of the fee and factors that are in the public interest. In making these amendments, we are to "add, delete, or reclassify services in the Schedule to reflect additions, deletions or changes in the nature of its services." See 47 U.S.C.  159(b)(3). 7. Section 9(i) requires that we develop accounting systems necessary to adjust our fees pursuant to changes in the costs of regulation of the various services subject to a fee and for other purposes. See 47 U.S.C.  9(i). For FY 1997, we relied for the first time on cost accounting data to identify our regulatory costs and to develop our FY 1997 fees based upon these costs. Also, for FY 1997, we limited the increase in the amount of the fee for any service in order to phase in our reliance on cost-based fees for those services whose revenue requirement would be more than 25 percent above the revenue requirement which would have resulted from the "mandatory adjustments" to the FY 1997 fees without incorporation of costs. This methodology enables us to develop regulatory fees which more closely reflect our costs of regulation and also allows us to make annual revisions to our fees based to the fullest extent possible, and consistent with the public interest, on the actual costs of regulating those services subject to a fee. Finally, section 9(b)(4)(B) requires that we notify Congress of any permitted amendments 90 days before those amendments go into effect. See 47 U.S.C.  159(b)(4)(B). III. Discussion A. Summary of FY 1998 Fee Methodology 8. As noted above, Congress has required that the Commission recover $162,523,000 for FY 1998 through the collection of regulatory fees, representing the costs applicable to our enforcement, policy and rulemaking, international, and user information activities. See 47 U.S.C.  159(a). 9. In developing our proposed FY 1998 fee schedule, we first determined that we would continue to use the same general methodology as we used in developing fees for FY 1997. We next estimated payment units for FY 1998 in order to determine the aggregate amount of revenue we would collect without any revision to our FY 1997 fees. Next, we compared this revenue amount to the $162,523,000 that Congress has required us to collect in FY 1998 and pro-rated the overage among all the existing fee categories. 10. We then separately projected revenue requirements in each service category using data generated by our cost accounting system and established a revenue ceiling in each service no higher than 25 percent above the revenue that payers within a fee category would have paid if FY 1998 fees had remained at FY 1997 levels (adjusted only for changes in volume and the increase required by Congress). This methodology, described in our FY 1997 Report and Order at paragraph 35, reduces fees for services whose regulatory costs have declined and increases fees for services experiencing higher regulatory costs in order to continue to eliminate disparities disclosed by our cost accounting system between a service's current costs and fees ascribed to these services in prior fiscal years. The 25 percent limitation minimizes the impact of unexpected substantial increases to fees which could affect the well-being of licensees. 11. Once we established our tentative FY 1998 fees, we evaluated proposals made by Commission staff concerning other adjustments to the Fee Schedule and to our collection procedures. These proposals are discussed in paragraphs 20-30 and are factored into our proposed FY 1998 Schedule of Regulatory Fees, set forth in Attachment F. 12. Finally, we have incorporated, as Attachment H, proposed Guidance containing detailed descriptions of each fee category, information on the individual or entity responsible for paying a particular fee and other critical information designed to assist potential fee payers in determining the extent of their fee liability, if any, for FY 1998. In the following paragraphs, we describe in greater detail our proposed methodology for establishing our FY 1998 regulatory fees. B. Development of FY 1998 Fees 1. Adjustment of Payment Units 13. As the first step in calculating individual service regulatory fees for FY 1998, we adjusted the estimated payment units for each service because payment units for many services have changed substantially since we adopted our FY 1997 fees. We obtained our estimated payment units through a variety of means, including our licensee data bases, actual prior year payment records, and industry and trade group projections. Whenever possible, we verified these estimates from multiple sources to ensure the accuracy of these estimates. Attachment B provides a summary of how revised payment units were determined for each fee category. 2. Calculation of Revenue Requirements 14. We next multiplied the revised payment units for each service by our FY 1997 fee amounts in each fee category to determine how much revenue we would collect without any change to the FY 1997 Schedule of Regulatory Fees. The amount of revenue we would collect without changes in the fee schedule is approximately $171.5 million. This amount is approximately $9 million more than the amount the Commission is required to collect in FY 1998. We then adjusted these revenue requirements for each fee category on a proportional basis, consistent with section 9(b)(2) of the Act, to obtain an estimate of revenue requirements for each fee category at the $162,523,000 level required by Congress for FY 1998. Attachment C provides detailed calculations showing how we determined the revised revenue amount for each service. 3. Calculation of Regulatory Costs 15. In accordance with section 159(i) of the Act, the Commission utilizes a cost accounting system designed, in part, to provide data which helps to ensure that fees closely reflect our actual costs of regulation for each service category. The Commission's cost accounting system accumulates both personnel and non-personnel costs on a service-by-service basis and is described in detail in our FY 1997 Report and Order at paragraph 12. 16. In order to utilize actual costs for fee development purposes, we first add indirect support costs to direct costs and then adjust the results to approximate the amount of revenue that Congress requires us to collect in FY 1998 ($162,523,000). In effect, we proportionally adjusted the actual cost data pertaining to regulatory fee activities recorded for the period October 1, 1996 through September 30, 1997 (Fiscal Year 1997) among all the fee categories so that total costs approximated $162,523,000. For fee categories where fees are further differentiated by market (e.g., Markets 1-10 under the general VHF and UHF Commercial Television fee categories), we distributed the costs to each market group by maintaining the same ratios between the market groups as between the revenue requirements in the FY 1997 fee schedule. The results of these calculations are shown in detail in Attachment D and represent our best estimate of actual total attributable costs relative to each fee category for FY 1998. 4. Establishment of 25% Revenue Ceilings 17. Our next step was to establish a ceiling of 25 percent on the increase in the revenue requirement of each fee category (over and above the Congressionally mandated increase in the overall revenue requirement and the difference in unit counts) using the same methodology we described in detail in our FY 1997 Report and Order. Capping each fee category's revenue requirement at no more than a 25 percent increase enables us to continue the process of reducing fees for services with lower costs and increasing fees for services with higher costs in order to close the gap between actual costs and fees designed to recover these costs. 18. As noted in our FY 1997 Report and Order, an important consideration in utilizing a revenue ceiling is the impact on other fee payers. Because the Commission is required to collect a full $162,523,000 in FY 1998 regulatory fees, the additional revenue ($34,456,724) that would have been collected from licensees subject to a revenue ceiling had there been no ceiling, needs to be collected instead from licensees not subject to the ceiling. This results in a certain amount of subsidization between fee payer classes. We believe, however, that the public interest is best served by this methodology. To do otherwise would subject payers in some fee categories to unexpected major fee increases which could severely impact the economic well being of certain licensees. Attachment E displays the step-by-step process we used to calculate adjusted revenue requirements for each fee category for FY 1998, including the reallocation of revenue requirements resulting from the application of our revenue ceilings. 5. Recalculation of Fees 19. Once we determined the amount of fee revenue that it is necessary to collect from each class of licensee, we divided the revenue requirement by the number of payment units (and by the license term, if applicable, for "small" fees) to obtain actual fee amounts for each fee category. These calculated fee amounts were then rounded in accordance with section 9(b)(3) of the Act. See Attachment E. 6. Proposed Changes to Fee Schedule 20. We examined the results of our calculations made in paragraphs 15-19 to determine if further adjustments of the fees and/or changes to payment procedures were warranted based upon the public interest and other criteria established in 47 U.S.C. 159(b)(3). As a result of this review, we are proposing the following changes to our Fee Schedule: a. Commercial AM & FM Radio 21. For FY 1997 we established a revised methodology for determining AM & FM radio regulatory fees. This new methodology relies upon a radio station's calculated field strength signal contour overlaid upon U.S. Census data to obtain an estimate of population coverage for each station. The calculated population coverages are then used along with a station's class to develop a range of fees for both AM and FM radio stations. 22. Although the calculated contours used in FY 1997 are consistent with Commission radio station signal protection policies and rules, we received several complaints from licensees stating that the contours exaggerated actual market areas and populations served. In several instances licensees complained that small, rural stations whose contours, at the fringe, intersected major metropolitan areas, were attributed with populations far in excess of what they considered to be their primary or even secondary market areas. See, for example, letters from KTXC, dated September 10, 1997; Music Express Broadcasting Corporation of Northeast Ohio, dated August 28, 1997; and Martin Broadcasting Company, dated August 26, 1997. To alleviate this disparity and to ensure that radio stations are assigned population coverage figures more in line with their actual market areas, we are proposing for FY 1998 to utilize the same general methodology for determining regulatory fees as we introduced in FY 1997, but to change the applicable signal contours to 5 m/V/m for AM radio stations and 70 dBuV/m for FM radio stations. These reduced contours are generally consistent with the city grade contours of radio stations and should limit population coverage to only those populations actually within a station's primary local market area. We seek comment on this proposal. It should be noted that population coverage is only one factor used to determine radio station regulatory fees. For example, the number of stations claiming non-profit exemption from fees impacts the number of stations which may be assessed regulatory fees. Additionally, the overall amount that Congress requires the Commission to collect and the actual costs attributable to radio station regulation also influence the final determination of fee amounts. The following paragraphs explain in detail the development of our proposed fee schedule for AM and FM radio stations. 23. We calculated the revenue requirements for each category of station (e.g., AM, FM or construction permit) under our existing methodology for assessing radio station fees as shown in Attachment E. In order to consider both population and class of station, we then multiplied the population served by the same ratio between the individual classes as compared to the original FY 1994 Schedule to determine the weighted population. The weighted approach also streamlines the schedule by allowing us to combine AM and FM stations into a single "radio" category. 24. Our next step was to sort the data by compiling a list of every AM and FM station in descending order by class-weighted population. Next, we determined actual fees for each station. We designed a schedule which would place stations in wide bands based upon the classes of station and total populations served, with different fees for each band. We established the ranges for the schedule by first proposing a minimum and a maximum fee amount. In setting a minimum fee, we are proposing that it should be no less than the AM Construction Permit fee which we calculated in Attachment E to be $235. Therefore, we set the lowest radio fee at $250. In order to prevent the fee from becoming too great a burden for any licensee, we are proposing to limit the maximum fee to $2,500. At the same time, we are proposing to retain the number of actual fee classifications at ten as in our FY 1997 Report and Order. This allowed us to establish fee classifications in $250 increments, with each increment containing the same number of stations, resulting in a more equitable fee schedule while keeping the size of the schedule relatively manageable. The resulting schedule of regulatory fees for radio stations (both AM and FM) would read: CLASSIFICATION GROUP NUMBER OF STATIONS FEE 1 878 $2,500 2 878 $2,250 3 878 $2,000 4 878 $1,750 5 878 $1,500 6 878 $1,250 7 878 $1,000 8 878 $750 9 878 $500 10 873 $250 25. This schedule, which we propose today, results in: (1) same class stations in different size cities generally having different fees, (2) different class stations in the same city generally having different fees, and (3) same class stations in the same city generally having the same fee. In addition, it is generally true that in using this methodology: (1) larger stations and those located in larger metropolitan areas tend to be assessed higher fees and (2) small stations and those located in rural areas tend to be assessed lower fees. This proposed fee schedule achieves the objectives of both assessing fees based on class of station and populations served, thereby providing a fair and equitable means of distinguishing between stations located in metropolitan areas and those located in rural areas. Moreover, if a licensee believes that it has been improperly placed in a particular fee classification group or that it will suffer undue financial hardship from the fee assessment, our rules provide for waiver, reduction or deferral of a fee as described in  1.1166 of our rules. 47 U.S.C  1.1166. b. Alternative Proposed Schedule for AM and FM Radio Stations 26. We also received a number of complaints that licensees could not easily see how their station class was used in determining their regulatory fee for FY 1997. Further, several licensees expressed the view that there was not enough difference between the fees imposed on stations in the largest population centers and those below. See, for example, letter from Heckler Broadcasting, Inc. received October 2, 1997; and Petition for Reduction of Regulatory Fee filed September 18, 1997, from Family Communications, Inc. The alternative schedule shown below addresses both of these concerns. However, it should be noted that although the ratios between the classes in the alternative schedule would no longer match the original schedule adopted by Congress, which was implemented in our FY 1994 Report and Order, it addresses licensee complaints that the differentiations between the size of service and fee assessed in our existing schedule are inequitable. We invite public comment on whether this alternative schedule for AM and FM Radio should be implemented instead of the one proposed in paragraph 24. AM Radio Station Regulatory Fees Population Served Class A Class B Class C Class D <=20,000 $500 $400 $250 $300 20,001 - 50,000 $1,000 $750 $400 $500 50,001 - 125,000 $1,500 $1,000 $500 $750 125,001 - 400,000 $2,000 $1,500 $750 $1,000 400,001 - 1,000,000 $3,000 $2,500 $1,250 $1,750 >1,000,000 $4,250 $3,500 $2,000 $2,500 FM Radio Station Regulatory Fees Population Served Classes A, B1 & C3 Classes B, C, C1 & C2 <=20,000 $400 $500 20,001 - 50,000 $750 $1,000 50,001 - 125,000 $1,000 $1,500 125,001 - 400,000 $1,500 $2,000 400,001 - 1,000,000 $2,500 $3,000 >1,000,000 $3,500 $4,250 7. Effect of Revenue Redistributions on Major Constituencies 27. The following chart illustrates the relative percentage of the overall revenue requirements borne by the major constituencies since inception of regulatory fees in FY 1994. PERCENTAGE OF REVENUE COLLECTED BY CONSTITUENCY FY 1994 (Actual) FY 1995 (Actual) FY 1996 (Actual) FY 1997 (Actual) FY 1998 (Proposed) Cable TV Operators (Inc. CARS Licenses) 41.4 24.0 33.4 21.8 18.1 Broadcast Licensees 23.8 13.8 14.6 14.1 15.3 Satellite Operators (Inc. Earth Stations) 3.3 3.6 4.0 5.0 5.0 Common Carriers 25.0 44.5 40.9 49.8 47.8 Wireless Licensees 6.5 14.1 7.1 9.3 13.8 TOTAL 100.0 100.0 100.0 100.0 100.0 C. Other Issues 1. Distinguishing between CMRS Fee Categories 28. We have received several comments from CMRS fee payers concerning the difficulty some of them have had in distinguishing between CMRS Mobile Services fees and CMRS Messaging Services fees. In our FY 1997 Report and Order (see paragraphs 58-62) we stated that Congress in its statutory fee schedule distinguished between licensees that we authorized to provide exclusive use services and those we authorized to provide only shared use services. Section (g) assesses a higher fee upon licensees of exclusive use spectrum than upon licensees of less valuable shared use spectrum. Similarly, the statutory fee schedule established fees for broadcast licensees that consider the type of service and class of service authorized. Moreover, since we established the fee program, our fee schedules have adhered to Congress' principle that our fee categories are to be based on the authorization provided to a licensee rather than the use a particular licensee makes of its authorized spectrum. Thus, we propose that our fee schedule for CMRS will not consider the particular use made of a licensee's spectrum and will consider the nature of services offered only to the extent that services offered on broadband spectrum and services offered on narrowband spectrum will be subject to different categories of fee payment. Thus, licenses authorizing operations on broadband spectrum would be subject to the CMRS Mobile Services fee, regardless of the services offered on that spectrum by the licensee. Further, licenses authorizing the provision of services on narrowband spectrum would be subject to the CMRS Messaging Services fee, regardless of the services offered on that spectrum. See also Attachment H, paragraphs 14 and 15. We also tentatively conclude that the Wireless Communications Service should be classified as CMRS Mobile Services. We request comments on these matters. We also believe a further clarification of which entities should be paying which CMRS fee would be beneficial to licensees and other fee payers. Separately, we propose to incorporate a clarification as to what is meant by CMRS "units" and who is responsible for paying regulatory fees for various kinds of CMRS units. See also Attachment H, paragraph 16. 29. The following categories of CMRS licensees would be covered by the CMRS Mobile Services regulatory fee: Rural Radio Service Air-ground Radiotelephone Service Cellular Radiotelephone Service Offshore Radiotelephone Service Broadband Personal Communications Services Wireless Communications Service Specialized Mobile Radio Service Public Coast Service 30. The following categories of CMRS licensees would be covered by the CMRS Messaging Services regulatory fee: Paging and Radiotelephone Service Narrowband Personal Communications Services 220 - 222 MHz Band Interconnected Business Radio Services 31. Licensees in the Specialized Mobile Radio Service have requested reconsideration of our determination that FY 1997 CMRS regulatory fees should be based upon whether a licensee operates on broadband or narrowband spectrum. See FY 1997 Report and Order at para. 60. We expect to address these concerns in our action on petitions for reconsideration of the FY 1997 Report and Order. Interested parties may comment in this proceeding on the appropriate fee structure for CMRS licensees and, in particular, may present alternatives to the methodology we established for FY 1997. Commenters should be aware that we do not believe that a case-by-case determination of the appropriate fee for a particular SMR licensee would serve the public interest due to the heavy resource burden it would require. 2. Clarification of Operational LEO System 32. In our FY 1997 Report and Order at paragraph 75, we reiterated our requirement that licensees of low earth orbit satellite systems (LEOS) pay the LEO regulatory fee upon their certification of operation of a single satellite pursuant to section 25.120(d). We stated that we require payment of the LEO fee following commencement of operations of a system's first satellite in order to assure that we recover our regulatory costs related to LEO systems from licensees of these systems as early as possible so that regulatees in other services are not burdened with these costs any longer than necessary. However, because section 25.120(d) applies to both geostationary and non-geostationary satellite systems, we believe that we need to clarify our existing definition of an operational LEO satellite. Non-geostationary satellite licensees, including licensees of LEO systems, are required to submit reports pursuant to Sections 25.142(c), 25.143(e), and 25.145(g) of the Commission's rules. These reports, annual and filed upon completion of milestones, report the status of a [the] system and indicate compliance under Section 25.120(d). In our FY 1997 Report and Order at paragraph 75, we reiterated our requirement that licensees of low earth orbit satellite systems (LEOS) pay the LEO regulatory fee upon their certification of operation of a single satellite pursuant to section 25.120(d). We stated that we require payment of the LEO fee following commencement of operations of a system's first satellite in order to assure that we recover our regulatory costs related to LEO systems from licensees of these systems as early as possible so that regulatees in other services are not burdened with these costs any longer than necessary. However, because section 25.120(d) applies to both geostationary and non-geostationary satellite systems, we believe that we need to clarify our existing definition of an operational LEO satellite to prevent misunderstanding of our intent as stated in paragraph 75 of our FY 1997 Report and Order. As such, we propose to add the following to our guidance (see Attachment H) relative to determining whether or not a LEO satellite is operational for fee assessment purposes: Licensees of Non-Geostationary Satellite Systems will be assessed the LEO regulatory fee upon the commencement of operation of a system's first satellite as reported annually pursuant to section 25.142(c), 25.143(e), 25.145(g) or upon certification of operation of a single satellite pursuant to section 25.120(d). 3. Renaming of LEO Fee Category 33. "Non-Geostationary" satellite orbits were first introduced in the early 90's with the filing of applications for non-voice, non-geostationary satellite service operating below 1 GHz. These satellites proposed to operate satellites in a "low earth" orbit, or a non-geostationary orbit The term, "low earth orbit" was then synonomous with "non-geostationary". As new technologies have evolved, we have received applications proposing to operate in "medium" and "high" earth orbit technologies, also non-geostationary orbits[, have been filed with the FCC]. Thus, we propose to change the name of the "Low Earth Orbit Satellite Systems" fee category to the "Non-Geostationary Satellite Systems" fee category in order to clarify that non-geostationary satellites, whether operating in low, medium or high orbits, are covered under this regulatory fee. This is consistent with current industry use, as well as with Commission rules, which refer to non- geostationary, not low earth, orbits and satellites. This name change will have no adverse impact on any entity covered by regulatory fees in FY 1998. D. Procedures for Payment of Regulatory Fees 34. Generally, we propose to retain the procedures that we have established for the payment of regulatory fees. Section 9(f) requires that we permit "payment by installments in the case of fees in large amounts, and in the case of small amounts, shall require the payment of the fee in advance for a number of years not to exceed the term of the license held by the payer." See 47 U.S.C.  159(f)(1). Consistent with section 9(f), we are again proposing to establish three categories of fee payments, based upon the category of service for which the fee payment is due and the amount of the fee to be paid. The fee categories are (1) "standard" fees, (2) "large" fees, and (3) "small" fees. 1. Annual Payments of Standard Fees 35. As we have in the past, we are proposing to treat regulatory fee payments by certain licensees as "standard fees" which are those regulatory fees that are payable in full on an annual basis. Payers of standard fees are not required to make advance payments for their full license term and are not eligible for installment payments. All standard fees are payable in full on the date we establish for payment of fees in their regulatory fee category. The payment dates for each regulatory fee category will be announced either in the Report and Order terminating this proceeding or by public notice in the Federal Register pursuant to authority delegated to the Managing Director. 2. Installment Payments for Large Fees 36. While we are mindful that time constraints may preclude an opportunity for installment payments, we propose that regulatees in any category of service with a liability of $12,000 or more be eligible to make installment payments and that eligibility for installment payments be based upon the amount of either a single regulatory fee payment or combination of fee payments by the same licensee or regulatee. We propose that regulatees eligible to make installment payments may submit their required fees in two equal payments (on dates to be announced) or, in the alternative, in a single payment on the date that their final installment payment is due. Due to statutory constraints concerning notification to Congress prior to actual collection of the fees, however, it is unlikely that there will be sufficient time for installment payments, and that regulatees eligible to make installment payments will be required to pay these fees on the last date that fee payments may be submitted. The dates for installment payments, or a single payment, will be announced either in the Report and Order terminating this proceeding or by public notice published in the Federal Register pursuant to authority delegated to the Managing Director. 3. Advance Payments of Small Fees 37. As we have in the past, we are proposing to treat regulatory fee payments by certain licensees as "small" fees subject to advance payment consistent with the requirements of section 9(f)(2). We propose that advance payments will be required from licensees of those services that we decided would be subject to advance payments in our FY 1994 Report and Order, and to those additional payers set forth herein. We are also proposing that payers of advance fees will submit the entire fee due for the full term of their licenses when filing their initial, renewal, or reinstatement application. Regulatees subject to a payment of small fees shall pay the amount due for the current fiscal year multiplied by the number of years in the term of their requested license. In the event that the required fee is adjusted following their payment of the fee, the payer would not be subject to the payment of a new fee until filing an application for renewal or reinstatement of the license. Thus, payment for the full license term would be made based upon the regulatory fee applicable at the time the application is filed. The effective date for payment of small fees established in this proceeding will be announced in our Report and Order terminating this proceeding or by public notice published in the Federal Register pursuant to authority delegated to the Managing Director. 4. Minimum Fee Payment Liability 38. As we have in the past, we are proposing that regulatees whose total regulatory fee liability, including all categories of fees for which payment is due by an entity, amounts to less than $10 will be exempted from fee payment in FY 1998. 5. Standard Fee Calculations and Payment Dates 39. As noted, the time for payment of standard fees and any installment payments will be published in the Federal Register pursuant to authority delegated to the Managing Director. For licensees, permittees and holders of other authorizations in the Common Carrier, Mass Media, and Cable Services whose fees are not based on a subscriber, unit, or circuit count, we are proposing that fees be submitted for any authorization held as of October 1, 1997. October 1 is the date to be used for establishing liability for payment of standard fees. 40. In the case of regulatees whose fees are based upon a subscriber, unit or circuit count, the number of a regulatees' subscribers, units or circuits on December 31, 1997, will be used to calculate the fee payment. E. Schedule of Regulatory Fees 41. The Commission's proposed Schedule of Regulatory Fees for FY 1998 is contained in Attachment F of this NPRM. IV. Procedural Matters A. Comment Period and Procedures 42. Pursuant to procedures set forth in sections 1.415 and 1.419 of the Commission's rules, interested parties may file comments on or before [insert date 20 days after publication in the FEDERAL REGISTER], and reply comments on or before [insert date 30 days after publication in the FEDERAL REGISTER]. All relevant comments will be considered by the Commission before final action is taken in this proceeding. To file formally in this proceeding, participants must file an original and four copies of all comments, reply comments and supporting materials. If participants want each Commissioner to receive a personal copy of their comments, an original and nine copies must be filed. Comments and reply comments should be sent to the Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Interested parties, who do not wish to formally participate in this proceeding, may file informal comments at the same address or may e-mail their comments to mcontee@fcc.gov. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20054. B. Ex Parte Rules 43. This is a non-restricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed pursuant to the Commission's rules. See 47 CFR  1.1202, 1.1203 and 1026(a). C. Initial Regulatory Flexibility Analysis 44. As required by the Regulatory Flexibility Act, see 5 U.S.C.  603, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible impact on small entities of the proposals suggested in this document. The IRFA is set forth as Attachment A. Written public comments are requested with respect to the IRFA. These comments must be filed in accordance with the same filing deadlines for comments on the rest of the NPRM, but they must have a separate and distinct heading, designating the comments as responses to the IRFA. The Office of Public Affairs, Reference Operations Division, shall send a copy of this NPRM , including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the Regulatory Flexibility Act. D. Authority and Further Information 45. Authority for this proceeding is contained in sections 4(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i)-(j), 159, & 303(r). IT IS ORDERED that this NPRM IS ADOPTED. IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference Operations Division, SHALL SEND a copy of this NPRM, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. 46. Further information about this proceeding may be obtained by contacting the Fees Hotline at (202) 418-0192. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary Attachment A INITIAL REGULATORY FLEXIBILITY ANALYSIS 1. As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in the present Notice of Proposed Rulemaking, In the Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 1998. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the IRFA provided above in paragraph 42. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. See 5 U.S.C.  603(a). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register. See id. I. Need for, and Objectives of, the Proposed Rules: 2. This rulemaking proceeding is initiated to obtain comments concerning the Commission's proposed amendment of its Schedule of Regulatory Fees. For Fiscal Year 1998, we intend to collect regulatory fees in the amount of $162,523,000, the amount that Congress has required the Commission to recover. The Commission seeks to collect the necessary amount through its proposed revised fees, as contained in the attached Schedule of Regulatory Fees, in the most efficient manner possible and without undue burden to the public. II. Legal Basis: 3. This action, including publication of proposed rules, is authorized under Sections (4)(i) and (j), 9, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and (j), 159, and 303(r). III. Description and Estimate of the Number of Small Entities to which the Proposed Rules Will Apply: 4. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term "small entity " as having the same meaning as the terms "small business," "small organization," and "small governmental jurisdiction." In addition, the term "small business" has the same meaning as the term "small business concern" under the Small Business Act. A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). A small organization is generally "any not-for-profit enterprise which is independently owned and operated and is not dominant in its field." Nationwide, as of 1992, there were approximately 275,801 small organizations. "Small governmental jurisdiction" generally means "governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000." As of 1992, there were approximately 85,006 such jurisdictions in the United States. This number includes 38,978 counties, cities, and towns; of these, 37,566, or 96 percent, have populations of fewer than 50,000. The Census Bureau estimates that this ratio is approximately accurate for all governmental entities. Thus, of the 85,006 governmental entities, we estimate that 81,600 (91 percent) are small entities. Below, we further describe and estimate the number of small entity licensees and regulatees that may be affected by the proposed rules, if adopted. CABLE SERVICES OR SYSTEMS 5. The SBA has developed a definition of small entities for cable and other pay television services, which includes all such companies generating $11 million or less in revenue annually. This definition includes cable systems operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems and subscription television services. According to the Census Bureau data from 1992, there were 1,788 total cable and other pay television services and 1,423 had less than $11 million in revenue. 6. The Commission has developed its own definition of a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a "small cable company" is one serving fewer than 400,000 subscribers nationwide. Based on our most recent information, we estimate that there were 1,439 cable operators that qualified as small cable system operators at the end of 1995. Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 1,439 small entity cable system operators. 7. The Communications Act also contains a definition of a small cable system operator, which is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000." The Commission has determined that there are 66,000,000 subscribers in the United States. Therefore, we found that an operator serving fewer than 660,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that the number of cable operators serving 660,000 subscribers or less totals 1,450. We do not request nor do we collect information concerning whether cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, and thus are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act. It should be further noted that recent industry estimates project that there will be a total 66,000,000 subcribers, and we have based our fee revenue estimates on that figure. 8. Other Pay Services. Other pay television services are also classified under Standard Industrial Classification (SIC) 4841, which includes cable systems operators, closed circuit television services, direct broadcast satellite services (DBS), multipoint distribution systems (MDS), satellite master antenna systems (SMATV), and subscription television services. COMMON CARRIER SERVICES AND RELATED ENTITIES 9. The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide, as well as the numbers of commercial wireless entities, appears to be data the Commission publishes annually in its Telecommunications Industry Revenue report, regarding the Telecommunications Relay Service (TRS). According to data in the most recent report, there are 3,459 interstate carriers. These carriers include, inter alia, local exchange carriers, wireline carriers and service providers, interexchange carriers, competitive access providers, operator service providers, pay telephone operators, providers of telephone toll service, providers of telephone exchange service, and resellers. 10. The SBA has defined establishments engaged in providing "Radiotelephone Communications" and "Telephone Communications, Except Radiotelephone" to be small businesses when they have no more than 1,500 employees. Below, we discuss the total estimated number of telephone companies falling within the two categories and the number of small businesses in each, and we then attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules. 11. Although some affected incumbent local exchange carriers (ILECs) may have 1,500 or fewer employees, we do not believe that such entities should be considered small entities within the meaning of the RFA because they are either dominant in their field of operations or are not independently owned and operated, and therefore by definition not "small entities" or "small business concerns" under the RFA. Accordingly, our use of the terms "small entities" and "small businesses" does not encompass small ILECs. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will separately consider small ILECs within this analysis and use the term "small ILECs" to refer to any ILECs that arguably might be defined by the SBA as "small business concerns." 12. Total Number of Telephone Companies Affected. The U.S. Bureau of the Census ("Census Bureau") reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, personal communications services providers, covered specialized mobile radio providers, and resellers. It seems certain that some of those 3,497 telephone service firms may not qualify as small entities or small ILECs because they are not "independently owned and operated." For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It is reasonable to conclude that fewer than 3,497 telephone service firms are small entity telephone service firms or small ILECs that may be affected by the proposed rules, if adopted. 13. Wireline Carriers and Service Providers. The SBA has developed a definition of small entities for telephone communications companies except radiotelephone (wireless) companies. The Census Bureau reports that there were 2,321 such telephone companies in operation for at least one year at the end of 1992. According to the SBA's definition, a small business telephone company other than a radiotelephone company is one employing no more than 1,500 persons. All but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non-radiotelephone companies that might qualify as small entities or small ILECs. We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 2,295 small telephone communications companies other than radiotelephone companies are small entities or small ILECs that may be affected by the proposed rules, if adopted. 14. Local Exchange Carriers. Neither the Commission nor the SBA has developed a definition for small providers of local exchange services (LECs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 1,371 carriers reported that they were engaged in the provision of local exchange services. We do not have data specifying the number of these carriers that are either dominant in their field of operations, are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of LECs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 1,371 providers of local exchange service are small entities or small ILECs that may be affected by the proposed rules, if adopted. 15. Interexchange Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services (IXCs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 143 carriers reported that they were engaged in the provision of interexchange services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 143 small entity IXCs that may be affected by the proposed rules, if adopted.. 16. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access services providers (CAPs). The closest applicable definition under the SBA rules is for telephone communications companies other than except radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 109 carriers reported that they were engaged in the provision of competitive access services. We do not have data specifying the number of these carriers that are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 109 small entity CAPs that may be affected by the proposed rules, if adopted.. 17. Operator Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of operator services. The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 27 carriers reported that they were engaged in the provision of operator services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of operator service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 27 small entity operator service providers that may be affected by the proposed rules, if adopted.. 18. Pay Telephone Operators. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to pay telephone operators. The closest applicable definition under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 441 carriers reported that they were engaged in the provision of pay telephone services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of pay telephone operators that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 441 small entity pay telephone operators that may be affected by the proposed rules, if adopted. 19. Resellers (including debit card providers). Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to resellers. The closest applicable SBA definition for a reseller is a telephone communications company other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 339 reported that they were engaged in the resale of telephone service. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of resellers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 339 small entity resellers that may be affected by the proposed rules, if adopted. 20. 800 Service Subscribers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to 800 service ("toll free") subscribers. The most reliable source of information regarding the number of 800 service subscribers appears to be data the Commission collects on the 800 numbers in use. According to our most recent data, at the end of 1995, the number of 800 numbers in use was 6,987,063. Similarly, the most reliable source of information regarding the number of 888 service subscribers appears to be data the Commission collects on the 888 numbers in use. According to our most recent data, at the end of August 1996, the number of 888 numbers that had been assigned was 2,014,059. We do not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 6,987,063 small entity 800 subscribers and fewer than 2,014,059 small entity 888 subscribers that may be affected by the proposed rules, if adopted. INTERNATIONAL SERVICES 21. The Commission has not developed a definition of small entities applicable to licensees in the international services. Therefore, the applicable definition of small entity is generally the definition under the SBA rules applicable to Communications Services, Not Elsewhere Classified (NEC). This definition provides that a small entity is expressed as one with $11.0 million or less in annual receipts. According to the Census Bureau, there were a total of 848 communications services providers, NEC, in operation in 1992, and a total of 775 had annual receipts of less than $9,999 million. The Census report does not provide more precise data. 22. International Broadcast Stations. Commission records show that there are 20 international broadcast station licensees. We do not request nor collect annual revenue information, and thus are unable to estimate the number of international broadcast licensees that would constitute a small business under the SBA definition. However, the Commission estimates that only six international broadcast stations are subject to regulatory fee payments. 23. International Public Fixed Radio (Public and Control Stations). There are 3 licensees in this service subject to payment of regulatory fees. We do not request nor collect annual revenue information, and thus are unable to estimate the number of international broadcast licensees that would constitute a small business under the SBA definition. 24. Fixed Satellite Transmit/Receive Earth Stations. There are approximately 3000 earth station authorizations, a portion of which are Fixed Satellite Transmit/Receive Earth Stations. We do not request nor collect annual revenue information, and thus are unable to estimate the number of the earth stations that would constitute a small business under the SBA definition. 25. Fixed Satellite Small Transmit/Receive Earth Stations. There are 3000 earth station authorizations, a portion of which are Fixed Satellite Small Transmit/Receive Earth Stations. We do not request nor collect annual revenue information, and thus are unable to estimate the number of fixed satellite transmit/receive earth stations may constitute a small business under the SBA definition. 26. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. These stations operate on a primary basis, and frequency coordination with terrestrial microwave systems is not required. Thus, a single "blanket" application may be filed for a specified number of small antennas and one or more hub stations. The Commission has processed 377 applications. We do not request nor collect annual revenue information, and thus are unable to estimate of the number of VSAT systems that would constitute a small business under the SBA definition. 27. Mobile Satellite Earth Stations. There are two licensees. We do not request nor collect annual revenue information, and thus are unable to estimate of the number of mobile satellite earth stations that would constitute a small business under the SBA definition. 28. Radio Determination Satellite Earth Stations. There are four licensees. We do not request nor collect annual revenue information, and thus are unable to estimate of the number of radio determination satellite earth stations that would constitute a small business under the SBA definition. 29. Space Stations (Geostationary). Commission records reveal that there are 46 space station licensees. We do not request nor collect annual revenue information, and thus are unable to estimate of the number of geostationary space stations that would constitute a small business under the SBA definition. 30. Space Stations (Non-Geostationary). There are six Non-Geostationary Space Station licensees, of which only two systems are operational. We do not request nor collect annual revenue information, and thus are unable to estimate of the number of non-geostationary space stations that would constitute a small business under the SBA definition. 31. Direct Broadcast Satellites. Because DBS provides subscription services, DBS falls within the SBA-recognized definition of "Cable and Other Pay Television Services." This definition provides that a small entity is one with $11.0 million or less in annual receipts. As of December 1996, there were eight DBS licensees. However, the Commission does not collect annual revenue data for DBS and, therefore, is unable to ascertain the number of small DBS licensees that could be impacted by these proposed rules. Although DBS service requires a great investment of capital for operation, there are several new entrants in this field that may not yet have generated $11 million in annual receipts, and therefore may be categorized as small businesses, if independently owned and operated. MASS MEDIA SERVICES 32. Commercial Radio and Television Services. The proposed rules and policies will apply to television broadcasting licensees and radio broadcasting licensees. The SBA defines a television broadcasting station that has $10.5 million or less in annual receipts as a small business. Television broadcasting stations consist of establishments primarily engaged in broadcasting visual programs by television to the public, except cable and other pay television services. Included in this industry are commercial, religious, educational, and other television stations. Also included are establishments primarily engaged in television broadcasting and which produce taped television program materials. Separate establishments primarily engaged in producing taped television program materials are classified under another SIC number. There were 1,509 television stations operating in the nation in 1992. That number has remained fairly constant as indicated by the approximately 1,564 operating television broadcasting stations in the nation as of December 31, 1997. For 1992, the number of television stations that produced less than $10.0 million in revenue was 1,155 establishments. Only commercial stations are subject to regulatory fees. 33. Additionally, the Small Business Administration defines a radio broadcasting station that has $5 million or less in annual receipts as a small business. A radio broadcasting station is an establishment primarily engaged in broadcasting aural programs by radio to the public. Included in this industry are commercial, religious, educational, and other radio stations. Radio broadcasting stations which primarily are engaged in radio broadcasting and which produce radio program materials are similarly included. However, radio stations which are separate establishments and are primarily engaged in producing radio program material are classified under another SIC number. The 1992 Census indicates that 96 percent (5,861 of 6,127) radio station establishments produced less than $5 million in revenue in 1992. Official Commission records indicate that 11,334 individual radio stations were operating in 1992. As of December 31, 1997, Commission records indicate that 12,27 radio stations were operating, of which 7,465 were FM stations. Only commercial stations are subject to regulatory fees. 34. Thus, the proposed rules, if adopted, will affect approximately 1,558 full power television stations, approximately 1,200 of which are considered small businesses. Additionally, the proposed rules will affect some 12,156 full power radio stations, approximately 11,670 of which are small businesses. These estimates may overstate the number of small entities because the revenue figures on which they are based do not include or aggregate revenues from non-television or non-radio affiliated companies. There are also 1,952 low power television stations (LPTV). Given the nature of this service, we will presume that all LPTV licensees qualify as small entities under the SBA definition. Alternative Classification of Small Stations 35. An alternative way to classify small radio and television stations is by number of employees. The Commission currently applies a standard based on the number of employees in administering its Equal Employment Opportunity Rule (EEO) for broadcasting. Thus, radio or television stations with fewer than five full-time employees are exempted from certain EEO reporting and record keeping requirements. We estimate that the total number of broadcast stations with 4 or fewer employees is approximately 4,239. Auxiliary, Special Broadcast and other program distribution services 36. This service involves a variety of transmitters, generally used to relay broadcast programming to the public (through translator and booster stations) or within the program distribution chain (from a remote news gathering unit back to the station). The Commission has not developed a definition of small entities applicable to broadcast auxiliary licensees. Therefore, the applicable definitions of small entities are those, noted previously, under the SBA rules applicable to radio broadcasting stations and television broadcasting stations. 37. There are currently 2,720 FM translators and boosters, 4,952 TV translators. The FCC does not collect financial information on any broadcast facility and the Department of Commerce does not collect financial information on these auxiliary broadcast facilities. We believe, however, that most, if not all, of these auxiliary facilities could be classified as small businesses by themselves. We also recognize that most translators and boosters are owned by a parent station which, in some cases, would be covered by the revenue definition of small business entity discussed above. These stations would likely have 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). Furthermore, they do not meet the Small Business Act's definition of a "small business concern" because they are not independently owned and operated. 38. Multipoint Distribution Service (MDS). This service involves a variety of transmitters, which are used to relay programming to the home or office, similar to that provided by cable television systems. In connection with the 1996 MDS auction the Commission defined small businesses as entities that had annual average gross revenues for the three preceding years not in excess of $40 million. This definition of a small entity in the context of MDS auctions has been approved by the SBA. These stations were licensed prior to implementation of Section 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  309(j). Licenses for new MDS facilities are now awarded to auction winners in Basic Trading Areas (BTAs) and BTA-like areas. The MDS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 BTAs. Of the 67 auction winners, 61 meet the definition of a small business. There are 1,573 previously authorized and proposed MDS stations currently licensed. 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. It is estimated, however, that only 1,878 MDS licensees are subject to regulatory fees and the number which are small businesses is unknown. WIRELESS AND COMMERCIAL MOBILE SERVICES 39. Cellular Licensees. Neither the Commission nor the SBA has developed a definition of small entities applicable to cellular licensees. Therefore, the applicable definition of small entity is the definition under the SBA rules applicable to radiotelephone (wireless) companies. This provides that a small entity is a radiotelephone company employing no more than 1,500 persons. According to the Bureau of the Census, only twelve radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. Therefore, even if all twelve of these firms were cellular telephone companies, nearly all cellular carriers were small businesses under the SBA's definition. In addition, we note that there are 1,758 cellular licenses; however, a cellular licensee may own several licenses. In addition, according to the most recent Telecommunications Industry Revenue data, 804 carriers reported that they were engaged in the provision of either cellular service or Personal Communications Service (PCS) services, which are placed together in the data. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of cellular service carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 804 small cellular service carriers that may be affected by the proposed rules, if adopted.. 40. 220 MHz Radio Services. Because the Commission has not yet defined a small business with respect to 220 MHz services, we will utilize the SBA definition applicable to radiotelephone companies, i.e., an entity employing no more than 1,500 persons. With respect to 220 MHz services, the Commission has proposed a two-tiered definition of small business for purposes of auctions: (1) for Economic Area (EA) licensees, a firm with average annual gross revenues of not more than $6 million for the preceding three years and (2) for regional and nationwide licensees, a firm with average annual gross revenues of not more than $15 million for the preceding three years. Given that nearly all radiotelephone companies under the SBA definition employ no more than 1,500 employees (as noted supra), we will consider the approximately 1,500 incumbent licensees in this service as small businesses under the SBA definition. 41. Private and Common Carrier Paging. The Commission has proposed a two-tier definition of small businesses in the context of auctioning licenses in the Common Carrier Paging and exclusive Private Carrier Paging services. Under the proposal, a small business will be defined as either (1) an entity that, together with its affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $3 million, or (2) an entity that, together with affiliates and controlling principals, has average gross revenues for the three preceding calendar years of not more than $15 million. Because the SBA has not yet approved this definition for paging services, we will utilize the SBA's definition applicable to radiotelephone companies, i.e., an entity employing no more than 1,500 persons. At present, there are approximately 24,000 Private Paging licenses and 74,000 Common Carrier Paging licenses. According to the most recent Telecommunications Industry Revenue data, 172 carriers reported that they were engaged in the provision of either paging or "other mobile" services, which are placed together in the data. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of paging carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 172 small paging carriers that may be affected by the proposed rules, if adopted. We estimate that the majority of private and common carrier paging providers would qualify as small entities under the SBA definition. 42. Mobile Service Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to mobile service carriers, such as paging companies. As noted above in the section concerning paging service carriers, the closest applicable definition under the SBA rules is that for radiotelephone (wireless) companies, and the most recent Telecommunications Industry Revenue data shows that 172 carriers reported that they were engaged in the provision of either paging or "other mobile" services. Consequently, we estimate that there are fewer than 172 small mobile service carriers that may be affected by the proposed rules, if adopted. 43. Broadband Personal Communications Service (PCS). The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined "small entity'' for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. For Block F, an additional classification for "very small business" was added and is defined as an entity that, together with their affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These regulations defining "small entity'' in the context of broadband PCS auctions have been approved by the SBA. No small businesses within the SBA-approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40% of the 1,479 licenses for Blocks D, E, and F. Based on this information, we conclude that the number of small broadband PCS licensees will include the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F blocks, for a total of 183 small entity PCS providers as defined by the SBA and the Commission's auction rules. 44. Narrowband PCS. The Commission has auctioned nationwide and regional licenses for narrowband PCS. There are 11 nationwide and 30 regional licensees for narrowband PCS. The Commission does not have sufficient information to determine whether any of these licensees are small businesses within the SBA-approved definition for radiotelephone companies. At present, there have been no auctions held for the major trading area (MTA) and basic trading area (BTA) narrowband PCS licenses. The Commission anticipates a total of 561 MTA licenses and 2,958 BTA licenses will be awarded by auction. Such auctions have not yet been scheduled, however. Given that nearly all radiotelephone companies have no more than 1,500 employees and that no reliable estimate of the number of prospective MTA and BTA narrowband licensees can be made, we assume, for purposes of this IRFA, that all of the licenses will be awarded to small entities, as that term is defined by the SBA. 45. Rural Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). We will use the SBA's definition applicable to radiotelephone companies, i.e., an entity employing no more than 1,500 persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and we estimate that almost all of them qualify as small entities under the SBA's definition. 46. Air-Ground Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Air-Ground Radiotelephone Service. Accordingly, we will use the SBA's definition applicable to radiotelephone companies, i.e., an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and we estimate that almost all of them qualify as small under the SBA definition. 47. Specialized Mobile Radio (SMR). The Commission awards bidding credits in auctions for geographic area 800 MHz and 900 MHz SMR licenses to firms that had revenues of no more than $15 million in each of the three previous calendar years. In the context of 900 MHz SMR, this regulation defining "small entity" has been approved by the SBA; approval concerning 800 MHz SMR is being sought. 48. The proposed fees in the NPRM apply to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. One firm has over $15 million in revenues. We assume, for purposes of this IRFA, that all of the remaining existing extended implementation authorizations are held by small entities, as that term is defined by the SBA. 49. The Commission has held auctions for geographic area licenses in the 900 MHz SMR band, and recently completed an auction for geographic area 800 MHz SMR licenses. There were 60 winning bidders who qualified as small entities in the 900 MHz auction. In the recently concluded 800 MHz SMR auction there were 524 licenses awarded to winning bidders, of which 38 were won by small or very small entities. 50. Private Land Mobile Radio (PLMR). PLMR systems serve an essential role in a range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories. The Commission has not developed a definition of small entity specifically applicable to PLMR licensees due to the vast array of PLMR users. For the purpose of determining whether a licensee is a small business as defined by the SBA, each licensee would need to be evaluated within its own business area. 51. The Commission is unable at this time to estimate the number of small businesses which could be impacted by the rules. However, the Commission's 1994 Annual Report on PLMRs indicates that at the end of fiscal year 1994 there were 1,087,267 licensees operating 12,481,989 transmitters in the PLMR bands below 512 MHz. Because any entity engaged in a commercial activity is eligible to hold a PLMR license, the proposed rules in this context could potentially impact every small business in the United States. 52. Amateur Radio Service. We estimate that 10,000 applicants will apply for vanity call signs in FY 1998. All are presumed to be individuals. All other amateur licensees are exempt from payment of regulatory fees. 53. Aviation and Marine Radio Service. Small businesses in the aviation and marine radio services use a marine very high frequency (VHF) radio, any type of emergency position indicating radio beacon (EPIRB) and/or radar, a VHF aircraft radio, and/or any type of emergency locator transmitter (ELT). The Commission has not developed a definition of small entities specifically applicable to these small businesses. Therefore, the applicable definition of small entity is the definition under the SBA rules for radiotelephone communications. 54. Most applicants for recreational licenses are individuals. Approximately 581,000 ship station licensees and 131,000 aircraft station licensees operate domestically and are not subject to the radio carriage requirements of any statute or treaty. Therefore, for purposes of our evaluations and conclusions in this IRFA, we estimate that there may be at least 712,000 potential licensees which are individuals or are small entities, as that term is defined by the SBA. We estimate, however, that only 16,500 will be subject to FY 1998 regulatory fees. 55. Fixed Microwave Services. Microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. At present, there are approximately 22,015 common carrier fixed licensees and 61,670 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services. The Commission has not yet defined a small business with respect to microwave services. For purposes of this IRFA, we will utilize the SBA's definition applicable to radiotelephone companies -- i.e., an entity with no more than 1,500 persons. We estimate, for this purpose, that all of the Fixed Microwave licensees (excluding broadcast auxiliary licensees) would qualify as small entities under the SBA definition for radiotelephone companies. 56. Public Safety Radio Services. Public Safety radio services include police, fire, local government, forestry conservation, highway maintenance, and emergency medical services. There are a total of approximately 127,540 licensees within these services. Governmental entities as well as private businesses comprise the licensees for these services. As indicated supra in paragraph four of this IRFA, all governmental entities with populations of less than 50,000 fall within the definition of a small entity. All licensees in this category are exempt from the payment of regulatory fees. 57. Personal Radio Services. Personal radio services provide short-range, low power radio for personal communications, radio signalling, and business communications not provided for in other services. The services include the citizen's band (CB) radio service, general mobile radio service (GMRS), radio control radio service, and family radio service (FRS). Inasmuch as the CB, GMRS, and FRS licensees are individuals, no small business definition applies for these services. We are unable at this time to estimate the number of other licensees that would qualify as small under the SBA's definition; however, only GMRS licensees are subject to regulatory fees. 58. Offshore Radiotelephone Service. This service operates on several UHF TV broadcast channels that are not used for TV broadcasting in the coastal area of the states bordering the Gulf of Mexico. At present, there are approximately 55 licensees in this service. We are unable at this time to estimate the number of licensees that would qualify as small under the SBA's definition for radiotelephone communications. 59. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation and digital audio broadcasting satellite uses. The Commission defined "small business" for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a "very small business" as an entity with average gross revenues of $15 million for each of the three preceding years. The Commission auctioned geographic area licenses in the WCS service. In the auction, there were seven winning bidders that qualified as very small business entities, and one that qualified as a small business entity. We conclude that the number of geographic area WCS licensees affected includes these eight entities. IV. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements: 60. With certain exceptions, the Commission's Schedule of Regulatory Fees applies to all Commission licensees and regulatees. Most licensees will be required to count the number of licenses or call signs authorized, complete and submit an FCC Form 159 ("FCC Remittance Advice"), and pay a regulatory fee based on the number of licenses or call signs. Interstate telephone service providers must compute their annual regulatory fee based on their adjusted gross interstate revenue using information they already supply to the Commission in compliance with the Telecommunications Relay Service (TRS) Fund, and they must complete and submit the FCC Form 159. Compliance with the fee schedule will require some licensees to tabulate the number of units (e.g., cellular telephones, pagers, cable TV subscribers) they have in service, and complete and submit an FCC Form 159. Licensees ordinarily will keep a list of the number of units they have in service as part of their normal business practices. No additional outside professional skills are required to complete the FCC Form 159, and it can be completed by the employees responsible for an entity's business records. 61. Each licensee must submit the FCC Form 159 to the Commission's lockbox bank after computing the number of units subject to the fee. As an option, licensees are permitted to file electronically or on computer diskette to minimize the burden of submitting multiple copies of the FCC Form 159. This latter, optional procedure may require additional technical skills. Licensees who pay small fees in advance supply fee information as part of their application and do not need to use the FCC Form 159. 62. Licensees and regulatees are advised that failure to submit the required regulatory fee in a timely manner will subject the licensee or regulatee to a late payment fee of 25% in addition to the required fee. Until payment is received, no new or pending applications will be processed, and existing authorizations may be subject to rescission. Further, in accordance with the Debt Collection Improvement Act of 1996, federal agencies may bar a person or entity from obtaining a federal loan or loan insurance guarantee if that person or entity fails to pay a delinquent debt owed to any federal agency. Thus, debts owed to the Commission may result in a person or entity being denied a federal loan or loan guarantee pending before another federal agency until such obligations are paid. 63. The Commission's rules currently provide for relief in exceptional circumstances. Persons or entities that believe they have been placed in the wrong regulatory fee category or are experiencing extraordinary and compelling financial hardship, upon a showing that such circumstances override the public interest in reimbursing the Commission for its regulatory costs, may request a waiver, reduction or deferment of payment of the regulatory fee. However, timely submission of the required regulatory fee must accompany requests for waivers or reductions. This will avoid any late payment penalty if the request is denied. The fee will be refunded if the request is granted. In exceptional and compelling instances (where payment of the regulatory fee along with the waiver or reduction request could result in reduction of service to a community or other financial hardship to the licensee), the Commission will accept a petition to defer payment along with a waiver or reduction request. V. Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered: 64. The Omnibus Consolidated Appropriation Act, Public Law 105-119, requires the Commission to revise its Schedule of Regulatory Fees in order to recover the amount of regulatory fees that Congress, pursuant to Section 9(a) of the Communications Act, as amended, has required the Commission to collect for Fiscal Year (FY) 1998. See 47 U.S.C. 159(a). We seek comment on the proposed methodology for implementing these statutory requirements and any other potential impact of these proposals on small entities. 65. With the use of actual cost accounting data for computation of regulatory fees, we found that some fees which were very small in previous years would have increased dramatically. The methodology proposed in this NPRM minimizes this impact by limiting the amount of increase and shifting costs to other services which, for the most part, are larger entities. 66. Several categories of licensees and regulatees are exempt from payment of regulatory fees. See, e.g., footnote 108, supra, and Attachment H of the NPRM, infra. VI. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules: 67. None. Attachment B SOURCES OF PAYMENT UNIT ESTIMATES FOR FY 1998 In order to calculate individual service fees for FY 1998, we adjusted FY 1997 payment units for each service to more accurately reflect expected FY 1998 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee data bases, actual prior year payment records and industry and trade association projections when available. We tried to obtain verification for these estimates from multiple sources and, in all cases, we compared FY 1998 estimates with actual FY 1997 payment units to ensure that our revised estimates were reasonable. Where it made sense, we adjusted and/or rounded our final estimates to take into consideration the fact that certain variables that impact on the number of payment units cannot yet be estimated exactly. These include an unknown number of waivers and/or exemptions that may occur in FY 1998 and the fact that, in many services, the number of actual licensees or station operators fluctuates from time to time due to economic, technical or other reasons. Therefore, when we note, for example, that our estimated FY 1998 payment units are based on FY 1997 actual payment units, it does not necessarily mean that our FY 1998 projection is exactly the same number as FY 1997. It means that we have either rounded the FY 1998 number or adjusted it slightly to account for these variables. FEE CATEGORY SOURCES OF PAYMENT UNIT ESTIMATES Land Mobile (All), Microwave, IVDS, Marine (Ship & Coast), Aviation (Aircraft & Ground), GMRS, Amateur Vanity Call Signs, Domestic Public Fixed Based on Wireless Telecommunications Bureau (WTB) projections of new applications and renewals taking into consideration existing Commission licensee data bases. Aviation (Aircraft) and Marine (Ship) estimates have been adjusted to take into consideration the licensing of portions of these services on a voluntary basis. CMRS Mobile Services Based on actual FY 1997 payment units adjusted to take into consideration industry estimates of growth between FY 1997 and FY 1998 and Wireless Telecommunications Bureau projections of new applications and average number of mobile units associated with each application. CMRS Messaging Services Based on industry estimates of the number of units in operation. AM/FM Radio Stations Based on actual FY 1997 payment units. UHF/VHF Television Stations Based on actual FY 1997 payment units. AM/FM/TV Construction Permits Based on actual FY 1997 payment units. LPTV, Translators and Boosters Based on actual FY 1997 payment units. Auxiliaries Based on actual FY 1997 payment units. MDS/MMDS Based on actual FY 1997 payment units. Cable Antenna Relay Service (CARS) Based on actual FY 1997 payment units. Cable Television System Subscribers Based on Cable Services Bureau and industry estimates of subscribership. Interstate Telephone Service Providers Based on actual FY 1997 interstate revenues associated with contributions to the Telecommunications Relay System (TRS) Fund, adjusted to take into consideration FY 1998 revenue growth in this industry as estimated by the Common Carrier Bureau. Earth Stations Based on actual FY 1997payment units. Space Stations (GEOs & NGEOs) Based on International Bureau licensee data bases. International Bearer Circuits Based on International Bureau estimate. International HF Broadcast Stations, International Public Fixed Radio Service Based on actual FY 1997 payment units. Attachment F PROPOSED FY 1998 SCHEDULE OF REGULATORY FEES Fee Category Annual Regulatory Fee PMRS (per license) (Formerly Land Mobile - Exclusive Use at 220-222 MHz, above 470 MHz, Base Station and SMRS) (47 CFR Part 90) 12 Microwave (per license) (47 CFR Part 101) 12 Interactive Video Data Service (per license) (47 CFR Part 95) No Fee Marine (Ship) (per station) (47 CFR Part 80) 6 Marine (Coast) (per license) (47 CFR Part 80) 6 General Mobile Radio Service (per license) (47 CFR Part 95) 6 Land Mobile (per license) (all stations not covered by PMRS and CMRS) 6 Aviation (Aircraft) (per station) (47 CFR Part 87) 6 Aviation (Ground) (per license) (47 CFR Part 87) 6 Amateur Vanity Call Signs (per call sign) (47 CFR Part 97) 1.29 CMRS Mobile Services (per unit) (47 CFR Parts 20, 22, 24, 27, 80 and 90) .29 CMRS One-Way Paging (per unit) (47 CFR Parts 20, 22 and 90) .04 Multipoint Distribution Services (per call sign) (47 CFR Part 21) 260 AM & FM Radio (47 CFR Part 73) Group 1 2,500 Group 2 2,250 Group 3 2,000 Group 4 1.750 Group 5 1,500 Fee Category Annual Regulatory Fee AM & FM Radio (47 CFR Part 73) continued Group 6 1,250 Group 7 1,000 Group 8 750 Group 9 500 Group 10 250 AM Construction Permits 235 FM Construction Permits 1,150 TV (47 CFR Part 73) VHF Commercial Markets 1-10 41,275 Markets 11-25 24,850 Markets 26-50 22,600 Markets 51-100 11,375 Remaining Markets 3,250 Construction Permits 4,100 TV (47 CFR Part 73) UHF Commercial Markets 1-10 14,625 Markets 11-25 10,575 Markets 26-50 5,750 Markets 51-100 3,775 Remaining Markets 1,500 Construction Permits 3,625 Satellite Television Stations (All Markets) 900 Construction Permits - Satellite Television Stations 420 Low Power TV, TV/FM Translators & Boosters (47 CFR Part 74) 265 Broadcast Auxiliary (47 CFR Part 74) 11 Fee Category Annual Regulatory Fee Cable Antenna Relay Service (47 CFR Part 78) 50 Cable Television Systems (per subscriber) .44 Interstate Telephone Service Providers (per revenue dollar) .0011 Earth Stations (47 CFR Part 25) 165 Space Stations (per operational station in geostationary orbit) (47 CFR Part 25) also includes Direct Broadcast Satellite Service (per operational station) (47 CFR Part 100) 119,000 Space Stations (per operational system in non-geostationary orbit) (47 CFR Part 25) 164,800 International Circuits (per active 64KB circuit) 6 International Public Fixed (per call sign) (47 CFR Part 23) 375 International (HF) Broadcast (47 CFR Part 73) 475 Attachment G COMPARISON BETWEEN FY 1997 & PROPOSED FY 1998 REGULATORY FEES Fee Category Annual Regulatory Fee FY 1997 Proposed Regulatory Fee FY 1998 PMRS (per license) (Formerly Land Mobile-Exclusive Use at 220-222 Mhz, above 470 Mhz, Base Station and SMRS) (47 CFR Part 90) 10 12 Microwave (per license) (47 CFR Part 101) 10 12 Marine (Ship) (per station) (47 CFR Part 80) 5 6 Marine (Coast) (per license) (47 CFR Part 80) 5 6 General Mobile Radio Service (per license) (47 CFR Part 95) 5 6 Land Mobile (per license) (all stations not covered by PMRS and CMRS) 5 6 Aviation (Aircraft) (per station) (47 CFR Part 87) 5 6 Aviation (Ground) (per license) (47 CFR Part 87) 5 6 Amateur Vanity Call Signs (per call sign) (47 CFR Part 97) 5 1.29 CMRS Mobile Services (per unit) (47 CFR Parts 20, 22, 24, 27, 80 and 90) .24 .29 CMRS Messaging Services [formerly One Way Paging] (per unit) (47 CFR Parts 20, 22, and 90) .03 .04 Multipoint Distribution Services (per call sign) (47 CFR Part 21) 215 260 Radio (47 CFR Part 73) Group 1 2,000 2,500 Group 2 1,800 2,250 Group 3 1,600 2,000 Group 4 1,400 1,750 Fee Category Annual Regulatory Fee FY 1997 Proposed Regulatory Fee FY 1998 Group 5 1,200 1,500 Group 6 1,000 1,250 Group 7 800 1,000 Group 8 600 750 Group 9 400 500 Group 10 200 250 AM Construction Permits 195 235 FM Construction Permits 950 1,150 TV (47 CFR Part 73) VHF Commercial Markets 1-10 35,025 41,275 Markets 11-25 28,450 24,850 Markets 26-50 18,600 22,600 Markets 51-100 9,850 11,375 Remaining Markets 2,725 3,250 Construction Permits 4,800 4,100 TV (47 CFR Part 73) UHF Commercial Markets 1-10 16,850 14,625 Markets 11-25 13,575 10,575 Markets 26-50 8,750 5,750 Markets 51-100 4,725 3,775 Remaining Markets 1,350 1,500 Construction Permits 2,975 3,625 Satellite Television Stations (All Markets) 950 900 Construction Permits - Satellite Television Stations 345 420 Low Power TV, TV/FM Translators & Boosters (47 CFR Part 74) 220 265 Broadcast Auxiliary (47 CFR Part 74) 25 11 Cable Antenna Relay Service (47 CFR Part 78) 65 50 Fee Category Annual Regulatory Fee FY 1997 Proposed Regulatory Fee FY 1998 Earth Stations (47 CFR Part 25) 515 165 Cable Television Systems (per subscriber) (47 CFR Part 76) .54 .44 Interstate Telephone Service Providers (per revenue dollar) .00116 .0011 Space Stations (per operational station in geostationary orbit) (47 CFR Part 25) also includes Direct Broadcast Satellite Service (per operational station) ( 47 CFR Part 100) 97,975 97,975 119,000 119,000 Space Stations (per operational system in non- geostationary orbit) (47 CFR Part 25) 135,675 164,800 International Bearer Circuits (per active 64KB circuit) 5 6 International Public Fixed (per call sign) (47 CFR Part 23) 310 375 International (HF) Broadcast (47 CFR Part 73) 390 475 Attachment H DETAILED GUIDANCE ON WHO MUST PAY REGULATORY FEES 1. The guidelines below provide an explanation of regulatory fee categories established by the Schedule of Regulatory Fees in section 9 (g) of the Communications Act, 47 U.S.C.  159(g) as modified in the instant NPRM. Where regulatory fee categories need interpretation or clarification, we have relied on the legislative history of section 9, our own experience in establishing and regulating the Schedule of Regulatory Fees for Fiscal Years (FY) 1994, 1995, 1996, and 1997 and the services subject to the fee schedule. The categories and amounts set out in the schedule have been modified to reflect changes in the number of payment units, additions and changes in the services subject to the fee requirement and the benefits derived from the Commission's regulatory activities, and to simplify the structure of the schedule. The schedule may be similarly modified or adjusted in future years to reflect changes in the Commission's budget and in the services regulated by the Commission. See 47 U.S.C.  159(b)(2), (3). 2. Exemptions. Governments and nonprofit entities are exempt from paying regulatory fees and should not submit payment. A nonprofit entity may be asked to submit a current IRS Determination Letter documenting that it is exempt from taxes under section 501of the Internal Revenue Code or the certification of a governmental authority attesting to its nonprofit status. The governmental exemption applies even where the government-owned or community-owned facility is in competition with a commercial operation. Other specific exemptions are discussed below in the descriptions of other particular service categories. 1. Private Wireless Radio Services 3. Two levels of statutory fees were established for the Private Wireless Radio Services -- exclusive use services and shared use services. Thus, licensees who generally receive a higher quality communication channel due to exclusive or lightly shared frequency assignments will pay a higher fee than those who share marginal quality assignments. This dichotomy is consistent with the directive of section 9, that the regulatory fees reflect the benefits provided to the licensees. See 47 U.S.C.  159(b)(1)(A). In addition, because of the generally small amount of the fees assessed against Private Wireless Radio Service licensees, applicants for new licenses and reinstatements and for renewal of existing licenses are required to pay a regulatory fee covering the entire license term, with only a percentage of all licensees paying a regulatory fee in any one year. Applications for modification or assignment of existing authorizations do not require the payment of regulatory fees. The expiration date of those authorizations will reflect only the unexpired term of the underlying license rather than a new license term. a. Exclusive Use Services 4. Private Mobile Radio Services (PMRS) (Formerly Land Mobile Services): Regulatees in this category include those authorized under part 90 of the Commission's Rules to provide limited access Wireless Radio service that allows high quality voice or digital communications between vehicles or to fixed stations to further the business activities of the licensee. These services, using the 220-222 MHz band and frequencies at 470 MHz and above, may be offered on a private carrier basis in the Specialized Mobile Radio Services (SMRS). For FY 1998, PMRS licensees will pay a $12 annual regulatory fee per license, payable for an entire five or ten year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is either $60 for a license with a five year term or $120 for a license with a 10 year term. 5. Microwave Services: These services include private and commercial microwave systems and private and commercial carrier systems authorized under part 101 of the Commission's Rules to provide telecommunications services between fixed points on a high quality channel of communications. Microwave systems are often used to relay data and to control railroad, pipeline, and utility equipment. Commercial systems typically are used for video or data transmission or distribution. For FY 1998, Microwave licensees will pay a $12 annual regulatory fee per license, payable for an entire ten year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is $120 for the ten year license term. 6. Interactive Video Data Service (IVDS): The IVDS is a two-way, point-to-multi-point radio service allocated high quality channels of communications and authorized under part 95 of the Commission's Rules. The IVDS provides information, products, and services, and also the capability to obtain responses from subscribers in a specific service area. The IVDS is offered on a private carrier basis. The Commission does not anticipate receiving any applications in the IVDS during FY 1998. Therefore, for FY 1998, there is no regulatory fee for IVDS licensees. b. Shared Use Services 7. Marine (Ship) Service: This service is a shipboard radio service authorized under part 80 of the Commission's Rules to provide telecommunications between watercraft or between watercraft and shore-based stations. Radio installations are required by domestic and international law for large passenger or cargo vessels. Radio equipment may be voluntarily installed on smaller vessels, such as recreational boats. The Telecommunications Act of 1996 gave the Commission the authority to license certain ship stations by rule rather than by individual license. The Commission exercises that authority. Thus, private boat operators sailing entirely within domestic U.S. waters and who are not otherwise required by treaty or agreement to carry a radio, are no longer required to hold a marine license, and they will not be required to pay a regulatory fee. For FY 1998, parties required to be licensed and those choosing to be licensed for Marine (Ship) Stations will pay a $6 annual regulatory fee per station, payable for an entire ten-year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is $60 for the ten year license term. 8. Marine (Coast) Service: This service includes land-based stations in the maritime services, authorized under part 80 of the Commission's Rules, to provide communications services to ships and other watercraft in coastal and inland waterways. For FY 1998, licensees of Marine (Coast) Stations will pay a $6 annual regulatory fee per call sign, payable for the entire five-year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is $30 per call sign for the five-year license term. 9. Private Land Mobile (Other) Services: These services include Land Mobile Radio Services operating under parts 90 and 95 of the Commission's Rules. Services in this category provide one- or two-way communications between vehicles, persons or fixed stations on a shared basis and include radiolocation services, industrial radio services, and land transportation radio services. For FY 1998, licensees of services in this category will pay a $6 annual regulatory fee per call sign, payable for an entire five-year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is $30 for the five-year license term. 10. Aviation (Aircraft) Service: These services include stations authorized to provide communications between aircraft and between aircraft and ground stations and include frequencies used to communicate with air traffic control facilities pursuant to part 87 of the Commission's Rules. The Telecommunications Act of 1996 gave the Commission the authority to license certain aircraft radio stations by rule rather than by individual license. The commission exercises that authority. Thus, private aircraft operators flying entirely within domestic U.S. airspace and who are not otherwise required by treaty or agreement to carry a radio are no longer required to hold an aircraft license, and they will not be required to pay a regulatory fee. For FY 1998, parties required to be licensed and those choosing to be licensed for Aviation (Aircraft) Stations will pay a $6 annual regulatory fee per station, payable for the entire ten-year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee due is $60 per station for the ten- year license term. 11. Aviation (Ground) Service: This service includes stations authorized to provide ground-based communications to aircraft for weather or landing information, or for logistical support pursuant to part 87 of the Commission's Rules. Certain ground-based stations which only serve itinerant traffic, i.e., possess no actual units on which to assess a fee, are exempt from payment of regulatory fees. For FY 1998, licensees of Aviation (Ground) Stations will pay a $6 annual regulatory fee per license, payable for the entire five-year license term at the time of application for a new, renewal, or reinstatement license. The total regulatory fee is $30 per call sign for the five-year license term. 12. General Mobile Radio Service (GMRS): These services include Land Mobile Radio licensees providing personal and limited business communications between vehicles or to fixed stations for short-range, two-way communications pursuant to part 95 of the Commission's Rules. For FY 1998, GMRS licensees will pay a $6 annual regulatory fee per license, payable for an entire five-year license term at the time of application for a new, renewal or reinstatement license. The total regulatory fee due is $30 per license for the five-year license term. c. Amateur Radio Vanity Call Signs 13. Amateur Vanity Call Signs: This category covers voluntary requests for specific call signs in the Amateur Radio Service authorized under part 97 of the Commission's Rules. Applicants for Amateur Vanity Call-Signs will continue to pay a $5 annual regulatory fee per call sign, as prescribed in the FY 1997 fee schedule, payable for an entire ten-year license term at the time of application for a vanity call sign until the FY 1998 fee schedule becomes effective. The total regulatory fee due would be $50 per license for the ten-year license term. For FY 1998, Amateur Vanity Call Sign applicants will pay a $1.29 annual regulatory fee per call sign, payable for an entire ten-year term at the time of application for a new, renewal or reinstatement license. The total regulatory fee due is $12.90 per call sign for the ten-year license term. We propose that there will be no refunds to applicants who submit applications before implementation of the FY 1998 fee. d. Commercial Wireless Radio Services 14. Commercial Mobile Radio Services (CMRS) Mobile Services: The Commercial Mobile Radio Service (CMRS) is an "umbrella" descriptive term attributed to various existing broadband services authorized to provide interconnected mobile radio services for profit to the public, or to such classes of eligible users as to be effectively available to a substantial portion of the public. CMRS Mobile Services include certain licensees which formerly were licensed as part of the Private Radio Services (e.g., Specialized Mobile Radio Services) and others formerly licensed as part of the Common Carrier Radio Services (e.g., Public Mobile Services and Cellular Radio Service). While specific rules pertaining to each covered service remain in separate parts 22, 24, 80 and 90, general rules for CMRS are contained in part 20. CMRS Mobile Services will include: Specialized Mobile Radio Services (part 90); Broadband Personal Communications Services (part 24), Public Coast Stations (part 80); Public Mobile Radio (Cellular, Rural Radio Service, 800 MHz Air-Ground Radiotelephone, and Offshore Radio Services) (part 22); and Wireless Communications Service (part 27). Each licensee in this group will pay an annual regulatory fee for each mobile or cellular unit (mobile or telephone number), assigned to its customers, including resellers of its services. For FY 1998, the regulatory fee is $.29 per unit. 15. Commercial Mobile Radio Services (CMRS) Messaging Services: The Commercial Mobile Radio Service (CMRS) is an "umbrella" descriptive term attributed to various existing narrowband services authorized to provide interconnected mobile radio services for profit to the public, or to such classes of eligible users as to be effectively available to a substantial portion of the public. CMRS Messaging Services include certain licensees which formerly were licensed as part of the Private Radio Services (e.g., Private Paging and Radiotelephone Service), licensees formerly licensed as part of the Common Carrier Radio Services (e.g., Public Mobile One-Way Paging), licensees of Narrowband Personal Communications Service (PCS) (e.g., one-way and two-way paging), and 220-222 MHz Band and Interconnected Business Radio Service. While specific rules pertaining to each covered service remain in separate parts 22, 24 and 90, general rules for CMRS are contained in part 20. Each licensee in the CMRS Messaging Services will pay an annual regulatory fee for each unit (pager, telephone number, or mobile) assigned to its customers, including resellers of its services. For FY 1998, the regulatory fee is $.04 per unit. 16. Finally, we are reiterating our definition of CMRS payment units to make it clear that fees are assessable on each PCS or cellular telephone and each one-way or two-way pager capable of receiving or transmitting information, whether or not the unit is "active" on the "as-of" date for payment of these fees. The unit becomes "feeable" if the end user or assignee of the unit has possession of the unit and the unit is capable of transmitting or receiving voice or non-voice messages or data and the unit is either owned and operated by the licensee of the CMRS system or a reseller, or the end user of a unit has a contractual agreement for the provision of a CMRS service from a licensee of a CMRS system or a reseller of a CMRS service. The responsible payer of the regulatory fee is the CMRS licensee. For example, John Doe purchases a pager and contractually obtains paging services from Paging Licensee X. Paging Licensee X is responsible for paying the applicable regulatory fee for this unit. Likewise, Cellular Licensee Y donates cellular phones to a high school and the high school either pays for or obtains free cellular service from Cellular Licensee Y. In this situation, Cellular Licensee Y is responsible for paying the applicable regulatory fees for these units. 2. Mass Media Services 17. The regulatory fees for the Mass Media fee category apply to broadcast licensees and permittees. Noncommercial Educational Broadcasters are exempt from regulatory fees. a. Commercial Radio 18. These categories include licensed Commercial AM (Classes A, B, C, and D) and FM (Classes A, B, B1, C, C1, C2, and C3) Radio Stations operating under part 73 of the Commission's Rules. We have combined class of station and city grade contour population data to formulate a schedule of radio fees which differentiate between stations based on class of station and population served. In general, higher class stations and stations in metropolitan areas will pay higher fees than lower class stations and stations located in rural areas. The specific fee that a station must pay is determined by where it ranks after weighting its fee requirement (determined by class of station) with its population. The regulatory fee classifications for Radio Stations for FY 1998 are as follows: Group 1 .....................................$2,500 Group 2 .......................................2,250 Group 3 .......................................2,000 Group 4 .......................................1,750 Group 5........................................1,500 Group 6 .......................................1,250 Group 7 .......................................1,000 Group 8 ..........................................750 Group 9 ..........................................500 Group 10 ........................................250 19. Licensees may determine the appropriate fee payment by referring to a list which will be provided as an attachment to the final Report and Order in this proceeding. This same information will be available on the FCC's internet world wide web site (http://www.fcc.gov), by calling the FCC's National Call Center (1-888-225-5322), and may be included in Public Notices mailed to each licensee. b. Construction Permits - Commercial AM Radio 20. This category includes holders of permits to construct new Commercial AM Stations. For FY 1998, permittees will pay a fee of $235 for each permit held. Upon issuance of an operating license, this fee would no longer be applicable and licensees would be required to pay the applicable fee for the designated group within which the station appears. c. Construction Permits - Commercial FM Radio 21. This category includes holders of permits to construct new Commercial FM Stations. For FY 1998, permittees will pay a fee of $1,150 for each permit held. Upon issuance of an operating license, this fee would no longer be applicable. Instead, licensees would pay a regulatory fee based upon the designated group within which the station appears. d. Commercial Television Stations 22. This category includes licensed Commercial VHF and UHF Television Stations covered under part 73 of the Commission's Rules, except commonly owned Television Satellite Stations, addressed separately below. Markets are Nielsen Designated Market Areas (DMA) as listed in the Television & Cable Factbook, Stations Volume No. 66, 1998 Edition, Warren Publishing, Inc. The fees for each category of station are as follows: VHF Markets 1-10...............$41,275 VHF Markets 11-25...............24,850 VHF Markets 26-50...............22,600 VHF Markets 51-100.............11,375 VHF Remaining Markets........3,250 UHF Markets 1-10...............$14,625 UHF Markets 11-25...............10,575 UHF Markets 26-50.................5,750 UHF Markets 51-100...............3,775 UHF Remaining Markets........1,500 e. Commercial Television Satellite Stations 23. Commonly owned Television Satellite Stations in any market (authorized pursuant to Note 5 of  73.3555 of the Commission's Rules) that retransmit programming of the primary station are assessed a fee of $900 annually. Those stations designated as Television Satellite Stations in the 1998 Edition of the Television and Cable Factbook are subject to the fee applicable to Television Satellite Stations. All other television licensees are subject to the regulatory fee payment required for their class of station and market. f. Construction Permits - Commercial VHF Television Stations 24. This category includes holders of permits to construct new Commercial VHF Television Stations. For FY 1998, VHF permittees will pay an annual regulatory fee of $4,100. Upon issuance of an operating license, this fee would no longer be applicable. Instead, licensees would pay a fee based upon the designated market of the station. g. Construction Permits - Commercial UHF Television Stations 25 This category includes holders of permits to construct new UHF Television Stations. For FY 1998, UHF Television permittees will pay an annual regulatory fee of $3,625. Upon issuance of an operating license, this fee would no longer be applicable. Instead, licensees would pay a fee based upon the designated market of the station. h. Construction Permits - Satellite Television Stations 26. The fee for UHF and VHF Television Satellite Station construction permits for FY 1998 is $420. An individual regulatory fee payment is to be made for each Television Satellite Station construction permit held. i. Low Power Television, FM Translator and Booster Stations, TV Translator and Booster Stations 27. This category includes Low Power UHF/VHF Television stations operating under part 74 of the Commission's Rules with a transmitter power output limited to 1 kW for a UHF facility and, generally, 0.01 kW for a VHF facility. Low Power Television (LPTV) stations may retransmit the programs and signals of a TV Broadcast Station, originate programming, and/or operate as a subscription service. This category also includes translators and boosters operating under part 74 which rebroadcast the signals of full service stations on a frequency different from the parent station (translators) or on the same frequency (boosters). The stations in this category are secondary to full service stations in terms of frequency priority. We have also received requests for waivers of the regulatory fees from operators of community based Translators. These Translators are generally not affiliated with commercial broadcasters, are nonprofit, nonprofitable, or only marginally profitable, serve small rural communities, and are supported financially by the residents of the communities served. We are aware of the difficulties these Translators have in paying even minimal regulatory fees, and we have addressed those concerns in the ruling on reconsideration of the FY 1994 Report and Order. Community based Translators are exempt from regulatory fees. For FY 1998, licensees in low power television, FM translator and booster, and TV translator and booster category will pay a regulatory fee of $265 for each license held. j. Broadcast Auxiliary Stations 28. This category includes licensees of remote pickup stations (either base or mobile) and associated accessory equipment authorized pursuant to a single license, Aural Broadcast Auxiliary Stations (Studio Transmitter Link and Inter-City Relay) and Television Broadcast Auxiliary Stations (TV Pickup, TV Studio Transmitter Link, TV Relay) authorized under part 74 of the Commission's Rules. Auxiliary Stations are generally associated with a particular television or radio broadcast station or cable television system. This category does not include translators and boosters (see paragraph 26 infra). For FY 1998, licensees of Commercial Auxiliary Stations will pay an $11 annual regulatory fee on a per call sign basis. k. Multipoint Distribution Service 29. This category includes Multipoint Distribution Service (MDS), and Multichannel Multipoint Distribution Service (MMDS), authorized under part 21 of the Commission's Rules to use microwave frequencies for video and data distribution within the United States. For FY 1998, MDS and MMDS stations will pay an annual regulatory fee of $260 per call sign. 3. Cable Services a. Cable Television Systems 30. This category includes operators of Cable Television Systems, providing or distributing programming or other services to subscribers under part 76 of the Commission's Rules. For FY 1998, Cable Systems will pay a regulatory fee of $.44 per subscriber. Payments for Cable Systems are to be made on a per subscriber basis as of December 31, 1997. Cable Systems should determine their subscriber numbers by calculating the number of single family dwellings, the number of individual households in multiple dwelling units, e.g., apartments, condominiums, mobile home parks, etc., paying at the basic subscriber rate, the number of bulk rate customers and the number of courtesy or fee customers. In order to determine the number of bulk rate subscribers, a system should divide its bulk rate charge by the annual subscription rate for individual households. See FY 1994 Report and Order, Appendix B at paragraph 31. b. Cable Antenna Relay Service 31. This category includes Cable Antenna Relay Service (CARS) stations used to transmit television and related audio signals, signals of AM and FM Broadcast Stations, and cablecasting from the point of reception to a terminal point from where the signals are distributed to the public by a Cable Television System. For FY 1998, licensees will pay an annual regulatory fee of $50 per CARS license. 4. Common Carrier Services a. Commercial Microwave (Domestic Public Fixed Radio Service) 32. This category includes licensees in the Point-to-Point Microwave Radio Service, Local Television Transmission Radio Service, and Digital Electronic Message Service, authorized under part 101 of the Commission's Rules to use microwave frequencies for video and data distribution within the United States. These services are now included in the Microwave category (see paragraph 5 infra). b. Interstate Telephone Service Providers 33. This category includes Inter-Exchange Carriers (IXCs), Local Exchange Carriers (LECs), Competitive Access Providers (CAPs), domestic and international carriers that provide operator services, Wide Area Telephone Service (WATS), 800, 900, telex, telegraph, video, other switched, interstate access, special access, and alternative access services either by using their own facilities or by reselling facilities and services of other carriers or telephone carrier holding companies, and companies other than traditional local telephone companies that provide interstate access services to long distance carriers and other customers. This category also includes pre-paid calling card providers. These common carriers, including resellers, must submit fee payments based upon their proportionate share of gross interstate revenues using the methodology that we have adopted for calculating contributions to the TRS fund. See Telecommunications Relay Services, 8 FCC Rcd 5300 (1993), 58 FR 39671 (July 26, 1993). In order to avoid imposing any double payment burden on resellers, we will permit carriers to subtract from their gross interstate revenues, as reported to NECA in connection with their TRS contribution, any payments made to underlying common carriers for telecommunications facilities and services, including payments for interstate access service, that are sold in the form of interstate service. For this purpose, resold telecommunications facilities and services are only intended to include payments that correspond to revenues that will be included by another carrier reporting interstate revenue. For FY 1998, carriers must multiply their adjusted gross revenue figure (gross revenue reduced by the total amount of their payments to underlying common carriers for telecommunications facilities or services) by the factor 0.0011 to determine the appropriate fee for this category of service. Regulatees may want to use the following worksheet to determine their fee payment: TOTAL INTERSTATE (1) Revenue reported in TRS Fund worksheets (2) Less: Access charges paid (3) Less: Other telecommunications facilities and services taken for resale (4) Adjusted revenues (1)minus(2)minus(3) (5) Fee factor 0.0011 (6) Fee due (4)times(5) 5. International Services a. Earth Stations 34. Very Small Aperture Terminal (VSAT) Earth Stations, equivalent C-Band Earth Stations and antennas, and earth station systems comprised of very small aperture terminals operate in the 12 and 14 GHz bands and provide a variety of communications services to other stations in the network. VSAT systems consist of a network of technically-identical small Fixed-Satellite Earth Stations which often include a larger hub station. VSAT Earth Stations and C-Band Equivalent Earth Stations are authorized pursuant to part 25 of the Commission's Rules. Mobile Satellite Earth Stations, operating pursuant to part 25 of the Commission's Rules under blanket licenses for mobile antennas (transceivers), are smaller than one meter and provide voice or data communications, including position location information for mobile platforms such as cars, buses, or trucks. Fixed- Satellite Transmit/Receive and Transmit-Only Earth Station antennas, authorized or registered under part 25 of the Commission's Rules, are operated by private and public carriers to provide telephone, television, data, and other forms of communications. Included in this category are telemetry, tracking and control (TT&C) earth stations, and earth station uplinks. For FY 1998, licensees of VSATs, Mobile Satellite Earth Stations, and Fixed-Satellite Transmit/Receive and Transmit-Only Earth Stations will pay a fee of $165 per authorization or registration as well as a separate fee of $165 for each associated Hub Station. 35. Receive-only earth stations. For FY 1998, there is no regulatory fee for receive-only earth stations. b. Space Stations (Geostationary Orbit) 36. Geostationary Orbit (also referred to as Geosynchronous) Space Stations are domestic and international satellites positioned in orbit to remain approximately fixed relative to the earth. Most are authorized under part 25 of the Commission's Rules to provide communications between satellites and earth stations on a common carrier and/or private carrier basis. In addition, this category includes Direct Broadcast Satellite (DBS) Service which includes space stations authorized under part 100 of the Commission's rules to transmit or re-transmit signals for direct reception by the general public encompassing both individual and community reception. For FY 1998, entities authorized to operate geostationary space stations (including DBS satellites) will be assessed an annual regulatory fee of $119,000 per operational station in orbit. Payment is required for any geostationary satellite that has been launched and tested and is authorized to provide service. c. Space Stations (Non-Geostationary Orbit) 37. Non-Geostationary Orbit Systems (such as Low Earth Orbit (LEO) Systems) are space stations that orbit the earth in non-geosynchronous orbit. They are authorized under part 25 of the Commission's rules to provide communications between satellites and earth stations on a common carrier and/or private carrier basis. For FY 1998, entities authorized to operate Non-Geostationary Orbit Systems (NGSOs) will be assessed an annual regulatory fee of $164,800 per operational system in orbit. Payment is required for any NGSO System that has one or more operational satellites operational. In our FY 1997 Report and Order at paragraph 75 we retained our requirement that licensees of LEOs pay the LEO regulatory fee upon their certification of operation of a single satellite pursuant to section 25.120(d). We require payment of this fee following commencement of operations of a system's first satellite to insure that we recover our regulatory costs related to LEO systems from licensees of these systems as early as possible so that other regulatees are not burdened with these costs any longer than necessary. Because section 25.120(d) has significant implications beyond regulatory fees (such as whether the entire planned cluster is operational in accordance with the terms and conditions of the license) we are clarifying our current definition of an operational LEO satellite to prevent misinterpretation of our intent as follows: Licensees of Non-Geostationary Satellite Systems (such as LEOs) are assessed a regulatory fee upon the commencement of operation of a system's first satellite as reported annually pursuant to sections 25.142(c), 25.143(e), 25.145(g), or upon certification of operation of a single satellite pursuant to section 25.120(d). d. International Bearer Circuits 38 Regulatory fees for International Bearer Circuits are to be paid by facilities-based common carriers (either domestic or international) activating the circuit in any transmission facility for the provision of service to an end user or resale carrier. Payment of the fee for bearer circuits by non- common carrier submarine cable operators is required for circuits sold on an indefeasible right of use (IRU) basis or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services. Compare FY 1994 Report and Order at 5367. Payment of the international bearer circuit fee is also required by non-common carrier satellite operators for circuits sold or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services. The fee is based upon active 64 Kbps circuits, or equivalent circuits. Under this formulation, 64 Kbps circuits or their equivalent will be assessed a fee. Equivalent circuits include the 64 Kbps circuit equivalent of larger bit stream circuits. For example, the 64 Kbps circuit equivalent of a 2.048 Mbps circuit is 30 64 Kbps circuits. Analog circuits such as 3 and 4 KHz circuits used for international service are also included as 64 Kbps circuits. However, circuits derived from 64 Kbps circuits by the use of digital circuit multiplication systems are not equivalent 64 Kbps circuits. Such circuits are not subject to fees. Only the 64 Kbps circuit from which they have been derived will be subject to payment of a fee. For FY 1998, the regulatory fee is $6.00 for each active 64 Kbps circuit or equivalent. For analog television channels we will assess fees as follows: Analog Television Channel No. of equivalent 64 Kbps Circuits Size in MHz 36......................................................................... 630 24......................................................................... 288 18.......................................................................... 240 e. International Public Fixed 39. This fee category includes common carriers authorized under part 23 of the Commission's Rules to provide radio communications between the United States and a foreign point via microwave or HF troposcatter systems, other than satellites and satellite earth stations, but not including service between the United States and Mexico and the United States and Canada using frequencies above 72 MHz. For FY 1998, International Public Fixed Radio Service licensees will pay a $375 annual regulatory fee per call sign. f. International (HF) Broadcast 40. This category covers International Broadcast Stations licensed under part 73 of the Commission's Rules to operate on frequencies in the 5,950 KHz to 26,100 KHz range to provide service to the general public in foreign countries. For FY 1998, International HF Broadcast Stations will pay an annual regulatory fee of $475 per station license. Attachment I Description of FCC Activities Authorization of Service: The authorization or licensing of radio stations, telecommunications equipment, and radio operators, as well as the authorization of common carrier and other services and facilities. Includes policy direction, program development, legal services, and executive direction, as well as support services associated with authorization activities. Policy and Rulemaking: Formal inquiries, rulemaking proceedings to establish or amend the Commission's rules and regulations, action on petitions for rulemaking, and requests for rule interpretations or waivers; economic studies and analyses; spectrum planning, modeling, propagation-interference analyses, and allocation; and development of equipment standards. Includes policy direction, program development, legal services, and executive direction, as well as support services associated with policy and rulemaking activities. Enforcement: Enforcement of the Commission's rules, regulations and authorizations, including investigations, inspections, compliance monitoring, and sanctions of all types. Also includes the receipt and disposition of formal and informal complaints regarding common carrier rates and services, the review and acceptance/rejection of carrier tariffs, and the review, prescription and audit of carrier accounting practices. Includes policy direction, program development, legal services, and executive direction, as well as support services associated with enforcement activities. Public Information Services: The publication and dissemination of Commission decisions and actions, and related activities; public reference and library services; the duplication and dissemination of Commission records and databases; the receipt and disposition of public inquiries; consumer, small business, and public assistance; and public affairs and media relations. Includes policy direction, program development, legal services, and executive direction, as well as support services associated with public information activities. Attachment J Factors, measurements and calculations that go into determining station signal contours and associated population coverages AM Stations Specific information on each day tower, including field ratio, phasing, spacing and orientation was retrieved, as well as the theoretical pattern RMS figure (mV/m @ 1 km) for the antenna system. The standard, or modified standard if pertinent, horizontal plane radiation pattern was calculated using techniques and methods specified in sections 73.150 and 73.152 of the Commission's rules. See 47 U.S.C.  73.150 and 73.152. Radiation values were calculated for each of 72 radials around the transmitter site (every 5 degrees of azimuth). Next, estimated soil conductivity data was retrieved from a database representing the information in FCC Figure M3. Using the calculated horizontal radiation values, and the retrieved soil conductivity data, the distance to the city grade (5 mV/m) contour was predicted for each of the 72 radials. The resulting distance to city grade contours were used to form a geographical polygon. Population counting was accomplished by determining which 1990 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted city grade coverage area. FM Stations The maximum of the horizontal and vertical HAAT (m) and ERP (kW) was used. Where the antenna HAMSL was available, it was used in lieu of the overall HAAT figure to calculate specific HAAT figures for each of 72 radials under study. Any available directional pattern information was applied as well, to produce a radial-specific ERP figure. The HAAT and ERP figures were used in conjunction with the propagation curves specified in section 73.313 of the Commission's rules to predict the distance to the city grade (70 dBuV/m or 3.17 mV/m) contour for each of the 72 radials. See 47 U.S.C.  73.313. The resulting distance to city grade contours were used to form a geographical polygon. Population counting was accomplished by determining which 1990 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted city grade coverage area.